We’ve entered the last year of the popular modern commemorative quarter program. For better or worse, all fifty states have created designs and the final mintages will hit the nation’s cash registers during the remainder of the year. While I find these final five designs attractive, they (like their modern predecessors) lack the historical depth and symbolisms many of their classic commemorative cousins encompassed. And, as I look over the 2008 proof set that just crossed my desk, my mind goes back to the original commemorative quarter.

The 1893 Isabella Quarter, was created for the Columbian Exposition. $10,000 of the funds intended for the Board of Lady Mangers at the Expo was delivered in the form of forty thousand of these commemorative quarters. The board had been formed at the urging of woman’s rights activist Susan B. Anthony, who felt both genders should be represented in the managerial makeup of this great national project the expo had become. The inclusion of a coin to commemorate female contributions to industry seems almost trifling by today’s standards. But the Woman’s Suffrage movement was full steam ahead at the time. In fact, women didn’t legally win the right to vote until Colorado adapted an amendment to allow them to do so, during this year, 1893. A cause Anthony had championed over the previous two and a half decades. What seems like just a novel idea now, was a veritable coup at the time. The quarter served not only to raise money for the cause, but as a sort of name recognition ad for the woman’s rights movement. And it fueled the growing fires of suffrage. The coins were to be sold at the fair for $1 each. A premium over face that was obscene to some. For this and a variety of other reasons, thousands went unsold during the fair. The balance was slowly sold off to dealers during the coming decade.

The dies were prepared by Charles Barber, presumably from sketches done by Kenyon Cox. Later research has brought this into question. But regardless of where the original ideas came from, the coin is wrought with symbolism – especially the reverse. The use of a monarch on the obverse is somewhat controversial, but considering what event the coin was supposed to commemorate, it was a natural choice. Queen Isabella was the backing Christopher Columbus needed to fund his adventure. The reverse is simply described in most numismatic literature as a kneeling woman holding a distaff, the spool used to hold unspun cotton. This image is now reported to represent “woman in industry.” This may be the case but, Barber’s image would have meant a lot more to the people in his time.

First, the word distaff carried a more pertinent meaning in 1893. We understand it to be the spools used as part of the process in making wool and cotton thread. We therefore attribute its inclusion here to emphasize women’s part in industry or more specifically the textile industry. However, in 1893 the word distaff was used to describe a woman, a woman’s work or women collectively. This definition is lost to modern collectors.

During the turn of the last century, this synonym for woman in the workplace was a powerful image. But there’s more! Her body’s position on the reverse is an obvious play on an early hard times token promoting woman’s suffrage. That alone is interesting, but this particular kneeling woman was used for its visual likeness to a similar anti-slavery movement image. The Isabella Quarter’s image wasn’t well received and surely the connection with slavery (only a few decades from the Civil War) met with mixed emotions. Again, the slavery connection is lost to all but the best read modern collector.

In 1893, The American Journal of Numismatics unfavorably reviewed the design of this and the Columbian half dollar stating, “If these two coins really represent the highest achievements of our medalists and our mints, under the inspiration of an opportunity without restrictions, the like of which has never been presented hitherto in history of our national coinage, we might as well despair of its future.” What would this reviewer say about the modern Wyoming state quarter?

Many Isabella quarters went unsold during the fair, a fact that must be attributed to the poor reception and the lack of commitment by fair goers to the woman’s liberation movement. Other factors contributed, but coin sales were initially unfavorable. These early commemorative coins have now become collector favorites. And, as I look over the 50 State quarters complete collection, no design carries the weight that this the original commemorative quarter held. In today’s world of political correctness, our over zealous Mint will likely never produce the meaningful designs that this and many of the classic counterparts cleared the way for.

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Every coin tells a story. Coins can tell stories of love, greed, hate, and many other things. Anyone who collects coins can do a little research and bring these stories to light. Ancient coins tell especially amazing stories. The paragraphs below tell of two coins that I earned through the ANA’s David R. Cervin Ancient Coin Project and the story that they tell.

I recently acquired a Septimius Severus Silver Denarius through the ANA’s David R. Cervin Ancient Coin Project. I researched the coin recently and I found out many interesting things. The coin told a story that encompassed a whole era of Roman History.

In my research, I discovered that the emperor that is depicted on the obverse and the reverse of the coin, Septimius Severus, is one of the greatest Roman Emperors of all time. His full name is Imperator Caesar Lucius Septimius Severus Pertinax Augustus Arabicus, Adiabenicus, Pius, Parthicus Maximus, Britannicus Maximus.

These titles came from a variety of sources: “Arabicus”- Meaning Arab, refers to place of birth, “Adiabenicus”- referring to one of the peoples that Severus conquered, “Pius”- meaning humble, “Parthicus Maximus”- meaning greatest Parthian, “Britannicus Maximus”-meaning greatest Briton.

He ascended to the throne through the murder and defeat of his political rivals. This took some time, but when he succeeded, Severus held a fi rm grip on the empire and conquered many lands. He had two sons, Caracalla and Geta. Caracalla was notoriously cruel and was known for murdering his brother, wife, and father-in-law in A.D. 211. But aside from all this bloodshed, Caracalla also made his own contribution to numismatics. He instituted a new denomination of coins in the Roman Empire, the antoninianus.

This coin is believed to have been valued at twice that of a denarius, but its metal content at the time of its institution was only 1.5 times that of a denarius. To add to this, the metals were gradually debased after that to a point where the denarii were hoarded because the coins that were said by the government to be worth twice as much were actually worth less. The metal content of the antoninianus was debased because of the lack of silver and gold coming into Rome from its dominions. The government still needed to bankroll its large army and had to make more coins with a debased metal content to continue paying its troops, which were guarding the empire from invaders along the borders. When the general public found out about the debasement of the coins, a period of hyperinfl ation occurred. This continued until the monetary reforms of Diocletian, when the economy was stabilized. Diocletian completely reorganized the monetary system, creating new denominations and values for Roman Currency.

Diocletian had all the citizens of the empire turn in their old currency and exchange it for the new, reformed currency. This is similar to what happened in the early 1920’s in Germany when prices doubled every two days and people would burn their old currency in lieu of wood because it lasted longer than the amount of fi rewood that it could buy. The German government then reformed the currency system and stabilized the economy. They had all the citizens of Germany turn in their old, devalued marks in exchange for new ones at a rate of a trillion (1,000,000,000,000) to one. This near-collapse of the empire from within marked a new era in Roman history. This era would last until the military defeat of the empire and the sacking of Rome by Germanic tribesmen several centuries later.

