[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
                    COIN AND CURRENCY ISSUES FACING
                  CONGRESS: CAN WE STILL AFFORD MONEY?

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                       DOMESTIC AND INTERNATIONAL
                 MONETARY POLICY, TRADE, AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 19, 2006

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 109-109




                    U.S. GOVERNMENT PRINTING OFFICE
31-538                      WASHINGTON : 2007
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana          PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio                  MAXINE WATERS, California
SPENCER BACHUS, Alabama              CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware          LUIS V. GUTIERREZ, Illinois
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma             MELVIN L. WATT, North Carolina
ROBERT W. NEY, Ohio                  GARY L. ACKERMAN, New York
SUE W. KELLY, New York, Vice Chair   DARLENE HOOLEY, Oregon
RON PAUL, Texas                      JULIA CARSON, Indiana
PAUL E. GILLMOR, Ohio                BRAD SHERMAN, California
JIM RYUN, Kansas                     GREGORY W. MEEKS, New York
STEVEN C. LaTOURETTE, Ohio           BARBARA LEE, California
DONALD A. MANZULLO, Illinois         DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North          MICHAEL E. CAPUANO, Massachusetts
    Carolina                         HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois               RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut       JOSEPH CROWLEY, New York
VITO FOSSELLA, New York              WM. LACY CLAY, Missouri
GARY G. MILLER, California           STEVE ISRAEL, New York
PATRICK J. TIBERI, Ohio              CAROLYN McCARTHY, New York
MARK R. KENNEDY, Minnesota           JOE BACA, California
TOM FEENEY, Florida                  JIM MATHESON, Utah
JEB HENSARLING, Texas                STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey            BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida           DAVID SCOTT, Georgia
J. GRESHAM BARRETT, South Carolina   ARTUR DAVIS, Alabama
KATHERINE HARRIS, Florida            AL GREEN, Texas
RICK RENZI, Arizona                  EMANUEL CLEAVER, Missouri
JIM GERLACH, Pennsylvania            MELISSA L. BEAN, Illinois
STEVAN PEARCE, New Mexico            DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas              GWEN MOORE, Wisconsin,
TOM PRICE, Georgia                    
MICHAEL G. FITZPATRICK,              BERNARD SANDERS, Vermont
    Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
CAMPBELL, JOHN, California

                 Robert U. Foster, III, Staff Director
Subcommittee on Domestic and International Monetary Policy, Trade, and 
                               Technology

                       DEBORAH PRYCE, Ohio, Chair

JUDY BIGGERT, Illinois, Vice Chair   CAROLYN B. MALONEY, New York
JAMES A. LEACH, Iowa                 BERNARD SANDERS, Vermont
MICHAEL N. CASTLE, Delaware          MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma             MAXINE WATERS, California
RON PAUL, Texas                      BARBARA LEE, California
STEVEN C. LaTOURETTE, Ohio           PAUL E. KANJORSKI, Pennsylvania
DONALD A. MANZULLO, Illinois         BRAD SHERMAN, California
MARK R. KENNEDY, Minnesota           LUIS V. GUTIERREZ, Illinois
KATHERINE HARRIS, Florida            MELISSA L. BEAN, Illinois
JIM GERLACH, Pennsylvania            DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas              GWEN MOORE, Wisconsin
TOM PRICE, Georgia                   JOSEPH CROWLEY, New York
PATRICK T. McHENRY, North Carolina   BARNEY FRANK, Massachusetts
MICHAEL G. OXLEY, Ohio


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    July 19, 2006................................................     1
Appendix:
    July 19, 2006................................................    47

                               WITNESSES
                        Wednesday, July 19, 2006

Bowers, Q. David, Numismatic Director, American Numismatic 
  Rarities, LLC..................................................    31
Cipoletti, Christopher, Executive Director, American Numismatic 
  Association....................................................    35
Deisher, Beth, Editor, Coin World Magazine.......................    33
Felix, Larry R., Director, Bureau of Engraving and Printing, U.S. 
  Department of the Treasury.....................................     8
Glass, Brent D., Director, National Museum of American History, 
  Smithsonian Institution........................................    13
Johnson, Scott, Deputy Special Agent in Charge, Criminal 
  Investigative Division, U.S. Secret Service....................    10
Lebryk, David A., Acting Director, U.S. Mint.....................     6
Roseman, Louise L., Director, Division of Reserve Bank Operations 
  and Payment Systems, Board of Governors of the Federal Reserve 
  System.........................................................    11
Weinberg, Fred, Vice Chairman, Industry Council for Tangible 
  Assets.........................................................    37

                                APPENDIX

Prepared statements:
    Bowers, Q. David.............................................    48
    Cipoletti, Christopher.......................................    52
    Deisher, Beth................................................    56
    Felix, Larry R...............................................    72
    Glass, Brent D...............................................    78
    Johnson, Scott...............................................    80
    Lebryk, David A..............................................    86
    Roseman, Louise L............................................   100
    Weinberg, Fred...............................................   109

              Additional Material Submitted for the Record

Hon. Frank D. Lucas:
    Statement of Harvey G. Stack.................................   113
Hon. Carolyn B. Maloney:
    Letter to Hon. Deborah Pryce and Hon. Carolyn Maloney from 
      David Ganz, Ganz & Hollinger...............................   120
Hon. Deborah Pryce:
    Responses to Questions Submitted to Louise L. Roseman........   128
    Responses to Questions Submitted to David A. Lebryk..........   130
Hon. Michael Castle:
    Responses to Questions Submitted to David A. Lebryk..........   132
Hon. Frank D. Lucas:
    Responses to Questions Submitted to David A. Lebryk..........   137
Hon. Carolyn B. Maloney:
    Responses to Questions Submitted to David A. Lebryk..........   138


                    COIN AND CURRENCY ISSUES FACING
                  CONGRESS: CAN WE STILL AFFORD MONEY?

                              ----------                              


                        Wednesday, July 19, 2006

             U.S. House of Representatives,
                       Subcommittee on Domestic and
                     International Monetary Policy,
                             Trade, and Technology,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 2:05 p.m., in 
room 2128, Rayburn House Office Building, Hon. Deborah Pryce 
[chairwoman of the subcommittee] presiding.
    Present: Representatives Pryce, Lucas, Neugebauer, Maloney, 
Sherman, and Kelly.
    Chairwoman Pryce. Good afternoon. I am very pleased to 
welcome all of your here today to this hearing on coin and 
currency issues. I want to thank Representatives Lucas and 
Castle for their support of this hearing and leadership on the 
issue, and as always, my friend, Mrs. Maloney, the co-chair of 
this subcommittee--the ranking member of this subcommittee, and 
we act like co-chairs.
    The collection of coins in our country can be a charitable 
act and an education piece all at once. Legislation like my own 
commemorative coin to honor the passage of the Civil Rights Act 
of 1964 or Chairwoman Kelly's coin commemorating the sacrifices 
disabled veterans have made for our country can be used in 
remembrance, and in passing on the history of our country from 
generation to generation.
    Additionally, we have seen an overwhelming use and 
appreciation for the States quarters program. The Mint and 
Federal Reserve have done a good job of getting word out about 
the quarters, and I hope they will do the same with the newly-
enacted Presidential $1 coin.
    Unfortunately, with all the successes we have seen with 
these programs, we are continuing to learn that our coins are 
costing more to make than they are worth. While our Mint works 
to produce new, less-costly coins, our Bureau of Engraving and 
Printing has put its concentration on protecting our paper 
currency from counterfeiting.
    We welcome the new director of the BEP, Mr. Felix, here 
today, and look forward to hearing from him and the other 
witnesses on steps our Government, and the governments of other 
countries, are taking to address similar problems with the cost 
of coins and counterfeiting.
    Finally, this hearing will also serve in part as a 
legislative hearing on Representative Lucas's bill, H.R. 5077, 
the Numismatic Rarities Certainty Coin Act of 2006.
    We would like to thank our witnesses for being here today 
and look forward to hearing your testimony.
    Ms. Maloney?
    Mrs. Maloney. I would like very much to thank Chairwoman 
Deborah Pryce, and I welcome the witnesses to this hearing, 
which serves as the regular oversight hearing that this 
subcommittee holds each year to examine the operations of the 
Mint and the Bureau of Engraving and Printing. It is also an 
opportunity to address issues relating to coins and currency, 
and recently passed or pending legislation in those areas.
    Today we have several such issues: the implementation of 
the Presidential Dollar Coin Act, a bill on which I was the 
lead Democrat with Congressman Castle; the rising cost of 
manufacturing the penny and the nickel; a bill introduced by 
Mr. Lucas to resolve ownership of mint rarities; and a bill 
introduced by Mr. Colby to eliminate both the penny and the 
dollar bill.
    The Presidential dollar coin bill that Mr. Castle and I 
initiated was bipartisan legislation intending to be a win/win 
for the taxpayers and the economy. The House passed this bill 
by an overwhelming bipartisan majority, and the Senate did the 
same with the same version.
    The Presidential dollar coin will begin in January of 2007 
with the issuance of the George Washington dollar, and continue 
at the rate of four Presidents a year, until all Presidents who 
have completed their term in office have been honored, 
including President Bush, and at least one successor.
    Through discussions with Representative Pomeroy, Indian 
tribal chiefs, and women's groups, the provisions of the bill 
relating to the Sacagawea dollar coin were clarified and 
strengthened to make clear that Sacagawea will continue to be 
honored on the dollar throughout the program and after the 
program is complete.
    This law was modeled on, and builds on, the remarkably 
successful program of our 50 State quarter bill. Like the State 
quarters, the Presidential dollar coin is expected to revive 
interest in the dollar coin, educate the public about our 
presidents, and make money for the taxpayers.
    After 5 years, at the halfway point, the 50 State quarter 
point had made $4 billion, primarily from collectors--including 
my two daughters--taking the coins out of circulation so that 
the Federal Reserve then buys more from the Mint.
    We have similar expectations for the effect of the 
individuals collecting the Presidential dollar coins. In 
addition, we expect this bill will revive interest in and 
encourage use of the dollar coin. To some extent, however, this 
depends on the Mint and the Federal Reserve taking a strong 
advocacy position in the implementation of this program. And I 
will be asking those witnesses today what they are going to do 
in this regard.
    On the Lucas bill, I see no reason to reward collectors who 
happen to have acquired coins illegally taken from the Mint. If 
we want to resolve these ownership issues through legislation, 
which I am not sure is a good idea when the courts are 
perfectly well suited for this task, we need to do a much more 
careful job of it. I would also like to ask for permission to 
put into the record the comments of David Ganz, a coin expert 
who has substantial, detailed information on this bill.
    While I understand Mr. Colby's desire to find new ways to 
reduce Government waste and make our currency more profitable, 
I cannot support eliminating the penny at this time. First, I 
am not persuaded that we would save money. Although the penny 
does cost more than what it costs to make the penny, the nickel 
also costs more than a nickel to make. According to the Mint, 
the penny costs 1.4 cents and the nickel 6.4 cents. In other 
words, we lose more per unit on the nickel than on the penny. 
While we are not making more nickels than pennies, if we drop 
the penny, we would need to make more nickels. So it is not 
clear that the Mint would come out ahead financially.
    Also, a study by a former Federal Reserve economist shows 
that rounding hurts lower income people the most. And this 
effect would be especially strong if only cash transactions are 
rounded, since lower income people are most prone to be 
unbanked and to rely more on cash.
    That said, I will be asking the Mint and the Federal 
Reserve for their views on these issues, and I hope to learn 
what they are planning to do to reduce Government spending on 
currency. I look forward to the hearing, and I thank the 
chairwoman for calling this hearing. Thank you.
    Chairwoman Pryce. Thank you.
    Representative Lucas?
    Mr. Lucas. Thank you, Madam Chairwoman. I would like to 
thank you and the ranking member for holding this hearing 
today. It is extremely appropriate that we have this 
opportunity to discuss these issues of numismatic importance.
    And I would like to thank our witnesses for coming today. I 
look forward to a complete and thorough discussion by both 
panels of the numismatic and currency issues of the past and of 
today, and how these issues affect the numismatic as a whole.
    I have filed H.R. 5077, the Numismatic Rarities Certainty 
Act, as an effort on my part to address some of our 
uncertainties in present law and perhaps an opportunity to 
enhance the numismatic experience for everyone, and clearly 
provide some guidance to the United States Government on how to 
handle some very important issues.
    The bill sets a date, December 31, 1932, before which any 
coin manufactured by the Mint but never properly issued will no 
longer be declared Government property. It would be safe for 
coin collectors to buy, to own, and to sell. Coins that were 
manufactured after that date would still be considered 
Government property unless the current possessor could 
demonstrate legal ownership.
    The Mint would be required to preserve any coins that came 
into the Mint's possession under the provisions of the bill, 
not destroy them, as has been the case sometimes in the past. 
If a sufficient amount of a certain coin has been preserved 
under the bill, the excess would be legally sold at Government 
auction to coin collectors, with the proceeds going to the 
Smithsonian for the preservation and display of the national 
coin collection. Once these pieces have been deemed excess and 
sold by the Government at auction, they would then be legally 
ownable forever.
    With my bill, I intend to provide certainty to coin 
collectors who currently have coins that may have originally 
been mysteriously manufactured or released from the U.S. Mint, 
but which have been publicly sold at auction several times 
since then without the Mint ever attempting to confiscate them.
    Additionally, the Mint has gone after, as is famously 
discussed by many, any 1933 Double Eagle that has been found, 
but has ignored other coins, such as the 1913 Liberty head 
nickels. The bill also directs the Secretary of the Treasury to 
conduct an inventory of all coins, medals, or numismatic items 
that are in the possession of the United States Government and 
report back to Congress the inventory before January 31, 2007, 
and every 5 years thereafter.
    Again, I would like to thank our witnesses for agreeing to 
appear today. I look forward to hearing from the Mint about 
their thoughts on my proposed legislation. As for the 
Smithsonian, I would like to thank them for their efforts in 
preserving the national coin collection, the largest numismatic 
collection in the world.
    And I am very curious about what plans the Smithsonian has 
for the national collection if my legislation were to pass and 
a funding stream could be created. It is a tragedy that due to 
limited resources, the collection is not currently in permanent 
display.
    Finally, I look forward to hearing from the numismatic 
experts assembled for the second panel. This should be a 
fascinating hearing.
    Thank you, Madam Chairwoman.
    Chairwoman Pryce. Mrs. Kelly, do you have a statement?
    Mrs. Kelly. Thank you, Madam Chairwoman. I appreciate you 
holding this hearing.
    As a representative of the Nation's newest Mint at West 
Point, I am keenly interested in ensuring that our circulating 
coinage meets today's needs while numismatic products remain 
the most commercially appealing in the world. This committee, 
with your support, passed the Presidential Dollar Coin Act that 
authorized the production of the new $50 gold Buffalo coins at 
West Point. These .999 pure gold coins celebrate the numismatic 
heritage of the famous Buffalo nickel while meeting the world's 
needs for pure gold bullion coins for savings and investment.
    I am also thankful for your comments in support of H.R. 
1951, which would pay homage to our Nation's disabled veterans 
in two very important ways. First, it would mint a coin 
depicting a veteran disabled for life while defending his or 
her country. Second, the proceeds from the sale of the coin 
will go toward helping to plan, design, and construct a 
memorial for disabled veterans here in Washington, D.C.
    This is a long-overdue tribute. There are over three 
million living disabled veterans in the United States, and the 
sacrifices that they have made to protect our freedom can never 
be repaid. They should be remembered and they should be 
honored. And this is a tribute that is a very timely one 
because there are over 16,000 U.S. soldiers who have been 
wounded fighting the current global war on terror.
    Congress approved this national memorial to be built in 
October of 2000 with the passage of Public Law 106-348. The law 
created the American Veterans Disabled for Life Memorial 
Foundation to see to the construction of the memorial. The 
foundation's work is important, but it is not yet complete. 
They have raised quite a bit of money for it, but this will 
help. The coin will help. And when they are finished, they will 
have created a memorial that is long overdue to pay tribute to 
the Nation's veterans who have returned from the battlefield 
bearing the scars of war.
    H.R. 1951 currently has over 180 co-sponsors. I urge all of 
the members who are present here who have not co-sponsored this 
to do so soon so we can allow this legislation to move forward.
    I thank you again, Madam Chairwoman. I look forward to a 
very interesting hearing today, and I look forward to hearing 
from our witnesses. Thank you.
    Chairwoman Pryce. Thank you all.
    I will now introduce our panel and ask that, without 
objection, your written statements will be made a part of the 
record. Each of you will be recognized in the order of 
introduction for a 5-minute summary of your testimony.
    We have with us today David Lebryk, the Deputy Director of 
the United States Mint. He is responsible for the day-to-day 
operations of the world's largest manufacturer of coins, 
medals, and coin products, with operations in San Francisco, 
Denver, Philadelphia, West Point, Fort Knox, and the District 
of Columbia. Welcome.
    And Larry Felix, the Director of the Bureau of Engraving 
and Printing. As Director, Mr. Felix is responsible for the 
overall operations of the Bureau in the production of U.S. 
currency and other Government securities documents. Welcome.
    Also, Scott Johnson, the Deputy Special Agent in Charge, 
Criminal Investigative Division, U.S. Secret Service. His areas 
of responsibility include supervision of all domestic and 
foreign Secret Service criminal investigations, as well as 
liaison with other Government agencies and local law 
enforcement with the Secret Service. Thank you.
    And Louise Roseman, the Director of the Division of Reserve 
Bank Operations and Payment Systems, Board of Governors of the 
Federal Reserve System, which oversees the Federal Reserve 
Bank's provision of financial services to depository 
institutions, fiscal agency services to the Treasury, and other 
Government agencies in significant support functions. Welcome.
    And last, but not least, Brent Glass, the Director of the 
National Museum of American History, Smithsonian Institute. 
From 1987 to 2002, he served as the executive director of the 
Pennsylvania Historical and Museum Commission, the largest 
public history program in the Nation. He has served on the U.S. 
National Historical Publications and Records Commission and on 
the council of the American Association for State and Local 
History.
    Welcome to all of you. Once again, you can summarize your 
statements, and you will all be given 5 minutes. And Mr. 
Lebryk, we will begin with you. Thank you all.

