BUILDING THE LILLY COLLECTION, CONTINUED

​Sometimes forces interfere with a collector’s desires and plans that are not in the collector’s control or even in the control of the hobby. This happened during the time frame when Stack’s was instrumental in building the J.K. Lilly Collection. During the post-World War II years and even into the 1960s, some gold coins issued were found to be counterfeits.

Demand for gold for various reasons led to an industry developing overseas after the Second World War. Places like Milan and Florence in Italy, and Beirut in the Middle East, copied the designs of many popular gold coins and sold them to unknowledgeable collectors, tourists and the jewelry industry at a substantial profit above the intrinsic value of the coin. As the demand increased, so did the shipments made to the United States; the supply seemed endless. The American market was being ripped off because many buyers did not know the difference. The designs were so well reproduced that the coins were bought and sold as if they were genuine. Thousands of people were being fooled. Since the United States Secret Service was busy with counterfeit paper currency and received complaints only after the false coins were discovered, enforcement was difficult.

To help stop the importation of counterfeit coins, in 1960 the Office of Gold & Silver Operations (OGSO) was empowered to try to stop the false coins before they entered the United States. The OGSO started a licensing procedure, requiring a license to import gold coins, issued by that Department of the U.S. Treasury. Before a gold coin could be carried into the United States or received in this country by mail, it had to receive a license. From day one the procedure caused delays, and loss of sales, but it was somewhat effective in stopping the importations. However it was burdensome and restrictive to all involved.

Buying a gold coin from overseas became a much more difficult project. Collectors needed to know if they could get a license to bring their purchases into the United States before they bought coins. If they purchased coins before having a license, they could be denied and the coins could not be brought into the country. How could buyers know what would be admitted? Hand-carried packages were examined and sometimes confiscated and held at customs houses if there was not an appropriate license. Items that came by mail could be held at the post office. While the importation of counterfeits was slowed -- a good thing for all -- the burden on collectors and the numismatic hobby was great. A collector, seeing a coin in a price list or auction, had to ask the seller to hold it until a license could be acquired. It was virtually impossible to get a supply into the country.

This made it difficult to add to a collection such as the one that J.K. Lilly was trying to build. In one particular instance Stack’s ran up against these licensing difficulties when a large numismatic gold coin collection was offered to the firm in 1962. The collection, comprising over 900 different coins of the world, would require months to get the appropriate license. Stack's finally lost the opportunity to offer it at public auction, since the consignor was sick and would not wait.

The loss of this overseas collection, together with other business problems resulting from the license requirement caused Stack's to sue. The problem was that the rules defining what could or would be licensed were never revealed by the OGSO, but the decisions were made at their sole discretion. Stack's sued that the OGSO licensing requirements were Arbitrary and Capricious because they kept their rulings to themselves. Being a government agency the OGSO made the determinations on their own. It took till 1967 to win the case. A member of the Treasury Department announced the removal of the licensing requirements at a PNG meeting, explaining, “the intent of the law had been satisfied”

The restrictions did great harm to coin collecting and even to jewelers. However, at Stack’s we always did our best to meet the needs of our clients, including Mr. Lilly.

To read the complete article, see:
Building a World Class Numismatic Gold Coin Collection: The Josiah K. Lilly Collection Part 22 (www.stacksbowers.com/News/Pages/Blogs.aspx?ArticleID=2450)

To read the earlier E-Sylum article, see:
BUILDING THE LILLY COLLECTION, CONTINUED (www.coinbooks.org/v20/esylum_v20n05a17.html)

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