The dispute involving an extremely rare 1974-D aluminum penny was one of the numismatic highlights of 2016.
Copper prices were on the rise in 1973, so alternative alloys were proposed to replace the traditional bronze alloy penny. The US Mint struck more than a million pennies composed of aluminum with trace metals at the Philadelphia Mint. There were also 10-12 coins struck at the Denver Mint, struck one at a time on planchets supplied by the Philadelphia Mint.
Sample pennies were distributed to members of congress and a few other well-connected people during the consideration of the new penny. Ultimately the aluminum penny was rejected, and the samples were recalled by the Mint, which destroyed the entire run–except a few which were never returned. Some sources suggest as many as 20 of these specimens may still be at large.
Fast-forward 40 years, to 2014. Randall Lawrence has a sandwich baggie of coins left to him by his deceased father Harry Edmond Lawrence, a former deputy superintendant of the Denver Mint. Lawrence, then a resident of San Diego, sells the baggie of coins to Michael McConnell, owner of La Jolla Coin Shop.
Imagine the surprise awaiting both gentlemen when coin expert McConnell evaluated the contents of that little bag! Because it’s such an extremely rare coin, McConnell estimated its value between $250,000 and $2 million. McConnell and Lawrence agreed to own the treasure in partnership.
The government, however, had other ideas. Because the coin had never been authorized for release, and because the samples had all apparently been recalled, the US Government asserted ownership of the coin.
Naturally, litigation was next. The end result? McConnell and Lawrence relinquished all claims of ownership to the coin and returned it to the US Mint, which displayed the rare aluminum penny at the American Numismatic Association World’s Fair of Money in Anaheim, California in August 2016. The coin had been graded Mint State 63.
Why was the aluminum alloy penny rejected in the first place? Many factors contributed. The copper industry lobbied against it; the vending machine industry believed the pennies would cause mechanical problems; pediatric radiologists said the radiodensity of the metal inside the respiratory and gastrointestinal tracts was similar to that of soft tissue, and would make them hard to detect in X-ray imaging. Ultimately, the price of copper declined enough that interest in changing the composition of pennies declined.