a guest blog by Richard Radick

Introduction

On September 30, 2020, a striking set of 449 US gold coins was sold by the German auction firm Fritz Rudolf Künker GmbH & Co. KG (“Kunker”) in Osnabrück, Germany. Unlike many sales by large US auction houses, these coins were not offered as date sets, but rather as 74 single date/mint groups, each group typically comprising about five coins, but ranging from one to 17. All the groups were better dates; indeed, there were no coins that could be considered “common” in the sale, except perhaps the one group of five 1911-D quarter eagles. The other 444 coins were more-or-less evenly divided between half eagles, eagles, and double eagles. There were no gold dollars or $3 pieces. Slightly more than half the coins were Carson City issues.

The following table presents the details of the distribution of the 449 coins by denomination and mint.

The sale included two rarities: an 1859-O $20 graded NGC AU-58, which sold for 85,000€ (about $99,700), and an 1881 $20, also graded NGC AU-58, which sold for 65,000€ (about $76,200), and an important condition rarity, an 1865-S $10 graded NGC MS-61, which sold for 90,000€ (about $105,600) - the highest APR of the sale. The total realized from the sale was 3,130,7500€ (about $3,672,000, which works out to over $8,100 per coin).

**1859-O $20.00, NGC AU58, image from the Künker sale**

Although the sale occurred in Europe, it did not pass unnoticed in the US. For example, Jeff Garrett, in one of his Market Commentary articles for NGC entitled “US Gold Coins Coming Home,” wrote on September 24, 2020:

“A couple of weeks ago, I received an auction catalog from the German coin company Künker, one of the largest and most well-respected rare coin auction houses in Europe, which specializes in world and ancient coins. …

When I looked at the Auktion 340 catalogue from September 30-October 1, 2020, I realized that the gold coins were not from one collector, but cherry-picked from a large hoard of gold coins. The sale features dozens of interesting US rarities, but most have a similar appearance and none are extremely high grade. There are quite a few Mint State coins, but most are in the lower states of preservation and show gentle signs of circulation.”

Coming as it did immediately after the first sale of half eagles from the Fairmont Collection by Stack’s Bowers Galleries (SBG) in August 2020, the Künker sale triggered speculation that its coins may have come from the Fairmont hoard. Although Garrett himself did not explicitly suggest this possibility, he did write immediately before the passage quoted above: “Stack’s Bowers has been offering a steady stream of US gold coins from what they call the “Fairmont Collection.” The sales have been very successful and will probably continue into the near future.”

I certainly asked the question. In an e-mail exchange with Doug, I wrote: “There is speculation that these coins (i.e., from the Künker sale) came from the same source as the Stack’s & Bowers “Fairmont Collection.” Do you know whether this is correct”? Doug replied: “I assume the Künker coins are from the same source as Fairmont, but they had a slightly different look, suggesting that they may be from somewhere different.”

The purpose of this piece is to re-examine this question, from the perspective offered by the passage of four-years’ time.

The Affirmative Case

As Garrett noted, most of the coins from the Künker sale had a similar appearance, which I might describe as a light, straw-gold patina, original surfaces, a bit of dirt, and relatively few scuffs and bag-marks. Of course, as is now well-known, the description I have just offered also characterizes the Fairmont coins.

However, appearance alone is not a very strong argument, especially if it is judged from photographic images rather than direct inspection of the coins. I personally have not seen any of the Künker coins, and presumably neither had Garrett when he wrote his description. Doug evidently has seen some of them, and remarked that they looked “slightly different” from the Fairmont coins, without elaborating on what he saw that lead to his opinion.

More importantly, perhaps, the noted similarity of appearance suggested that the Künker coins came from a single source, which Garrett described as a “large hoard.” Furthermore, that parent population must have had breadth as well as size, and both size and breadth, combined, are not a commonly-encountered characteristic of gold coin hoards - think, for example, of the S.S. Central America treasure.

However, the Fairmont hoard does have both the necessary size and breadth to supply the Künker coins. It comprises at least 400,000+ coins, perhaps substantially more, and, unlike many US gold coin hoards from foreign banks, it is not limited to a few date/mint varieties. Its oldest coins were minted in 1834, the newest in 1932, and everything in between is present proportionately, lacking only some of the rarest issues. And, of course, the Fairmont hoard is currently being liquidated - the first sale of Fairmont coins was in June, 2018, and the next will be in November, 2024, with over 25 sales in between that offered coins from the Fairmont hoard.

Doug has noted that very few Charlotte and Dahlonega coins have been found in repatriated US gold coin hoards. However, the Fairmont hoard does contain some, perhaps 300 half eagles from each of the two mints, and clearly the source for the Künker coins also contained some, since there were 45 half eagles from the two mints in the sale.

The Negative Case

Perhaps the strongest argument against the hypothesis that the Künker coins came from the Fairmont hoard is the fact that 7 of the 74 single date/mint groups in the Künker sale comprise coins that are completely absent from the Fairmont hoard, as it is presently known: (1) the 1911-D quarter eagle (5 coins), (2) the 1863-S eagle (5 coins), (3) the 1871-CC eagle (5 coins), (4) the 1881 double eagle (1 coin), (5) the 1908-S double eagle (4 coins), (6) the 1924-S double eagle (8 coins), and (7) the 1925-D double eagle (1 coin).

