For the second time in 16 years, the United States Secret Service has officially declared as genuine the only known specimen of a 1959-D Lincoln cent mule error bearing a Wheat Stalks reverse instead of the intended Lincoln Memorial reverse.
The latest declaration of authenticity is accompanied by a five-page report prepared by Secret Service forensics experts.
The coin has not been encapsulated by any third-party grading service, several of which have declined to authenticate the coin. Several veteran numismatists representing some of the services that have examined the coin said that based on their examinations, they would have to issue a "No Decision" judgment if the coin were to be submitted for authentication and grading.
The coin is to be offered at public auction in September, without reserve, by Ira & Larry Goldberg Coins & Collectibles Inc., Beverly Hills, Calif., under terms of a Professional Numismatists Guild Inc. arbitration.
A mule is a coin bearing obverse and reverse designs not intended to be paired. The Wheat Stalks reverse first appeared on the Lincoln cent upon its debut in 1909 and was last officially used in 1958. U.S. Mint Engraver Frank Gasparro's reverse depicting the Lincoln Memorial was introduced in 1959.
The latest Secret Service report, dated May 17, was prepared by Mark Surrency, a counterfeit specialist in the U.S. Secret Service Office of Investigations, Counterfeit Division, Printing Technology Section, in Washington, D.C. The findings in the report are based on optical and scanning electron microscopic examinations of the coin. The coin was submitted by Irvine, Calif., collector Larry Choate and is reportedly owned by an Orange County, Calif., business syndicate whose members' names have not been disclosed. Choate is reported to be the syndicate's representative. The acquisition price of the coin was reported by Choate to be "five hefty figures."
The coin was discovered in 1986 by Walnut Creek, Calif., collector Leon Baller.
Choate said he took a chance on possible confiscation of the coin in order to reconfirm the 1986 government findings by sending the mule to the Secret Service for a second time and more extensive testing. The recent testing included examination under a 200-power optical scanning electron micrograph. Choate said the government's latest findings make the mule legal tender and legal to own.
The results of Surrency's examination "revealed that the coin's obverse does not exhibit any indications of alterations to the date or surrounding field," according to the report. "Further, the edge and rim of the submitted coin was examined for evidence of seams or alterations that would suggest that the submitted coin was a composite of a 1959-D obverse with a separate Wheat reverse."
The report indicates the examination shows there is no evidence of alterations or seams. "The metal shows smooth transition from the field to the rim and then to the edge," according to the report. "An alteration at these magnifications would be evident by tool mark striations or seams with solder or glue."
Prominent die polish (raised striations in the field but absent in the raised devices) is evident on the obverse and reverse of the mule. Surrency notes that during the examination, the 1959-D mule was compared to one 1959 Lincoln cent and two 1959-D Lincoln cents that have similar die polish on the obverse, and "no significant differences in the appearance of the polish were observed."
Nondestructive testing revealed the 1959-D Lincoln, Wheat cent mule is consistent in mass, diameter and thickness with genuine 1958 and 1959 cents. Surface measurements reached through energy dispersive X-ray spectroscopy determined the mule to be consistent in metallic composition with genuine 1958 and 1959 cents.
"Although the submitted 1959-D Lincoln cent exhibits the Wheat reverse, instead of the Mint-specified Memorial reverse, the submitted coin exhibits physical characteristics, such as device detail, metal flow, die polish, thickness, diameter, mass and composition, consistent with genuine 1958/1959 Lincoln cents," according to Surrency's conclusions.
"Further, the submitted Lincoln/Wheat cent does not exhibit any indications of alterations to the date or evidence of edge alteration, indicating that the submitted coin was a result of combining two genuine coins. Additionally, no characteristics associated with counterfeit coins, such as tool marks, file marks, raise metal or unusual oxidation ('toning') were observed.
"In the absence of any evidence that the submitted 1959-D Lincoln, Wheat cent is not consistent with having been manufactured by the U.S. Mint, the coin was determined to be a genuine mule cent."
Anthony M. Chapa, the Secret Service's special agent in charge who approved the release of Surrency's findings, said although the U.S. Mint's technical personnel have never examined the 1959-D mule cent in person, Surrency was in constant liaison with Mint experts during the testing process.
"The best that we can say, based on our scientific skills and abilities, it was not manufactured like a counterfeit coin," Chapa said. "There was nothing that jumped out at us to indicate that. We looked at what we believe a true item to be." Had the Secret Service considered the mule to be a counterfeit, the bureau would have seized the coin and not returned it, he said, and would have then made a determination whether any prosecution was in order.