The period of economic mayhem described above can be traced all the way to Caracalla and his institution of the antoninianus. I happened to acquire an antoninianus, also through the David R. Cervin project. It was issued by a rebel emperor in Gaul (modern day France.) This coin is also known as barbarous radiate because of the shape of the crown depicted and also the fact that the persons depicted on them were frowned upon by Roman citizens because they were attempting to overthrow the true emperor. This coin would have never been minted if it were not for Caracalla. Caracalla would have never become emperor if his father had not fought his way into becoming emperor. I wonder how this coin or the person depicted on it affected world history.

All coins tell a story. These stories can tell of greed or love, hatred and revolts, but all of these stories are refl ected through the coinage of the time. Those who are fortunate enough to own or to collect ancient coins, or any type of coins for that matter, can take a trip back in time to learn about history, economics, and our world as it was many years ago.

Cole Schenewerk will be submitting part 2 of his article to run in the next issue of TCN. Look for it! [GB]

The earliest prototype in the Croesus series is a heavy gold stater (#120/1) of which I have owned two examples. It is such a perfect missing link that I would have been fearful of it had I not discovered a worn example in the Ashmolean Museum collection, placed there almost 100 years ago. In a way the Ashmolean specimen has been a negative for me personally as dealers in Europe and the U.S. have plagerized this idea by quoting the Ashmolean and stating, “Like Ashmolean must be the earliest Creosus gold Stater”. The prototype is of somewhat rough, crude style with the lion in a stretched, leaping position resembling the silver staters of Caria which had been found in hoards with coins of Croesus. The bull has a head similar to that of an Uncertain Ionian silver tetrobol (Rosen 376). The crowning glory that establishes this missing link is the fact that the lion has a wart on the bridge of the nose, just like the 1/3 staters of Lydia that preceded the coinage of Croesus. It is important to note that on the prototype piece the protomes are extremely animated in lifelike poses. On the regular issues (#120/2), while the protomes are well done, they are somewhat immobile and the front leg of the lion, as well as the front leg of the bull, are rather stiff acting like pedestals.

In the silver series, I have recently discovered a prototype earlier than one that I had identified in 1990 when I first published my work on Croesus. (#120/16, 10.41 grams) This silver stater is later than the earlier gold prototype in that the lion has no wart on the bridge of its nose. The type is very animated and much more elaborately resolved than the prototype I identified in 1990. (#120/17, 10.67 grams) The second prototype, a silver stater of 10.67 grams, is also very animated in that the four legs of the lion and the bull are in natural positions, but less elaborated than the first prototype. The second prototype stater was found with a prototype siglos (#120/21) which is struck from the same dies. All of these three prototype coins are the only specimens recorded of their types. (Recently another die of the second prototype was discovered and is in this collection #120/18)

In the regular issues of silver coinage (#120/20) a silver stater weighing 10.68 grams has a heretofore unrecognized banding on the top of the head below the horn extending down the forehead of the bull. I have studied this coin very carefully. The banding is not a die-break or an undertype, but may have been ribbons or some type of ceremonial dressing placed on the bull’s head. Confirming this, the silver siglos (#120/23) of 5.35 grams has the same banding. Other silver Croesus coins of excellent quality (EF or better) show no banding. The “banding” is probably some sort of ceremonial draping placed on the bull. (This led to my idea that the lion and bull were not fighting but represented the two strongest aspects of the Lydians as they perceived it. The lion normally represents strength, military or otherwise and the bull represents fertility.) Since they are more elaborate, I call them Class I of the regular silver issues. This is thought of as a regular issue because the lion’s foreleg is rather stiff and straight like a pedestal. The silver stater (#120/20) of 10.74 grams is the standard regular issue silver stater of Croesus with no banding on the bull’s horn; therefore, it is Class II.

Going back to the gold issues, #120/2 is a standard heavy gold stater of 10.76 grams where the lion’s front foot while somewhat modeled, is still pedestal-like. #120/3 is a light gold stater of Croesus of 8.07 grams which should be distinguished from #120/4, a light Persian gold stater of 8.06 grams. The difference between the Persian and the Croesoid gold staters is the fact that the protomes, the lion and the bull, are very delicately rendered in the Croesus model and rather large and somewhat clumsy in the Persian version. The Persian type also has a somewhat less intelligent look to the lion. This is attributable to the fact that possibly a Persian die-cutter may have been cutting a type that was meaningless to him.

Denominations of less than a siglos from a 1/3 stater to a 1/24 stater were made in relatively small quantities for local use. This is indicated by the fact that when you study examples 120/10, 120/11, 120/12 1/12 light gold Staters 120/13 and 120/29 1/24 silver Stater, we discover they were even struck with the same die. This denominational and metallic crossover in coin striking indicates a small issue which is not something that would be exported. Small Greek coins are not struck for export; and normally only circulated locally.

In studying the coinage of Croesus in general, I noticed a very interesting characteristic. The lion always has his skin tightly pulled over his skull as though he were a well-toned hunter and the eye of the lion is a raised, round dot within a diamond-shaped recess. Look for this when obtaining a coin of Croesus as forgers seem to miss this nuance. The collection plated in this article does not contain a light weight 1/24 stater which would weigh approximately 0.36 grams. The reason that I do not have this coin in the article is that it has not been discovered yet, but knowing the consistency with which Croesus operated, a 1/24 light stater of 0.36 grams existed, and hopefully, one still exists. (It was discovered in 1998 and I bought it. It is #120/30)

From time to time, scholars and collectors like to say that what is obvious is not and that what is true is in fact false. In the case of the coinage of Croesus, there are those who say that all of Croesus’ coinage was struck by Darius, the conqueror of Croesus. This is simply not the case. The coinage Darius struck was an accommodation to the Greek people that he had conquered since he issued no coinage in his homeland. The coinage that depicted a kneeling, running king, which was from 510 to 330 B.C., is a bi-metallic, bi-denomination issue: a gold Daric and a silver siglos. Fractional denominations exist but only in extremely rare situations. The regular issue was the Daric and the siglos. Backing up one step to the lion and bull types, the heavy large foreparts of the lion and bull which were Darius’ issues of Croesus’ types, can be rather easily separated from the much more delicate work of the Lydians. It would seem the height of improbability for Darius to issue this complex coinage system of Croesus’ just to accommodate people whom he had conquered then stop it. Croesus accomplished what no one in the Greek world ever did. He created a large, bi-metallic, interrelated coinage where silver coins traded for gold coins at a rate of 13:1. Only under Berenike did the Ptolemies came close to what Croesus accomplished. The Romans had a multiple metallic denominational system for a sustained amount of time, but did not have as many denominations. The Romans had nine denominations while Croesus had 16. The coinage of Croesus was simple in concept yet very versatile. Croesus was a mercantile genius or his treasurer was.