    STATEMENT OF DAVID A. LEBRYK, ACTING DIRECTOR, U.S. MINT

    Mr. Lebryk. Chairwoman Pryce, Representative Maloney, and 
members of the subcommittee, the United States Mint welcomes 
this opportunity to report to you today. I am pleased to say 
the United States Mint has never been busier, with 35 new coins 
at some stage of design and production, and manufacturing an 
average of 70 million coins per day. Thank you for keeping us 
busy.
    In the past year, we have launched many popular coin 
programs and coins that you have authorized--five State 
quarters, the final two nickels in the Westward Journey Nickel 
Series, the John Marshall and Benjamin Franklin commemorative 
coins, the sold-out Marine Corps commemorative coins, and the 
American Legacy set.
    Most recently we have introduced the 24-karat American 
Buffalo Gold Proof Coin and Bullion. We are particularly proud 
of this program, executed and introduced to the public in less 
than 6 months from the enactment of the bill. The men and women 
of the United States Mint at West Point have done a fabulous 
job in executing this program, and I brought samples, not to 
keep, but if you would like to take a look at the proof and the 
bullion, you are welcome to take a look at them as we are going 
through our testimony.
    As of this morning, we have sold over 320,000 ounces of 24-
karat gold, generating more than $200 million in revenue. That 
is a remarkable introduction, and remarkably successful in such 
a short period of time, since June 22nd.
    Despite rising base metal prices, the United States Mint 
has increased total revenue and cut costs and made its products 
more accessible to Americans. In Fiscal Year 2005, the United 
States Mint transferred $775 million to the Treasury General 
Fund, an increase of $110 million from the previous year. 
Despite the increased spike in prices, we expect to transfer 
close to $800 million to the Treasury General Fund this year.
    We have done that with a focus on efficiency and cost 
reduction throughout the United States Mint. In the last 2 
years, for example, we have increased our manufacturing 
efficiency by 26 percent and we have cut our General and 
Administrative expenses by 13 percent. In response to lower 
production of circulating coins, we have had staffing levels go 
from a peak of 2,800 FTE's in 2000, to 1,933 FTE's as of this 
morning.
    We have improved by between 21 and 141 days the time it 
takes to introduce our products to market. In the last 6 years, 
we have been among the top agencies in customer service and 
customer satisfaction. The United States Mint has received 12 
clean audits, and we reduced our lost time accidents from 5 in 
the year 2000 to .8 as of this morning. In 2005, our 
Philadelphia facility won an award for safety, the top award 
OSHA gives. And we recently received a White House Closing the 
Circle Award for environmental management.
    Last month we launched the 38th quarter in the 50 State 
Quarters Program. More than 140 million Americans are now 
collecting these coins, and we are now down to the last twelve 
States. There are only 29 months remaining.
    The United States Mint is also energetically implementing 
the Presidential $1 Coin Act of 2005, and we have had to move 
quickly. Within 4 short weeks of the President signing the bill 
in late December of 2005, we presented design concepts for the 
Presidential $1 coins and a 24-karat bullion coin to our 
advisory committees. These coins and productions have proceeded 
on schedule.
    On June 22nd, a month ago, as I mentioned, we issued and 
minted the Nation's first 24-karat American Buffalo Gold Coin. 
The research and development work is completed, and the 
manufacturing processes and equipment for edge lettering are 
being finalized. The anti-tarnishing process for the new coins 
is also finalized.
    Together with the Federal Reserve, we hosted a well-
attended and well-received dollar coin users group forum on 
June 8th to discuss, among other things, how to maximize 
circulation and the acceptance of the Presidential dollar. 
Additional forums and outreach will occur over the course of 
the fall. We are also implementing a demand/acceptance study to 
see if we can gauge what the demand for the new coins will be, 
and this fall we will launch a public awareness and public 
education campaign to make sure that Americans are aware of the 
new coin.
    We expect to successfully introduce the George Washington 
$1 coin on or about President's Day of February 19, 2007, to 
honor our Nation's Presidents. We thank the sponsors and the 
Congress for the opportunity to implement this legislation. We 
look forward to, and are committed to, a successful program.
    I now turn to H.R. 5077, the ``Numismatic Rarities 
Certainty Act of 2006.'' The most significant provision of this 
bill would similarly terminate the public ownership of any 
coin, medal, or numismatic item made prior to 1933 if such item 
is not then in the possession of the Government.
    The production and security of America's money and property 
are essential to the Treasury Department's mission. We 
recognize the concerns of the numismatic community, but they 
are not unique.
    While the United States Mint appreciates the efforts of 
Congressman Lucas to lend certainty to numismatic rarities, we 
are particularly concerned that this bill could transfer title 
to rare antiquities and other ``national treasures'' currently 
owned by the public, from the Government to the person who 
happens to possess it--regardless of whether he knew it was 
public property, knew it might be illegal to own, or worse, 
played a role in its illegal production or distribution.
    The Department of the Treasury can either support a small 
fraction of the numismatic community--a community, I might add, 
that is a vital stakeholder to the United States Mint--or 
protect the Government's broader national interest in 
protecting public property as trustee of the citizenry. The 
Administration respectfully supports the latter position.
    In conclusion, we are proud of the work of the men and 
women of the United States Mint who strive to be good stewards 
of the taxpayer's money and to fulfill our mission of producing 
coins and protecting the Nation's assets. The question posed by 
today's hearing is, ``Can we still afford money?'' We at the 
United States Mint are determined to prove that the answer is 
``yes'' to that question.
    I thank you and welcome the opportunity for questions.
    [The prepared statement of Mr. Lebryk can be found on page 
86 of the appendix.]
    Chairwoman Pryce. Well, thank you for being with us today. 
And I am sorry if some of us were just a bit distracted while 
we looked at that beautiful coin that you sent up here. It is 
very, very lovely.
    Larry Felix will be next. Mr. Felix. Welcome.

STATEMENT OF LARRY R. FELIX, DIRECTOR, BUREAU OF ENGRAVING AND 
           PRINTING, U.S. DEPARTMENT OF THE TREASURY

    Mr. Felix. Thank you, Chairwoman Pryce, Congresswoman 
Maloney, and members of the subcommittee. Thank you for holding 
this hearing and inviting me to testify. I appreciate the 
opportunity to report on the initiatives of the Bureau of 
Engraving and Printing.
    The BEP is the security printer of the United States. While 
our primary product is Federal Reserve notes, we also produce 
other security documents on behalf of Federal agencies. The BEP 
uses state-of-the-art equipment in combination with exceptional 
technical competence of the workforce, to efficiently produce 
billions of Federal Reserve notes each year.
    The goal of staying ahead of technological threats to our 
currency rather than simply responding to existing threats 
requires the Government to plan ahead and regularly develop new 
designs for currency. This means that the new currency must be 
in development several years before the counterfeiting threat 
is projected to materialize.
    In the mid-1990's, the Bureau introduced the first redesign 
of U.S. currency in 65 years. The design changes were needed to 
combat the emergence of a new breed of counterfeiters who were 
beginning to employ computers and scanners, color copiers, and 
other emerging technologies to replicate notes. All of the 
notes, all of the denominations, with the exception of the $1 
and $2, were redesigned. This design of currency was effective 
in combating counterfeiting that existed then by making it more 
difficult to produce a high quality counterfeit note.
    Nevertheless, due to the increased availability of 
sophisticated digital equipment, the Advanced Counterfeit 
Deterrence Committee concluded that further actions were needed 
to stay ahead of emerging counterfeit threats. Consequently, 
U.S. currency was further enhanced with the introduction of the 
current design series, commonly referred to as the 2004 series, 
which features background colors and improved security 
features.
    The redesigned $20, $50, and $10 notes were introduced into 
circulation. Recently, the Treasury Department, the BEP, and 
the Federal Reserve announced that the $5 note is expected in 
2008, with the new $100 note to follow. The Government has no 
plans to redesign the $1 and $2 notes.
    The redesigned 2004 notes contain an array of counterfeit 
deterrent security features, some of which are visible and 
easily recognizable to the American public, and some of which 
are machine-readable only. The signature feature of this 
redesigned note is, in fact, an anti-digital counterfeiting 
system that was developed under the auspices of the Central 
Bank Counterfeit Deterrence Group in cooperation with major 
digital printer and software manufacturers.
    The United States' effort on this initiative is led by the 
Federal Reserve. The anti-digital system, which is being used 
in a number of countries, relies on a hidden marker embedded in 
the note design that can be read or detected by new technology 
digital printers and software.
    This new systemic design feature heralds a vibrant and 
growing partnership between the public and private sector to 
protect the Nation's currency, and is intended to thwart 
increasing counterfeiting of currency using digital 
reprographic technology. This is a significant investment in 
the future of currency and will greatly assist in preventing 
counterfeiting as the anti-digital technology becomes much more 
dominant in the marketplace.
    In addition to the security features mentioned above, plans 
for the redesigned $100 note include the addition of new overt 
features intended to deter increasingly sophisticated 
counterfeiting activities directed at the $100 note.
    In cooperation with the Federal Reserve, the BEP 
administers a public education program to support the 
introduction of new currency designs. The goal of this program 
is to build an adequate threshold of awareness to ensure 
seamless transitions as the new currency designs are introduced 
into the public.
    The BEP is progressing with its solicitation to acquire 
public education services over the next 5-year period. Most of 
the duties associated with that contract will entail providing 
educational support for the introduction of the $5 note in the 
spring of 2008, and the redesigned $100 note in Fiscal Year 
2009.
    Public education outreach to support the $100 effort is 
especially vital given that the value of $100 notes comprise 
roughly 72 percent of the estimated $762 billion of outstanding 
United States currency, of which, by the way, an estimated two-
thirds of which are held outside our borders.
    There are a number of initiatives that the BEP is in the 
process of implementing to continue to enhance efficiency and 
effectiveness of the organization, such as the introduction of 
the new 50-subject printing production process, and enhancing 
our employee development to be able to achieve those production 
capabilities.
    While my tenure at the BEP is only a few months old, I am 
eager to push the BEP to securely produce products of the 
highest quality in the most cost-effective manner possible.
    This concludes my opening remarks, Madam Chairwoman, and I 
would be happy to respond to any questions you or the 
subcommittee members may wish to ask.
    Thank you.
    [The prepared statement of Mr. Felix can be found on page 
72 of the appendix.]
    Chairwoman Pryce. Thank you very much, Mr. Felix.
    Mr. Johnson.

  STATEMENT OF SCOTT JOHNSON, DEPUTY SPECIAL AGENT IN CHARGE, 
      CRIMINAL INVESTIGATIVE DIVISION, U.S. SECRET SERVICE

    Mr. Johnson. Good afternoon, Chairwoman Price. I would like 
to thank you as well as the distinguished Ranking Member, Mrs. 
Maloney, and the other members of the subcommittee for 
providing an opportunity to discuss currency issues and the 
trends in counterfeiting, as well as the introduction of new 
Federal Reserve notes.
    The United States Secret Service was established in 1965 to 
protect our financial infrastructure through the investigation 
of counterfeiting U.S. currency. Our mission to protect our 
payment systems and financial infrastructure continues as we 
mark 141 years of service to this country.
    Though our agency was transferred to the Department of 
Homeland Security in 2003, we continue to maintain our historic 
ties in a robust partnership with the Department of the 
Treasury in the safeguarding of our currency and other payment 
systems.
    The Secret Service strongly believes that the economic 
security is a central element of homeland security. Therefore, 
the safeguarding of our financial infrastructure and monetary 
framework continues to be a paramount objective of our 
worldwide investigative efforts.
    We continue to see the expanded international use of the 
U.S. dollar as the world's currency of choice. Of the 
approximately $762 billion of U.S. currency in circulation, as 
much as two-thirds of that amount circulates outside of our 
borders, making the U.S. dollar a truly global currency. In 
addition to the dollarized economies, those nations that have 
adopted the U.S. dollar as their own currency, businesses and 
individual interests worldwide depend upon the integrity and 
the stability of the U.S. dollar.
    Recent trends in the counterfeiting of U.S. currency 
indicate a growing globalization in production and distribution 
of counterfeit notes. Because not all nations report U.S. 
counterfeit currency activity, it is difficult to provide 
precise figures detailing how much counterfeit U.S. currency is 
passed on a global scale each year.
    However, being the U.S. depository for the counterfeit 
currency, the Secret Service received approximately $56 million 
in counterfeit that was passed successfully to the U.S. public 
in Fiscal Year 2005. Approximately $52.6 million in counterfeit 
U.S. currency was seized last year by the United States Secret 
Service and other authorities worldwide. Of this amount, 
approximately $14.7 million was seized in the United States. 
The remaining notes were seized overseas, with over $14.4 
million seized in Colombia alone.
    It is also interesting to see the different methods 
utilized by counterfeiters both within the United States and 
outside of our borders. Currently, more than 44 percent of all 
counterfeit currency passed domestically was printed outside of 
the United States using traditional offset printing techniques, 
predominately offset printing. Virtually every note that was 
produced overseas and passed in the United States was produced 
by offset printing. In contrast, 46 percent of the counterfeit 
currency passed domestically last year was produced within the 
United States by individuals using digital technology such as 
computers, scanners, printers, and multi-function devices.
    Today, Colombia is the second largest source of counterfeit 
U.S. currency in the world, accounting for approximately 14 
percent, or $8 million of the $56 million in counterfeit 
dollars passed in the United States. A trend has emerged that 
indicates counterfeiting activity may increase in Latin America 
as Colombian organized crime and others take advantage of 
counterfeiting opportunities associated with the widespread use 
of the U.S. dollar in Latin America.
    Counterfeit printing plant suppressions and seizures in 
Colombia show that a number of Colombian counterfeiters are 
producing lower denomination counterfeit U.S. currency for 
distribution in fully dollarized countries.
    As a result of our collaborative efforts with the Colombian 
national police, there has been a 56 percent reduction in 
Colombian-produced counterfeit currency passed in the United 
States since 2001. The collaboration with the Colombian 
Government has been a success story, and the Secret Service is 
eager to work with Congress to obtain the authority to continue 
these efforts in Colombia and other troubled regions.
    As new technologies continue to emerge, the challenges 
facing law enforcement are significant as large quantities of 
counterfeit currency and other obligations can be reproduced 
quickly and efficiently.
    Domestically, the Secret Service is attacking counterfeit 
production and circulation from several fronts. First, with our 
partners in the Department of the Treasury and the Federal 
Reserve, we are continuing with the redesign of our currency. 
We have an active role in the research, design, and 
introduction of our new currency, and the Secret Service is 
continually evaluating the methods currently employed by 
counterfeiters and studying the cutting edge anti-
counterfeiting technology to enhance future redesigns of U.S. 
currency.
    The Secret Service is also continuing our public education 
and training efforts both domestically and abroad. Secret 
Service personnel conduct training seminars on topics such as 
financial crimes and computer forensics in an effort to assist 
our domestic and foreign counterparts in their local law 
enforcement communities and augment the Secret Service mission.
    Chairwoman Pryce, this concludes my prepared remarks. I 
would be pleased to answer any questions that you or the 
members of the subcommittee may have.
    [The prepared statement of Mr. Johnson can be found on page 
80 of the appendix.]
    Chairwoman Pryce. Thank you very much, Mr. Johnson.
    Ms. Roseman?

