These coins are advertised as “official legal tender in the country of Liberia”, and I’m not doubting that…but do people who actually live in Liberia use these coins–you know, the JFK Jr. coin, the George W. Bush coin, the Civil War coin, etc.?
I suppose it’s a good way to raise some money for a third world country, but I could imagine that if they keep this up it could get rather confusing for Liberian merchants and consumers.
What coins will they come out with next?
I’ve always wondered why the Liberians have all of these American coins. If I went to Liberia and tried to use them, would they take them?
Liberia used to be an American colony-their only one, I believe.
Only American colony? What about Puerto Rico, the Phillipines, American Samoa and Guam? None of these were colonies?
IIRC Liberia was never really claimed by the US Government as an Unincorporated Territory (legalese for what the rest of the world calls a “colony”, what Otto refers to) but rather was a “colony” in the sense of a settlement, founded by Americans, specifically liberated slaves in a 19th-Century Back-to-Africa move, and soon afterwards “recognized” as a Republic by the US.
Anyway, they essentially transplanted every institution of 19th-century American governeance to Liberia, up to and including oppression of the actual native-Africans :rolleyes: . For most of the time afterward the Liberian Dollar was officially pegged at 1:1 to the US dollar, but for all practical purposes the real monetary unit was the U.S.Dollar. All a Liberian dollar meant was there was a USD allegedly in their central bank, while on the street the USD circulated freely and was the preferred currency. Since like many smaller countries, the actual printing or striking of their currency was hired out to US commercial mints; and since due to their history Liberian coinage traditionally featured many “American” themes, it was not unreasonable to then turn around and generate revenue through American-themed special issues for sale to collectors, as many countries do with their postage stamps. After all, the average Joe in Monrovia would be using a regular US greenback anyway.
As the AfrAm-founded Liberian government fell (under the weight of its own corruption and of rebellion) and various successors did likewise, in the last 2 decades of the 20th Century, the legal fiction of the Liberian Shipping Registry and the Liberian Legal Tender coinage continued being “accepted,” but the 1:1 exchange disappeared in practice. The person or persons who run what passes for the Liberian Bureau of the Mint still duly authorize these emissions of legal tender, as a revenue source, but in the streets of Monrovia you’d better bring a sack of food or a fistful of “real” dollars.
Liberia is just one of many countries which have produced/and continue to produce series of commemorative coins which have denominations on them, thereby making them “legal tender.” This practice started in the 1960’s when the private Franklin Mint approached many countries with the idea that they, the Franklin Mint would produce sets of “legal tender” coins, selling them to a collecting public, most of whom were in the U.S., and giving part of the proceeds to the government of the country. Implicit in the deal was Franklin Mint assuring the countries that these coins would never be redeemed, as the collectors would keep and value them too much.
But that was a long time ago. Many of these coins came back on the market when a generation passed, and enterprising coin dealers started buying up huge quantities, particularly coins from nice Carribean countries which one might wish to visit for a vacation. Buy up a few thousand dollars worth of, say, Cayman Island coins for half their face value, take your vacation and redeem the coins there at face value. Voilla! Free vacation. But there was a catch…
You don’t just walk into the restaurant at your hotel and give them a $25 face value coin for your meal. They won’t take it. So, you go to the bank and present the coin, demanding your $25. The bank tells you that only the “central bank” can redeem these. So you go to the “central bank” and they redeem them. But the “central bank” decides that they are redeeming too many of these and declares that you can only redeem these legal tender coins in minimum batches of $5,000. And only on the first Monday in the month. And then, to further impede the redemption, you give them the coins, and they send you a check 3-6 months later.
This practice was/is certainly not limited to “third world” countries. Take Canada. They issued a set of Olympic coins in 1976 which had $210.Canadian in face value. They sold these to collectors for prices which were multiples of that face value. When too many of these coins came back on the market and were presented for redemption in the 1980’s/1990’s, the Canadian government declared them no longer redeemable. I believe that today they are redeemable again, as the government got such a backlash from their policy they had to rescind it.
An ongoing battle has been taking place with The Marshall Islands. There are millions of dollars of “legal tender” coins floating around which were marketed to the public with the idea that they were backed by the Marshall Islands. The coins are made out of copper nickel and have no metallic value. Currently, on the resale market, these coins change hands at $1. each. So, some enterprising German dealers bought up some hundreds of thousands of dollars of these for about one quarter of face value. They then showed up in the Marshall Islands and demanded their face value. The Marshall Islands said something to the effect of “don’t hold your breath.” I think the case went to court, and the outcome was that the government decided to implement a policy which basically said you can redeem one coin per day, AND pay a $5. fee for the transaction. Nice out.
I have probably made more than a few errors in this long rant. But my basic info is true. I would be glad to be corrected on matters of fact.
These coins have no real numistic value as they are not particularly beautiful, they are readily available, and not sought after.
The U.S. Mint has an extensive commerative coin program also, and I have a whole bunch of them. A typical example is the Korean War commemorative silver dollar. It has an ounce of silver, which is worth a few bucks and they will charge about $25 for it, give or take. After packaging and all, the Mint probably clears 10 to 15 dollars. (I gave mine to my father who served our country in Korea as a corporal doing artillery and the insistent and mandatory invitation of our government). They do not appreciate much in value, and in fact usually decline in value.
The key to a good investment in coin collecting is rarity and quality of the coin. Watch the Coin Vault and they will explain quality and rarity. But check your local dealer for prices, because the ones on cable TV tend to be overpriced.
Three cheers for samclem, the SDMB’s Resident Numismatist and coin dealer! 