This is the first time a complete denominational set of Croesus has ever been assembled. This is also the first time all of the denominations have ever been identified. The coins in this collection took 14 years to find and they are either the finest known or equal to the finest known in almost every case.

This is a revised and updated version of the article published in SAN 1997 which itself updated the yet earlier 1990 Celator article.

Copyright @ 1997 by Harlan J. Berk, Ltd. – http://www.harlanjberk.com – E-Mail: info@harlanjberk.com
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Most of the coins and pieces of paper money which will find their way under the Christmas tree or next to the Hanukkah menorah will not be the break-the-bank variety. Yet, some fortunate numismatists, perhaps in the Bill Gates or the Oprah Winfrey families, just might be surprised by an extremely valuable coin or two presented to them by a generous relative.

In the case of the less expensive category of numismatic fare, the concern over price versus value is not a major concern. This is not to say that purchasers of low-priced hobby items in the under–$100 range, for instance, welcome getting ripped off. After all, it’s only human nature to desire good deals during shopping experiences. No one would argue this point. But it understandably requires significantly more contemplation to decide if a coin priced at say, $50,000, offers good value, than it does to decide if a $50 coin is worth the money. Either way, the purchaser doesn’t want to overpay. But, the risk of this occurring obviously increases as costs rise.

Yet, before we even reach the point of decision when purchasing collectibles such as coins, we might ask how the values are determined in the first place. How are prices established and who is involved in this process? First, it must be pointed out that the dynamics involved are complicated and cannot be capsulized or put into a nutshell. As tangible as these collectible assets might appear, evaluating them requires many intangible considerations. Coins and other collectibles are not, for instance, similar to staples of life such as food and clothing. College marketing students, for example, quickly learn the fundamentals involved in producing, pricing, and promoting consumer goods. Established guidelines used to bring products to market are universally employed by businesses around the globe. It is a relatively simple task to calculate the costs of raw materials, manufacturing, and marketing, and add on a standard mark-up to determine the retail price of most consumer goods. But with coins, it’s not so straightforward.

In the first place, with the exception of modern gold, silver, and platinum issues tied to the spot price of precious metals, the cost of raw materials isn’t factored into the price of most coins. And obviously, there are no manufacturing costs involved, since the coins are already in existence. There are, however, marketing costs factored into the prices of rare coins, which can fluctuate from one seller to another. And, of course, acquisition costs are part of the equation, unless the seller received his coin or coins as a gift, that is. Yet, long before sellers determine what a fair rate of return would be for their holdings, price histories of their particular coins are usually reviewed. But what do these price histories reveal?

Well, in simplest terms, price histories are just what the term implies: a compilation of prices which collectors have paid in the past for the coins in question. Extending as far back in time as existing pricing data allows, we can trace the earliest prices paid for these coins. At one point in history even the rarest coins traded for prices very close to their face values. As unfathomable as this might seem to collectors in the early years of the twenty-first century, who have observed coins selling for hundreds of thousands or even millions of dollars, these mega-rarities once traded for fractions of the prices they sell for today.

Yet, regardless of whether a rare coin once sold for a mere double or triple its face value, or if it brings $1 million in 2007, someone, somewhere, had to set the price, and someone else?the buyer?had to agree with that price. But what criteria does the one who sets the price use in his evaluation of a coin? If we could crack this code we could perhaps remove much of the mystery surrounding the prices of rare coins.

Unfortunately, there are no set rules governing the dynamics of coin pricing. If there were, then buyers and sellers might possibly always agree, and price resistance would vanish.

Let’s examine the price history of one of the classic rarities in U.S. numismatics, the 1913 V nickel, to illustrate several ambiguities inherent in evaluating rare coins.

We are told that at least one employee at the Philadelphia Mint in late 1912 or early 1913 (perhaps Storekeeper-Clerk Samuel W. Brown or Chief Engraver Charles E. Barber, or both), arranged to have five 1913 V nickels struck, even though 1912 was the last year of issue for this design. Subsequently, in December of 1919, Samuel W. Brown, who had retired from the mint six years earlier, placed a series of ads offering to pay $500 for a 1913 V nickel. Of course, at that time he alone (perhaps there were co-conspirators) knew of the existence of these coins. To the rest of the collecting community the only nickels dated 1913 displayed the Indian and the bison. A few months later, Brown upped his offer to $600 per piece, and later that same year (1920) he exhibited one of his 1913 V nickels at a national coin convention.

Though not a single example of these mysterious coins had ever traded hands (at least to anyone’s knowledge), Brown had elevated their value from five cents to six hundred dollars?Their perceived value anyway. Yet even this value was not etched in stone. For in 1923 and 1924, a Philadelphia coin dealer named Augustus Wagner advertised the five nickels for sale, but apparently did not sell them for his reported asking price of between $400 and $500 apiece. At this time, another coin dealer, named Stephen K. Nagy, reported to have been involved with the nickels from the beginning, sold all five of them to Edward H. R. Green, the boorish, freewheeling son of the “Witch of Wall Street,” Hetty Green. Mr. Green (or Col. Green to some people) died in 1936 and noted collector Eric P. Newman subsequently purchased his five celebrated nickels in 1941 for an approximate average price of $400 apiece.

Did Mr. Newman pay a fair price for the nickels? No one could have known for sure since the coins had not exchanged hands often enough to gauge their market value. During the next few years Newman’s purchase prices for the nickels proved to be bargains, as one of the highest quality specimens traded for $900 in 1942, escalating to $3,750 in 1947. Another piece, considered to be inferior in quality compared to the finest specimens, sold for $1,000 (or $2,450 depending on the source) less than a year after Newman purchased it, and then for $3,750 around 1945.

These early transactions paled in stature compared with sales yet to transpire over the next six decades. After a rather lackluster period from 1945 through the mid 1950s, in which the price level for 1913 nickels struggled to break the $4,000 barrier, market exuberance catapulted the value first to $25,000, and then to the $40,000 to $50,000 mark by 1961.

Collectors apparently had difficulty in assimilating this sudden surge in value, however, as one of the more publicized examples failed to meet the consignor’s reserve price of $50,000 at an auction held in Los Angeles in March 1961. But, who really knew if this reserve price was too steep? It’s not as if someone could have looked up the price of 1913 V nickels in a coin values guide similar perhaps to the Kelly Blue Book for automobiles. Oh, there were price guides for coins to be sure; but none of them in 1961 ventured so much as an estimate as to how much a 1913 V nickel was worth. The only citations found in either of the two most popular price guides of that era informed readers that only five 1913 V nickels existed. So it was left up to numismatic experts and advanced collectors to determine the values of recognized rarities such as 1913 V nickels.