 STATEMENT OF LOUISE L. ROSEMAN, DIRECTOR, DIVISION OF RESERVE 
BANK OPERATIONS AND PAYMENT SYSTEMS, BOARD OF GOVERNORS OF THE 
                     FEDERAL RESERVE SYSTEM

    Ms. Roseman. Thank you. Madam Chairwoman, and members of 
the subcommittee, thank you for inviting me to discuss Federal 
Reserve activities related to currency and coin. My written 
testimony provides an update on the new currency designs and 
currency counterfeiting generally, in addition to some specific 
coin issues. In the time I have before you today, I would like 
to focus my comments on our planning for the Presidential 
dollar coin program.
    The Presidential Dollar Coin Act of 2005 establishes a 
program under which the U.S. Mint will issue four new 
Presidential dollar coin designs and a Sacagawea coin each year 
starting in 2007. In February, Federal Reserve and Mint staff 
began meeting regularly to establish plans for effectively 
distributing the new coins. And last month, as Dave mentioned, 
we hosted the first dollar coin users group forum. We will 
continue to consult with a wide range of coin users to gather 
ideas, advice, and information to gauge demand and anticipate 
circulation obstacles.
    It is unclear at this point whether the Presidential dollar 
coin program will have a substantial effect on the use of 
dollar coins in everyday transactions. The last redesign of the 
dollar coin did not lead to a sustained increase in demand. Net 
payments of dollar coins into circulation did rise sharply in 
2000, but once the public satisfied its initial interest in 
collecting Sacagaweas, demand has returned to historic levels.
    The Sacagawea has not been successful in substantially 
increasing ongoing demand because it appears that some of the 
largest obstacles to dollar coin circulation don't relate to 
the design. Vending machine operators, transit authorities, and 
other organizations that accept payment at automated equipment 
have indicated that dollar coins are less costly than dollar 
notes for them.
    Other sectors of the retail industry, however, have 
indicated that their costs for using dollar coins would be much 
higher than those associated with dollar bills. In addition, 
dollar coins do not have widespread consumer acceptance. 
Consumers seem to prefer to carry dollar bills rather than 
weigh down their pockets with dollar coins.
    A 2002 GAO study concluded that the continuing circulation 
of the dollar bill is the biggest barrier to the widespread use 
of the dollar coin. So should the Government eliminate the 
dollar bill so the public has no choice but to use the dollar 
coin? We believe, at this stage, that market forces, rather 
than Government action, should determine the relative use of 
the dollar bill and dollar coin in our economy, particularly 
given that there is no compelling evidence that societal costs 
will decrease as a result of a shift to a greater use of dollar 
coins.
    The Reserve Banks and the Mint currently hold large 
inventories of dollar coins, enough to meet current demand for 
the next three-and-a-half years. If this new program does not 
spark broad use of dollar coins for everyday transactions, we 
expect Federal Reserve inventories will further increase with 
the issuance of each new Presidential dollar coin design.
    The Presidential Dollar Coin Act requires the Treasury to 
mint and issue Sacagawea coins each year in quantities equal to 
no less than one-third of the total Presidential dollar coins 
issued. Given our already ample inventories, which may increase 
further under this program, the Reserve Banks may not need to 
order more Sacagaweas from the Mint for a number of years.
    If the Presidential dollar coin program does not 
substantially increase demand for dollar coins in everyday 
transactions, the requirement that the Mint must nonetheless 
produce Sacagaweas would result in a cost to the taxpayers 
without any offsetting benefits. In those circumstances, we 
would strongly recommend that Congress reassess this one-third 
requirement.
    We are working with the Mint on how best to address the 
demand for the Presidential dollar coin for ordinary commerce 
as well as from casual collectors, while effectively managing 
Reserve Bank inventories. For example, we are exploring options 
for providing dollar coins to depository institutions in 
increments that are smaller than our current standard of 2,000, 
and are planning to conduct a pilot program in conjunction with 
the Mint to assess the benefits of packaging dollar coins in 
smaller rolls.
    In addition, for about the first month after each new 
Presidential dollar coin design is issued, the Reserve Banks 
will suspend their normal practice of first paying previously 
circulated coins to depository institutions and instead will 
pay out only the new design.
    In conclusion, the Federal Reserve will continue to work 
with the Mint to successfully implement the Presidential dollar 
coin program. More broadly, we will continue our focus on 
meeting the public's demand for currency and coin in an 
effective and efficient manner.
    I appreciate the opportunity to discuss these issues with 
you, and would be happy to answer your questions.
    [The prepared statement of Ms. Roseman can be found on page 
100 of the appendix.]
    Chairwoman Pryce. Thank you very much, Ms. Roseman.
    And Dr. Glass.

