INVESTING

“The most beautiful money money can buy.”

That almost became the advertising slogan for the Soviet Union's coin series commemorating the 1980 Moscow Olympic Games. Instead, says Donald Gartland, marketing director for the coin program, lawyers for his company — Numinter B.V. Inc. — toned down the copy sent out in half‐a‐dozen directmail campaigns to 10‐ to 15 million Americans and Canadians. “It's very staid and low‐key,” Mr. Gartland says, “but it points out all the firsts involved with the coins.”

That the Soviet Union is selling its own legal currency around the world with the help of Western corporations using modern marketing strategies, staid or no, may seem incongruous to some, but when the name Armand Hammer surfaces in connection with the project, the incongruity vanishes. Dr. Hammer, chairman of the Occidental Petroleum Corporation and a noted art collector whose ties to the Soviet Union date back more than half a century, negotiated the $150 million agreement with Soviet officials in September 1977 that gave the exclusive marketing rights for the coins to Numinter. The company was formed jointly by a subsidiary of Occidental and a subsidiary of Lazard Freres & Company, the investment banking house.

A Cluster of ‘Firsts’

The flurry of direct mail promotions — to American Express cardholders, Sears of Canada accounts and from a number of prestigious coin dealers, banks and retailers — have announced that the Moscow series are the first socalled “proof” coins minted in the Soviet Union, include the first platinum Olympic coin ever minted and commemorate the first Olympic Games held in that nation.

Those firsts have piqued the interest of many, even non‐collectors, in the collection — not to mention the fact of its limited edition mintage, high preciousmetal content and the consensus of experts that the coins are of superior quality, even in comparison to the 1976 Montreal Olympic series. An additional attraction is that the Olympic teams of each nation selling the coins, including the United States, will receive a percentage of the gross sales.

The collection is comprised of five series of silver coins, 28 in all; six gold coins and five platinum coins. All the coins are legal tender in the Soviet Union. The silver coins are struck in two denominations, 14 coins are 10 roubles, 14 are 5 roubles. (The approximate exchange rate is $1.50 per rouble.) As several coin dealers pointed out, this virtually makes the rouble —which is not traded on foreign‐exchange markets — a convertible currency.

There are 21 ounces of silver in the 28 silver coins, worth about $160 (intrinsic value). The collection is being offered at retail for about $465, about a 3‐to‐1 intrinsic‐to‐retail‐value ratio. Each gold coin — containing half‐an‐ounce of gold — has an intrinsic value of about $125, retails at $200, or less than a 2‐to‐1 ratio; and each platinum coin, containing half‐an‐ounce of platinum, worth about $175, retails at $400, for a ratio of slightly more than 2‐to‐1.

Gains in Intrinsic Value

These ratios were nearly twice as high last June when the first coins were struck, reducing the collection's intrinsic value. Since their release, the price of silver has risen from about $4.90 to $7.75 per troy ounce, while the price of gold bullion has soared from $167 to more than $250 an ounce and platinum from about $175 to about $350 an ounce.

Mr. Gartland pointed out that the intrinsic‐to‐retail‐value ratio of most numismatic coins is generally 3 or 4 or 5 or 6‐to‐1, while some commemorative medallions sell at a 10‐to‐1 ratio — figures that mean it is unlikely that a collection will appreciate substantially. The low ratios of this Olympic collection represent an added bonanza for small investors, some numismatists say.

The coins were struck by the Goznak Mint at plants in Moscow and Leningrad in two qualities: brilliant uncirculated and proof coins. Brilliant uncirculated coins have a satin finish, and are struck once. Proof coins, which are hand‐fed through the minting process, have a brilliant mirror finish background and are struck twice, but fewer coins are made so they are worth more to collectors.

The mintage represents the first time that proof coins — which are difficult to produce — have been struck in the Soviet Union. Some Western numismatists had initially expressed doubt that the Soviets would be able to turn out acceptable proof coins, Sheila Thomas, Nurninter's communications director, said.

But David L. Ganz, a numismatist who is legislative counsel to the Ameri can Numismatic Association, which represents 1,000 coin clubs with 2 million collector‐members, says the coins “are of superior quality to the Canadian [series] even for proof quality.”

Expert numismatists such as Louis Vigdor of Manfred Tordella & Brooks and officials who worked on the Montreal coin program provided Numinter with recommendations on developing a “problem‐free” program.

“We learned a lot from others’ mistakes,” Mr. Gartland said. “We asked people what they would do differently if they had to do it again.., about everything from the pricing, denominations, mintage, advertising. Out of that came the proposal to the Soviet Government.”

Corporate officials involved in the coin sales are careful to make no promises about the potential value of the collection. “The Olympic coins are just one of many direct mail and merchandise programs we offer,” an American Express spokeswoman said. “We're not saying the coins are an investment as such, but are commemoratives with solid intrinsic value.”

Mr. Ganz and other numismatists visited the Wall Street vault where the coins had been kept last year and examined random samples of the coins to see if they met the standards of proof specimen coins. The consensus was that they did “There is an almost frosty quality to the portraiture and wherever there is detailed artwork,” Mr. Ganz said. “That is good from a collector's point of view, that's what a collector is looking for.”

Louis Vtgdor of Manfred Tordella & Brooks agreed. “They are well made, well manufactured. In Europe they have (soIdl well. We have good demand for them in Europe... the first series has nearly sold out and the second series is coming out now to good response.”

But Mr. Vigdor added a firm caveat for non‐collectors. “1 don't like to look at modern‐issue coins for investment potential,” he said, “but for esthetic value, and for what they represent. The investment consideration should be the last thing you consider in this. They may appreciate in value in 5 or 10 years. But if somebody is looking just for an investment they should stay away from modern issues.”

The Moscow collection, he conceded, could appreciate in value. “They're giving you half an ounce of platinum or half an ounce of gold. That's a double melt value; that's not bad.”

Miss Thomas, of Numinter, stressed the limited editions of the series, which also enhances value. The production of the coins is to be limited to a maximum of 450,000 of each of the silver coins, with 100,000 reserved for sale within the Soviet bloc; 130,000 of each of the gold coins, with 30,000 retained by the Soviets, and 40,000 of each of the platinum coins, with the Soviets keeping 10,000 for their own distribution.

“That may sound like a lot of coins,” Mr. Gartland said, “but that is the total worldwide availability. It's actually a very restricted number, evidenced by the fact that the allocation for Western Europe is already sold out and the Pacific region [which includes Japan and Australia] is nearly sold out.”

In contrast, he said, the 1976 Montreal minting ranged from 650,000 to 1.48 million, depending on the series, and 2.9 million coins were struck for the 1964 Innsbruck Games and 600,000 for the 1952 Helsinki competitions.

But Mr. Vigdor feels that the size of the series is too large— for small investors to absorb and for the coins to appreciate in value. Referring to the 28 coins in the silver series, he said, “This is too many for an individual. It cuts down on his buying potential for other coins. A series like this should not have more than four coins of silver, with one gold and one platinum. I say this even though we are selling them well, making profits, and there are almost no returns for quality or appearance.”

Three percent of the face value of the coins sold in each country will be donated to that nation's Olympic team; about $1 million is expected to be raised for the United States Olympic team, Miss Thomas said, while the Canadian team is expected to net about $500,000 from the program.