Non-Coin of the Realm

Like almost every other operation of its kind, the Franklin Mint near Media, Pa., is surrounded by a high metal fence, patrolled by armed guards and constantly scanned by closed-circuit TV. Refuse is carefully placed in bins marked CLASSIFIED WASTE. But unlike most such fortresses, Franklin produces no money except for some coins for several small nations. It is the world's largest private mint, and it concentrates on turning out commemorative medals. The security precautions are not as outrageous as they might seem. In the past few years Franklin Mint has surpassed that nonstop disgorger of postage stamps, the principality of Liechtenstein, as the world's most profitable manufacturer of things created solely to be collected.

Last year Franklin Mint literally coined $45.8 million in commemorative medals, which "honor" everyone from U.S. Presidents to the Hollywood stars. First-quarter sales for 1971 rose to $11.9 million, nearly double those of a year ago. The medals are sold in series of up to 200 to subscribers, who pay about $3.25 each for bronze copies, $10.50 for silver and as much as $1,000 for platinum. The intrinsic value of the silver, for example, is slightly less than a quarter of the sales price. Altogether, some 300,000 persons have signed up for one or another of Franklin's collections, which are struck in high-proof quality and limited in number to the list of those who subscribe--and pay--in advance. After that number is made, the die is destroyed, creating what the mint's founder, former Adman Joseph M. Segel, calls "instant rarity."

Winner's Likeness. The 40-year-old Segel, who has never collected coins, got the idea for producing medals from a news photo of crowds lined up at the U.S. Mint in Washington in 1964 to buy the last bags of silver dollars sold at par value. Then part owner of a firm that promoted calendars, cigarette lighters and other giveaway items imprinted with corporate trademarks, Segel saw in the picture "an interesting marketing opportunity" for a kind of non-coin of the realm. Advertising in collectors' magazines, he initially signed up 5,252 people to join the National Commemorative Society, a profit-seeking corporation that invited members to vote on memorial candidates from a list of nominees and then buy the winner's likeness in metal. Subject of the first medal: General Douglas MacArthur.

When production problems developed in striking early medals, Segel hired away from the U.S. Mint no less an expert than its chief engraver, Gilroy Roberts, who helped set up the Franklin Mint and became its chairman. Construction was financed in 1965 by offering 400,000 shares of stock to members of the Commemorative Society and coin collectors at $6.075 a share. Anyone who then invested $607.50 in 100 shares, which have since been split six times, today owns stock worth $24,600. Segel and his wife have more than $9,000,000 of it. In 1969 Segel sold the Commemorative Society to a historical foundation and set up the Franklin Mint Collector Society as his primary sales outlet.

Besides dreaming up seemingly endless new series for his membership,* Segel publishes a monthly magazine providing background about the memorabilia and produces medals for groups that use them as a fund-raising device. The White House Historical Association, for example, has offered members a series depicting U.S. First Ladies, and the U.S. Olympic Committee sold one celebrating sports events including the 1972 Olympics in Munich. Franklin's founder is still slightly mystified at the collector instinct that his operation has uncapped. Says he: "Some retired people wait for the new medal each month and call the neighbors in to see it. Some businessmen get an issue and put it away without a second glance. Many people collect because it makes them feel like an expert in something." Not necessarily in investing, however. Many coin dealers refuse to handle the relatively small number of Franklin medals that come on the market, claiming that they are unworthy of numismatic attention. Segel cheerfully replies that some of his issues have already attained above-par value and dismisses the dealers' grumping as plain envy. Sales of Franklin medals, he says, are already larger than the entire collectors' market for U.S. coins. He can also point to a growing number of other medal merchandisers that have entered the field, including Chicago's Lincoln Mint, New York's Medallic Art Co. and International Mint in Attleboro, Mass. It is still too early to tell whether such growth will eventually become new proof of the old adage that collecting can be profitable as well as fun. But the millions of stored-away medals are certainly proof that artificial scarcity can add value to collected items.

* Current series: "Genius of Michelangelo," "The Shakespeare Medals," "Great Historic Sites of America," "States of the Union."

This file is automatically generated by a robot program, so reader's discretion is required.