   STATEMENT OF BRENT D. GLASS, DIRECTOR, NATIONAL MUSEUM OF 
           AMERICAN HISTORY, SMITHSONIAN INSTITUTION

    Mr. Glass. Thank you. Good afternoon, and thank you, 
Chairwoman Pryce, Ranking Member Maloney, and other members of 
the subcommittee, for inviting me to testify before you here 
today.
    As you know, the legislation offered by Congressman Frank 
Lucas, H.R. 5077, the Numismatic Rarities Certainty Act of 
2006, would require that the proceeds from a Government coin 
auction be deposited in an endowment fund for the National 
Numismatic Collection at the Smithsonian. The purpose of my 
testimony today is to tell you about this collection, and how 
these proceeds would be used if we were to receive them.
    The National Numismatic Collection is one of the largest 
numismatic collections in the world, and is the largest in 
North America. Located in the National Museum of American 
History, the collection includes approximately 1.6 million 
objects, more than 450,000 coins, medals, and decorations, and 
1.1 million pieces of paper in the collection highlight the 
numismatic history of the world.
    Also, the collection contains many great rarities, from the 
earliest coins created 2,700 years ago up to the latest 
innovations in electronic monetary exchange, as well as 
fascinating objects such as beads, wampum, and other 
commodities once used as money.
    The collection's emphasis is the development of money and 
medals in the United States. The core of the United States 
collection came to the Smithsonian during the 1920's from the 
United States Mint, and includes many exceptional rarities. 
Later transfer to the museum from the U.S. Mint included two 
examples of the world's most valuable coin, the 1933 Double 
Eagle.
    It is also important to note at this time that the museum 
is going through a major transformation. We are about to 
undergo a renovation. Beginning in September, the museum will 
close for approximately 2 years. That will allow us to make 
some important architectural changes and to replace critical 
infrastructure in the museum, as well as develop a new gallery 
for the Star Spangled Banner, the flag that inspired our 
National Anthem.
    In August 2004, initial preparations for this renovation 
required us to close the History of Money and Medals 
exhibition, which had been home to a small portion of the coin 
and currency collection for over 40 years. However, this 
closing of the gallery, the coin and currency gallery, actually 
created more opportunities for us to display and to use the 
collection in new ways that we think are more meaningful and 
engaging to our visitors.
    For example, several of the coins that had formerly been in 
the Hall of Money and Medals, as well as some that had not been 
on view for years, are now in a new exhibition called Legendary 
Coins and Currency, which is on display through March 2007 in 
the Smithsonian Castle. This exhibit contains 56 objects, 
including coins, bills, medals, and captivating oddities, while 
a companion Web site allows the museum to reach audiences far 
beyond those who come to Washington, D.C. With the help of 
private funding from the numismatic community, we are 
initiating a new traveling exhibition program beginning this 
August, when a selection of objects under the title Frontier 
Gold will be on view at the American Numismatic Association's 
convention in Denver. Other displays will travel in 2007 to 
numismatic conferences in Orlando, St. Louis, and Baltimore, so 
that more Americans, especially young audiences, can learn 
about these coins and currency and their history.
    To facilitate the traveling exhibitions, as well as other 
plans for the numismatic collection, we would like to establish 
a National Numismatic Collection Endowment to provide a 
dedicated funding source for the preservation, continued 
security, and display of these national treasures. The size of 
this endowment is proposed at $10 million. Importantly, any 
funds directed to the Smithsonian as a result of the 
legislation offered by Mr. Lucas would be made part of this 
endowment, and hopefully would help us reach and even surpass 
this fundraising goal.
    Funding from an endowment would allow us to hire additional 
curatorial and administrative staff to oversee the collection, 
present rotating exhibitions at the museum, and to collaborate 
with others, such as the U.S. Mint and the American Numismatic 
Association, to develop additional exhibitions that could 
travel.
    The funds in the endowment would allow us to pursue 
opportunities to secure new objects for the collection. In 
addition, we would hope to increase outreach to individuals in 
communities outside of Washington, D.C., by enhancing our 
existing Web site with virtual exhibitions and a searchable 
database. Educational outreach and public programs, including 
school curricula, symposiums, guest speakers, and visiting 
scholars, would be possible with an endowment.
    We at the Smithsonian know that American history cannot be 
told without understanding the history of America's coins and 
currency. In order to understand the American dream and 
American identity, one has to know about American money and 
economics. That is why it is very important to us to protect 
and share the National Numismatic Collection with the American 
public, a task that would be greatly supported by the funds 
generated by this legislation.
    Thank you, and I will be happy to answer questions.
    [The prepared statement of Mr. Glass can be found on page 
78 of the appendix.]
    Chairwoman Pryce. Thank you very much to our whole panel 
for their excellent testimony this morning.
    Let me begin the questioning with Mr. Johnson. We are all 
impressed with the anti-counterfeiting efforts of the Secret 
Service, and this committee in the past has given the Secret 
Service extra tools with which to do that job. And we are 
wondering, is there anything else we can do to give you 
additional tools to be helpful? Is there any new technology on 
the horizon? Are there new developments that we should be aware 
of, or make ourselves become aware of, as time goes on to be 
helpful to you?
    Mr. Johnson. Chairwoman Pryce, we are working with the 
Administration at this point in time to enhance our 
counterfeiting laws. If you could support those, and the 
committee could support those, the Secret Service would really 
appreciate that.
    Chairwoman Pryce. All right. Thank you.
    Ms. Roseman, I was interested to hear your testimony about 
the Sacagawea coin and the mandate that a third of the new 
Presidential coins be Sacagawea.
    And when should that reevaluation happen?
    Ms. Roseman. Well, we have been concerned for some time 
that this may require the Mint to produce coins for which there 
is no public demand. So it may be useful to start the 
evaluation now.
    But I think fairly early next year, we may start getting 
more information with respect to the demand after we have gone 
through a cycle of at least one or two coins to better gauge 
both what depository institution ordering practices are going 
to be--whether they are going to group their orders for dollar 
coins that they may need during just the 1-month introductory 
periods we have for each design, and maybe our orders will go 
down significantly during the other 2 months before the next 
design goes out.
    So I think we may have some fairly early indications in the 
first half of next year of what the situation is going to be 
like.
    Chairwoman Pryce. And what happens traditionally if there 
is a glut, if there is no adjustment made? Is there a history 
that tells us how to handle ths?
    Ms. Roseman. I will defer to Dave on this. I am not aware 
of previous legislation that required the Mint to mint 
circulating coins in particular quantities. So I don't know if 
there has been a precedent for this or not.
    Chairwoman Pryce. Well, there being no precedent, what 
would you imagine would happen?
    Ms. Roseman. My best guess is that the Presidential dollar 
coins will largely meet the public's demand for dollar coins 
during the course of the program. We already have substantial 
numbers of Sacagawea coins that are already minted. And I 
suspect that there probably isn't additional demand, at least 
in the next several years, to warrant minting additional 
Sacagaweas, at least in any material quantity.
    Chairwoman Pryce. But if the law is not changed, you would 
be required to do that, and they would just sit there? Or what 
would happen?
    Ms. Roseman. I think that is what would happen. The Mint 
would mint them and they would just sit there because there 
wouldn't be a demand to have them issued.
    Chairwoman Pryce. All right. That is very interesting. 
Well, if you have data that would be useful to this committee, 
please provide it any time that it is available.
    Ms. Roseman. We will do so.
    Chairwoman Pryce. Mrs. Maloney?
    Mrs. Maloney. Thank you, Chairwoman Pryce.
    Mr. Lebryk, I would like to ask you about a letter that the 
Mint, or you, sent to Chairman Oxley earlier this year. And you 
estimated the Mint would lose about $12 million on the nickel 
and $20 million on the penny.
    And my question is, do you have the ability to calculate 
how much the Mint would lose if we were to eliminate the penny 
and make more nickels?
    Mr. Lebryk. We can do that calculation and get back to you 
on what it would do. There would be--as you mentioned in your 
opening statement, there would be a demand dynamic that would 
occur, that you would move from pennies to nickels as the 
lowest denomination, and that in turn would--you know, if you 
are losing money on the production of that coin, it would then 
have an impact along the way.
    You know, with respect to the penny and the nickel, what I 
would say is that metal prices have been rising significantly 
over the course of the last 3 or 4 years. And in some ways, we 
have not had this debate or this discussion any earlier because 
the United States Mint has become so much more efficient in its 
production; we have been able to offset those metal price 
increases through increased efficiencies.
    What we have seen recently, though, particularly in the 
case of the nickel, is that nickel prices are just spiking 
significantly, and that is why you are now seeing the nickel as 
costing more to produce than face value as well.
    Mrs. Maloney. So could you go back and get back to the 
committee an analysis on whether or not the Mint would make 
money as a result of eliminating the penny, but with the price 
of nickel going up, in fact it might cost you more money 
because then you would have to mint more nickels? Could you 
look at that and get back to us?
    Mr. Lebryk. We sure can. I think in your--in the letter 
that I sent on May 1st, it was $20 million as it related to the 
penny because of penny production levels. Seven or 8 billion 
pennies are made a year. By contrast, there are only a billion 
or so nickels produced every year. So the loss that we incur on 
the nickel is only $12 million relative to the penny losses.
    Mrs. Maloney. But if you minted more nickels, you might, in 
effect, lose more money. Correct?
    Mr. Lebryk. Correct.
    Mrs. Maloney. So could you give us a little look at that? 
Because we are all concerned about the Treasury and the 
deficit, the growing deficit, that we have in the country.
    I would like to ask you a little bit about the new dollar 
coin. And I am very excited about it. I am a former teacher, 
and I see it as a way that we can involve young people in 
learning more about their Presidents, their First Ladies, the 
history of this country--not just well-known Presidents, but 
lesser-known Presidents, as well.
    And I would like to know if you have any ideas of coming 
forward with educational materials. I can tell you that in my 
district, some of our teachers came forward with very creative 
teaching tools with the quarter program, learning about the 
States and the important parts about the States. It was 
tremendously successful on all levels. And I would like to know 
if you have any ideas of partnering with educational tools or 
ways that we can develop an interest educationally with our 
young people.
    I would also like to ask you about how you are going to 
market the new dollar coin. Obviously, with support for it and 
packaging and distributing it to various places, you would 
increase the use of it. I want to specifically mention the 
success that you had with the quarter coin in partnering with 
large retail establishments, such as Costco and Wal-Mart and 
dime stores, so that they had them, and it helped generate the 
use for it.
    So I am interested in what you are going to do to promote 
the dollar coin. There was one study that I read from the 
Department of Defense, and that was on the dollar coin. And 
they said--it was a GAO study that they did on the use of the 
dollar coin earlier in the 2000 introduction. And they 
literally criticized the Mint for having it in 2,000-coin bags, 
and they said that this was just--the volume was too large for 
their commissaries, and they would prefer to have a--they would 
have used it more in the commissary if it was fewer dollars in 
the bag.
    So I just would like to hear your comments on how you hope 
to work to bring this new dollar coin, which I am very excited 
about, into the public in a way that is successful.
    Mr. Lebryk. Well, I think that the drafters and the 
sponsors of this bill did a wonderful job of addressing many of 
the fundamental underlying issues. As you look through some of 
the barriers that we face introducing a coin, the circulating 
design, your mentioning about the educational value, our 
ability to promote and to educate the American public and 
school children about out great leaders in our Nation's 
history.
    Unlike the golden dollar, that provision, I think, is going 
to sustain interest in the program beyond an introductory 
period because you are going to have the opportunity to learn 
more about succeeding Presidents as we go through the list.
    The second piece I would mention is the anti-tarnishing 
provision in the bill, making sure that the coin retains its 
luster over a longer period of time. We have had success with 
that, and we are expected that as we are moving forward 
introducing the bill, that that will be fully in place and will 
be successful.
    Another is the packaging requirement found within the bill, 
which says, during the introductory period we need to have 
special packaging--that people should be able to get the coins 
in unmixed rolls, or unmixed quantities, during an introductory 
period, as the legislation says.
    As Louise was mentioning earlier, we are now in the process 
of assessing what is that right size? We had a dollar coin 
users forum recently, on June 8th, in which a lot of opinions 
were expressed about what is the right size. We need to do a 
little bit more research and figure out exactly what is the 
optimal way to deliver those coins.
    We will do that at the United States Mint and wrap them in 
a more limited quantity than in the 2,000 range that you have 
identified.
    Mrs. Maloney. Madam Chairwoman, may I respond briefly to 
his comment?
    On the size of the dollar coin, the first Sacagawea, it was 
too close to the quarter. Everybody did not like it because 
when they put it in their pocket, they mixed it up with their 
quarters. And so I think you really have to pay close attention 
to the size.
    I thank you for your work. I think you do an incredible 
job. And we are very proud of the work that you do for our 
country. Thank you.
    Chairwoman Pryce. Thank you.
    Mr. Lucas.
    Mr. Lucas. Thank you, Madam Chairwoman. And a few of the 
things we have discussed, I suspect perhaps with the next panel 
of sage old numismatists, we gain some insights. But it is 
worth probably noting from a historical perspective, we had a 
half-cent until 1857. We shrank the penny one time--sorry, the 
one-cent piece--in 1857. We did away with a smaller five-cent 
piece that was a half-dime. We have made changes before, so 
whatever is appropriate.
    Ms. Roseman, at the present level, on the Sacagaweas, what 
is the monthly draw-down rate? How many are leaving the Federal 
Reserve banks, on average?
    Ms. Roseman. Our net payments of dollar coins are about $5 
million a month.
    Mr. Lucas. $5 million a month. And off the top of your 
head, what is the draw-out or the payments on the one-cent 
pieces?
    Ms. Roseman. I think--
    Mr. Lucas. Dollars or pieces, either one.
    Ms. Roseman. I think that last year we may have had net 
payments of about eight billion pennies.
    Mr. Lucas. Okay. So on the dollar coins, if they are minted 
at a rate that they are used approximately by the public, then 
there is about a demand for, say, 60 million a year, taking 
that 5 million and multiplying it by 12?
    Ms. Roseman. Yes, the current demand has been 60 million a 
year, which is about what it was in the late 1990's before the 
Sacagawea coin came out, when we were using the Susan B. 
Anthonys.
    Mr. Lucas. Okay. Director Lebryk, for a moment to touch on 
your testimony on 5077, and I say this respectfully, but I 
appreciate the comments about the Mint's opposition to the bill 
and issues about Government property that has been loaned or 
things that are stolen. I would say, in all fairness, my 
lawyers disagree with your lawyers. And in the legislative 
process of drafting and crafting, we can work those kind of 
things out.
    Did I understand you to say, in fact or in effect, that the 
Mint reserves the right to be able to seize anything at any 
time that may have come from the Mint pre-1932, post-1932, if 
they define it as not having properly left?
    Mr. Lebryk. I would characterize that as ``recover'' 
because in that instance, if it has not been legally issued by 
the United States Mint, it remains United States Mint/
Government property.
    Mr. Lucas. So the Mint reserves the right to recover 
anything that they define as not having properly left? 
Anything?
    Mr. Lebryk. I would mention that the enforcement arm of 
this is not the United States Mint or the Treasury Department, 
but is the Secret Service and the Department of Justice.
    Mr. Lucas. But I would assume that the Secret Service, 
being the law enforcement arm, responds to requests from the 
Mint. And it would be subject to--fascinating. Anything. 
Fascinating.
    Let's touch for a moment on the inventory issue. You run a 
very modern and efficient industrial facility generating--
creating many billions of dollars in coins. In the bill, there 
is a section which in your testimony, in essence, it appears to 
refer to as a duplicative process that talks about the 
inventory issues.
    Tell me about what kind of an inventory system the Mint 
maintains now. You are an industrial plant. You have valuable 
metals. You have dies. You have all sorts of artwork. You have 
got a variety of things, as well as finished product. Tell me 
about the inventory system that you currently use as part of 
your management program.
    Mr. Lebryk. As a modern manufacturing facility, our 
objective is just-in-time inventory, that is, that we want to 
retain as little inventory as we possibly can on our books. So 
we work closely with the Federal Reserve to make sure that as 
coin demand orders come in, we fill them quickly and 
responsibly, and do not retain much inventory at all of 
existing product.
    Mr. Lucas. Well, in the popular media I have read accounts 
about inquiries from different individuals and media outlets 
about things. And I think they use the Freedom of Information 
Act, the FOIA stuff.
    Tell me about how the Mint responds to FOIA requests. Say 
someone writes you a letter and asks, ``Mr. Director, do you 
have any coins from pre-2005 still in your vaults or in your 
holdings?'' That would come as a FOIA request.
    Mr. Lebryk. Yes.
    Mr. Lucas. Is it the policy of the Mint to respond to those 
things and give that kind of information out?
    Mr. Lebryk. That is correct. There is a body of regulation 
and procedure which we follow when a FOIA request comes in to 
be responsive to those requests. And there are exemptions, and 
there are situations in which we can decide whether we withhold 
information based on a certain standard, or whether we can 
provide that information.
    Mr. Lucas. So from a perspective of an inventory like this, 
not only just the coins that commonly go into circulation, not 
only the coins that wind up, thanks to legislative action by 
Congress, for a particular purpose issued for a limited period 
of time that wind up in your inventory, but you also have, I 
would assume, dies and artwork from the past that were used to 
create present and past pieces. You have a variety of test 
strikes, those kind of things.
    Is there a master list of that kind of information?
    Mr. Lebryk. We keep an inventory of what--of our existing 
property consistent with generally accepted accounting 
principles, and that is property that is in the control of the 
United States Government. We take that responsibility very 
seriously.
    At the same time, we keep a working inventory of dies and 
the like. In fact, with respect to the 24-karat program, one of 
the reasons why it was so important to have those historical 
documents in hand is that as the legislation asked us to 
produce the 1913 James Earl Frazier type 1 variety of the 
Buffalo coin, we were able to go back to the original galvanos, 
digitally scan those into our system, and it saved us a lot of 
time and effort from having to recover that information from an 
alternative means.
    So when we have property--when we have possession of 
equipment, we take an assessment about whether that property is 
still of value to us or may be of value to us at some time in 
the future.
    Mr. Lucas. So if I write you a specific letter, as is 
customary in these hearings for a period after which with 
additional questions, and I were to address the question 
something to the effect of, please provide me with a list of 
all non-current dies that you may hold in your inventory, would 
it be possible for you to respond to me with an accounting like 
that?
    Mr. Lebryk. In the same way that we account for our 
property--if you asked me how many machines we had, how many 
Schuler presses we had, how many dies that we had and the like, 
we have the obligation to protect that property.
    Mr. Lucas. Of course.
    Mr. Lebryk. How easy it would be for us to come up with a 
quick inventory for you, I just don't know.
    Mr. Lucas. Fascinating. Because after--Madam Chairwoman, 
could I indulge you for an additional period of time?
    Chairwoman Pryce. Let's indulge for 2 more minutes. Do we 
have consent to do that?
    Mr. Lucas. Or after my colleague has--our colleague has had 
an opportunity to ask his questions, come back again?
    Chairwoman Pryce. Certainly. That is fine with me.
    Let's go to Mr. Neugebauer, who has been very patient. Then 
we will go to Mr. Sherman, who is just getting his breath.
    Mr. Neugebauer. Thank you, Madam Chairwoman.
    First, to Mr. Felix, I have had an opportunity to go over 
to the engraving operation that you have here. And I guess it 
is probably one of the few Government agencies that makes money 
faster than they can spend it.
    [Laughter]
    Mr. Neugebauer. I want to go to Mr. Lebryk. I want to make 
sure I am clear about this. Now, I am a customer, and I buy the 
gold eagles. I like the gold eagles. And I may buy--I am 
certainly interested in the Buffalo coin. I want to make sure, 
when I buy that coin from the Mint, are you telling me that, in 
fact, that still belongs to the people of the United States of 
America?
    Mr. Lebryk. No. We--by the way, I am a customer as well, so 
when I purchase a coin, I also purchase it directly from the 
Mint. When we lawfully issue a coin and sell it, and you 
purchase it with legal tender, it is now your coin.
    The issue, I think, that is being discussed here is if we 
have never lawfully issued a coin, at which point it should 
remain in the possession of the United States Government and 
the American people?
    Mr. Neugebauer. How do you not lawfully issue a coin?
    Mr. Lebryk. Through theft. In the case of the 1933 Double 
Eagle, there was a theft that occurred. President Franklin 
Delano Roosevelt said it was illegal to hold those coins at 
that time. And subsequent courts determined that it was 
Government property and remained Government property.
    Mr. Neugebauer. By the way, I do want to complement the 
Mint because they are very user-friendly, and I have found it 
to be a pleasure to do business with you.
    So when I have been with a good friend from Oklahoma and 
talk about his bill of arbitrarily setting--1933, I believe, is 
the date--does that mean coins that were in circulation? Like I 
used to collect pennies, for example. And so if I had a penny 
collection, are we saying that from 1933 on, the American 
people share ownership of that coin set with me? Is that what 
we are saying?
    Mr. Lebryk. If we lawfully issued any of those coins, then 
they are the possession of the person who holds them. The issue 
here is whether something is unlawfully being held, as is the 
case if someone stole your automobile. You would expect to be 
able to recover that automobile free of legal action.
    Mr. Neugebauer. Okay. So for all the people out there 
listening, if you have been collecting coins and you are going 
to collect some of the Presidential coins, they are going to be 
your coins and we don't have to worry about the Federal 
Government--
    Mr. Lebryk. That is correct.
    Mr. Neugebauer. I am glad we--
    Mr. Lucas. Would the gentleman yield for one moment?
    Mr. Neugebauer. Yes.
    Mr. Lucas. But if you paid several million dollars for a 
1913 Liberty Head nickel, you might think about it.
    Mr. Neugebauer. Well, I am a collector, but not that kind 
of collector.
    [Laughter]
    Mr. Neugebauer. I wouldn't mind someone showing me the 
money, so to speak.
    But I want to go to Ms. Roseman. This penny/nickel issue, 
with the debit cards and ATM's and credit cards and--you know, 
I go--well, sometimes I write one check a month, and I carry 
money around that is getting old because I am using credit 
cards just for about everything, or debit cards. Is that 
reducing the demand for coinage that the Federal Reserve needs? 
Or if you were to start graphing that, can you shed some light 
on that?
    Ms. Roseman. You know, it is interesting. You are right. 
There has been a very high growth in the number of electronic 
payments in this country, particularly over the last 10 years.
    Back in the mid-1990's, Americans wrote about 50 billion 
checks a year. Now it is roughly 30 billion a year. It is still 
a large number, but declining due to the increasing use of 
electronic payments.
    We suspect that this trend is also making some inroads, and 
may continue to make some inroads, in the domestic use of cash. 
The card companies are now focusing on signing up merchants 
that primarily accept cash, such as fast food chains.
    I don't think people will stop using coins and cash 
altogether by any means, but there may be some either lessened 
growth rate or maybe a slight decline in the usage as these 
instruments continue to expand into different kinds of 
retailers who don't have them today, and consumers get more and 
more comfortable making transactions by card or other 
electronic means rather than by cash.
    Mr. Neugebauer. Mr. Lebryk, just one short question. As I 
remember, there was a penny that was not copper. It was in the 
1940's or 1950's or something?
    Mr. Lebryk. Yes.
    Mr. Neugebauer. Yes. And have we explored, you know, 
alternatives of making--I mean, you know, a lot of people don't 
even know a nickel maybe is made out of nickel or--I mean, 
