ECONOMICS

The $2 Million Aluminium Penny

The low cost of aluminium makes it ideal for small-denomination coins, and it is a popular choice for coinage in countries like China, France, and Israel.
18 April, 2016
One country that has chosen not to produce coins in aluminium is the United States, where the metals used are primarily copper, nickel, and zinc.
The brief history of the aluminium American penny (which features the likeness of President Abraham Lincoln) was thrust into the spotlight recently as a federal lawsuit was being settled. The settlement saw the United States Mint take possession of the only known remaining example of a 1974-D Lincoln aluminium cent struck at the Denver Mint in Denver, Colorado.

In 1973, the U.S. Mint had a problem. The price of copper was increasing, and this rising cost made the copper-zinc alloy used to produce America's one-cent coin too expensive. The Mint decided a possible solution would be to produce the coin from aluminium instead. The Philadelphia branch of the U.S. Mint produced more than 1.5 million aluminium cents with a 1974 date as test pieces. Many went to members of Congress to use as samples when they were lobbying for the new composition. Despite their efforts, the plan was eventually rejected and the Philadelphia mint recalled the coins.
The U.S. Mint in Philadelphia. Photo by U.S. Treasury Department
Although the existence of the Philadelphia coins has been known about for some time, what makes this headline-making coin special is that it is a 1974-D aluminium cent, meaning it was produced not in Philadelphia but in Denver.

Until recently, it was thought that the short-lived aluminium coins had only been produced in Philadelphia. Since the emergence of this coin, a former die setter has come forward and confirmed that at least a dozen aluminium cents were produced in Denver (making use of the planchets from Philadelphia).

The Denver coin was brought to light by Randall Lawrence, who found it among the possessions of his late father, Harry (who served as Deputy Director at the Denver Mint until his retirement in 1980). Lawrence attempted to sell the exceedingly rare aluminium penny to coin dealer Michael McConnell, who believes the coin would fetch in excess of $2 million at auction.
(L) Randall Lawrence and Michael McConnell. (R) Harry Lawrence. Photos by Nelvin C. Cepeda/San Diego Union-Tribune.
Once the existence of the aluminium coin became public knowledge, the United States Mint actively sought the return of the coin from Randall Lawrence. Mr. Lawrence and Mr. McConnell responded by filing a lawsuit to establish legal ownership of the coin.

The case came to hinge on how the coin came to leave the Denver Mint. The U.S. Mint contended there "was never any authorization for an aluminum one-cent piece to be struck at the Denver Mint, that the piece was clandestinely struck and unlawfully removed from the Denver Mint." Mr. Lawrence, for his part, maintained that the coin was given to his father as a retirement gift when he left his job at the Denver Mint. The difficulty in the case was that there is no record of what occurred at the time. Although it now appears that at least a few aluminium cents were struck at the Denver Mint, there are no official records to account for their existence.

At least one judge agreed that Mr. Lawrence could be the legal owner of the coin, but the two parties ultimately came to an agreement that saw Mr. McConnell and Mr. Lawrence return the coin to the Mint and relinquish all claims to ownership.
This result ends the litigation successfully and returns the subject piece to its rightful owner, the United States Mint. It also vindicates the Government's position that items made at United States Mint facilities but not lawfully issued, or otherwise lawfully disposed of, remain Government property and are not souvenirs that government employees can merely remove and pass down to their heirs.
Laura Duffy
United States Attorney for the Southern District of California
Speaking on behalf of the U.S. Mint, Principal Deputy Director Rhett Jepson added: "The Mint is very pleased with the agreement... we look forward to displaying the coin appropriately as an important Mint heritage asset. This agreement is not only good for the integrity of the coin collecting hobby, but for the integrity of government property and rule of law."