SilverTowne Melts Thousands of Gold First Spouse & Commems

In its March 10 issue Coin World reports that SilverTowne has melted thousands of gold First Spouse and commemorative coins as gold prices have increased. SilverTowne said they "identified little or no retail demand" for the First Spouse coins - so they melted them. (Why did they buy so many of these coins if there was no demand for them?)

Estimates of how many of these coins they have destroyed to date are:

Martha Washington & Louisa Adams - 5,000 to 7,000

Jefferson & Dolley Madison - Unknown

2006-W San Francisco Old Mint $5 - 2,000 to 3,000

2007-W Jamestown $5 - 5,000 to 7,000

By their own admission this one company has singlehandedly destroyed almost 10% of the entire mintage of the first two First Spouse coins and over 10% of the Jamestown $5 issue. Others are probably also melting these coins and the total number destroyed will never be known.

I would like to know why SilverTowne didn't price these scarce coins (40,000 maximum total Unc. + Proof for First Spouse) at a price where they would sell rather than destroy them. These coins are now lost forever to future collectors.

I see on their web site that they are selling a surviving Dolley Madison graded NGC MS-69 for $898.98. That may explain why they "identified little or no retail demand" for these coins. Or maybe the destruction of the coins was self-serving: Fewer surviving coins = greater rarity (and a higher price).

If SilverTowne were in the Fine Art business would they melt bronze statues by Frederic Remington when the price of bronze went up? Would they scrape the paint off works of Van Gogh and Monet if the price of canvasses went through the roof? If marble prices skyrocketed would they send David to the scrap heap?

SilverTowne has its own private mint and they will most likely use the gold harvested from the coins they melted to make their own products.

I have never done business with SilverTowne and I most likely never will - especially after this episode - but I will think of their melting pot if I ever even think about buying something from them - or selling something to them.

Shame on you, SilverTowne!

 

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Business first I would suspect. No one wants the spouse coins but they want the gold.

That is a shame, not that anyone is buying them anyways. However those that have them will be glad to hear it I assume. Lower mintage - even scarer.

 

really ?

I would have to see positive proof !

 

Here is an artice about the great silver melt of the 1980s... Ironically, the owner of Silvertowne is qouted in this! He apologizes and then talks about how its basically good business sense...
http://www.pcgs.com/articles/article496.chtml

 

It may also just be a "statement" to help drive up sales by creating an uncertainty in the population.

 

non sense

non sense. by melting down gold. which is considered a precious metals. and the dollar amount were so big. and they not even count exactly how many pieces were melted down. just the estimation. and the estimation range is so big. 5,000 pc to 7,000 pc. 2,000 pc different in gold coins. are you kidding?. i wound have fire those people who managed it or counting it.

 

That sounds much more likely.

 

Because of information just like this, I can foresee a time when the Treasury will enact a Law making it illegal to melt any coinage not just Cents! Now that would put a crunch in their business!


Frank

 

This is news?

Leon Hendrickson was one of the first "major" dealers I ever met, way back in the 70's at the MI show. Silvertown will melt anything, lol.

 

Several jewelers were caught in the 1930's, melting gold coins, turning the result into the government at a 75% profit. Some of this is recounted in the book "Illegal Tender" about the 1933 $20.

 

maybe they bought a bunch of them and found that no one was buying them...so they melted them...hardly the same as destroying unique examples of fine art in my opinion. People do melt down coins, this is just another case.

 

melting down

i wonder if people melting down scrap silver coins. why until now they are (dealers) still selling a lot of scrap silver coins to the collectors?. it's been 27 years since silver boom and yet the scrap silver is still abundance.

 

Because that is the business they are in, making a market and buying and selling coins. Since there was no market in the coins they probably bought them as bullion as well (from people that bought them from the mint who can now make a profit selling them as the gold value.)

Because they would have had to price them below melt. They had the choice to sell them a little above melt to collectors and take forever to move them, Melt them and move them quickly, or sell them to collectors at less than melt inorder to move them quickly but make less or even lose money. The choice to melt them makes the most practical sense. I'm sure though that if you want to rescue any future coins from the pot they would be happy to sell you all the "scrap" pieces at 5% over spot. As for them being "scarce", they are only scarce if there are more cllectors for them than there are coins available. Since they are selling for bullion there obviously aren't that many collectors and the coins may be "scarce" but they are also common.

The problem is the only First Spouse coins that can command a premium are the 69 and 70 coins. There aren't enough of THOSE to satify collector demand, but if it doesn't make that rarified level then they are a drug on the market

Sure they would, and I wouldn't blame them one bit. Sure the Remington may be a great work of art, but if the art collectors won't pay more than $8,000 for the statue,and refinery wll pay $9,000 for the bronze guess who gets it. (Actually the example is farfetched considering there would only be one Remington statue. Make it mor like you are an art dealer who has 10,000 copies of a Remmington statue ofwhich there are around 5,000 potential purchasers, and the bronze is worth more than the collectors are willing to pay for the statue. You're in business to make money so you scrap them.)

I'm sure they DIDN'T count them, I know I wouldn't. They are being scrapped, the count doesn't matter the weight does. and the batch of scrap almost certainly contained coins of many types from many souces. So there was no count and the numbers are just a very rough estimate.

Well it WAS good business sense at the time.

 

Fine with me

If they melt enough of the first spouse coins, then maybe the ones that I foolishly bought may be worth something some day. Melt away!

 

Silvertowne had to melt the coins. These coins were purchased by small local coins shops and they just sat in the case and no one ever even looked at them. Dealers needed the money and sent them to silvertowne to sell. Leon will buy anything at a certain price. So many of them flooded in as they were the highest buyer in the nation. Now that they have so many of them they have to melt them to get the money back out of them.

I talked to Leon at a local show in Ohio and he said that they are so busy with gold and scrap gold that the bank is overdrawn. I watched them for the first three hours of the show and all they did was buy. When it was over they said the spent almost 1 million $. IN THREE HOURS. All in scrap gold and silver. At rates like that they do not have the money to hold the items to sell them.

I purchase over 40k a week in my store and I understand. It is sad what is melted but I can not afford to keep anything as the price keeps going up and the gold keeps coming in. God I spent over 20k just today and its only 4:20

 

If I owned some of these coins, this would be music to my ears.

 

melting down

i hope they continue to melt more. any silver and gold coins. they were plenty. specially foreign coins. anyway, so that our holdings will appreciate in the future.

 

I remember going to a show several years ago, my father in law had some Vietnamese gold bars that he had purchased cheap at an estate sale, SilverTowne was the only dealer that would even touch them, and gave melt on them. Father in law turned around and spent their check at another dealer for double eagles.

 

Alot of people deal with silvertowne because they know their checks are good. They are not always the highest payer but you don't have to worry about the check being good which is still worth some thing.

I will always take silvertowne checks as cash as well as some other dealers.

 

Interesting to say the least.

Now I have never dealt with SilverTowne (nor do I intend to) and have no interest in the spouse coins.
If they had to recoup "losses" and it's legal well what can one say?
For those that bought them. Good for you - hope they do go up in value.

I'm also thinking SilverTowne may have kept more than a few after such a move. Future investment as it were.