February 2, 2017 – Founded in 1850, the Birmingham Mint, specialized in bronze coins as the small change of that era and in so doing developed into the world’s largest private mint within only 10 years. The Birmingham Mint produced the change on behalf of many large-scale economic powers of the 19th century, for example France, the UK and Italy.
A glance at the now closed Birmingham Mint, a typical building of the 19th cent. Photo: Oosoom / CC BY-SA 3.0
The Mint could play this crucial role in the global coin production because the Royal Mint was forbidden to accept any orders of foreign governments. And so everybody who wanted to benefit from British know-how had to turn to private Birmingham Mint. But then, in 1923, the Royal Mint was granted official permission to accept the relevant orders which led to the demise of the Birmingham Mint. In the years between 1940 and 1964, the coin production only accounted for 10-20% of the entire business.
Sometime at the beginning of the 1960s, the Royal Mint concluded an agreement with the Birmingham Mint. It stipulated that the Birmingham Mint was to receive a specified percentage of all overseas orders of the Royal Mint. What the Royal Mint received for this generous courtesy, on the other hand, is not known.
2001 was a bad year for the Royal Mint. With more than 5 million pounds trading loss, it achieved the worst result in its history. Responsible for this was not just the decline in orders, but also the high restructuring cost incurred by the necessary restructure of the state-owned enterprise that was operating at a loss.
The situation was further inflamed by a homemade scandal. Coins in the value of 25,000 pounds (then equalling 40,000 euros) had been taken from the safes of the Royal Mint. The theft went unnoticed for eight months, which was publicly denounced.
In this beleaguered position, the Royal Mint terminated the contract with the Birmingham Mint. We only know about the existence of this agreement through an action for damages, in the amount of 5.4 million pounds, which the Birmingham Mint filed against the Royal Mint in October 2002.
In this context, Roland Vernon, owner of the Birmingham Mint, requested that the contract for coins and blanks in the UK should now go out for tender: “The Royal Mint has the monopoly on UK coins and I think these figures confirm it really should be coming out to tender for other people to bid. I believe we could give tax-payers better value for money.”
The lawsuit grinded on and the situation became more and more threatening for the Birmingham Mint, even though it had received a major order for the production of euro blanks in 2002. Because of acute cash deficiency, the Birmingham Mint was put under KPMG administration in March 2003. The attempt of a local politician to motivate the Royal Mint to agree to a compromise, by threatening to file a lawsuit, with reference to the 1997 Competition Act, failed. In May 2003, the Birmingham Mint closed.
To see how the former factory site may develop in the near future read this article in the Birmingham Post.