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How do government mints work?


gxseries
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I don't know why I was being awfully silly, but I guess I called up a mint here in Australia when I wondered what kind of qualification was needed to work in a mint. Nevertheless, I didn't even stand a chance to apply as one :ninja:

 

Keeping that aside, one of the interesting stories that came out from one of mint directors is that, although quite a lot of the mints are supposely government owned, the mints are supposed to be responsible for their own sales and losses, and the governments would not even give them a penny to help them out! This is one of the reasons why the mints keep on producing such commemorative coins or mint sets.

 

I was pretty suprised out of the whole story, well yes, in a sense, it does make some sense, but does this apply to the rest of the mints worldwide?

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1. Historically, Mints took in gold and silver and struck coins with the metal. Since, gold and silver were money and coins were a convenient form of that, the question would come up if the Mint "ran out of money." Where did it all go? What did you do with it?

 

2. In Medieval Englande and much of Western Europe, Mints were private entities that bid for work, promising to give the king (or other ruler) so much money (gold, silver in coin form) in return for hte license to strike coins.

 

3. We have a modernist democratic-republican view that the government takes tax money from all of us, dumps it into a big pot and the legislature parcels it out for the things we all commonly need: roads, schools, etc. But that is a modernist view. Really, the government's only mandate is to maintain itself. The war is never over until the ruler is dead or captured. The rest is just accidental association, as for instance, the argument in the Magna Carta over who was going to maintain the bridges.

 

4. As recently as 1800-1802, the U.S. Government considered closing its Mint as a waste of money since they could not make a profit and as real republicans, the Americans were not convinced that running a Mint was a necessary and proper function of government.

 

5. Even today, since it costs about 8 to 12 cents to make $1 in coin form and about the same to print paper, you have to go back to square 1 and ask how it could be that they cannot make a profit?

 

6. Not every nation operates its own Mint, of course. Big nations do. Old nations do. Many contract the job out with the British Royal Mint and the Royal Canadian Mint being big contractors.

 

7. The PERTH mint is actually an independent business owned by the state of Western Australia.

 

8. The Royal Canadian Mint is a crown corporation. The Bank of Canada is a crown corporation. They are two entirely different entities, as are the British Royal Mint and the Bank of England.

 

9. In the US, the Mint is one thing and the Bureau of Engraving and Printing is another. What binds them is their common customer: the Federal Reserve Bank which pays for their products with US Treasury Bonds which it buys with their products. (Don't ask. We don't undertand it either.)

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I was pretty suprised out of the whole story, well yes, in a sense, it does make some sense, but does this apply to the rest of the mints worldwide?

Quite a few European mints are "profit centers" in that sense too. The Royal Dutch Mint, for example, is a corporation (Koninklijke Nederlandse Munt NV) with the Kingdom of the Netherlands being the sole shareholder. A similar construction is used in Austria where the Mint (Münze Österreich AG) is a corporation wholly owned by the Austrian central bank. And yes, both are expected to be profitable. Making coins for the government is only part of their business. Producing coins for other countries, and - more and more important - selling medals and the like, also generate revenue. The Austrian Mint even owns two coin dealers, one company in Austria and one in Germany.

 

Speaking of Germany, there are four mints here which are owned by different states. (One state mint has two locations, hence a total of five mint marks.) If they had to exist only with the minting jobs that the federal government gives them, operating them would hardly be profitable. So they all make money by producing medals and various other metallic souvenirs ...

 

Christian

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The Romanian State Mint (Monetaria Statului), http://www.monetariastatului.ro/monetaria.html is under control of National Bank of Romania. It wasn't very profitable after 1995, when half of workers were fired...

But increasing quality of new issues (it became able to struck proof quality coins in past years), and starting to issue silver and gold commems, the balance became positive. As I know the coins of Republic of Moldova are struck there.

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Quite a few European mints are "profit centers" in that sense too. ...

 

Yup. The Mint of Finland has swallowed its neighbors and is the dominant mint in Scandinavia.

 

And it is no coincidence that when the Mint of Finland became an incorporated company, commems went from costing face value to having a significant premium. :ninja:

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Yup. The Mint of Finland has swallowed its neighbors and is the dominant mint in Scandinavia.

 

And it is no coincidence that when the Mint of Finland became an incorporated company, commems went from costing face value to having a significant premium. :ninja:

Ah yes, even Norway is now Finnish ... mint wise. As for the prices of the collector coins, well, I am in the fortunate position of not wanting/buying each and every commem from FI anyway. But such a move would certainly bug me if so far I had collected all pieces ... ;)

 

Christian

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