Some Thoughts on Proof Gold Survival Rates

As someone who handles a decent amount of rare and interesting Proof gold coinage, I've been thinking about survival rates. I'd like to share some thoughts about typical survival rates and why certain issues don't comply with the "basic laws." First, a little background. The United States mint struck proof gold coins as far back as the 1820's, but production became more established by the 1858-1860 era; which neatly coincides with the beginning of coin collecting as a hobby in this country. Production of most proofs remained small until the early to mid-1880's, when collectors and dealers became more interested and a decent-sized mania for Proofs began to take hold.

For most United States Proof gold coins, I believe that the following survival rates are pretty consistent:

*Pre-1870 gold issues, with exceptions, appear to have a survival rate of around one-third of the original mintage.

*Issues from around 1870 to around 1890, with exceptions, appear to have survival rates of around half of the original mintage.

*Issues from 1890 until the end of the Liberty Head design (1907) typically have survival rates that range from one half to two-thirds of the original mintage.

Let's now take a look at some of the factors that influence survival rates of Proof gold coins. Please note that these are not listed in order of importance.

1. Original Mintage Figures. This seems pretty obvious but it is an important factor that needs to be discussed. A gold issue with a low mintage (say 25-50 coins) tends to be rarer than an issues with a relatively high mintage (100 or more).

However, there are some notable exceptions to this rule.

There are some years that mintage figures are incorrect. An example of this is the 1861 gold dollar with a reported mintage of 349. This figure has never made sense to me and given the small number of survivors (two to three dozen) and the unlikely scenario that nearly all of the supposed "349" struck were melted.

The opposite situation exists with Proof Three Dollar gold pieces dated 1875 and 1876. These are Proof-only issues; i.e, they were made only in a Proof format with none made for business strike purposes. The reported mintage figures for these two dates are 20 and 45, respectively.

But there are probably more than 20 and 45 known of these dates. As an example, looking at the PCGS and NGC population data for the 1876 three dollar, we see that eighty examples have been graded. Even if we discount, say, 30 of these as resubmissions, this still means that 50 examples may have been graded.

It is my belief that both the 1875 and 1876 three dollar gold pieces were restruck, in order to fill a demand among collectors, either later in the year(s) or, perhaps, a year or two later.

2. The Size of the Coin. Small sized Proof gold (i.e., gold dollars and quarter eagles) tends to have a higher survival rare than larger sized coins.

The reasons for this are fairly obvious. The face value of a small gold coin means that it was more likely to survive the Depression era where a number of larger Proofs were spent or melted by collectors because of their high face value and low numismatic value.

3. The Era in Which it Was Struck. I mentioned above that proof gold from the 1890's was saved with greater regularity than those issues from the 1860's.

In the 1890's, coin collecting was a well-developed hobby. But in the 1860's, there were far fewer collectors. It is a known fact that many Proofs struck in the 1860's and 1870's went unsold to collectors and were later melted by the mint. Even if the number melted was not great (say five or ten coins) with issues that mintages of just 25-50 coins, this small number becomes significant.

As far as we know, proofs were still melted up to the early 1900's but not as often as with earlier issues.

4. Economic Issues I mentioned meltings during the Depression in the second bullet point above. This is an important factor, worth repeating.

As remarkable as it seems today, a Proof double eagle in the early 1930's had very little numismatic premium. For some collectors, it made more sense to spend a Proof double eagle from the 1880's then it did to try and sell them to a coin dealer or place them in an auction. Many higher denomination proofs (specifically eagles and double eagles) were lost in this fashion. Some were melted while others circulated so much that they are barely recognizable as Proofs today.

There are other issues that were produced during years in which the economy suffered. The Panic of 1893, while not as well known as the Depression, was a short-lived but highly significant downturn in the economy. It is likely that proof gold coins from 1892-1894 were unsold and melted due to collectors suddenly not being able to afford luxuries such as coins.

5. Contemporary Hoarding Not unlike with today's modern coins, dealers and collectors speculated with smaller denomination proof gold in the 1880's and early 1890's. If you look at mintages for gold dollars, they increased dramatically in the 1880's: from a low of 36 in 1880 to a high of 1,779 in 1889. This was due to significant demand from hoarders and speculators; a situation not all that much different than what we see in 2011 with the hoarding of the 25th anniversary ASE sets!

These issues that were hoarded tend to have higher survival rates than earlier issues, due to the fact that they went into numismatic channels.

How exactly does a collector determine the survival rate of a proof gold issue he is contemplating buying? I think the best way is to study auction appearances over the years. A close study will often reveal interesting anomalies. An example: I recently bought an 1870 gold dollar in PR65. I did a little research and realized that I had only handled one example in twenty+ years and not an especially nice one at that. A study of auction records showed that only a few Gems have ever been sold and nothing better than PR65. My sort-of-cool coin suddenly seemed very cool, not to mention exceedingly rare.