The federal government is bracing itself this week for a good old-fashioned silver stampede, a mad dash by coin collectors and precious-metal investors to acquire Uncle Sam's batch of sure-enough silver dollars.
Pocket-sagging hefty coins that are 90 percent pure silver, these coins are not to be confused with the modern-day Susan B. Anthony dollars that are barely larger than a quarter and made of baser stuff (copper and nickel). No, sir, these "Carson City silver dollars," minted between 1878 and 1893 just before the old Nevada mint shut down, are the genuine article.
Making these coins available to the public has been a source of emabarrassment and minor pain in the neck for the federal government.
First, the government lost track of about 3 million of these coins that had never been circulated. During a 1964 audit of Treasury Department facilities, they turned up by the bagful in a subvault in Washington. They were offered several times at auction, but many collectors considered the government's minimum bid requirement ($15 each) too high.
Last November, the General Services Administration announced that as of Feb. 8, 1980, the remaining 923,287 coins could be ordered for as low as $20 (some dates were rarer and commanded higher prices), no competitive bidding necessary. The GSA figured that this was fair, based on the worth of the coins' silver content (about $12.50 at the time) plus numismatic value.
Since then, however, the price of silver has shot through the ceiling, climbing from $16.16 an ounce to a peak of $48. This means that Uncle Sam would have been selling for as low as $20 coins worth nearly twice this amount, not even calculating their historical value. Not surprisingly, the Bureau of the Mint office in San Francisco (from where the coins will be sent) was in-undated with hundreds of thousands of early orders.
Last month, the GSA (the federal government's storekeeper) canceled the previously announced prices, but not the sale itself.
Instead, when the coins are officially offered at a Smithsonian Institution ceremony Friday (Feb. 8), new prices will be posted as well.
"We like to think that people are interested in these coins because they were struck at Carson City, not because they're going to make a fortune on them," says Edward Rochette, executive vice-president of the American Numismatic Association. "But that profit motive is on everybody's mind."
Federal officials are expecting (and perhaps hoping) that there will be a first-day sellout of the coins so that they won't have to play catch-up with silver prices again.
"It's the last of the Carson City silver dollar hoard, as collectors like to call it," said Margo Russell, editor of the weekly newspaper, Coin World. "These will never go on the market again."
GSA spokesman Steve Guiheen says the government won't renege on the coin's price tag again, but adds that "depending on the market, it might be necessary at some point in the sale to cancel it."
Many coin buffs apparenlty were upset that the government changed plans in midgame, but understand that the unusual times may have made it necessary.
"When silver prices reached $40 an ounce, there was more than $30 worth of silver in every coin they would have been selling for $20," said Mr. Rochette of the American Numismatic Association. "I think the government would have been severely criticized if it sold its silver at 50 percent less than market."