**1865-S $10.00 NGC MS61, image from the Künker sale**

There is also an impressive run of San Francisco eagles from the early 1860s among the Künker coins that are not particularly well-represented among the Fairmont coins (1) the 1860-S (6 in Künker vs 2 in Fairmont), (2) the 1861-S (5 vs 6), (3) the 1862-S (5 vs 2), the 1863-S ( 5 vs 0), and the 1865-S (5 vs 4, with one of the five Künker coins perhaps the fourth finest known). There are several other such examples among the eagles, and the pattern occurs in one conspicuous case among the half eagles: are five 1862 $5s among the Künker coins, but only two examples in Fairmont, both of which were sold in 2022 - i.e., two years after the Künker sale.

To focus the argument: Why would the Fairmont manager (presumably SBG) elect to send the only example of the 1881 $20 in the Fairmont hoard, along with all its 1863-S and 1871-CC eagles, a condition-census 1865-S eagle, etc., to a sale in Europe, with the Fairmont Hendricks Set sale (not to mention its successors) on the horizon in the US, starting in 18 months?

A second argument is sort-of the inverse of the first. Although the Künker sale was rich in Carson City issues, the condition of these coins was notably unexceptional, compared to the grades of the same issues in the Fairmont Collection. To cite one example among several, consider the 1890-CC $20. There were five of these coins in the Künker sale, none graded by NGC. All were sold raw, and Künker assigned grades of AU(1), XF-AU(1), and XF(3) to these five coins. Within the Fairmont hoard, it appears that there were some 321 examples of this issue, of which 17, all pedigreed, are known with mint state grades from PCGS - eleven MS-62, five MS-61, and one MS-60. There are probably additional mint state 1890-CC $20 coins among the non-pedigreed Fairmonts that I don’t know about. In any case, there are enough mint state 1890-CC Fairmont $20s so that SBG has decided to sell some outside the auctions: I know of two examples, both MS-61 - one was sold to Doug Winter, and another to JM Bullion.

To focus the argument: If the Fairmont manager (again, presumably SBG) was willing to consign the only 1881 “Fairmont” $20 to the Künker sale, and all the 1863-S and 1871-CC eagles, why would they not also consign at least one or two of the mint state 1890-CC double eagles, instead of sending only shlock?

Finally, there is the quarter eagle problem. For whatever reason, there seems to be no quarter eagles among the Fairmont coins. Why this should be is a bit of a mystery: if quarter eagles were represented in the Fairmont hoard in proportion to the three larger denominations, there should be thousands of them (primarily Indians), but there aren’t. None have appeared in the Fairmont auctions, and there is no evidence in the time series that I have created and maintain that large numbers of quarter eagles from Fairmont have ever been submitted to PCGS for grading.

However, the source for the coins in the Künker sale clearly contained quarter eagles.

Discussion

Overall, I find the negative case more convincing, which leads me conclude that the Künker sale coins probably did not come from the Fairmont hoard. Some readers may come to the opposite conclusion. In any case, there are people, presumably at Stack’s Bowers and Künker GmbH, who undoubtedly know for sure, but they aren’t saying.

Of course, this conclusion implies that there is another hoard of US gold coins, comparable in size and breadth to the Fairmont hoard, out there (presumably somewhere in Europe), waiting. Waiting for what? Waiting, perhaps, for the Fairmont sales to end.

To amuse myself, I decided to try to estimate the size of this horde by comparing it to two known aggregates of US gold coins, the Fairmont hoard itself, and the universe of all US gold coins that have been graded by PCGS.

For each issue in the Künker sale (the 1847-C half eagle, for example), I collected three numbers: the number in the Künker sale (for the 1847-C $5, five), the number I believe are in the Fairmont hoard (20), and the number that have been graded by PCGS (299, as of late September 2024). I then formed two ratios: Künker/Fairmont (5/20 = 0.25) and Künker/PCGS (5/299 = 0.0167). As a second example, the numbers for the 1891-CC half eagle are (17, 720, and 2,854) and the ratios are (0.024 and 0.0060). For each of the three larger denominations (i.e., ignoring the quarter eagles), I then computed the median values for the ratios, as well as for all the 74 issues.

**1891-CC $10.00 NGC MS61, image from the Künker auction**

I then collected values for the total number of Fairmont and PCGS-graded coins for each denomination, and multiplied each by the corresponding median value, thereby scaling the estimates from the limited number of issues present in the Künker sale to the total number of coins for each denomination. The result is an estimate for the number of coins for each denomination present in the source population for the Künker coins. For example, using my current estimate for the total number of half eagles in the Fairmont hoard (171,616) and the corresponding median ratio computed previously (0.26), I can estimate the number of half eagles in the Künker source population (171,616 x 0.26 = 45,162).

The table below summarizes the results. The final column is the average for the two estimates, from Fairmont and from PCGS, and represents my estimate for the number of coins in the Künker source population. The total is 117,377.

A rigorous analyst would probably be appalled by this procedure, and the critical reader will undoubtedly raise several objections, also: I cheerfully plead guilty to all charges. My goal was simply to obtain a rough estimate: is the size of the putative Künker source population on the order of 10,000 coins, 100,000 coins, or 1,000,000 coins? Evidently, it is on the order of 100,000 coins, which means that is rather smaller than the Fairmont hoard, but still in the same ball-park.

As Garrett noted, this putative Künker source population has been cherry-picked, and its best coins were presumably those sold in the Künker auction of September 2020, just as the best coins from the Fairmont hoard were sold in the Hendricks Set sale of April, 2022.

From this, it may be possible to infer something about the condition of the coins in this source population. As I noted above, it appears that the grades of the Carson City coins in the Künker sale were somewhat lower than the best for the corresponding coins in the Fairmont hoard. If this pattern extends to all the coins, and if the Künker sale was really the best from its source hoard, then its remaining coins may be not quite the equals of typical Fairmont coins.

Time will tell - presumably the remaining coins from this (as yet un-named) hoard will eventually enter the market.