Surrency's analysis also determined the mule to exhibit evidence of polyvinyl chloride (PVC) residue, most likely from storage in a PVC coin flip. The flip in which the coin was submitted contained elemental chlorine, consistent with PVC and the contaminant found on the mules' surfaces.
Baller, a retired police officer, submitted the mule to the Secret Service for the first time not long after he discovered it in 1986 while sorting through jars of Lincoln cents he had accumulated for years.
On Feb. 7 of that year, the Secret Service, after examining the mule, returned the coin to Baller, accompanied by a letter from Special Agent Richard M. McDrew that states: "This coin was microscopically examined by our Forensic Services Division in Washington, D.C., and it is their opinion that the coin is genuine."
Baller subsequently sold the coin to Heritage Rare Coin Galleries in Dallas, which then offered the coin to California collector Steve Benson in 1987. Before Benson could purchase it, Heritage sold it to another collector for a reported $15,000. Benson got his second chance several years later when he bought the coin from the East Coast owner, with Heritage as the broker.
When Benson submitted the coin to Professional Coin Grading Service in 1993 for certification and grading, the firm's then president, David Hall, sent Benson a letter on April 20, 1993, stating: "In our opinion, the 1959-D Wheat reverse cent, is not a U.S. Mint product. We feel that it was made from fabricated dies, probably spark erosion. Our opinion is based on a visual examination. Our opinion was so strong that we felt more elaborate tests were unnecessary."
A spark erosion die is made by an electrical connection between a genuine coin and a blank soft steel die. An electrical spark of a specific length eats into the soft steel of the die, creating the impression from the coin. Some detail is lost from the original coin by this process. The process will copy every scratch and nick from the original coin.
While PCGS balked at certifying the coin, Hall later told Coin World for a story published in the May 10, 1993, issue that, "There is some chance that the coin is genuine."
In the same article, Mint Engraver Frank Gasparro was quoted as saying that no test pieces, to his knowledge, had been made combining a 1959 obverse and 1958 reverse.
"They're pretty tight though with the security all the way around on those dies, so there's no chance of a mistake of for instance, a 1958-dated coin still being struck into 1959," Gasparro was quoted as saying.
However, Gasparro's comment that there was no chance of such a mistake occurring has been proven incorrect by other, similar coins discovered and authenticated. As collectors now know, coins thought "impossible" have entered circulation, including several mule errors that surfaced in recent years. Among the mules are a pair of Washington quarter dollars struck by two reverse dies that are dated to 1965; a 1995 Lincoln cent, Roosevelt dime mule struck on a dime planchet; a 1999 Lincoln cent, Roosevelt dime mule struck on a cent planchet; and an undated (2000) Washington quarter dollar, Sacagawea dollar mule struck on a golden dollar planchet.
In regards to the 1959-D Lincoln cent mule, Dr. Sol Taylor, president and founder of the Society of Lincoln Cent Collectors and author of a book on Lincoln cents, disputed Hall's opinion, claiming he had examined the coin before Hall did and believed the mule exhibited all the attributes of a genuine Mint product. Taylor restated his opinion in a Feb. 21, 2002, letter to Choate after examining the mule a second time, that he is convinced the mule is a genuine Mint product.
Benson submitted the coin to the American Numismatic Association Authentication Bureau where its numismatist/museum authenticator, J.P. Martin, rendered a "No Decision" because his findings after examination using a dispersive scanning electron microscope could not definitively determine the mule's authenticity nor dispute it.
"The coin looked to be within normal specifications, but looked atypical for a 1959 cent," Martin is quoted in The Authoritative Reference on Lincoln Cents by John Wexler and Kevin Flynn. "The surface texture seemed glossy, but exhibited several areas of die polish, which is unusual for this coin. I was fairly certain that the coin was not two halves joined, due to the bell-like tonal qualities it exhibited when tapped. There was no evidence of edge manipulation. Also, the coin was subjected to dispersive X-ray analysis under the scanning electron microscope. This test revealed the composition to be near specification.
"The coin appeared to be struck without evidence of die flow [or] cracking. This is typical of counterfeits or genuine early strikings. All in all, the attention given to the die as shown by the die polish is the most bothersome. I challenge any readers to match the shown die polish to the 1959-D obverse or the Wheat reverse. Though this piece appears to be suspicious, no absolute technical condemnation can be made. Especially without a comparison example from the same dies. For this reason, the coin was given a 'No Decision' by ANAAB."