Six years after the unsuccessful auction attempt to sell one of the higher condition-rated 1913 V nickels, Nebraska coin dealer Aubrey Bebee chunked down $46,000 to purchase the poorest quality specimen. Two years later, in 1969, Bebee rejected an offer of $75,000 for his nickel. Three years after that, in 1972, the specimen which had failed to bring $50,000 in the 1961 auction, gained notoriety for being the first coin to ever sell for $100,000. Five years later, in 1977, this same piece sold for $200,000 and subsequently fetched $350,000 in 1985, $962,500 in 1993, $1.84 million in 2002, and a staggering $3 million in 2004.

Considering that ninety-one years earlier, the aggregate value of all 1913 V nickels in existence was twenty-five cents, the prices paid by collectors to own just one example over the past nine decades are incomprehensible, to say the least. I think it’s fair to say that no one, at any point along the way, could have predicted what these coins would eventually sell for. Although, credit must be given to World-Wide Coin Investments, Ltd., of Atlanta Georgia, the company that purchased the $100,000–specimen in 1972, for having prophesied way back then that 1913 V nickels would eventually bring $1 million. World-Wide Coin was just a little off in its projection of when this would occur, however, as it suggested that the million-dollar mark would be reached by 1980, when in fact, this did not happen until 1996 (It came close in 1993 with the $962,500 price realized).

Along the way, two 1913 V nickels were forever removed from the market; when the Norweb family donated their prized specimen to the Smithsonian Institution in 1978, and Aubrey and Adeline Bebee presented their piece, purchased for $46,000 in 1967, to the American Numismatic Association in 1989. The whereabouts of a third example, known as the Walton specimen, remained unknown for decades. And then, in 2003, in response to a massive media blitz focused on 1913 V nickels, the heirs brought this specimen out of hiding, triggering a fireworks explosion of publicity when it was displayed with the other four specimens at an ANA convention in Baltimore. As far as anyone knew, this was the first time the five nickels had been together in one place since 1942. Although hounded by auction companies, the heirs of this heretofore-missing specimen announced that it was not for sale. Even if it was, who could tell the heirs unequivocally what their coin was worth?

Throughout the long history of evaluating rare coins this has always been a challenge (Please keep in mind that we are talking here about truly rare coins, not those common issues passed off as rarities by home shopping networks, and by deceitful telemarketers). An incisive case in point can be illustrated by continuing the saga of 1913 V nickels.

During the latter half of 2006, the collector community buzzed with eager anticipation over the announcement that the finest known example of a 1913 V nickel would appear in an auction in early January 2007. This piece, reverently referred to for decades as the Eliasberg specimen, held the distinction of being the first coin to ever sell for $1 million, when an auction buyer paid $1.485 million for it in 1996. Within seven years it traded hands a couple times, more than doubling its value from 1996. Then, in 2005, it set yet another price record when Washington-state businessman Bruce Morelan acquired it for $4.15 million. After a year of ownership, Morelan felt it was time to pass it on to the next collector (He had previously owned the specimen which had failed to meet the consigner’s reserve of $50,000 in 1961. Morelan paid $1.84 in 2002 for that one.)

The question was, what kind of reserve would Morelan place on his prestigious consignment? Of foremost consideration was the $4.15 million investment he had in the coin. Knowing that by the time he received payment from the auction company he would have owned the nickel for one and a half years, he needed to calculate the time value of his money. At a simple six percent rate of interest over a period of eighteen months, $4.15 million would earn approximately $375,000, which would bring the break-even total to $4.525 million. Then, of course, Mr. Morelan expected to earn a profit above that amount, and in the rapidly evolving bull market in rare coins, this seemed like a no-brainer. A reserve price of $5 million was set, and no doubt the auction company (Stack’s) afforded Morelan other special-client comps for the privilege of handling such an illustrious coin.

No doubt, Morelan and Stack’s had their sights set on a much higher price realized anyway. The five-million-dollar reserve would serve only as a catalyst for loftier bids to transpire. It was not as if there were no precedents for numismatic items exceeding the $5-million barrier. After all, a 1933 $20 gold piece had sold for $7.59 million in 2002 and there were rumblings that certain coins could possibly bring $10 million to $15 million if offered on the market.

In some ways, the pre-sale hype focused on Mr. Morelan’s nickel, was reminiscent of the auctioneer’s publicity campaign for the 1913 V nickel that did not meet the consignor’s $50,000 reserve back in 1961. In that sale, the cataloguer declared that from all inclinations, the nickel would in all probability exceed the $50,000 mark. But, as you are now aware, the coin was not destined to break that barrier at that time.

With cameras rolling and news reporters standing by, Morelan’s nickel hit the auction block. Euphoria suddenly dissipated into disenchantment as the auctioneer closed the bidding, with not one person willing to raise his paddle for the $5 million reserve price (the total price would have actually been $5.75 million after the auction company’s 15 % commission was factored in). Once again, the coin market, as represented this time by auction participants, did not agree on the price asked for an unquestionable rarity. Would someone have paid $4.5 million (plus the buyer’s fee) for the nickel? Probably. How about $4.75 million? Maybe. But why not $5 million? Who knows? Who in that crowd of numismatic experts attending this auction could have emphatically declared that Morelan’s 1913 V nickel was not worth $5 million, or $5.75 million, or even $6 million?

These same questions are applicable for any rare coins, not just those of the million-dollar variety. Time after time, collectors have rejected a rare coin based on price resistance, only to regret their decisions later on when the coin is no longer available, or when the coin’s price rises high above the original asking price. This is not meant to imply that collectors should remove all restraints when faced with purchasing decisions. The 1913 V nickel offered at auction in 1961, for example, might not have been worth $100,000 at the time, but certainly $50,000 or even $60,000 seems reasonable, especially for well-heeled collectors who might have been interested. Of course, we have the advantage of hindsight when evaluating coin prices from the past which often makes us seem like experts, at least in our own minds.

Yet, regardless of what we might learn from evaluating price histories, there is one essential lesson that can be taught from reviewing collector experiences from the past. Ownership is key. In other words, those collectors that owned the choice rarities that we all drool over today, are the ones that reaped the dual rewards of pride of ownership and profiting from their passion. But ownership often requires stepping out and paying in excess of what everyone else is willing to pay. To reiterate, this only applies to the rarest, most desirable coins, the coins that are only offered infrequently, the ones that every collector would love to own. You need to make sure that you know which coins this refers to before you follow this advice.

