Rarest Latin Monetary Union silver crown up for auction

The Swiss-based auction firm Numismatica Genevensis will offer the rarest Latin Monetary Union silver crown, which auctioneers called “a very important numismatic rarity,” in mid-November.

The 1886 Swiss Confederation five-franc coin – one of five known specimens – will cross the block as Lot 395 of the Nov. 16 sale. Also one of only two examples in private hands, it will be the first time the coin has been offered since 2008. The other three examples are held in Swiss museums.

The Florida-based third-party grading service Numismatic Guaranty Corporation certified the coin on offer next month as Mint State-64, and it’s estimated at 200,000 Swiss francs (about $270,000 Cdn.).

“This coin not only holds significance in the world of Swiss numismatics. It is a key testament to the economic history of the 19th century, bearing witness to the close link between the silver deposits discovered in the American state of Nevada and European monetary policy, as well as the almost global transition to the gold standard,” wrote author Ursula Kampmann, a director with the Numismatic Literary Guild, for Numismatica Genevensis.

The coin’s obverse depicts Helvetia against an Alps backdrop using a die created by Geneva-born medallist Antoine Bovy for the recently established confederation’s new coinage. What Kampmann called the “incredibly rare year” is on the reverse surrounded by a wreath of oak leaves and Alpine roses. Minted in Bern, the coin’s small “B” is found under the wreath.

Established in 1865 and disbanded in 1927, the Latin Monetary Union unified several European currencies, including the Swiss franc, into a single currency for use in all of its member states. At the time, most national currencies were struck in gold or silver.

The coin’s reverse (shown) features its denomination, ‘5 Fr.,’ and its 1886 year-date surrounded by a wreath of oak leaves and Alpine roses. Its ‘B’ mintmark, noting the coin was struck in Bern, is at the bottom.

THE HISTORY

In Europe when the coin was issued, the Latin Monetary Union was “struggling to counteract the currency distortions caused by the overproduction of silver in America,” Kampmann wrote.

“Since it was established, the Latin Monetary Union had relied on bimetallism,” meaning the fineness of coins minted under the agreement had to follow a fixed ratio of one to 15 for the metal value of silver and gold coins, she added.

“But with the price of silver constantly falling, this was impossible to sustain. The price of silver was plummeting faster than the weight and fineness for new silver coins could be determined, the old ones could be withdrawn or the new ones could be minted. That’s why the representatives of the Latin Monetary Union members, which also included Switzerland, met in Paris to discuss how they should proceed.”

At the end of 1885, the delegates signed a treaty stating the minting of silver coins should be suspended until further notice, Kampmann wrote.

“In exchange, France promised to continue exchanging the currently circulating silver coins at face value into gold on account of the French Treasury. The Swiss representatives were able to negotiate a special arrangement for themselves: since Switzerland had seen colossal growth, both in terms of population and gross national product, and therefore had a lack of silver coins, it was granted permission to mint a disproportionately larger amount of circulating coinage in silver than the other member states.”

The official figure was six francs in silver coins per capita, which would have amounted to 19 million francs; however, this figure was increased by six million francs to 25 million, Kampmann explained.

Switzerland was also granted permission to “remint” 10 million francs worth of old five-franc pieces into new five-franc coins, she added.

The treaty was effective on Jan. 1, 1886.

“Whereas in 1884 and 1885 the Bern mint had only produced small-denomination coins from base metal, in 1886, it released an extensive issue of gold and silver coins.”

A total of 250,000 gold coins were minted along with one million two- and one-franc coins. Despite plans to mint five-franc coins, this “failed due to a technical problem,” Kampmann wrote, adding the obverse master die broke, “meaning that no new obverse dies could be produced.”

“The newly produced 1886 reverse die had to be tested with old obverse dies before the official decision was made to mint the large-scale issue with new coin designs.”

A competition was held in 1886 to select the new coin design, but it took another two years for the design to be used to mint an “extensive issue” of five-franc coins, Kampmann wrote. That makes the rarity a “historic piece that proves that globalization is not just something that has emerged in the past few decades,” she added.

“The rareness of this coin was caused by the same historical events that led to the prevalence of the American Morgan dollar, which was minted 6,400 kilometres away.”

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