"Knowledge Through Education"

"Oh, No It Ain't ...!!"
#32
Fake Silver Dime Blanks Still Plague Hobby
by Ken Potter -- NLG

Photo © 2004 & courtesy of Ken Potter

    August 21, 2004 -- Back in the late 1980s, the marketplace became flooded with hundreds of alleged silver dime blanks and planchets* that boasted major errors. The bulk of the pieces turned up virtually overnight and was implied to have escaped from the U.S. Mint.  In The Error Shuttle Coin Magazine #15, (issued in the summer of 1989), this author exposed these pieces as being of a silver content lower than that of a 90% silver dime blank and thus as being something far less significant than what they were being touted as.  In terms of dollars and cents the fraud was rather insignificant but it terms of the number of dealers who were deceived by the supplier of the blanks and the number of pieces involved, it was large!  It was also a major embarrassment to an entire industry that had been so blinded by greed that it failed to heed the old axiom: if it sounds too good to be true -- it probably isn't. 
    Today, the story is largely forgotten, undoubtedly partially because some of the dealers involved would prefer to forget how they got stung and naturally tend to not talk much about it ... and obviously due to the passage of time.  I was also told (in a long letter that is still here on file) by one of the larger old-time dealers that the story should have never been told because it gave the error hobby and the dealers involved a black eye.  Thus we can assume that at least one person that is in a position to educate newcomers to the hobby -- will not.
    Though it was somewhat embarrassing to those involved, it was my opinion that hobby deserved to know what it was (or was not) that they had been sold over the years.   My policy back then was (and continues to be) that if I make a mistake that effects the hobby, (or my customers), I admit to it and "eat crow" if that is what it takes to straighten it out.  I "ate crow" and offered refunds to anybody who wanted to return the items.  To the credit of most error dealers at the time they also, at the very least, discontinued selling the items in question once they were exposed.
    However, the pieces themselves still exist and many that were sold to collectors have reentered the market described in the manner in which they were originally sold  -- as silver dime blanks with major errors.  It can also be presumed that some of the "discontinued items" eventually reentered the market as dealers went out of business or passed away and their stocks were transferred to other sellers.  Thus these blanks still show up from time to time offered as "silver dime blanks." Thus, the story needs to be retold.
    To start at the beginning: for about 20 years, alleged silver dime blanks and planchets were showing up in the hobby exhibiting major planchet errors including: major curved, straight, elliptical, crescent, ragged and bow-tie, type clips.  These were often found in combination with blowhole and other forms of lamination or defective planchets and often with a combination of different types of clips on the same blank.  Even unheard of exotic error types such as pairs of planchets that had been run through the upset mill together piggyback were seen.
    For a number of years these blanks were being fed into the hobby just a few at a time via dealer inventories and error-variety auctions.  While unusual, there was never a quantity large enough to surface at any one time to make anybody suspect anything was wrong.
    Then in the late 1980s the floodgates were opened.  Just about every major dealer in the error business was contacted by well-known hobbyist/part-time wholesale error dealer, the late Don Gordon of California, and offered a deal too good to be true.  The deal was that he had a small quantity of silver dime blanks with major errors that he was willing to trade off for undated Off Center struck Lincoln cents.  No cash deals were accepted.  As I remember it the offer was one silver dime blank for seven off center cents.  Mark Longas, a Michigan based error dealer at the time, remembers it as even fewer off centers needed to make the trade saying it was closer to five per "dime blank" but added that he may have negotiated a better deal than others who may have had to give more.  While I do not know what each dealer was told or what their trade deal was, what I do know is that Longas and I were both advised (completely independent of one another) that we were getting an exclusive deal and that none would be offered to any other dealers if we took the entire lot.  I assume that other dealers were given similar assurances.  With no-date off center cents being very common and wholesaling at 35c to 50c each at the time it appeared that each dealer was going to be able to get an exclusive deal that allowed them to corner the market on a quantity of silver dime blanks with major errors with retail values at $40 each or more for just $3.00 or so each in trade material.  I ended up with about 70 of the pieces and Longas with over 100 and I assume others ended up with similar numbers.
    As the run on undated off center cents began, maybe it should have become obvious that something was wrong but undated off centers were a glut on the market at the time and were available by the thousands to anybody who wanted them and nobody noticed that a run was actually occurring.  Also, many of us already had them in quantities as the byproduct of buying large lots of unsorted off center cents to obtain dated pieces for stock.  We were more than happy to get rid of them in trade for this "exclusive" deal.  Then all of a sudden the first part of the fraud became obvious as the pieces began showing up in various dealer catalogs, magazines, lists, ads and error-variety auctions almost simultaneously.  The alleged "exclusive" was not so exclusive after all!  Everybody had them and the value of the pieces was falling fast!
    It was time to take a second look at the blanks!  After all, if the deal itself was filled with deception, perhaps the too-good-to-be-true trade-value price was too!  Maybe they weren't U.S. silver dime blanks at all!  A closer look revealed that some of the cut-bands inside of the clips indicated that the shear took place in the opposite direction to what they should have on some of the pieces in this group (the direction of a cut band pattern inside of a clip should be opposite of that seen on the outside circumference of the blank). Additionally, when looking at the group as a whole, it seemed that the slightly yellowish, streaky look seen on all of the pieces was just too consistent, as if all had been made at the same time from the same piece of strip that happened to be of a streaky "poor metal mix" with lots of lamination.  What were the chances of this happening in the US Mint?
    With my suspicions aroused and my scale out for repairs, I then contacted the American Numismatic Association Certification Service, told them of my concerns, and asked them if they'd be willing to run a specific gravity test on a couple of the blanks to see if they were 90% silver.  They were sent a blank and a planchet and it was found that both were .875 silver or well below the tolerances of a US silver dime blank!  They were asked to repeat the test on two more blanks and did so with similar results.  Their obvious conclusion was that they were not US silver dime blanks!
    Still later I received a letter from Evelyn Wallace, relating facts to me from her ill husband, Don Wallace, stating that Don remembered those blanks and planchets well.  (Don and Evelyn Wallace penned the COINage Magazine column In Error  with Evelyn taking helm after Don became incapacitated.)  He was an expert witness in a criminal trial against a small group of hobbyists turned counterfeiters who had manufactured the infamous counterfeit 1969 Doubled Die cents within a company he identified as Token And Medal Co (or TAMCO for short).  According to Wallace the trial brought out the fact that they had planned to make fake 1942/1 Mercury dimes next and that those dies had already been made but were confiscated during the raid on the facility before any were struck.  However, many planchets had already been produced and somewhere along the line during this process somebody got the idea to make some fake dime blanks with errors on them.  Wallace, amongst others, was  given a few of these at the time and he remembered well the streaky, yellowish look they exhibited.  He stated his were used as evidence but they were returned to him after the trial as they were not considered contraband since they were not struck into coins.  Since Don Gordon was known to be associated with some of the individuals involved in the counterfeiting scheme it made perfect sense that his so-called dime blanks had the same look at the fake dime blanks that were at the trial!  At this point we cannot prove they are the same but if we give any weight to the circumstantial evidence -- we can assume these are blanks and planchets from the same group.  It took years for him to release them but eventually as memories faded and he reentered the hobby as an active participant, he was able to easily slip them onto an unsuspecting group of mostly new dealers.  So now you know the probable history of these blanks, what they are and what you are buying if you decide to own one!