Noted collectors from the past knew what these coins were and only the most resolute ones acquired them. Still, even the most successful numismatists have experienced lock-lobe at times, refusing to pay another dollar for a rarity which they so desperately desired. In the event that this happens and the collector gets a second chance, usually the mistake is not repeated, and he gladly pays whatever the cost.

The truth is, no one really knows what a truly rare coin is worth. You can speculate, you can perform mathematical analysis, you can compare price histories, you can consult an expert, and you can refer to price guides. Yet, regardless of which method you employ, in the end you will never get a clearer answer to the question regarding the value of a rare coin than this: A rare coin is worth whatever price a seller and a buyer agree on. What might seem like exorbitant prices today might cause collectors ten years from now to turn green with envy.

In light of all the choices from every category of collectibles which are available to hobbyists, few seem to offer more value than rare coins and paper money. Stamps, art, old comic books, old movie posters, old LPs, old dolls, old baseball cards, Old West memorabilia, old bottles, old firearms, and old casino chips all attract serious enthusiasts. Yet none of these fields appear to have the following that rare coins do. This trend seems destined to continue for as long as people have a passion to collect things and have money to purchase them.

This is one of the primary reasons why press releases about the sales of expensive coins will always find sufficient space in headlines, both in print and online, and will always receive adequate coverage on TV news broadcasts. Bruce Morelan is no stranger to such publicity. Witness for example the sensational coverage of his firm’s (Legend Numismatics) recent brokering of a $30,000,000 rare coin deal.

And, whatever became of his 1913 V nickel which failed to meet his reserve price in the January 2007 auction? Apparently, a Southern California collector, who may or may not have participated in the bidding, could not get the coin out of his mind and wound up paying $5 million for it three months after the auction in a private sale. So Morelan managed to sell the second 1913 V nickel pedigreed to him, recover the interest on his investment capital, and still earn a tidy little short-term profit. Curious observers will be eagerly waiting to see if he might buy one of his 1913 V nickels back in the future. And, the new owner of the rarest nickel in the world will be waiting to see if perhaps the next stop for the coin might be at the $10-million level.

Meanwhile, all of us bystanders will be trying to figure out what this coin is really worth. But will anyone other than its owner ever know its true value?

Author of this article: Rusty Goe
For more information about the rare coin market please contact Southgate Coins in Reno, Nevada, at (775) 322-4455. Ask for Marie or Amy. For information about the Carson City Coin Collectors of America club, please visit www.c4oa.blogspot.com.

Hawaii has always been an exciting place in my imagination. When I was a pre-teen, I was collecting coins, stamps, and old books. In those days, there seemed to be rare stuff all over the place. I would dig through piles of old books and came up with treasure after treasure for 10¢.

By the time I was 12, I often could spend as much as $5 or $10 for a coin, stamps, or a book. For me, the trio was a natural to collect. I found A New Voyage, Round the World In the Years 1768, 1769, 1770, and 1771 Undertaken by Order of His Present Majesty, Performed by James Cook, In the Ship Endeavour. The title goes on, but the really rare things about this book is not only the subject matter, but the fact that it was printed in New York by James Rivington in 1774. Books printed in America before the Revolution are rare, and this subject was very popular.

Four years later in 1778, Cook discovered Hawaii and was killed there shortly thereafter. For a few dollars I had purchased Cook’s Voyages With an Account of His Life by A. Kipps published in Philadelphia in 1838. This was followed by History of the Sandwich Islands With an Account of the American Mission Established There in 1820. This rare little book was printed in Philadelphia in 1831 by the American Sunday School Union.

The coming of the Missionaries doomed the Hawaiians. Soon most of the Missionaries and their families spread fatal western diseases that all but wiped out the Hawaiian population. Then the men of God and their families grabbed most of the land, and eventually overthrew Hawaii’s last ruler, Queen Lilinokalani in 1893 with the help of U.S. Marines from a U.S. warship in the harbor at Honolulu. Read Full Article

Photos used with permission and courtesy of Heritage Auction Galleries

When asked to write an article on the ten most significant U.S. commemorative coins for this issue, I chortled and thought to myself what an easy assignment this was going to be! I had just that day finished reading galleys for the commemorative coin section of the Coin World “Comprehensive Catalogue and Encyclopedia of U.S. Coins” edited by David T. Alexander and myself, and all of the material was fresh in my mind.

However, when I went back over the listings with a consideration in mind of their national importance rather than a straightforward documentation of them, I suddenly realized how hard it was going to be to find ten pieces that were truly significant! After weeding out the 14 state commemoratives and most of the town, county, island, mountain, trail, bridge and music center commemoratives, there were scarcely ten pieces left that were both national and significant. Here’s what I came up with, though you might disagree.

Number one on my list is the Chicago World’s Columbian Exposition half dollar of 1892 and 1893, in part because the fact that Columbus landed in what we now call “the Americas” in 1492 was one of the major historical events of the last millennium, and in part because it was the first U.S. commemorative and set the stage for all that followed, good or bad.

The design of the coin is not the greatest, but it is ruggedly handsome after its own fashion, adequate to the task and not an embarrassment to the nation as some of its modern successors have been. Though some have complained that the portrait of Columbus is not accurate, there is no known portrait of Columbus taken from life, so nobody can prove that it is not accurate. The designs of the 1992 Columbus commemoratives are perhaps more imaginative, but as they repeat a theme already covered I have chosen not to include them in my top ten listing.

The 1892 and 1893 coins also became America’s first circulating commemorative, however inadvertently, when the World’s Fair committee defaulted on its local bank loans and the banks released millions of the coins held as collateral into circulation. There they did indeed circulate without confusing the public, despite their “different” design, as evidenced by the dozens of well-worn pieces we buy over the counter here in Chicago every year.

I would love to see the U.S. Mint release a nationally significant commemorative half dollar into circulation every year at face value for the tremendous publicity it would bring to collecting, but the nay-sayers in Congress would never be so bold (unless, perhaps, it was one of their aunts or sisters!)

My next choice would be the Battle of Gettysburg 75th Anniversary half dollar of 1938, even if it did bear the confusing authorization date of 1936 as well. The teaching of unrevised history being a dying art, few people today under the age of 35 realize that, as some believe, this was the single most important battle fought in the Western hemisphere.

The battle of Lexington-Concord in 1775 was psychologically important to the American independence movement, but America would have won its independence eventually even if that battle had never been fought. A bold advance by Union General McClellan before or after the battle of Antietam might have shortened the Civil War by several years, but as it was fought the battle accomplished little more than the slaughter of tens of thousands.

The Battle of Gettysburg teetered on a sword point. Had Confederate forces moved to seize Little Round Top at the southern end of the Union line but a few hours earlier, they would not have found it freshly occupied by northern troops and their flanking move might have rolled the bluecoats off of Cemetery ridge, out of Gettysburg and back towards Washington D.C. in a rout. The South might have forced a treaty of peace, and America as we know it today would never have existed.