obviously I think a lot of people know that a penny is copper. 
But, I mean, I know in other countries that I have been in, 
they are using--
    Mr. Sherman. If the gentleman will yield, I believe a penny 
is not made out of copper. It is chiefly zinc.
    Mr. Neugebauer. Maybe so. So you see there what I am 
saying?
    Mr. Sherman. Ninety-seven and a half percent zinc and--
    Mr. Neugebauer. I rest my case. I made my own case, and 
thanks to the gentleman for helping me. But, I mean, have we 
explored different other metals to--
    Mr. Lebryk. We have. And about two-and-a-half years ago, we 
undertook an extensive review of alternative metals that we 
might use, and we have a variety of criteria on which we 
assessed the different metals that might be alternatives.
    I would mention that we at the United States Mint are a 
supplier, a manufacturer of coins. There are a lot of 
considerations that are beyond our control that would have to--
that the Congress would need to take into account to determine 
whether they wanted us to change the composition of those 
coins.
    The Constitution, Article I, Section 8, grants the power to 
make money or coin money to the--and determine the standards 
and weights to Congress. And so if we were going to change the 
composition of our coins or change the denominations or do 
something with our coins, it would be an act of Congress which 
we would require to do that.
    So with that said, we have done our research on this issue. 
We have tried to figure out what is viable. But we have not 
taken into account the broader range of issues, that is, how 
they will be--how they will work through commerce, the impact 
on the American public, and the like.
    As a result, I think, in its wisdom, the U.S. House of 
Representatives has asked the GAO to look at these sets of 
issues and report back, I believe, by March 7th of next year, 
of looking at the research that we have done and looking at the 
broader range of issues.
    My view is that this is the appropriate next step--to look 
at this very analytically and thoroughly to determine what is 
the best thing for the American people so that the Congress has 
the best available information to it as it makes that decision, 
if it makes that decision.
    Chairwoman Pryce. The gentleman's time is expired.
    And Mr. Sherman, thank you for your patience.
    Mr. Sherman. Thank you. I misspent my youth dedicated to 
the proposition that collecting stamps was the superior 
approach.
    [Laughter]
    Mr. Sherman. And I am confident that no matter what we in 
Congress do, that whether you are minting dollar coins or 
pennies, that there will be plenty of interesting things for 
numismatists--I hope I have that right--to collect.
    The big controversies that I was aware of is whether we 
should abolish the penny and whether we should abolish the 
paper dollar so as to popularize the dollar coin. And I want to 
get to those in a second. But I was intrigued by David's 
comment that perhaps, even with the existing coinage that we 
have, we might want to use other metals.
    Could we save much money by shifting to another metal for 
any of the coins that we are issuing now?
    Mr. Lebryk. Well, as we have seen, it depends on which 
denomination I think you are talking about. You know, we have 
seen just a huge spike in the price of our underlying metals, 
whether it be zinc, copper, or nickel that is the major 
components that go into our coins.
    I would mention that other nations have faced this same set 
of issues and are facing this same set of issues. Most 
countries right now, their lowest denominations are being 
produced for more than face value because of the rising 
worldwide metal prices.
    Other countries, when they face this issue, have really 
addressed it in one of three ways. They have either accepted 
the fact that they are going to have a coin that costs more 
than face value because they believe the benefits--or perhaps 
the public believes that is appropriate. The second option 
would be to change the alloy and try to find a less expensive 
metal to use to coin. And the third is to eliminate the 
denomination.
    Mr. Sherman. Yes. Getting back to the cheaper alloy, 
because I want to talk mostly about eliminating denominations, 
but what metals would be cheaper for which of the coins we 
issue now that would still be a coin that would have a good 
lifetime to it and perhaps the same weight that we are used to?
    Mr. Lebryk. One of the things I would mention about zinc, 
zinc is the--as you rightfully mention, it is 97-1/2 percent 
zinc and 2-1/2 percent copper. Zinc is one of the lowest cost 
metals available. Other countries have--
    Mr. Sherman. Could we make our nickels or quarters or 
dollar coins out of zinc? And how much money would we save if 
we did? Putting aside the public acceptance issues.
    Mr. Lebryk. Yes. That is technologically feasible to do 
that.
    Mr. Sherman. How much--would we save a million or would we 
save a hundred million a year in your operations?
    Mr. Lebryk. Congresswoman Maloney had an interesting 
question about substitution effect. And the amount of money 
that would be saved is something that we can look at more 
closely, but it would be in the tens of millions range, 
annually.
    Mr. Sherman. Okay. Now, one of the chief arguments against 
abolishing the penny is then how do you buy something for a 
particular price, if it sells for 49 cents? Before I came to 
Congress, I headed the largest sales tax agency in the country, 
and so I am well aware that every time you buy something, the 
amount you owe the merchandise has to be rounded.
    In other words, if you buy something in a State with a 5 
percent sales tax for 49 cents, you don't owe the merchant 49 
cents. You owe them 49 cents plus 2.4 cents tax. They round to 
the nearest penny, and the consumer benefits because the 2.4 
cents of tax is rounded down to 2 cents. If, on the other hand, 
you buy two of those items, then you owe 4.9 cents in tax. And 
you round up, and you end up paying a nickel in tax.
    I don't know of a single merchant, or even a single 
consumer, that has ever sought to buy items in such a way so 
that the tax is rounded down or up to the nearest penny. And 
even if you were going to round things to the nearest nickel, I 
can't imagine a merchant saying, well, we will sell apples for 
so many cents, and people will tend to buy so many. And then 
they will owe us so much sales tax, and it will come to 2.8 
percent sales tax, and they will have to give us a nickel.
    So it would--I think we need to somehow explain to the 
American people that all transactions are rounded. When I was a 
kid, we rounded to the nearest penny. And that penny that they 
rounded to when I was a kid is worth more than today's nickel.
    The other thing is whether to have a dollar--whether to 
abolish a paper dollar and popularize the dollar coin. I will 
point out, when I was a kid, we had a very, very popular dollar 
coin. We called it a quarter. It was worth more than a dollar 
now. On a good day, you could buy a gallon of gas, not for a 
piece of paper money, but for something that was commonly in 
your pocket.
    So since the right time in the good old days is always our 
own youth, I think that I should have a coin capable of 
carrying more value than today's quarter, perhaps as much as 
today's dollar.
    I know we hear often from the transportation agencies, and 
the vending machine operators, that they would like people to 
carry that dollar coin. What improvements are being made in the 
ability for vending machines to read dollars, not be ripped off 
by counterfeiters? Do vending machines still need the dollar 
coin to work effectively, or has technology overridden that 
demand for a dollar coin to be popular?
    Mr. Lebryk. Would you like me to try to address that?
    Mr. Sherman. Yes.
    Mr. Lebryk. I, by the way, make the same point to Larry all 
the time about the utility of the dollar coin, having more 
utility all the time than the dollar bill. As you can imagine, 
he does appreciate me telling him that.
    I would just mention that it is the policy of the Treasury 
that we will have both a dollar coin and a dollar bill in 
circulation. So at least at this point, it is not a 
consideration that we would eliminate one or the other unless 
Congress asks.
    Mr. Sherman. But if you don't eliminate the dollar bill, 
the dollar coin is just an oddity. The Post Office in this 
building gave me dollar coins as change, and I have no idea how 
or when I am going to spend them. But I know I am going to have 
to explain to the person who takes them what they are.
    Mr. Lebryk. I believe that once the dollar coin 
implementation occurs, that you will have a much better chance 
of using those coins more widely. And that really is the issue 
right now, is that there is really a chicken-and-egg problem 
right now, which is that the coins are not available because 
there is not a demand, and that there is not a demand because 
they are not available.
    And I think that as we move forward with the implementation 
and our objective is to make them more readily available--
    Mr. Sherman. Are they distinguishable sufficiently from a 
quarter? And I assume you have thought of putting a hole in 
them so that they would be distinguished from a quarter. Is 
there resistance to using them because--I know you have the 
serrated versus the non-serrated edges. And they are a goldish, 
copperish color rather than a quarter. They still--I could 
still confuse them for a quarter. Is that a problem that you 
are running into, and have you fully dismissed the idea of 
putting a hole in the coin?
    Mr. Lebryk. We will faithfully execute the legislation as 
it is written right now, which is it does require that we 
continue to use the same material and the same characteristics 
as the existing golden dollar for the new Presidential dollar.
    I do want to get back to your question, though, about 
vending machines. And yes--
    Mr. Sherman. Wait. Going back to this question, do you face 
difficulty in popular acceptance because people feel that the 
dollar coin is too much like a quarter, too easy to confuse?
    Mr. Lebryk. We have not seen that as a barrier with the 
golden dollar. It was more of a barrier with the Susan B. 
Anthony because of the color. And with the anti-tarnishing 
provision that is in this bill, we believe that there will 
continue to remain a luster to the coin that will readily 
distinguish it from the quarter.
    But getting back to your question on the vending machine, 
yes. The vending machine industry is very interested in us 
introducing this bill because they would in fact--and the 
transit authorities because it is less expensive, as Louise 
mentioned, for them to use coins in transactions.
    I would mention, though, something that is on the horizon 
that came out on the dollar coin users forum is that most of 
the transition authorities right now, most of the areas that 
have historically been the purview of coins, are increasingly 
becoming more receptive to electronic transactions--they are 
becoming the preferred way for those authorities to operate.
    So even today, on the way here, on the street corner in 
Washington, D.C., there is a new Connector bus that is 
available to people to move them from Capitol Hill to 
Georgetown. On the street corner, you can buy a token for the 
bus with a credit or debit card right now. You can pay parking 
tickets with credit or debit cards in many places. You can go 
to laundromats and use credit cards and debit cards. There are 
fewer pay phones now, and even toll booths now accept 
electronic means of payment. In the dollar coin user forum, it 
was interesting to hear the transit authorities say that they 
are charging a premium for cash transactions over credit card 
transactions.
    Mr. Lucas. [presiding] The gentleman's time has expired.
    The Chair now turns to the gentlelady from New York.
    Mrs. Kelly. Thank you, Mr. Chairman.
    Mr. Lebryk, in 2002, the $20 Double Eagle auctioned off by 
Sotheby's was described by the Mint as the only--the Mint 
described it as the only 1933 Double Eagle that would ever be 
authorized for private ownership.
    I wonder if you could explain to the committee how ten 1933 
Double Eagles recently that were recovered by the Secret 
Service--and they were stolen, apparently, from the 
Government--why allowing them to be sold would encourage theft 
from the U.S. taxpayer.
    Mr. Lebryk. When we reached a settlement regarding the 
Double Eagle you mentioned, the one that was auctioned, we very 
specifically in the agreement stated that the settlement shall 
not be deemed to have any precedential significance or effect, 
legal or otherwise, on any other coin in the United States, 
including any other 1933 Double Eagle that may exist. We were 
not aware of any additional Double Eagles that existed at that 
time.
    As a matter of policy, we stated at the same time that we 
would not--we did not intend to monetize, issue, or auction any 
additional coins that would be--that might be recovered. My 
view is that when the United States Government makes a 
statement, it is important for us to uphold our word. And so as 
we looked at recovering the 10 Double Eagles that came to our 
attention last year, we should remain true to our word.
    And I think that these coins are the property of the 
American people. And as a result, the appropriate disposition 
of those coins is with the American people.
    Mrs. Kelly. By that you mean in your Treasury?
    Mr. Lebryk. We believe that there are opportunities to 
display these coins and make them available to the American 
public so they, too, can--
    Mrs. Kelly. When you say, ``making them available,'' are 
you talking about sale?
    Mr. Lebryk. No. We do not intend to sell, auction, or 
monetize the coins.
    Mrs. Kelly. So your statement that it was--the 1933 coin 
that Sotheby's sold was the only one that would ever be 
authorized for private ownership--
    Mr. Lebryk. Correct.
    Mrs. Kelly.--you still hold by that?
    Mr. Lebryk. Correct.
    Mrs. Kelly. Okay. Just checking.
    I wanted to ask you, we talked--I talked and you talked 
about the Buffalo gold coin. And I wonder what you see for the 
long-term potential for the U.S. Mint at West Point. It is a 
wonderful Mint, and it has just such dedicated workers.
    Mr. Lebryk. They are among the finest public servants in 
Government. And that is one of my favorite visits. I know it is 
one of your favorite visits, too, to visit that facility to see 
the strength and the dedication of the workers within that 
facility.
    The 24-karat bullion program is a wonderful thing for the 
United States Mint. It is wonderful for the United States Mint, 
but I think that it is probably more important to say it is a 
good thing for the American public. We produce bullion coins 
for those people who choose to hold gold or precious metals.
    We don't make a recommendation whether they should or they 
shouldn't. But if they choose to hold it, we want to make sure 
that we produce a beautiful product that has the guarantee of 
the United States Government behind it.
    It is a tribute, once again, to the men and women of the 
United States Mint at West Point that they were able to execute 
that program in less than 6 months. That is something we have 
never done in the recent history of the United States Mint. And 
that is a wonderful reflection on the dedication and quality of 
the people at the United States Mint at West Point.
    I should also mention there were others who were involved 
in that, but they were the ones who really had to bring the 
product to market.
    Mrs. Kelly. Thank you. Thanks for your kind words on that.
    I want to ask Agent Johnson, I have been concerned about 
the problem of North Korea counterfeiting U.S. currency. I 
don't think it has gotten anywhere near the amount of 
attention, and as we are able--as we dry up legitimate sources 
of money transfer, these counterfeit areas where we--like in 
North Korea, become extremely much more important.
    I want to know what progress you have made in the 
counterfeiting agenda with regard to the Financial Action Task 
Force. And are you getting where you need to get with regard to 
North Korea's counterfeiting?
    Mr. Johnson. Ms. Kelly, we found our first Supernote in 
1989, and hundreds of personnel from the Secret Service have 
worked this investigation for 16 years. We have determined that 
the Supernote is being produced in North Korea.
    We do have a--our agency was founded in 1865. We have an 
outstanding relationship with the Department of the Treasury. 
We have special agents assigned over there who work with 
Treasury. And we have worked with the task force in the past.
    Mrs. Kelly. Are you getting where you need to go with 
regard to North Korea?
    Mr. Johnson. We are getting to where we need to go with 
North Korea. It is a quality versus quantity issue. There is 
$762 billion of U.S. currency in circulation, and less than 1/
10th of 1 percent is counterfeit. In the history of the 
Supernote, we have only seen a little less than $50 million.
    Mrs. Kelly. Okay. Secretary Levey had testified to this 
committee about the Banco Delta Asia and its role as a 
launderer of these Supernotes. It is a Chinese-controlled bank 
in Macau. And when--additionally, they have apparently found 
North Korean ships carrying Supernotes. They have made a lot of 
repeated calls to the Chinese naval ports.
    Given that, would you say it is fair to say that Communist 
China has actually been an accomplice with North Korea on these 
Supernotes?
    Mr. Johnson. I would not like to answer that. But I will 
tell you this, that if any Supernotes appear worldwide, we have 
field offices all over the world. We will investigate it.
    Mrs. Kelly. That is very comforting to know. Thank you.
    I yield back.
    Mr. Lucas. [presiding] The Chair thanks the gentlelady from 
New York, and would note that our chairwoman, who is also 
chairwoman of the majority conference, has been called away, 
and she has asked me to sit in for her, which means that we are 
going to have another round. For some reason, I thought there 
would be a great deal of humor seen in that response.
    [Laughter]
    Mr. Lucas. Ms. Roseman, to touch for a moment on another 
denomination we have not discussed, do you know off the top of 
your head what the draw-down rate or purchase rate or transfer 
rate is on half-dollars out of the Reserve system to the Banks?
    Ms. Roseman. More half-dollars are deposited into the 
Federal Reserve than we pay out. In 2005, our net receipts were 
17 million half-dollars.
    Mr. Lucas. So then perhaps, when we talk about the one cent 
pieces and the dollar coins, we need to talk about the 
viability of the 50-cent piece also. My observation, not yours.
    Mr. Lebryk, back for a moment to the Congresswoman from New 
York's comments. So did I understand you to say that, in 
effect, contrary to the expectations of an auction house, in 
fact the Mint did not obligate itself to not--or did not give 
up the ability at some point in the future to transact other 
33's if they would become publicly known?
    Mr. Lebryk. I will be very clear and say it was not our 
intent to sell or auction or issue off any other 1933 Double 
Eagles if they were recovered.
    Mr. Lucas. There again, another example of your lawyers and 
somebody's lawyers having a different perspective. Okay. All 
right.
    Along those lines, can you tell me what kind of standard 
has been developed--and I touch back for a moment about the 
Mint reserving the right to recover any coin, apparently, since 
1973 that the Mint felt that was improperly issued. Have there 
been standards formulated for this kind of an issue? Is this a 
fly-by-the-seat-of-your-britches sort of a deal? And I hope you 
say no.
    Mr. Lebryk. No, it is not. In fact, there have been Supreme 
Court decisions on this that are very important about the 
Government's ability to dispose of Government property. There 
is a famous case where a Civil War ship was sunk that was a 
Confederate ship.
    The Secretary of the Navy determined that he was going to 
relinquish possession of that ship. The 4th Circuit Court of 
Appeals determined that the Secretary of the Navy did not have 
the authority, that once it was Government property, it was 
always Government property, and reversed that decision.
    And so unless there is specific authority, Government 
property will always remain the property of the United States 
Government.
    Mr. Lucas. Specific authority meaning an Act of Congress?
    Mr. Lebryk. Correct.
    Mr. Lucas. So the same body that created your institution 
can direct and guide it?
    Mr. Lebryk. Correct.
    Mr. Lucas. Thank you. That is very insightful. Very 
insightful.
    I guess at this moment, I would turn to my colleagues. 
Would the gentleman from Texas have any additional questions?
    Mr. Neugebauer. No. Just that I was disappointed that we 
were just looking at the sample and not getting samples.
    [Laughter]
    Mr. Lucas. Speaking of looking at it, before we release the 
panel, Mr. Glass, could you touch for just a moment--with 
900,000 pieces, as you said two-and-a-half-thousand-plus years, 
a couple things come to mind from people out there. And a 
tremendous amount of information has come across my trail since 
filing this bill from every perspective, every group, every 
interest, and every seemingly potential numismatic item that 
has come along in the last 200 years.
    One of the questions put to me about the bill is the nature 
of the pieces in your collection. Has the Smithsonian ever, as 
apparently was the custom when the Mint had the collection 
prior to 1920, ever traded pieces, sold pieces, that sort of 
thing, out of the National Collection?
    Mr. Glass. I don't believe we have ever sold pieces from 
the National Collection. I think we lend items to other 
museums, with the proper security, and to other associations, 
with the proper security. And we would continue to do that.
    We had an exhibit at the International Monetary Fund Center 
of our collection, and we would continue to lend out pieces. In 
Houston, the Museum of Natural History had a wonderful 
exhibition on gold, and we had one of the Double Eagles on 
display there, one of the two that we have.
    So we would lend out--we do lend out our collection under 
the proper circumstances and security and conditions. But we 
have not sold any.
    Mr. Lucas. Mr. Lebryk, just a couple of questions, and then 
I will be done, and I appreciate the patience of the entire 
panel.
    Those 10 Double Eagles are, according to popular press 
accounts, locked up at Fort Knox?
    Mr. Lebryk. That is correct. That is part of the inventory 
that we have of valuable items.
    Mr. Lucas. And I wait for a more extended inventory soon.
    Also in the popular press, occasionally it is discussed the 
99 fine gold Sacagaweas. Where are they kept, if there is such 
a thing, the dollar coins?
    Mr. Lebryk. We do have some rare Sacagaweas. I don't know 
about 99 fine, but we did have some Sacagaweas that were aboard 
a spacecraft, a Space Shuttle. They also are at Fort Knox right 
now.
    Mr. Lucas. Okay. How many of those were there?
    Mr. Lebryk. Someone who was at the Mint before me? I have 
been at the Mint since 2003, so I don't know the exact number. 
But I can certainly get that for you.
    Mr. Lucas. Are those kind of things classified as trial 
strikes, or how do we--where in the authority do we do that 
sort of stuff?
    Mr. Lebryk. I am not sure. Again, that predates me, and I 
don't know the origin of those coins. I believe there are a 
dozen, but I can check on that for you.
    Mr. Lucas. Now, I know from my reading in the popular 
media, and a number of what I consider to be fairly scholarly 
journals, it appears that a variety of these interesting pieces 
in the last 2 centuries have involved people who either had 
access to the Mint or access to the people who were within the 
Mint. And I have complete and total confidence in your staff 
and all the things that have gone on.
    I suppose, probably, that might reflect some of the efforts 
in the past, like melting the previous 33's or other coins down 
through the years that have been dispatched to the here ever 
after. But from an outsider's perspective, it appears that none 
of these or many of these interesting things would not have 
occurred had there been clandestine effort on somebody's 
behalf.
    I would hope--and I will conclude my observation question 
with that--I would hope that in the effort of the institution, 
that it would acknowledge that this is just the things that 
have happened in the past, and that good, bad, or indifferent 
on how these items were created, we have an obligation to 
preserve our heritage.
    Mr. Lebryk. I would agree, and--
    Mr. Lucas. That is a part of it.
    Mr. Lebryk. I would agree. I would tell you that I think 
that many in the numismatic community would tell you that we 
have perhaps gotten too good at reducing error coins and 
allowing coins to be removed from the United States Mint. We 
have undertaken a serious effort in the 1990's, so you see very 
few. And the numismatic community sometimes jokingly says we 
have become too good at it.
    But I would also agree with you. Our coins represent our 
Nation's history. They reflect important people, places, and 
events. And it is important that we preserve that heritage 
because they say a lot about our culture. As Brent will tell 
you, there are coins that go back thousands of years that are 
of great interest to people. And they say a lot about those 
societies, as our coins today say a lot about our society.
    Mr. Lucas. Mr. Director, take very good care of those 
unusual pieces. I suspect, whether it is through the 
appropriations amendment process or a free-standing bill or an 
amendment on another bill, if consensus can be achieved here, 
we may help provide you with some guidance and refinement from 
a statute perspective.
    And with that, the committee wishes to thank the panel for 
their important observations. And Mr. Felix, you are a very 
lucky man today. I ask the next panel to come forward.
    And while the second panel is coming forward, the Chair 
would like to note that we are scheduled some time very soon, 
perhaps in the next few minutes, perhaps in the next 10 
minutes--the nature of Congress--to have a series of votes. And 
when we break for that, we will return probably 35 minutes 
later and complete the second panel's testimony. But for now, I 
would like to call the second panel forward and give them the 
opportunity to offer their oral testimony. And while you are 
stepping up, ladies and gentlemen, we have Q. David Bowers, who 
is the numismatic director of American Numismatic Rarities, 
LLC, and the numismatic director of the Whitman Publishing 
Company, LLC, a leading publisher of reference books on rare 
coins.
    We also have Christopher Cipoletti, who is executive 
director of the American Numismatic Association. The ANA is the 
world's largest collector organization.
     Beth Deisher, editor of Coin World, the largest and most 
widely circulated news weekly serving collectors of coins, 
medals, and paper money.
    And rounding out our witness list today, Fred Weinberg, who 
serves as the vice chairman of the Industry Council for 
Tangible Assets. He is past president of the Professional 
Numismatics Guild, and a life member of the American Numismatic 
Association.
    The Chair wishes to thank this esteemed and knowledgeable 
panel for coming forward, and I hope that you have survived 
observing the last round of discussions, and will be able to 
provide us with your insights.
    And with that, Mr. Bowers, whenever you are ready.