*A planchet has the upset edge and is ready for striking while a blank is normally considered to be unprocessed as it was cut from the strip with a burr edge on one side.          

    History of the "Oh, No It Ain't ...!!" column:  A number of years ago, CONECA member, Bill Fivaz penned a popular long-running series entitled, "Oh, No It Ain't ...!!"  It was published in the CONECA Errorscope for 26 consecutive issues from the March 1991 issue through the July/August 1994 issue.  His focus was on a variety of different coins that at first glance may have fooled many collectors into believing they were legitimate error coins.  It included such items as faked clips, double strikes and brockages; plugged coins, reeded blanks, Mint/Proof Set Sealing Device damage, "jumbo coins" (from hammering), etc.
    When Bill finally ended the series he indicated that if there was anybody who wanted to carry it on that it was open to them.  Later, when I mentioned the column to him in casual conversation, he repeated his offer and suggested that if I was interested in reviving the series -- to feel free.  That offer was made eight or nine years ago and since then I've entertained the idea, off and on, many times.
    The clincher was the CONECA Membership Survey that was sent out in 2003.  In it we asked members for their likes/dislikes and suggestions of what they'd like to see in the Errorscope or on the web site.  Respondents ranked a column such as this one right at the top of the list.  So be it!  The revived "Oh, No It Ain't...!!" column will continue on from where Bill left off.  I hope you enjoy!   Ken Potter 03/11/04.