My third choice would be the 1925 half dollar honoring the 150th anniversary, or sesquicentennial, of the Battle of Lexington and Concord, because that event did indeed give the cause of American independence a powerful shot heard ’round the world. Revolt had been building since the Boston Massacre of 1770, and the battle opened the Revolutionary War that many Americans naively assume began on July 4, 1776. Oddly enough, the Revolutionary War itself has never been the subject of an American commemorative coin, although the 1777 Battle of Bennington, Vermont, was.

My joint fourth choice would be the 1926 half dollar and $2-1/2 gold piece honoring the sesquicentennial of the Declaration of Independence, for the obvious historical significance of that document approved on July 2, 1776, and publicly signed two days later. The commemorative quarter, half dollar and dollar of 1976 repeat the observance of this event, but again I choose to list only the first coinage for it. It is unfortunate that neither the 1926 nor the 1976 designs come anywhere near the power of the Lexington-Concord design, but that’s the way the plaster model crumbles.

My fifth and sixth choices would be the 1932 commemorative quarter dollar marking George Washington’s 200th birthday and the 1982 half dollar for the 250th anniversary of the same. Though Washington had appeared with General Lafayette on the Lafayette dollar of 1900 and with President Calvin Coolidge on the Sesquicentennial half dollar of 1926, the 1932 quarter put history in our pockets when it became the first commemorative coin intentionally issued for circulation.

As the impact of this commemoration was considerably diminished when the design was adopted as the regular issue in 1934, so much so that most people no longer recognize the 1932 issue as a commemorative coin, the well-designed 1982 commemorative must serve as our primary recognition of the “Father of our Country.” It also served to launch the modern era of commemoratives, for which we must forgive it as an innocent bystander.

At this point the selection process begins to blur a bit. The 1937 half dollar for the 350th anniversary of the 1587 Roanoke colony, which failed, is arguably more significant than the 1920 half dollar for the 300th anniversary of the Johnny-come-lately Pilgrims. However, it was the New Englanders who survived and went on to write the history books long taught in out schools, which implied that American history began in 1620, and so most Americans are unaware of the Roanoke story. Never mind the successful 1607 Jamestown colony, unrecognized on the coin of our realm, or the flourishing Spanish civilization in Florida and the West.

From a historical point of view, the 1987 Constitution half dollar, dollar and $5 gold piece are probably of greater national significance than any other remaining commemorative, and so I would choose the trio as number seven on my list. However, I see the Bill of Rights as an addition to the Constitution, and so I am reluctant to add the 1993 Bill of Rights coins on their own merit.

Another “battle coin” issue worthy of inclusion as number eight on my list would be the 1991-1995 dated World War II commemorative set issued in 1993. The global significance of the War, and the implications if the Allies had lost it, mandate its inclusion on this or any other list.

I only regret that the commemoration was limited to one each half dollar, dollar and $5 gold piece, and did not include at least one coin for each year’s main events from 1941 to 1945 just as the U.S. Postal Service has issued souvenir sheets for the same. Apparently our government felt that we the American people were not mature enough to experience the emotional impact of a Pearl Harbor commemorative, or that the Japanese people could not handle the memories a Hiroshima and/or a V-J issue would evoke.

In 1995, President Clinton ordered the USPS to remove a picture of the Hiroshima blast from the 1995 WW2 commemorative sheet, solely because it would offend the Japanese people. As the baby boom son of a M.P. scheduled for beachhead duty in the invasion of mainland Japan in September of 1945, where the casualty rate was expected to be 90% or greater, I naturally have a personal feeling that the Hiroshima bomb was significant for the lives that it saved by ending the war when it did. As things stand, however, our coins and our stamps completely ignore V-J Day and the stamps merely note that the “War in the Pacific” ended in 1945.

My ninth choice would be the 1986 Statue of Liberty set, issued upon the centennial of its dedication, for its inspiring renditions of this beloved national symbol. No one who has ever stood at the feet of this colossus of New York, or climbed that damnable double-helix staircase inside the statue, can ever forget the feeling of awe and sore legs that it inspires. The sale of these commemoratives helped to finance the restoration of the statue, a perfect example of the correct use of commemorative generated funds.

My tenth and final choices are the 1915 Panama-Pacific $50 round and octagonal slugs, not because they are nationally significant, which they are not, but just because they are so exquisitely beautiful. They serve as a reminder of what we as a people can produce if challenged to produce art and not politically correct lapel buttons. Ten thousand years from now, a historian (or an archaeologist?) might look upon one of these coins and say “Now that was a great people!”, and be right.

First, there was the problem of matching up desires. What if the person with the wheat was only interested in swapping it for hand axes? It could be a long time before the first man found an axe-rich individual in desperate need of a goat. In the meantime, he might starve.

Second, what if the wheat man did want a goat, but not until his daughter’s wedding in three months’ time? Had they been able to read and write, the protagonists could have drawn up a contract, but at this stage there were no literate societies. Even if there had been, a system relying on written records of who owed what to whom would have become hopelessly unwieldy once there was a reasonable amount of trade going on.

As it was, the parties to the deal would have had to rely on memory. This was open to abuse (“What are you talking about? I never said I’d give you a whole goat!”) and still more liable to become overtaxed (“If Ug owes Stig seven axes, Stig owes Rok four clubs and Rok owes Ug two goats, how many bear hides does Stig owe Yed?”). And there was always the risk that the poor old goat might turn up its toes before the wedding day.

One day, an anonymous Neolithic farmer came up with an ingenious solution. Why not settle on something that everyone agreed was worth having? This could then be used to buy goats, axes, clubs and all the rest of it. The dollar bill signs flashed in the proto-economist’s mind. Eventually his big idea would become known as “money”.

After a period of trial and error, it became apparent that candidates for this exciting new function had to have certain characteristics. They needed to be:

> Scarce – Ordinary pebbles would be useless as a form of money, at least in most places. They are just too easy to obtain. It wouldn’t seem right to trade the goat you had lovingly reared for years for a handful of stones that the buyer could simply pick off the ground.

> Difficult to fake – This is related to the scarcity imperative. A monetary system which is based on pieces of paper with simple crosses drawn on to them would be doomed to failure. If people could literally make money with the minimum of effort, the temptation would be very difficult to resist. The result would be galloping inflation and a total loss of confidence in the currency.

> Portable – You can certainly trade items like houses and mountains, but taking them to the local market is not really practical. OK, the Yap islanders did have stone “coins” that weighed several tons, but they also had little ones for everyday transactions.