Martin, who is now senior numismatist for Independent Coin Grading Company in Englewood, Colo., said he has not been swayed from his 1993 opinion despite the Secret Service's latest findings. Martin said he was in contact with Surrency from the Secret Service before, during and after Surrency examined the mule. Martin said it would take extensive die studies for him to render a more conclusive decision, which would involve first having the coin submitted to ICG.
After Martin's 1993 opinion was issued, the mule was returned through Heritage to its previous owner and Benson's purchase price was refunded. For the past two and a half years, according to Heritage's vice president, Greg Rohan, Choate and/or his business partners have been seeking to acquire the mule. The mule's owner retired in December, Rohan said, and contacted Heritage about selling the coin. Heritage brokered the coin to Choate in late December.
PCGS's current president, Rick Montgomery, reported he examined the mule back in 1993 and again earlier this year, and said he'd also deliver a "No Decision" concerning the mule's authenticity. He said he verbally indicated to Choate after the latest examination that PCGS would not certify the mule. He said the Secret Service's findings have not changed his opinion and believes more die studies are necessary.
"Is it a genuine coin or a coin struck from false dies? I don't think the Secret Service addresses that in its entirety," Montgomery said. "I'm not condemning the piece nor wholly endorsing it."
The mule has also been examined by error coin specialist Fred Weinberg; David Camire, error coin specialist for Numismatic Guaranty Corporation of America; and David W. Lange, NGC's director of numismatic research and author of The Complete Guide to Lincoln Cents.
Weinberg responded: "I have been a full-time coin dealer for over three decades. I have had a few mentors in my life who have given me good advice. When I was a young man, my parents always told me, 'If you have nothing nice to say about something, don't say anything.' Speaking for myself, and not for any other business or organization, unfortunately I have nothing to say on this matter."
Neither Camire nor Lange would comment on their examination of the mule.
Weinberg, Camire and Lange said they were sent a warning from Choate and/or representatives of the business syndicate not to render any disparaging remarks about the mule.
"The federal government has determined the 1959-D Wheat-back cent to be genuine as of May 17, 2002," according to the advisory. "This is the highest opinion and authority in any court of law. Unless you can conclusively prove otherwise; it is mandated that you refrain from giving any negative opinion regarding the coin to be counterfeit pursuant to laws regarding interference with economic advantage.
"This coin is going to be sold at public auction. No doubt you will be contacted for comment. Please be advised and refrain from speaking any unfounded opinion of certainty that is negative, such as the coin is counterfeit, because you cannot prove it! The federal government has spoken and their opinion of genuine takes precedence over your own opinion, which should be kept to yourself, unless you can prove otherwise, ..." according to the advisory.
The mule was also submitted to PNG arbitration that was resolved by a three-member panel during the Long Beach (Calif.) Coin & Collectibles Expo in early June. PNG Executive Director Robert Brueggeman said as executive director he is prohibited from discussing terms of the settlement, but the parties to the arbitration were not.
Greg Rohan from Heritage, which was one of the parties involved in the arbitration, said the arbitration panel's decision required the mule to be offered at public auction, without reserve, with Heritage and Choate to split the profits equally. Heritage and Choate were to mutually agree on the selection of the auction company to sell the mule, with Heritage barred from consideration as the seller.
Proposals were solicited from several auction companies, and Ira & Larry Goldberg Coins & Collectibles Inc. was selected to sell the coin.
Larry Goldberg said Choate hand-delivered the mule to his office on June 17 in a Secret Service-sealed "flip." The flip was then opened for examination. Goldberg said the mule has the correct weight of a Lincoln cent, the proper coin ring and does not exhibit any unusual abnormalities under high magnification that would suggest the mule is not genuine. The coin would grade in a range from Mint State 60 to MS-63 brown, with no Mint red, according to Goldberg.
Goldberg said the coin would be offered, without reserve, as part of his firm's Sept. 22 to 24 auction at the Crowne Plaza, 1150 S. Beverly Drive, in Los Angeles. He said he plans to devote several pages of the auction catalog to the mule, with color images gracing either the front or back cover. He said he will be checking with the grading services to discuss their reluctance to encapsulate the mule, but in any event, the mule will still be offered for sale.
Goldberg said the mule would be on display at the firm's table in New York City July 31 to Aug. 4 during the American Numismatic Association Anniversary Convention at the Marriott Marquis Hotel.
