The Record-Setting Sale of an 1875 Half Eagle: What Does it Portend?

In the Bowers and Merena November 2010 Baltimore auction, a business strike 1875 half eagle sold without a lot of fanfare for a lot of money. I think this was one of the most significant individual sales in the rare gold coin market in 2010 and I'd like to spend a bit of time analyzing both the coin that was sold and the significance it portends for both the Liberty Head half eagle series and the rare gold market as a whole. The 1875 is the rarest collectible Liberty Head half eagle. (The 1854-S is rarer but with no pieces likely available to collectors in the near future, I regard this issue as "non-collectible.") Only 200 business strikes were produced and the number of pieces known has generally been estimated to be in the area of ten. I think this estimate is reasonably accurate although I think the actual number known could be as low as seven or eight.

The 1875 is unknown in Uncirculated and most of the examples that exist are in the EF40 to AU50 range. PCGS has graded five coins including an EF40 and two each in AU50 and AU53 while NGC has graded four: one in EF45 and three in AU55. I believe that these figures are inflated by resubmissions and the total number of distinct 1875 half eagles in slabs is four or five. There have been 10 auction appearances since 1991. Six have occurred since 2000 but this includes a number of reappearances of the same coin(s).

The coin in the Bowers and Merena auction was graded AU55 by NGC and it appeared to have been the same coin that was offered as DLRC's Richmond I: 1444 back in July 2004 where it brought a record-setting $86,250. There had been no other 1875 business strikes that had been available since the Goldberg 2/07: 2335 coin that brought $74,750.

1875 $5.00 NGC AU55, image courtesy of Bowers and Merena

The Bowers coin was part of an interesting set of 1875 gold coinage called the "Kupersmith Once in a Lifetime" collection. Terrible name but an interesting and impressive set with examples of the rare Philadelphia gold dollar, quarter eagle and three dollar gold piece from this year but, curiously without the very rare 1875 business strike (or Proof) eagle.

The coin in the Bowers sale brought $149,500 which is far and away a record price for a business strike of this date. Considering that this is an esoteric coin and, to be honest, it wasn't a really nice-looking piece, I think this price is very significant.

In the same sale, the coin right before the business strike was an 1875 half eagle graded PR66 Cameo by NGC. With a mintage of just 20, this has long been recognized as a great rarity and it is an issue that has usually brought more than its under-appreciated (but rarer) business strike counterpart. The Proof in the Bowers sale, sold as Lot 5042, brought $143,750. I was really surprised but really pleased to see this happen.

I've been thinking for a year or two that Liberty Head half eagles have a chance to be the "next big thing" in the world of rare date gold. Here's why. The Liberty Head double eagle series is extremely popular right now and there are not many "ground floor" opportunities for the new collector. Same goes for the eagle series although I still think there are some very undervalued issues. But the Liberty Head half eagle series remains under-collected and there are dozens and dozens of individual issues that are extremely undervalued.

So why is a $149,500 Liberty Head half eagle so an important? Because its the rarest collectible issue in the series and you typically see high-end collector activity in a series start with coins like this. In other words, you can buy the C and D mint issues any day but how often can you buy the Big Gun like the 1875?

If the coin had sold for, say, $80,000 or $90,000 I don't think it would have been a big deal. But with a sale at nearly $150,000 the bar has been raised and I think we'll see higher prices for other very rare non-Southern Liberty Head half eagles like the 1863, 1864, 1864-S and 1865.

Of course there is the very real possibility that this coin was not bought by a collector who plans to do a date set of Liberty Head half eagles and this totally blows a hole into my theory. It could have just as easily of been bought by someone doing a set of 1875 business strike gold coinage or someone who likes really rare coins like the 1875 half eagle and thinks that 150k is a great value for an issue with just eight or nine business strikes known. All true but, as I said above, the bar has now been raised for the rarities in this series and the days of being able to buy an 1875 half eagle in AU for less than $100,000 are gone.

Liberty Head Half Eagle Series

Think you know the Liberty Head half eagle series pretty well? OK, then here is a test. Everyone (well, almost everyone...) knows that the extremely rare 1854-S is the rarest single issue in this long-lived series. But what is the rarest collectible date ? The answer and some interesting analysis can be found below. So have you given some thought to this question? If you answered the 1864-S, pat yourself on the back and give yourself a Gold Star because you know your Liberty half eagles! (For those of you who are about to complain and say, “Hey, Doug, how about the 1875?” my answer is that while this date is the rarest as a business strike, there are also Proofs known and the total number of 1875 half eagles is probably narrowly more than the 1864-S).

With a mintage of just 3,888 you have to figure that this is a rare coin. But there are other dates in the series with lower mintage figures, including the 1865, 1869, 1872, 1875, 1876 and 1877. As a rule Philadelphia coins were saved with greater frequency than those from the branch mints and almost no one saved any 1864-S half eagles. My best estimate is that no more than twelve to fifteen pieces are known.

As of January 2008, PCGS had graded just thirteen 1864-S half eagles including three in Extremely Fine, three in About Uncirculated and one in Uncirculated (more about this coin later) while NGC had graded ten with four in EF and three in AU.

In the last decade or so, I have personally seen a very small number of 1864-S half eagles in any grade. The last one I can recall selling at auction was a PCGS EF45 that Superior sold in May 2006 for $22,425 while an NGC EF45 brought $31,050 in David Lawrence’s July 2004 auction. Back in 2000, the Bass III coin, graded AU53 by PCGS, sold for an incredibly reasonable $23,000 and, at the time, that was one of the two best examples I had ever seen. I have also seen an NGC AU58 in the inventory of an East Coast dealer.

There is one 1864-S half eagle known that is so much better than any other survivor that it deserves special mention. I first saw this coin in October 1987 when it sold in the Norweb collection auction. The Norwebs had, in turn, purchased it in 1956 out of Abe Kosoff’s Melish sale.

This coin is in a PCGS MS65 holder but this doesn’t begin to tell the whole story about how incredible it is. The coin is essentially perfect and could easily grade MS66 or even MS67. Its only “fault” is the fact that isn’t all that well struck with some weakness visible on a few of the stars on the obverse and on portions of the upper obverse and corresponding reverse. It is by a large margin the nicest San Francisco half eagle from this era that I have ever seen and when I saw it again at the Bass sale back in 1999 I wrote the following in my catalog “world’s coolest San Francisco gold coin.”

As I was figuring my bids for this sale, the 1864-S kept popping into my mind. I badly wanted to buy this coin for myself or, at the very least, persuade one of my clients to put it away for a few years so I would have access to it when the market for coins like this would be stronger.

The coin opened for $60,000 and I bid up to $120,000 but I got cold feet and dropped out. It wound up selling for $160,000 to a Southern collector who, to the best of my knowledge, to this only owns one San Francisco gold coin—this 1864-S half eagle. And that is a hell of a San Francisco gold coin collection.

What would this 1864-S half eagle sell for today? I thought it would bring as much as $250,000 back in 1999 and had it been in a sale other than Bass II (which had FAR too many great coins for its own good...) it might have. Today, I figure it would bring at least twice this and maybe more.

Despite the obvious rarity of this coin, I think the 1864-S half eagle is still extremely undervalued. The current Trends value for an EF40 is just $14,250 in EF40 and $45,000 in AU50 with no prices listed for higher grades.

The 1864-S half eagle remains one of my favorite 19th century United States gold coins and I am confident that its true rarity will be fully appreciated in the near future.