> Durable – A commodity such as salt might seem a potential goer as a currency, but you would be rapidly disabused of this idea if you left your supply out in the rain.

> Easily divisible – Imagine a society where the only form of money was the $100 bill. Although this wouldn’t be a problem with relatively large transactions, it would be a mighty headache if you just wanted a box of matches. To work efficiently, units of currency need to be divisible into smaller units. For this reason, live goats are not a viable option.

> Desirable – Nowadays, we are all delighted to receive pieces of paper adorned with the right symbols, but this is only because of the symbolic value they have acquired through long and complex chainsof events. An early farmer would have been distinctly underwhelmed to be handed a wad of ?50 notes. To part with his goods, he would have needed to be given items directly exciting in themselves. Shiny, pretty or inherently useful things would have come to mind.

With these criteria in mind, or perhaps more likely operating unconsciously, our ancestors developed the first primitive forms of money. Cowrie shells were a popular early choice, as were precious or semi-precious stones and metals. The latter became increasingly important in the payment of tribute, which the empires that were now beginning to form started to extract from their subject territories. Such forms of what can loosely be described as cash are technically known as “commodity money”.

Primitive Banks

At this stage there were no coins. Instead, the value of metal was judged by its weight. The legacy of this can be seen in words such as the English ” spend”, which is derived from the Latin verb expendere, meaning “to weigh”.

Before coins (and later, bank-notes) could come into existence, the institution of banking had to be invented. This order of events may seem surprising, but if you think about it, notes and coins need pre-existing bureaucratic structures to give them their validity. One of their crucial features until relatively recently was the “promise to pay the bearer” clause. The holder had to have confidence that there were institutions that would exchange these symbolic forms of money for the commodity that underpinned them (often gold), or at least that they would do so in theory.

The first banking institutions were royal palaces, temples and state warehouses in Mesopotamia and Egypt. Because they were well guarded, these places were considered ideal for the storage of grain and other commodities. Those making deposits would be issued with receipts, which could then be used to conduct transactions with other parties. Written onclay tablets or papyrus, they can be regarded as the forerunners of today’s transferable cheques and banknotes. As the practice of using such receipts to make purchases caught on, private banking houses began to appear. They are mentioned (and regulated) in the Babylonian Code of Hammurabi (c1760BC).

Early Coins

The scene was almost set for the invention of coins. In the meantime, the Chinese came up with a couple of interesting intermediate stages between commodity money and true coinage. In about 1000BC, after at least two centuries of conducting transactions with the genuine articles, they started using bronze and copper models of cowrie shells. Then, around the eighth century BC, “spade” and “knife” monies came into vogue. These were miniaturised versions of agricultural implements that were too small to be of practical use, but gave nods to items that were. They came in standardised weights and tended to be marked by the issuing authority.

The world’s first true coins are widely believed to have been minted in Lydia in Asia Minor around 640BC. They were made of an alloy of gold and silver called electrum and were probably made in order to guarantee the purity of the constituent metal.

The design – a roaring lion’s head symbolising the ruling Mermnad dynasty – was stamped on one side only. This was a result of the primitive method of manufacture. Blank pieces of electrum were placed over dies and blows were struck against their reverses. At first such “hammer marks” were plain, but when the practice of minting coins spread to other parts of the Greek-speaking world, they began to incorporate the badges of the issuing cities. In time, the Persians and other ancient peoples started to produce coins of their own.

The Rise of Paper Money

The next phase in the evolution of currency was the invention of paper money. The first banknotes were issued in China during the reign of Emperor HienTsung (AD806-821), but not as a result of any great financial insight. The sole reason for their introduction was an acute copper shortage that precluded the striking of new coins. Eventually, China got carried away with the ease of producing this new form of cash. Too much of it was printed and this led to inflation. In 1455, the Chinese abandoned the use of paper money and did not return to it for several centuries.

The Chinese experience was repeated when Sweden became the first European nation to experiment with paper money. In 1661, a banker named Johan Palmstruch began to issue credit notes that could be exchanged at his Stockholm bank for stated numbers of silver coins. Unfortunately for Palmstruch, who had consulted the Swedish government before launching the scheme, he got carried away with his licence to print money. He issued more notes than his bank had silver deposits to redeem, and in 1668 was prosecuted for fraud. He was initially sentenced to death, but the penalty was later commuted to imprisonment.

Despite the less than glorious outcomes to these early trials of paper money, the tide of history was firmly on the side of the new form of currency. As economic activity increased in Europe, it became apparent that the money supply needed to be expanded beyond the limits imposed by holdings of precious metals.

This recognition led to the establishment of the first national central banks. People were much more likely to trust notes backed by government reserves than those issued by private institutions. They even proved willing to accept temporary governmental bans on the redemption of banknotes for silver, as happened in Britain during the “Restriction Period” of 1797 to 1821.

The Gold Standard

Entrusting the issue of banknotes to one central authority effectively removed the danger of bankruptcy, but it did raise the spectre of inflation. This would happen if a central bank printed too much money. (To understand this, imagine you were an egg seller and everyone suddenly had twice as much cash; you would feel foolish, not to say cheated, if you continued to sell your eggs at the old price.) It was the risk of inflation, among other factors, that propelled governments into joining the Gold Standard, a measure that harked back to the days when all money really was made of precious metal.

The Gold Standard was a mechanism that fixed the values of the coins and banknotes of participating nations in terms of specified quantities of gold.

The Standard operated both domestically and internationally. On the domestic front, it forestalled inflation by ensuring that the money supply remained relatively constant. In the international sphere, it had the effect of fixing exchange rates between the nations involved. If the US set the price of gold at $20.67 per ounce, for example (as it did from 1834 until 1933), and the UK set it at three pounds 17 shillings and 10.5 pence, as it did from 1844 until 1931 (apart from a period after the First World War), an exchange rate of $4.867 dollars to the pound necessarily followed.

The benefits of fixed exchange rates included stability and a balancing of prices between subscribing nations. If the UK made a technological breakthrough that increased economic output, its prices would fall. Assuming US prices stayed the same, this would make UK products more attractive from an American perspective, and American products less attractive to the UK. The upshot would be that gold – that is, the stuff in which payments were made – would flow out of the US and into Britain.

As the money supply/amount of gold in Britain had now increased, its prices would rise. At the same time, US prices would fall in line with the nation’s own money supply. Hey presto, everyone ended up more or less where they had been in the first place and price stability was restored.

