Rare Money Blog

Harvey Stack Remembers: Growing Up in a Numismatic Family, Part 39

By Harvey Stack, Co-Founder

Author: Harvey Stack / Thursday, March 07, 2019 / Categories: Harvey G. Stack Remembers

In 1965, the coin market became very hectic, as people became more aware that the change in their pockets could be more valuable than the face value printed on it. So daily, without a break, we had offers to buy silver, at a "hyped up price." This was fed by notices from the Treasury that one could not melt these coins, and that there might be redemption beyond face value. The Treasury implied that, after studying the ongoing confusion, they might consider approving in the future, the melting of the silver coins for their content.


Several prominent people created a new marketplace for coins. Dr. Jerekke, who owned Iron Mountain Depository, started buying up silver coins for the future. There were groups who pooled their wealth and speculated with their precious metal friends to drive up the demand for silver. The price of silver began to rise, but it wasn't until a new regulation was passed that they were able to sell at a profit some of the silver they had accumulated. The silver buyers were led by the famous Hunt Brothers of Texas, who spent their fortune buying up silver. The huge uproar meant coin dealers around the country were overwhelmed with questions about silver that interrupting their daily work. While many made money buying and selling silver and even speculating, this was all a real distraction from the usual numismatic business that still had to be done.


Also causing a distraction to our regular business were Silver Certificates, notes that were issued with silver backing them, that became another speculative item. As silver was removed from the nation’s coins, the U.S. had to redeem these notes.  Many billions were still in circulation, but in order to control demand, the Assay Office would not redeem these notes unless $10,000 face value was delivered to them. This created another secondary market. A buyer would pay a small premium initially for each note, and bundle them together until the face value reached $10,000. The one who submitted the notes for redemption made the greater profit and this redemption was more lucrative than trading silver on the precious metal market.


So, with the silver market going crazy and with the general public all hyped up about making money from our Treasury, you can imagine the activity that was created.


In addition, during 1965, the Office of Gold and Silver Operations (OGSO) was short of help and were very slow in issuing import licenses for gold coins, sometimes causing a wait of months to see if the OGSO would issue a license. For Stack’s this caused problems, not only when we wanted to bring coins into the U.S. for auction, but also when we were looking for items to enhance our clients’ collections. This was true of when we were looking for things to add to Josiah K. Lilly's collection. When we found something, we were never sure if the OGSO would allow it into the country.


Due to these difficulties, our lawyers in Washington filed papers, suing the OGSO and the Treasury Department for actions without explanation. We had to file papers with our complaint and wait for an answer. The OGSO had 60 days to respond, and then our attorney had to respond. To the surprise of our attorneys, the Department did not have a judge or a hearing officer to hear our case and we had to wait until one was found. One was found in the Commerce Department; we filed our complaint with him and then had to wait for him to set a date, which was finally done for the early part of 1966.