  STATEMENT OF Q. DAVID BOWERS, NUMISMATIC DIRECTOR, AMERICAN 
                    NUMISMATIC RARITIES, LLC

    Mr. Bowers. Thank you, Representative Lucas. I admire you 
for your numismatic expertise and your insights. I am going to 
depart from my prepared remarks for two reasons. First of all, 
you all have them and you can read them--well, three reasons. 
Second, the Mint staff largely left. And the third reason is 
time. I would like to give others time to speak. If you are 
going to vote, you are going to run out of time.
    Several observations. One great observation here is a lack 
of knowledge and communications between the collector community 
and the Government. And I am going to point out some examples 
that were brought out in testimony today.
    We had the Mint Director saying never before in history--
the acting Mint director--has a coin been brought to market 
within 6 months. I would like to point out that the Act of 
February 21, 1857, caused the small cent to be coined, and on 
March 25, 1857, the first ones reached circulation in quantity. 
I think that is about two-and-a-half or 3 months. Many, many 
other instances could be mentioned.
    We have--as far as who owns what in the Confederate States 
of America, in 1919, the United States Government took the 
legal position, correctly, perhaps, that it was heir to the 
property of the Confederate States of America, all the assets. 
It seized from collectors Confederate paper money, saying, ``We 
are the legal heir.'' That didn't get too far. But someone had 
to hire a lawyer and get their paper money back. We have what I 
call a great lack of definition of what is legal and what is 
not.
    There has been no recent court case, by the way, despite 
some testimony today, saying that the 1933 Double Eagle is 
illegal. No court action whatsoever that I am aware of, and I 
am a student of it. There have been some agreements and 
compromises, but I am not aware of any court action unless I 
missed something. Okay?
    We have the Mint Act of 1965, which is legislation that 
says, without equivocation, that any coin struck by the United 
States Mint prior to 1965 for any reason, patterns or anything 
else, is legal tender and legal to hold. That is completely 
ignored in all arguments.
    And the upshot of this is, I believe, that what is really 
needed is a liaison between the--or among the fine Congress, 
and I have studied Congress legislation back to day one, the 
numismatic community, and the Mint and Treasury officials.
    The Mint and Treasury officials, for this testimony, have 
about seven or eight errors. Another thing is the statement 
made by the Mint that never before this current legislation has 
anyone ever required that unnecessary coins be made. Well, we 
have the Bland-Allison Act of February 28, 1878, which mandated 
that hundreds of millions of unnecessary silver dollars be 
made.
    And these things are sort of like numismatics 101. It is 
not rocket science, and I am not Albert Einstein. But I think 
that our distinguished chair, Representative Pryce, and Mrs. 
Maloney, whose daughters are collectors, would benefit very 
greatly by, before having a presentation such as this, running 
some testimony by the numismatic community and saying, ``Hey, 
what do you think of this? Is this right?'' Because all of 
these factual errors have come out in Government testimony, not 
because of intent, but because of lack of knowledge.
    Second point, guarding my time here and respecting others, 
we have the Bureau of the Mint turning in $7- or $800 million 
worth of profits to the Treasury Department in a nice flow in 
the taxpayer's direction. We have Dr. Brent Glass, struggling 
to try to raise $10 million over a period of years to help out 
the Smithsonian exhibit at the same time the Mint desires, as 
was said today, to get its Presidential dollars circulating, 
maybe to get rid of some of those Sacagaweas, State quarters.
    The Mint has advertising budgets. They spend money on 
advertising. But they do not look at their own doorstep, within 
a short walk away, the Smithsonian. The Smithsonian is 
advertising the history and appeal of money. Maybe 1/10th of 1 
percent of the numismatic profits could go to the National Coin 
Collection. Dr. Glass said that they would send exhibits on the 
road, and they would have seminars. This is something that is 
probably less than the cost of a television campaign, but much 
more productive.
    And the last statement I want to make is in regards to Mint 
records and access.
    We have a situation, and brought up by Representative 
Lucas, and I am--as a researcher, I am very aware of this. If 
the Mint Director happens to be friendly, Donna Pope, for 
example, and I am a qualified researcher with some academic--or 
some experiential success, I would say, I would like to do some 
research in the archives.
    She would say, ``Be my guest. Go to Philadelphia. Take a 
camera person with you, wherever you want to,'' knowing that 
what I was doing or what Coin World is doing is not 
antagonizing the Mint. We are not snooping on its personnel. We 
are trying to educate people about coins.
    The last Administration, that of Mrs. Holsman Fore, if I 
wanted to look at something, the answer is, ``Well, we are too 
busy. No, you can't do it. You are going to be able to do it 
some time.'' And I have done absolutely no research at the Mint 
for about 5 years because I am not allowed in.
    And there is something wrong with this. There should be a 
person at the Mint, a civil service position, who is a liaison 
with the numismatic community and also could be a liaison with 
the distinguished Members of Congress, just transmitting 
education rather than preventing it.
    I think we are working at cross-purposes. We have 
Representative Lucas saying we should do one thing, saying that 
his lawyers are different than yours. I think a lot of this is 
unnecessary. I think we are all working in the same direction 
to promote coin collecting, to promote the legacy of the United 
States, and to increase numismatics.
    And I can't think of anything that the people at this side 
of the table want to do today that is in opposition to what 
Congress wants, or what the American people want, or even, for 
that matter, what the Mint wants. I think it is strictly a 
matter of communication.
    So I appreciate the opportunity to be here and would stay 
on for questioning afterwards, and I actually commend 
Representative Lucas for inviting numismatists here to what is 
obviously mainly a yearly financial hearing. I think this is a 
very nice opportunity. Thank you.
    [The prepared statement of Mr. Bowers can be found on page 
48 of the appendix.]
    Mr. Lucas. Thank you, Mr. Bowers.
    Ms. Deisher.

     STATEMENT OF BETH DEISHER, EDITOR, COIN WORLD MAGAZINE

    Ms. Deisher. Representative Lucas, and other members of the 
subcommittee, I would like to thank you for inviting me to 
testify today.
    I have chosen to focus my prepared testimony on H.R. 5077. 
Virtually everyone in the coin collecting community welcomes 
the certainty that H.R. 5077 would bestow upon certain coins, 
medals, and numismatic items made by, or in, the facilities of 
the United States Government prior to January 1, 1933. It would 
clarify the right to own and trade these historic U.S. 
numismatic items, many with origins that cannot be proven or 
documented today.
    I would like to offer three points regarding this section 
of the proposed legislation.
    Number one, there needs to be a legal definition of 
``issued.'' We have found this term to be used and applied in 
very different ways.
    Number two, there needs to be a timeframe or a statute of 
limitations on items which have entered the collector 
marketplace, are known to Government officials, but for which 
no action has been taken by the Government to recover them. It 
should allow the Government to prosecute those proven to be 
involved in illegal acts, but it should not punish the 
numismatic item itself.
    And number three, this legislation should address burden of 
proof. The burden of proof that a coin or medal or numismatic 
item has been stolen or illegally removed from a Government 
facility should rest on the shoulders of the Government prior 
to the item being seized, or as we heard in testimony today, 
recovered.
    All sections of this proposed legislation are important. 
But I would like to draw particular attention to Section C, 
which would require an inventory of all coins, medals, or other 
numismatic items in the possession of the United States 
Government regardless of when such items were made or struck. 
An inventory and public accounting of the Government's holdings 
is critically important for the U.S. Mint's customers, the 
sector of the public who purchase numismatic collectibles, so 
that they may have full faith in the products that the Mint 
manufactures, and certainty regarding the quantities available 
to the marketplace. This is because the number of available 
coins to collect is one of the primary determinants of value.
    The Mint currently, in its annual report, lists only the 
number of coins shipped to the Federal Reserve Bank, and the 
number of coins sold, in the case of numismatic and bullion 
coins. The Mint should be required to report in a permanent 
form the number of coins it strikes by date and Mint facility, 
whether for circulation, commemorative, bullion, or other 
numismatic products. It should be required to report annually 
the number of coins melted, defaced, or otherwise destroyed, 
and the numbers of these items being held in inventory.
    An inventory of U.S. Mint holdings is essential. Without 
it, uncertainty and speculation will continue to eat away at 
the integrity of the U.S. Mint's products, particularly the 
numismatic offerings. Rather than an inventory mandated every 5 
years beginning January 1, 2007, as proposed, an annual product 
inventory concurrent with the end of the Mint's fiscal year on 
September 30th would seem more logical and efficient.
    During the last decade, the U.S. Mint has spent hundreds of 
millions of dollars to computerize its operations and 
accounting abilities. Surely that system should be capable of 
identifying products in inventory on a date certain, and mint 
officials should be able to report that information in a timely 
manner and in a permanent document such as the annual Mint 
report.
    The inventory envisioned in H.R. 5077 also includes a 
listing of historic artifacts and experimental items. This kind 
of material, in all likelihood, is not part of the Mint's 
production and numismatic marketing computer systems. 
Identification in inventory of such items may take more than 1 
year. Two-year inventory intervals would seem logical for this 
kind of material, beginning September 30, 2008.
    It is imperative that numismatic artifacts being held at 
various U.S. Mint facilities be identified and inventoried, and 
that such information be disseminated in a timely and permanent 
format. In my written testimony, I have cited examples of 
experimental pieces, plasters, galvanos, ledgers, and other 
artifacts within the confines of the U.S. Mint facilities that, 
without a formal inventory, are in danger of being lost to 
history.
    Also, the U.S. Mint has struck commemorative silver coins 
since 1982, commemorative gold coins since 1984, and precious 
metals bullion coins since 1986. Yet there exists no 
independent public verification of the content of these coins. 
Congress should immediately reinstitute the US Assay 
Commission, with authorization to randomly test the weight and 
fineness of coins produced by the U.S. Mint in order to ensure 
that they conform to their respective legal standards. Each of 
these areas I have cited cry out for certainty and 
accountability. H.R. 5077 provides a vehicle that brings these 
issues to you for discussion and action. We trust that you will 
act wisely, decisively, and promptly.
    I thank you for the opportunity to testify, and I would be 
happy to answer any questions.
    [The prepared statement of Ms. Deisher can be found on page 
56 of the appendix.]
    Mr. Lucas. Thank you for your insights.
    Mr. Cipoletti?

