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HomeMy WebLinkAboutA003 - Letter from Ames Silversmithing with concerns, November 13, 1985 Ames Silversmithing GOLDSMITHS & DESIGNERS 220 MAIN STREET FILED AMES, IOWA 50010 (515) 232-0080 NOV 1 31985 CITY CLEM, November 13, 1985 CITY of AME I am writing this letter to address the proposed precious metals ordinance 17.25 for the City of Ames. We are active buyers and sellers in the precious metals market, and for this reason, I feel I can offer some insight as to why this ordinance should not be passed. First, let me explain that we have been very cooperative with the police in looking for and reclaiming stolen jewelry. There have been two or three cases in the past where our direct cooperation led to the arrest and conviction of persons who have broken into homes and stolen jewelry. We will continue to do so in the future. The police have stated that thefts have increased from $500,000 in 1983 to $578,000 in 1984. What they failed to explain was that less than 7% of the $578,000 was jewelry. Nearly 15% was televisions, radios, and cameras. It seems very misleading to say that an ordinance to regulate the buying and selling of precious metals is needed because thefts have increased. In fact, .with the exception of one year, the dollar value of gems, jewelry, and precious metals stolen has actually decreased over the last four years. I believe that this is a direct result of our cooperation with the police. So little jewelry came through in 1984, I am led to believe that the majority of what is stolen leaves the city for sale elsewhere. I also believe if this ordinance is passed, any chance we have of seeing locally stolen goods surface would be lost. What thief would willingly give his name, address, social security number, etc. , to sell stolen jewelry. The stolen goods would immediately leave town to be sold where an ordinance is not in effect. My main concern with this ordinance lies in the 10 day retention period. As I 'm sure you're aware, the precious metals market can be extremely volatile. Since margins are often small , usually 3-5% in the buying and selling of gold and silver bullion, a rapid decrease in the price would cause serious financial losses on our behalf. Let me give you an example of how a trade works. John Doe comes into my store with fifteen 1 ounce gold Kruggerands to sell . The market price for gold is $320.00 per ounce. I know I can sell this to my broker at 2% above the market price, or $326.40. This extends out to $4896. I call my broker and lock in the price. I offer John 2% under the market, $307.20, or $4608. I have guaranteed myself a $288 Ames Silversmithing GOLDSMITHS & DESIGNERS 220 MAIN STREET AMES, IOWA 50010 (515) 232-0080 profit. But let's say that I am forced by the proposed ordinance to hold the materials for ten days. I can' t lock in a price because I must deliver the material within 72 hours. I am now open to the fluctuations that may occur in the next ten days. As a specific example, from September 22, 1982, to October 4, 1982, the price of gold fell $55.75 per ounce. If this were to occur while I was in possession of the 15 ounces of gold I bought from John Doe, we would lose $836.25. Who will be accountable for these losses? The police? The city council ? The mayor? No, I will . Proponents of the ordinance might say, "Yes, but what if the price of gold goes up?" While it's true that this could occur, I am in business to make a profit, not to be a gambler. I would much rather, lock in my $288 profit than gamble with the market. That's how one of the largest gold and silver dealers in the country went bankrupt. The record keeping to keep track of the information would probably force me to hire a new employee, or take me away from the principal responsibilities of my job. My last concern with the ordinance involves a matter of just not personal feelings, but more importantly, constitutional legalities. I am very much against this ordinance giving ANY police officer a blanket provision to come into my store at ANY time and take into possession ANY article believed to be stolen. If I mistakenly buy a piece that is stolen, I will be more than happy to cooperate with the police to see that the piece is returned to its rightful owner and that justice is done. But giving the police the right to confiscate something only on their assumption that it may be stolen is a completely different story. Let me detail one last item concerning this ordinance. In 1981, it was proposed that a similar ordinance be enacted. I met with then Police Chief Siedelman, Capt. Ballantine, and Det. Larry Olson concerning this. I offered to be fully cooperative, but felt that I needed some guarantees. I asked that if I did indeed purchase something that was stolen and turned it into the police along with the information that we had, that I be guaranteed reimbursement for that piece within a short time frame. In return for this guarantee, I would continue to be an active buyer, taking down the necessary information to trace the sellers. I would also volunteer my time and testimony in order to make an arrest and conviction. This they were not willing to do. I was expected to lay my money on the line with the very real possibility that I would never get it back. The police expected me to cooperate with them but they would not cooperate with me. With no guarantees, you can see where the honest buyers and sellers would suffer and the dishonest prosper. In closing, I hope that you will not allow this selective type of ordinance to be passed. If the jewelry industry is to be singled out, so Ames Silversmithing GOLDSMITHS & DESIGNERS 220 MAIN STREET AMES, IOWA 50010 (515) 232-0080 then should the buying and selling of TV's, radios, cameras, sporting goods, etc. I think you see how ridiculous this could become. Please feel free to call or write if you have any questions or comments concerning this matter. 1 would be more than happy to discuss them with you. Sincerely, Gary Youngberg