Are tokens "coins"?

An email from Mark Andersen of the S A Coin Company raised an interesting point.....

Hi Scott

I can see that you are very busy. I have not researched the Griqua coins or your tokens at this time, I will do so in the future. Since we have bought our own building our business has taken off like a rocket and I find myself with less and less time. I do however have one observation to make and that is your tokens are tokens by definition and therefore cannot be considered coins. They look just like tokens and do not have the properties of coins, in terms of design etc. Whilst the Griqua coins have every single nature and properties of coins. One could consider them an attempt at South Africa’s first coinage. I do not think that it is necessary that they were actually circulated or used as coins. After all the Burgers ponds were at no time used as money either.

I hope that your time in South Africa is enjoyable and successful.

Best Regards Mark.
S A Coin Company


Hi Mark

As a numismatist and researcher, not a coin dealer, I stick to the strict definition of "what is, or makes, a coin". Clearly our viewpoints differ on this core issue. I have listed some accepted definitions which you can check for yourself on the web.

Merriam Webster on-line:
a: a usually flat piece of metal issued by governmental authority as money
b: metal money
c: something resembling a coin especially in shape

Wikipedia: A coin is generally a piece of hard material, generally metal and usually in the shape of a disc, which is used as a form of money. Along with banknotes, coins make up the cash forms of all modern money systems. Coins are used for lower-valued units, and banknotes are used for the higher values.

Numismedia: Metal formed into a disk of standardized weight and stamped with a standard design to enable it to circulate as money authorized by a government body.

Library of Economics: Each name is the legal definition of a coin containing a certain quantity of gold or silver. It is the metal that gives value; the stamp certifies the weight and purity. Until it is admitted that such coins, and such coins only, are good money, the true function of the bank and of the banker can not be fully comprehended.

American Numismatic Association definition of a coin: Usually a piece of metal, marked with a device, issued by a governing authority and intended to be used as money.

Design or origin has nothing to do with the historical fact of whether a coin (be it a trade token coin or a Griqua Town coin) actually circulated and, as such, is historically part of that country's currency. The Strachan and Co "trade tokens" (I actually call them currency tokens) clearly fall within the wider scope and interpretation of the definitions copied above and were circulated.

As you correctly say yourself some of the most beautiful "production coins" have exquisite designs but have no investment value as you yourself say they were NOT real coinage of the day - ie they never circulated. .

An "attempt at South Africa's first coinage" as you call it does not make the Griqua Town bona-fide coins - there is no actual numismatic history. They never were part of South Africa's circulating coinage and never will be - this does not stop the numismatic interest in or demand for these rare pattern pieces (for that is all that the Griqua Town "coins" actually were). Furthermore, if we are to get pedantic, there was no governing authority in that part of South Africa at that time the "coins" were supposed to have circulated in Griqua Town. (In other words if they had ever circulated they would have been "token coins").

The governing authority in East Griqualand in the 1870s, the Griquas, accepted the coins as did Standard Bank in Kokstad (by their own admission). The Griqua Secretary at the time, Charles Brisley, was one of two partners owning and running the Strachan stores. What does it matter that the bank was a trading store chain? There was a tangible need - no circulating currency of the crown in the region and the "coins" were supported by tangible goods in the Strachan stores. What supports the value of the coin and notes you have in your pocket right now? A monetary system based on faith and the whim of foreign currency traders with no tangible backing (look at what has happened to Zimbabwe's currency in recent years!)

The point I am trying to make is that the currency tokens of Strachan and Co WERE used as currency by the wider community in an area the size of Ireland for nearly sixty years while rare "coins" like the Burgerspond, Veldpond and Griqua Town coins WERE NEVER circulated and never used as coins! In effect they are all patterns or gold ornaments struck in the shape of a coin - the reason so many Veldponds and Burgersponds were mounted. Fundamentally, ask yourself, what the essence of coin collecting is about.... It is, as Dr Frank Mitchell once said, the fascination of holding and owning a small metal disc that was once circulated and used by people in the past... it is about real, tangible history - the richer, the better.

The fact that the design of the "currency token coin" is simple is no different to the simple design of the Veld Pond which was struck under the most extraordinary of circumstances - a key ingredient behind its value today. As you know the Veld Pond was not issued by any government authority but is nevertheless a valued and accepted numismatic item by the wider coin community.

Furthermore it is clearly arguable that even coins like the Mandela Proof R5 coin which you see as such a great investment is nothing more than a "token of value" as, since SA left the gold standard in 1932, the metal value in coinage has been disregarded - making these latter day "coins", in reality, nothing more than circulating tokens. It is interesting that the laws brought in 1932 outlawed the use of "token coins" as currency. An issue which got trader James Cole into a spot of bother with the police post-1932.

Extract "Zulu Journey" by Carel Birkby (pp 191-192) - from an interview with James Cole in 1937

Until 18 months ago (1935) the "Cole coins" still circulated in some parts of the country, but now the police have put their foot down and insisted that the currency of only one king may be used in the realm. 

It is clear that token coins can be considered, in some special cases, as circulating currency as important as any coin of the crown or government. The Strachan and Co currency token coins clearly fall into this category.  

I guess we might always be at odds in our view on this issue but I am pleased to see the number of serious numismatists who I have regular contact with who have seen that fundamental numismatics is about historical significance not pleasing designs - such as displayed in production coins; that numismatics is about historical application not intent and that, as raw numismatic interest is the key driving force behind value, important historical currency tokens such as the Strachan and Co pieces, are one of the finest investments around - even if you cannot see that at the moment. I look at the trade tokens of Australia which are now more sought after than some of our more desirable currency pieces... fetching thousands of dollars today. South Africa is not far behind.

In closing, on my home page I say: US Federal Board member Ben S Bernanke said in a speech on 21st November 2001: "The US government has a technology, called a printing press, or today, its electronic equivalent, that allows it to produce as many US dollars as it wishes at essentially no cost."

In 1932 much of the western world went off the gold standard effectively removing real value from the money in circulation today. A very good reason to invest in the coinage of yesteryear when governments and currency had history, value and credibility.

Kind regards

Scott Balson