    STATEMENT OF CHRISTOPHER CIPOLETTI, EXECUTIVE DIRECTOR, 
                AMERICAN NUMISMATIC ASSOCIATION

    Mr. Cipoletti. Thank you, Mr. Chairman. I am Chris 
Cipoletti, executive director of the American Numismatic 
Association. The American Numismatic Association is a federally 
chartered nonprofit corporation founded in 1981 and chartered 
by Congress in 1912. Our mission is to encourage and educate 
people to study and collect money and related items by 
promoting, preserving, and protecting the interests of those 
who desire to discover and explore the world of money. The 
American Numismatic Association appreciates the opportunity to 
present testimony here today.
    Money, in its many forms, reflects culture, art, science, 
and history. In the United States, our money is a source of 
documenting historic events, it reflects our values and our 
culture, and it presents artistic renderings of who we are and 
what is important to us as a Nation. Numismatists from around 
the world have a strong interest in American money. The 
production of money, with designs reflecting our history and 
culture, is as important to the numismatic community today as 
it always has been.
    In the last several years, the diminishing exposure to 
numismatics, particularly through circulating coins and paper 
money, has changed, with renewed excitement in the money 
produced by the United States. Much of the resurgence in 
numismatics at the basic level can be attributed to the 
introduction of the 50 State Quarters Program by the United 
States Mint, which has created an interest in collecting that 
has not been seen for decades.
    The changing face of money through designs and colorization 
of paper money produced by the Bureau of Engraving and Printing 
has furthered the interest created by the 50 State Quarters 
Program as people of all ages are now looking at and looking 
for the new look of money and numismatic materials being 
produced under the auspices of the Department of Treasury. With 
the new efforts from the United States Mint and Bureau of 
Engraving and Printing, an educational introduction to culture, 
art, and history is being presented in every transaction 
involving United States currency.
    Money is an educational tool that allows us to learn about 
the struggles in which the country has been engaged. It teaches 
us about significant events that have influenced the 
development of a nation. And it allows us to hold and own a 
tangible asset that has value beyond the denomination of the 
coin or the note. For money to be the educational tool that it 
has the potential to be, it must be accessible for viewing, 
research, and study.
    The American Numismatic Association is supportive of H.R. 
5077, introduced by Representative Lucas to address numismatic 
issues. Others have, and will, comment on the specific language 
of the legislation. And while the American Numismatic 
Association is not specifically commenting on the language of 
the proposed legislation today, the Association supports the 
intent of the legislation in creating certainty for the 
collecting community about numismatic materials.
    Currently, there are rare numismatic items that are 
privately owned by individuals who spent hundreds of thousands 
or millions of dollars to legitimately purchase the materials. 
Yet ownership is potentially called into question because the 
numismatic material was not formally released by the Department 
of the Treasury.
    H.R. 5077 addresses this issue for pre-1933 issued 
numismatic material, assuring numismatists that they have 
legitimate ownership, and that their ownership cannot be 
challenged, particularly when new Administrations in the 
Treasury take office and may have an agenda to address items 
which the Treasury believes were not rightfully released from 
the Treasury.
    The American Numismatic Association also supports the 
efforts of H.R. 5077 to provide funding for the National 
Numismatic Collection maintained by the Smithsonian 
Institution. This numismatic treasure is an educational 
resource that cannot be replaced or surpassed. Since the 
National Numismatic Collection was dismantled in the summer of 
2004, the country and visitors from around the world have been 
deprived of the educational treasure this collection offers.
    The National Numismatic Collection can, and should, be used 
to teach people of all ages. From the history of money to its 
current day uses, money serves as an irreplaceable educational 
asset. Money can be used in practically any educational 
discipline, but to be effectively used, people must have access 
to the tangible objects. This requires that an historical 
collection be maintained and available for display and 
collection. The efforts of H.R. 5077 to accomplish this for the 
National Numismatic Collection must be applauded.
    Money is not, and will not, become obsolete. Rather, it 
will change form over time as society and culture changes. 
Making sure that the culture, art, and history of money is 
collected, preserved, and maintained for future generations is 
an important and necessary action.
    The American Numismatic Association applauds the Department 
of the Treasury's foresight in changing and allowing changed 
designs on our money to pique interest in numismatics, to 
create a network of people who are interested in preserving our 
culture and our heritage through money. The American Numismatic 
Association also encourages the continued development of new 
and changing designs on American money. This will continue to 
keep people interested and involved in money as an educational 
tool and a collectible item of significant value.
    I appreciate the opportunity to provide testimony here 
today, and will be happy to answer any questions.
    [The prepared statement of Mr. Cipoletti can be found on 
page 52 of the appendix.]
    Mr. Lucas. Mr. Weinberg?