The Gold Standard worked very well so long as everyone played nicely. In the US, for example, inflation between 1880 and 1914 averaged a mere 0.1 per cent per year. The trouble was that many nations were inclined to cheat, particularly when the going got tough. When the First World War broke out in 1914, the countries involved threw their rule books out of the window. They started printing money to finance their war efforts and the Gold Standard broke down. It was reinstated in modified form in 1925, but collapsed again due to instability caused by the Great Depression.

In 1931, Britain left the Gold Standard as a result of massive outflows of gold from the nation’s coffers. The successor to the Gold Standard was the Bretton Woods system, named after the New Hampshire resort where the Second World War Allies thrashed out the details in 1944. Once again, exchange rates were fixed (within a margin of 1 per cent), but the key feature was that all participating nations apart from the US were allowed to settle their debts in US dollars. The US promised to redeem the dollar holdings of other countries for gold at a fixed rate of $35 per ounce.

Unfortunately, this offer was taken up to the extent that the US started running out of gold, which placed the entire system in jeopardy. In 1971, President Nixon announced that the US would no longer be paying out gold for dollars. For the Gold Standard, this was the final nail in the coffin.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with gold-backed currency replaced by what is called ” fiat money”. This is money that has no intrinsic value and obtains its worth entirely on the basis of governmental decree. (“This piece of paper can be used to pay debts because we say it can.”) The use of fiat money obviously places a greater responsibility on governments than they had in the days when currency had to be backed by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and the Mainwarings and Wilsons who ran the institutions long catered principally to the professional classes, discussing their affairs over a glass of Amontillado in the manager’s office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century the possession of a current account denoted respectability. The manual working classes relied on a little brown envelope of notes and coins at the end of the week, and remained “unbanked” until well into the 1970s. If they wanted to send money away they relied on the postal order, now almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running across the landscape) and students were being offered railcards and book tokens (another quaint form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the option of “pictorial” cheque-books, featuring images of badgers and bunny rabbits. Cheque use peaked in 1990, with 2.7 billion passing through the system; it’s about one-third of that level now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and cheques fell behind them in 1998. The advent of “chip and PIN” greatly reduced the scope for fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring ?3,848 in “cashback” and making purchases worth ?4,799.

However, British consumers were not to be constrained by such trivial considerations as how much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct but long-running rival Access in 1972) was the start of “plastic” – the discovery that a small rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life. Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took advantage of the initial free offers and then transferred the balance to the next free offer when the interest became due were known as “rate tarts”.

Our “flexible friend” (as the Access card marketing line went) had a nasty habit of landing us in economic trouble; now that he’s been allowed to make the acquaintance of the “sub prime” community in the United States and Britain, the extent of the credit card’s true perniciousness is becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of today is far more likely to have plastic than a building society book.

E-money: the future of cash

We may not be that far away from a world where cash follows the chequebook into oblivion and few transactions are conducted face to face. There are in excess of 20 billion payments of less than ?10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is the “card not present” phenomenon, where you have sufficient faith in the online retailer – nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your payment card details on to a web page. You and the “shopkeeper” never actually meet, and you never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic card – to being a purely virtual commodity (though of course banks themselves have long held your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web. Perhaps the most high-profile of these is PayPal, as featured, and trusted, on eBay. Barclays Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765; PayPal dates back only to 2000, yet it now operates in 103 markets, manages more than 133 million accounts and allows customers to send, receive and hold funds in currencies from the US dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards and their replacement by one single means of payment which you just wave, possibly nonchalantly, at the shop assistant. This is what the “contactless” card promises, so called because you don’t even have to put it into a reader to buy something.

The Barclaycard OnePulse card, for example, was launched only a month ago, with 4,000 guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for London’s existing “cashless” method of prepaying for bus and Tube journeys), a Barclaycard, and a “One Touch ” contactless technology card.

This is the novel bit. It allows cardholders to make purchases of ?10 or under more quickly and conveniently with a single touch of their card against a reader instead of entering a PIN or signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every move and tiniest purchase will then be tracked by your bank and, if legislation allows, officialdom. Thus can “they” know about your purchase of The Independent, a flapjack and day trip to Tate Modern. Very subversive.

Alternatively, the SIM card in your mobile phone could be used to pay for the little thingsin life (they’re trying this out in South Korea). Either way, you will be being monitored. Money is what money does, according to the old adage. And in the future, your money may even spy on you.

The first six sections of this article are from Minted: the story of the world’s money by Johnny Acton, published by Think Books on 31 October. To order a copy (free P&P), call Independent Books Direct on 0870 079 8897 or visit www.independentbooksdirect.co.uk

Currency affairs: the history of cash

Sterling

The first mention of sterling is in 1078 as “sterilensis”, and by the 13th century the term was in common usage. England had a uniform national currency 600 years before France, and 900 years before either Germany or Italy.

The pound was established in 1560 by Elizabeth I and its value was one Troy pound (373.2417216 grams) of sterling silver.

Until decimalisation in 1971, a pound was made up of 20 shillings – each shilling worth 12 pence. After decimalisation, the system was simplified, so that 100 “new pence” made up a pound.

Today, pound sterling is only used in the United Kingdom of Great Britain, Northern Ireland, the Isle of Man, the states of Jersey and the states of Guernsey. It is the world’s oldest currency still in use.

Euro

The idea of a single European currency was first mooted in 1957 in the Treaty of Rome, to increase economic prosperity and promote links between the people of Europe.

Twelve years later, a European summit at The Hague made a single currency an official objective, but it wasn’t until 1999 that the euro was introduced to an ambivalent world. Initially, it was used in a “non-physical” form – by banks and for traveller’s cheques. In 2002, coins and notes entered circulation.

More than 320 million Europeans, from 13 nations, now use the euro as their sole currency, making it the currency with the highest combined value of cash in circulation in the world.

According to the European Commission, the euro symbol is a combination of the Greek epsilon, an E for Europe and parallel lines to signify the stability of the currency.

Dollar

The dollar was adopted by the Congress of the Confederation of the United States on 6 July 1785. Prior to that, official British coinage was used, although it was frequently in short supply, resulting in an array of currency substitutes including foreign coins such as Spanish pesos or dollars and certificates for tobacco.

The use of foreign coins was supposed to be prohibited after the US dollar came into circulation, but a shortage of gold and silver meant that Spanish dollars remained legal tender until 1857.

The dollar is made up of 100 cents or 10 dimes, although “dime” is used only to describe a 10-cent coin. Although one-dollar coins are still minted, notes are significantly more common and are dubbed “bucks” or ” greenbacks”. And although the US declared independence from Britain in 1776, Americans still refer to their one-cent coin as a penny.

The dollar is used as the standard unit of currency for commodities such as gold and petroleum. The United States, the British Virgin Islands, East Timor and El Salvador are among the many countries that use the dollar as their sole currency.