A SHORT HISTORY OF THE FRANKLIN MINT

I read with interest Q. David Bower's comments on Joe Segel and the Franklin Mint. Joe was well away from FM when Morley Safer did his all-too-true 60 Minutes presentation. About the only loyalist left in the numismatic community was the late Russ Rulau, who felt the need to defend FM thanks to his long friendship with the late Virginia Culver, author of the guide "Numismatic Issues of the Franklin Mint."

FM was a uniquely successful merchandizing phenomenon. It was never really a factor in the rare coin market except in a negative sense, siphoning vast amounts of money from the general public that could not then be spent on real collector coins. FM dealt in modern medallic material and world coins largely sold to new or non-collectors who then blamed the numismatic market for the loss in value of their FM material.

I attach a story I wrote in 2003, detailing at first hand the saga of FM's early years. My late brother John L. Alexander (1938-1987) played a key role in this history. One artful technique employed by Segel was the presentation of FM stock to numismatic groups, which might feel less inclined to criticize FM policies. An exception was the Society for International Numismatics (SIN) which promptly sold its FM stock to assure its continued independence.

The Franklin Mint was not always a world-sized marketing phenomenon, and few collectors are familiar with the formative years of its remarkable saga. Collectors who associate the name Franklin Mint with the millions of coins struck by it for an endless array of governments, the medal and ingot series for which it became famous may not realize that most of its 1965 production was base metal gaming tokens struck for 27 casinos, mostly located in Las Vegas and Reno, Nevada.

The present writer observed the Franklin Mint’s explosion onto the numismatic scene at first hand in 1966. His brother, the late John L. Alexander (1938-1987) was a stock broker instrumental in the underwriting of the mint’s first common stock listed on the National Stock Exchange. The mint was then only one area of interest of a parent firm called General Numismatics Corporation (GNC), whose home town was Yeadon, Pa., not yet renamed Franklin Center.

John Alexander’s research in this dynamic young company interested his employers, the stock brokerage house of Hill, Darlington and Grimm is making the Franklin Mint one of its successful new stock issues. The story of the stock issue and of the beginning years of the Franklin Mint is basically the story of its founder, one-time advertising specialties prodigy Joseph M. Segel.

Segel personified the go-getting American entrepreneur, founding GNC in 1964 with an investment of $21,000. His business experience was already extensive and unusually successful. At the age of 13, he had launched a successful printing business before entering the Wharton School of Business administration in Philadelphia, Pennsylvania.

Coin collecting brought itself forcefully to his attention during the first great surge of silver prices in 1964. The public stormed the nation’s banks, eager to redeem their Silver Certificates for silver dollars from long-ignored Treasury stocks and later for silver granules from the national stockpile. Watching block-long lines form outside area banks, the young businessman became fascinated by the business possibilities offered by coin collecting.

He reasoned that if fortunes were being made in selling existing coins, adding to the supply of collectible numismatic items by manufacturing high quality coins and medals might be just as profitable.

Segel’s first step in numismatics was organizing the National Commemorative Society (NCS) in 1964. The first six NCS medals predated GNC and were struck elsewhere, but the society was Segel’s first venture in the field of ``limited edition’’ collectibles. They were struck in Sterling silver, the 92.5% pure silver alloy beloved of silversmiths over the centuries. NCS issued one 39-millimeter medal each month, coin-like objects combining low relief and Proof surface.

These early issues were given the oxymoronic name of “coin-medals.” A vast majority of collectors in 1964 sought coins and avoided medals, and Segel resorted to this hybrid term to overcome this widespread collecting limitation. Over the next several years, the Franklin Mint would trigger repeated debate through its sometimes innovative vocabulary.

Segel’s NCS closed its subscriber list at only 5,249 members. In the next years, several other membership series were created, however, honoring famous women, the history of the Catholic Church, U.S. Presidents, international Freemasonry, space exploration and British history.

A major event was the hiring of retiring U.S. Mint Chief Engraver Gilroy Roberts, creator of the Kennedy half dollar by the new GNC in 1965. With remarkable courage, Roberts left a secure, if non-spectacular U.S. government civil service post to join a new and untried venture. Before his death in 1992, Roberts became a wealthy man as Chairman of the Board of the Franklin Mint.

His creative opportunities were unlimited in his new post, and in these early years great honor was paid to the Franklin Mint’s artistic staff. The name Gilroy Roberts “sold,” and good use was made of it in merchandizing the mint and its rapidly growing range of products.

Segel possessed limitless self confidence. Where others eased into competitive situations, testing the waters, he was inclined to plunge right in. During the search for substitute metals for U.S. silver coinage, he made Franklin Mint an active participant with a cased three-piece set of dollar-size pieces called “Pattern Trial Proofs” designed by Roberts with the theme of Gardiner’s Island and its colony of fishing hawks or ospreys, located near the eastern tip of Long Island, N.Y.

A commemorative medal was struck for the successful listing of GNC stock on the National Stock Exchange, Feb. 1, 1967. It featured Gilroy Robert’s bust of Benjamin Franklin facing ¾ l. on its obverse, an old-fashioned glass-domed stock ticker on the reverse with the stock symbol GNC. Medals struck were 376 in Sterling and 3,750 “Nickel-silver.”

Market value of all Franklin Mint material became a problem as the 1970’s approached. At the time of the 1967 ANA convention, Segel toyed with an idea that might have created a stable after-market for Franklin Mint issues. This was to have been a bureau directing collectors seeking past issues to possessors of such medals. Such an agency could have fostered and directed a genuine second market for Franklin Mint material, assuring retention of both value and interest.

In an inexplicable change of heart, Segel rather off-handedly abandoned this idea. No worthwhile secondary market was ever to develop, paving the way for that catastrophic loss of value that soon made nearly all Franklin Mint sets and singles a source of despair and loss for their owners and the butt of ridicule or hostility throughout the numismatic hobby.

In fairness it must be emphasized that there were no legitimate complaints about the purity or quality of Franklin Mint products at any time. The mint’s Proofs were always of the finest and the silver and eventually the gold offered to Franklin Mint product buyers could not be faulted. Only the vexed question of plummeting value after the first purchase remained a running sore that never healed.

Some observers believe that over the years, surviving Franklin Mint coins and medals will slowly gain in value, as long as the supply is permanently ended. This happened, they point out, with many collector coins of the 1870’s and 1880’s that were marketed as unofficial patterns. No doubt the 1979-80 melts and the end of new issues will focus some collector interest on what will be a closed book. The ways of collectors are surely remarkable!

Many thanks to Dave for sharing this with us. I agree that the Franklin Mint products, while highly overpriced at the time, were of generally high quality. Segel sought out some top artists and gave them free reign. A lot of these medals may well someday have a numismatic value exceeding their inflation-adjusted issue price. Not sure if any of us will live that long, but it would be an interesting exercise to compile a market comparison. Do any of our readers know of particular Franklin Mint issues that have seen interest in the aftermarket? -Editor