STATEMENT OF FRED WEINBERG, VICE CHAIRMAN, INDUSTRY COUNCIL FOR 
                        TANGIBLE ASSETS

    Mr. Weinberg. Congressman Lucas, and members of the 
subcommittee, my name is Fred Weinberg, and I currently serve 
as the vice chairman of the Industry Council for Tangible 
Assets, or ICTA, which is the national trade association for 
rare coin, precious metals, and collectible currency dealers. 
Within the United States alone, it is estimated that retail 
sales of rare coins total about $10 billion annually, as of the 
end of 2005.
    I am also a past president of the Profession Numismatists 
Guild, and I have been a member of the American Numismatic 
Association for more than 38 years. I have been a full-time 
numismatist for 35 years, and a collector for over 40 years. 
And I specialize in mint error coins, currency, and the minting 
process.
    I appreciate you inviting the Industry Council for Tangible 
Assets to testify before you today. In mid-April of this year, 
Representative Lucas requested that ICTA gather input from the 
numismatic community for his bill, H.R. 5077, which he 
introduced in April of 2006.
    Consequently, I and a number of other leaders of the 
numismatic community, met with ICTA staff to collect our ideas 
on the bill as introduced and to decide what, if any, 
amendments or changes we would recommend to Congressman Lucas. 
This group then met with Mr. Lucas and his staff via conference 
the following month, and subsequently provided him with some 
suggestions designed to fulfill his purpose in introducing H.R. 
5077.
    H.R. 5077 will establish a clear definition regarding the 
legal private ownership of certain coins, medals, and owner 
numismatic items produced by the U.S. Mint. Such clarity will 
accomplish several goals that we feel will benefit both the 
U.S. Treasury and the numismatic community, which include the 
fact that the numismatic community and relevant Government 
agencies will have certainty as to which products may be 
legally owned and traded.
    H.R. 5077 will also provide for the preservation of 
historically important numismatic items, and create specific 
policy for the disposal of trial pieces, patterns, and other 
items so that they will not be lost for posterity at the 
discretion of changing administrations of the U.S. Mint or 
Treasury.
    It will also provide funding for the National Numismatic 
Collection at the Smithsonian Institution. This is especially 
important since the National Numismatic Collection at the 
Smithsonian was closed last year. H.R. 5077 will provide for 
the preservation of our coinage, which is part of our Nation's 
cultural heritage.
    Numismatic industry experts agree that the provision in the 
bill that would officially declare all coins, medals, and owner 
numismatic items produced before December 31, 1932, as legal to 
own and trade is acceptable, and very desirable, from our point 
of view.
    From our experience, the items of most concern to the U.S. 
Treasury have been a very small number of test or trial pieces, 
such as the solid gold 24-karat Sacagawea dollars and the 1933 
Double Eagle gold coins mentioned earlier. We understand many 
of the Treasury's and the Mint's concerns, and we wish to help 
resolve any of the issues that might impede passage of H.R. 
5077.
    Over time, proving whether an item left the Mint legally or 
illegally becomes very difficult. We would suggest that if an 
item in question comes to the attention, possession, or 
recovery of the Mint after a time frame of 50 or 75 years, it 
is legal to transact unless there is clear documentation that 
the item's return to the Mint was a requirement at the time of 
issue or within a reasonable time of its original distribution.
    For future issues, clear documentation could be something 
as simple as including in any cover letter or memo that 
accompanies the product, including some wording indicating that 
the Mint requires the item or items to be returned to the Mint 
if they are shown to a committee such as this.
    Should the Government seize numismatic items, it is our 
position that the Government should be required to show that 
these numismatic items were removed illegally from the U.S. 
Mint's facility.
    There are certain specific areas of concern to the 
numismatic community that the current language of H.R. 5077 
does not address. For your examination, I have brought with me 
some samples of the following products and items which are 
currently not specifically addressed in this legislation, and 
which we are concerned about. They include error coins, 
patterns, numismatic items such as cancelled dies, punched 
planchet strips, and items that may be legally provided by the 
Mint to legislators such as yourself or outsourcing companies 
that provide items to the Mint but whose legal status may be 
unclear if they have entered the marketplace.
    We urge Congress to establish that all mint error coins, 
made in the normal course of production, are legal to own and 
trade if they left the Mint legally. The Mint can be very proud 
that new production technology has resulted in far fewer 
striking errors, and technological advances in security and 
minting procedures at the Mint's facilities all across the 
country make items less likely to be able to be removed 
illegally.
    Indeed, my colleagues and I in the industry agree that in 
the last 5 years alone, due to the implementation of new 
minting presses and technology, the incidence of error coins 
alone has decreased by approximately 97 percent, and the Mint 
is to be commended for that. In addition, in the past, once 
these products have entered the marketplace, it is not always 
possible to determine if they entered commerce legally. We 
assume that die varieties should not be any problem for the 
Mint.
    To the best of our knowledge, none of the items listed 
above has been particularly problematic for the U.S. Treasury 
or for the Mint. However, we do believe that their status 
should be formally addressed in H.R. 5077.
    On behalf of ICTA, PNG, and the numismatic community, I 
wish to thank you for this opportunity to present our comments. 
I welcome your questions. And we encourage any member of this 
subcommittee or their staff to contact us for assistance and 
any additional information and background we may be able to 
provide. We look forward to continuing to work with Congressman 
Lucas and this subcommittee as you consider H.R. 5077. Thank 
you.
    [The prepared statement of Mr. Weinberg can be found on 
page 109 of the appendix.]
    Mr. Lucas. Thank you, Mr. Weinberg.
    And a couple of housekeeping notes. I would first like to 
ask unanimous consent that a letter in the form of some written 
testimony from Mr. Harvey Stack of New York City be included in 
the official record.
    Unanimous consent. So ordered.
    And we are now in a series of four votes on the Floor of 
the United States House. This is a very distinguished panel. 
You have come a long way, a number of you have. I would like to 
ask your indulgence to recess until the final vote, which is 
probably 40 minutes away, return at that point, and continue 
our discussion.
    With that, the committee will stand in recess until 5 
minutes after the final vote in this series.
    [Recess]
    Mr. Lucas. [presiding] The subcommittee is reconvened. I 
appreciate the indulgence of the witnesses. In this body, our 
most important act is voting on behalf of our constituents. We 
just had a series of four votes, and in an hour will have 
another vote. Certainly I wanted to give the witnesses an 
opportunity to expand a little bit more under the 
circumstances.
    And with that, could I turn to you first, Mr. Bowers. Part 
of the topic that we discussed today was the Nation's coinage 
in its present form. And from a little historic perspective, 
when we talk about the future of the one-cent piece, the future 
of the dollar coin--and we faced these challenges in the past--
the end of the old half-cent in 1957. I have read accounts in 
publications by yourself and others about literally barrels of 
the old large cents being turned in for the new small cents. 
This is not a new experience, is it?
    Mr. Bowers. No. The coinage spectrum has changed. It has 
evolved continuously. There was a time when we had gold coins. 
We no longer have them. The silver coins. These were 
foundational changes far exceeding nickels and cents. And we 
abolished silver coins. And somehow, the American economy 
survived and prospered.
    The numismatic community watches all this happen. If you 
make a two-cent piece tomorrow, we will collect it. But the 
historical record shows that the citizens will adapt to just 
about anything.
    The American West prior to the 20th century in California, 
Nevada, and Wyoming, didn't use nickels or one-cent pieces even 
though they were made. Their economies started at mainly a 
dime, and they didn't even have small change.
    But whatever is available, I think, will be used, and the 
public will get used to it. But there will be a resistance to 
change. Sort of like Y2K--the world was going to fall apart, 
but somehow it didn't. And if the one-cent piece, the dearly 
cherished one-cent piece, which I like its history, if it were 
to pass, soon whatever the lowest denomination would be would 
take its place and it would be forgotten, maybe and fondly 
remembered, and probably quickly collected. I could see them 
going out of circulation very fast.
    Mr. Lucas. While we are visiting with you, Mr. Bowers, 
would you touch for a moment on the comments by the Mint 
Director that in effect said that the Mint reserved the right 
to, as they use the phrase, ``recover'' any and all numismatic 
items which in effect, it appeared, they determined did not 
meet their standard of having been issued or delivered or 
brought forth or whatever?
    Mr. Bowers. Well, the record--
    Mr. Lucas. That is a pretty profound statement, isn't it, 
really? The potential consequences?
    Mr. Bowers. The record shows that in the 19th century and 
also at times since then, the Mint people themselves kept 
samples, and sold coins. There are approximately 1,700 
different varieties of patterns--a few more than that, 1,800--
of pattern coins from 1792 onward, of which there is no 
official record of being distributed, less than 5 percent of 
them were ever documented.
    There are tens of thousands of coins with no documentation 
whatsoever that are now avidly collected. And the Mint could 
take the position that, ``Well, we have no record these were 
ever issued; we want them back.'' And this puts a sword over 
the head of everybody who has such a thing and feels that they 
could be held legitimately.
    And as the Mint administrations change--I will give another 
example. Around 1960, I had a plastic one-cent piece that was 
made in 1942 by a private company as a proposal for a cent. The 
Secret Service came and seized this from me. And this was 1960, 
46 years ago. And I said, ``Well, I believe it is legally 
held.'' And they said, ``Well, we will let you know.''
    They could do this by fiat because no individual collector 
can say, ``Well, I am going to challenge the Secret Service and 
the Treasury Department. No one has enough money to do this. So 
I believe that H.R. 5077, by defining what can be held and what 
cannot be, removes uncertainty because there are so many 
undocumented things, and different ways of interpretation.
    Another way of interpretation in the past has been the 
statutes. You could point to legislation, well, the statute 
clearly says that a quarter dollar has to be made in ``XYZ'' 
metal and a certain diameter. Well, obviously a mint error, if 
you have a quarter that is struck on a one-cent planchet, 
violates Federal law. Yet--so the Mint could say--a new 
director, for example, say, oh, this violates the coinage 
statute. It could not have been legally issued. It was issued 
by mistake. We want it back. Or it was illegally issued.
    This House bill gives some assurance to American citizens 
who collect coins without any fraudulent intent, and just want 
to own things, and have some security in the value of their 
assets without fear of Government intervention.
    Mr. Lucas. Mr. Weinberg, along that line, again, part of 
this process is establishing an official record of our 
proceedings. And as I think the panel has observed, Congress, 
like the general public, is always in need of a little 
education. That is an important thing.
    Could you give some examples of the kind of items that we 
are talking about here and the dollar amounts of some of these 
items that have traded publicly that fall within this broad 
range of what we heard earlier from the previous panel?
    Mr. Weinberg. Well, when you talk about mint errors, there 
are coins that were struck off center that are only worth $5 
apiece, but there are hundreds of thousands of them that have 
been released from the Mint over the last even 50 years. The 
Mint accepts the fact that these errors were part of the 
production process and got out legally. They don't question 
that.
    But back in the 1960's, an off-metal coin, a coin like Mr. 
Bowers mentioned, a half-dollar struck on a penny or a nickel 
that was struck on a dime, could be considered, and was 
threatened by the Treasury Department to be, confiscated, even 
though there's very few, if any, actual records of seizure back 
in the 1960's. It was, as Mr. Bowers says, held over the head 
of every collector that these things weren't possibly legally 
issued.
    Some error coins are worth a few dollars. Some error coins 
are worth $50,000. There are certain gold error coins that 
might be worth $150,000, but those are 100 years old. So we are 
looking for some type of consistency for whether it is pattern 
coins that were issued by the Mint but never acknowledged, or 
error coins, 97 percent of which were probably issued as part 
of the normal production process, some of which might have been 
taken from the Mint 50 years ago, but they become fungible. You 
can't tell a double-struck penny that was taken from the Mint 
and a double-struck penny that was not taken from the Mint.
    And so the Mint should be required to show that they either 
know an employee was stealing these coins, and they know who 
they sold them to and they can recover them, or the Mint should 
say, these are coins that were issued in error--and again, the 
Mint does a great job. As my testimony says, the Mint makes--at 
the height, 5 years ago, the Mint made 26 or 27 billion coins. 
And if you take a defect rate of .000000001, that is still a 
decent amount of coins, but that is a better--a lower defective 
rate of probably any manufacturing process of almost anything 
in the world except maybe computer chips.
    Mr. Lucas. Fair enough. And I address this question to the 
entire panel. The portion of the bill that strikes toward the 
goal of a systematic inventory, trying to give the Mint maximum 
flexibility, requesting only, as the bill is now drafted, an 
every 5 year revision of that inventory, does it strike anyone, 
any of you members of the panel, as unreasonable that a public 
institution, using public resources, and generating public 
profit, would seem to have difficulty in providing what any 
good, from my perspective, private enterprise business would 
have on the books on a day-to-day basis? Mr. Bowers?
    Mr. Bowers. I can address that with personal experience. I 
wrote a book, the Encyclopedia of Silver Dollars--the official 
title was Silver Dollars and Trade Dollars of the United 
States: A Complete Encyclopedia--in 1993. At that time, I 
talked with Donna Pope, the Mint Director, and I said, the 
record shows that Susan B. Anthony dollars were made in large 
quantities in the year 1980, but yet they don't seem to turn 
up. Where are they?
    So she said she would check around. And the Mint didn't 
know where they were. And she was very cooperative, but the 
Mint had no idea where they were. She said, you might check 
with the Federal Reserve system. I made some calls, and they 
said, well, we think we might have 250,000 of these in Denver, 
but we are not sure. And there was no way I could get any 
further information.
    Right to this day, I believe the numismatic community 
doesn't know if all the 1980 dated Anthony dollars were 
distributed, if they were, how they were, or where they are 
stored. And I think, as the Mint accumulates things, we now 
know that the Mint gives information, like we have sold--this 
is just a hypothetical example--we have sold 38,000 of this 
commemorative coin. That is what they have sold. But that does 
not necessarily equal to what they have struck. They strike 
extras for possible loss. If they sold 38,000, did they make 
42,000, 38,004, or what? The numismatic community would like to 
know that.
    Also, for accounting purposes, if they sold 38,000 and they 
made 43,000, there are 5,000 available somewhere. What is the 
disposition of those? Can somebody with an inside track get 
them at face value? What if they have a numismatic premium?
    I think the H.R. bill does address that because if these 
are disclosed and we find 250,000 1980 Susan Anthony dollars 
that are worth hundreds of thousands of dollars in the 
aggregate or millions of dollars, we recognize this and make a 
sale that would benefit the Smithsonian.
    Right now, there is no accounting that I am aware of. And I 
try to be a fairly careful student of numismatics. It is just 
like a black hole when you ask for answers.
    Mr. Lucas. If I could, Mr. Bowers, at various times the 
topic has come up, in particular, those 1933 Double Eagles. And 
I know that there is potential litigation out there, and we are 
not concerned necessarily with that here. And I know that is 
not an issue of the bill.
    But in the way the Mint keeps their records and the records 
that you have been able to examine down through the years, is 
it possible that old customs from days gone by where collectors 
were allowed to swap for certain coins at the beginning of a 
new run year, were allowed to purchase certain pieces--is it 
possible that some of these ``rarities'' fall in that category?
    Mr. Bowers. Well, my theory on the 1933 Double Eagle, and I 
would require 2 hours to expound on it--
    Mr. Lucas. Of course.
    Mr. Bowers.--but in brief, in 1933 the Secretary of the 
Treasury was William H. Woodin, who was a numismatist, a 
student of gold coins, and at the time Double Eagles weren't 
widely collected.
    If I went to William H. Woodin in March 1933 and said, 
``Mr. Woodin, I would like to have one of your new 1933 Double 
Eagles,'' I am sure, based on Mint tradition, that he would 
say, ``Well, you go down to the cashier of the Mint and you 
just give him another Double Eagle and he will give you one.'' 
Things were very casual. When the 1933 Double Eagle was 
investigated in 1944, there was not a single administration 
person from 1933 still in service that they could interview. A 
case in point, a little closer in time, in 1936, there was a 
certain commemorative half-dollar made among over a dozen 
different designs. John Sinnock, the engraver, sent one of 
these pieces. He pickled it in acid to create a matte proof, 
and he sent it to the designer of this coin with a little 
letter like, ``I thought you would like to have one of the 
first strikings, and I actually prepared it with a special 
surface, the only one made. Here it is.''
    Okay. Well, this coin came into my possession and is now 
owned by a collector overseas. But the Treasury Department 
could rightfully say, ``Well, we have no record that the 
engraver was allowed to do that,'' and so on, and confiscate 
the coin. Whereas I think the circumstances I just mentioned 
show that it wasn't stolen from the Mint. According to practice 
at the time, it was given as a token of appreciation to the 
designer.
    The proposed House rule will protect coins from what I 
would call capricious seizure by people who are not aware of 
the facts, or in other instances the facts aren't known so they 
assume that the coin is guilty until proven innocent, whereas 
the average citizen of the United States doesn't have the legal 
wherewithal to challenge the Treasury Department and prove 
something isn't guilty.
    Mr. Lucas. A question from a slightly different angle, just 
drawing upon your numismatic knowledge. After the great gold 
recall that was ongoing for--well, basically, I guess, until in 
essence the legal ownership of gold was restored, initially all 
those coins were returned to the United States Government 
through, I assume, the Federal Reserve system.
    At what point was the decision made to melt all of those 
down into 90 percent bars?
    Mr. Bowers. Most of the coins were melted in 1937. So the 
coins were retained at the Mints in different vaults, at the 
Philadelphia Mint, mainly, and then in 1937 they were melted.
    In 1937, there were a number of people in the Treasury 
Department in Philadelphia that went into these vaults, 
substituted other Double Eagles for them for $20 gold pieces--
dated, for example, 1932 in particular, 1931--and took them to 
New York City coin dealers--for example, Abe Kosoff, and I 
interviewed these people. We had a steady stream of Mint people 
coming from Philadelphia with these rare Double Eagles that 
they were finding in the melt quantity. They substituted coins 
from pocket change.
    And I said--I have said this in print in my Coin World 
column and elsewhere--that these people are sort of like Robin 
Hood or somebody. I mean, we have to be thankful that these 
coins would have been reduced to bullion and lost forever. The 
Treasury Department didn't lose one penny because they got 
another Double Eagle to melt, and because of this, we have the 
vast majority of Double Eagles dated 1931, 1932, and also 1933.
    And talking about the 1933, Mr. Israel Switt was 
interviewed at great length in 1944 by the Treasury Service. No 
charges were ever filed against him. He was not convicted of 
anything. And now we have it as gospel that he stole them from 
the Mint. Well, that is highly unlikely. What probably happened 
is someone from the Mint came to him and said, would you like 
to get these that I just rescued from oblivion? Or maybe he got 
them some other ways.
    But in hindsight, when we don't know what happened in 1937 
or 1933, all sorts of very strong facts--and the word ``facts'' 
is in quotation marks--are saying, this is the true story of 
the so-and-so. And I will go beyond the Double Eagle because it 
is controversial.
    But take all the patterns. They were not released legally. 
In 1909 and 1910, the Treasury Department sought to seize 
pattern coins from a Philadelphia dealer named John Haseltine, 
seized them and said, ``These weren't officially released. We 
want them.'' And he went to court and got them back.
    But what the H.R.--what the resolution is trying to do is 
to prevent capricious seizures, not well-studied things where 
someone was--some coin was stolen from the Mint by armed 
robbery or something. Nothing that was documented, but things 
that fall into the great never-never land where they exist but 
are not documented. And the people who own them should be 
protected from a force that they cannot combat, and that would 
be the Treasury saying they are illegal.
    Mr. Lucas. From your research, who actually gave the order 
for the mass melting of those coins in the vaults? Did that 
ever come to the top?
    Mr. Bowers. I would have to research that. But that would 
be--it would have been--Franklin Roosevelt was President, and 
it would have probably been a Treasury edict. I don't think it 
would have been subject to--
    Mr. Lucas. Bless whoever in Treasury decided to wipe out 
that part of our heritage.
    Mr. Bowers. Right. Well, they probably said--and I don't 
like to deal in supposition--that we have been storing these, 
and we can't count them. And Fort Knox was a new facility. We 
can melt them down into bars, which are easier to count and 
store them in Fort Knox. And then we know easier how much gold 
we have rather than these cloth bags in various vaults in the 
Philadelphia Mint.
    Probably it was not necessarily a bad decision if you 
remember that in 1937, these weren't widely collected. I mean, 
it wasn't a good numismatic decision, but it wasn't a 
capricious decision. It was what they thought best at the time, 
and I have no quarrel with it.
    It is just that the pieces that got out of the Mint for one 
reason or another and were saved numismatically but not 
documented, to say that they were stolen from the Mint has 
several interpretations.
    Is a coin stolen if you are at a--if the Treasury 
Department tomorrow says, all Sacagawea dollars must be 
returned to the local bank. We are calling them in. Someone 
goes to their bank counter and said, well, instead of turning 
that one in, sir, I would like to buy it for a dollar bill, and 
gives the bank a dollar. Is that an illegal action? I would 
probably say no.
    Mr. Lucas. Good point.
    Mr. Cipoletti, as executive director of the largest coin 
collecting association in the country, could you expand on your 
written and oral testimony about the nature of how the ANA 
views the handling of our National Collection, and where as a 
group they believe we should go?
    Mr. Cipoletti. Certainly. One of the primary functions of 
the ANA is to provide educational resources in numismatics to 
not only the membership but to the general public. And 
certainly the National Numismatic Collection housed at the 
Smithsonian Institution is one of, if not the, very best 
resource that exists around the world for study and research on 
numismatic material.
    And it is imperative that material be accessible, not only 
to researchers who know how to get in behind the scenes but to 
the general public, to understand and learn about numismatics, 
to learn how money throughout the ages, whether it is U.S. 
money, whether it is ancient or foreign money, has really 
influenced and developed and is reflective of who we are as a 
people, what our culture is about, what our history is about, 
where we have been geographically--everything that money really 
speaks to.
    And so we at the American Numismatic Association actually 
have had dialogue with the Smithsonian about what we can do to 
benefit and support the Smithsonian in any efforts to bring the 
National Numismatic Collection back out of mothballs and into 
the public's eye.
    Mr. Lucas. Gentlemen, any final thoughts or observations 
you would care to share with the committee for the record?
    Mr. Bowers. I would like to reemphasize that the numismatic 
community is trying to ride the same horse team as the Mint and 
Congress. The numismatic community is a resource that we--
speaking for everybody at the table, I am sure--we want to work 
with the Treasury Department, work with the Mint, and help you 
with your programs.
    We have no adversarial interest whatsoever. We are just 
trying--we appreciate money. As Christopher Cipoletti said, it 
is history. It is heritage. We appreciate the current Mint. 
Often, when Mint Directors retire--Jay Johnson, who was here at 
the testimony today--if they were an Agricultural Department 
official, they would be forgotten. A Mint Director can go to a 
coin convention 10 years later, 20 years later, and be feted 
and honored.
    We like the Treasury Department. We like Mint officials. We 
like Congress. And I believe we just need to work closely 
together. And we invite you to tap us, free of charge, if we 
can help in any way.
    Mr. Lucas. Thank you, Mr. Bowers.
    Mr. Cipoletti?
    Mr. Cipoletti. Yes. I would echo what Mr. Bowers said. The 
American Numismatic Association certainly has developed a very 
good and strong working relationship with the United States 
Mint, and with the Bureau of Engraving and Printing, and it is 
our hope to continue to further that relationship.
    But we certainly don't find the position that is taken by 
the Mint on H.R. 5077 to be well thought out or supported, 
especially given the interests of the collecting community and 
the fact that it is the numismatic community that is truly 
supporting the Mint in many respects and providing a 
substantial amount of money to the Treasury of the United 
States.
    Mr. Lucas. Thank you.
    Mr. Weinberg?
    Mr. Weinberg. I would just like to say that the Industry 
Council for Tangible Assets is offering you and your committee 
any help, background, and suggestions to make your bill easier 
to pass, and any amendments or changes. We are here to help you 
with any information that we can provide that would support 
your bill.
    Mr. Lucas. The Chair wishes to thank the panel for their 
input and their observations. And yes, this will be a process 
that we will continue to move forward.
    With that, the Chair also would like to note that some 
members may have additional questions for the panel which they 
may wish to submit in writing. And without objection, the 
hearing record will remain open for 30 days for members to 
submit written questions to these witnesses and to place their 
responses in the record.
    And with that, this hearing is adjourned.
    [Whereupon, at 5:22 p.m., the subcommittee was adjourned.]


                            A P P E N D I X



                             July 19, 2006


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