The Availability of Rare Coins

One thing that I’ve always found interesting about the coin market is the ebb and flow of coins that are (or aren’t) available. If you actively buy and sell coins for any period of time, you learn that certain “rare” issues or series always seem available. Other supposedly available coins can, with no good reason, go through fallow periods where they become very hard to find. I was having a conversation with a client yesterday and he raised a good point: in the last year or so, it seems that interesting New Orleans half eagles have not been offered for sale with much frequency. As we began discussing this statement, my mind raced back through the last year and I asked myself what were some of the interesting New Orleans half eagles that I have recently handled. The answer was pretty illuminating...

Over the years, I think I’ve owned more interesting New Orleans half eagles than just about anyone. I was one of the first dealers to recognize how rare these coins are and I’ve tried to make a market in high quality New Orleans half eagles for close to two decades.

As recently as a few years ago, I was handling ultra-cool New Orleans half eagles on a regular basis. Coins like the Pittman MS63 1840-O, two of the three known Uncirculated 1842-O, two extremely high grade 1843-O Small Letters, the MS63 Bass 1845-O, two nice Uncirculated 1851-O, the two finest known 1854-O, etc. Often, I had two or three Finest Known or Condition Census coins at one time.

But since last summer I’ve noted a major slow down in the New Orleans half eagles I’ve handled. I don’t think I’ve owned a single 1842-O or 1847-O this year and the only Uncirculated pieces of note that I’ve handled have been the more available dates like the 1840-O, 1844-O, 1845-O, 1846-O and 1854-O. So where are the coins?

My guess is that what we are seeing here a classic case of a Real Collector’s Market. Let me explain. My enthusiasm for New Orleans half eagles has probably rubbed-off on a few people and my guess is, at this point in time, there are at least six to ten serious collectors of New Orleans half eagles. Assuming this is the case, this has removed most of the nicer New Orleans half eagles from the market. Let’s quickly do the math.

Say we’re looking at a coin like the 1851-O half eagle in Uncirculated. My best estimate is that a half dozen or so are known in Uncirculated. With at least six to nine collectors out there for this series in high grades, that means that the demand clearly exceeds the supply. Given the fact that most of the serious collectors for this series seem to be in buy mode right now as opposed to sell mode, this means that the supply has dried-up for a coin like an Uncirculated 1851-O half eagle. A high grade example won’t come on the market unless a current owner is forced to sell, a new coin is discovered or prices rise to the point that current owners are motivated to sell.

But the ebb and flow of coin supply isn’t always so cut and dry. Look at something like Large Cents. Years went by with no major collections selling and now, within the last two years, you have the Husak, Naftzger and Holmes collections becoming available. I don’t think any serious Cent collectors expected so many great coins to come on the market in such a short time. It was, instead, a series of circumstances that occurred in an almost random fashion.

Back to New Orleans half eagles. When will the dearth of choice, interesting coins end? It’s hard to say. This article could spur a few coins coming onto the market (and if you are planning to sell any, please call me first!). Or, we could go another year or two before any interesting coins come on the market. It’s hard to say and I think this degree of uncertainty is one of the things that make a truly rare segment of the market like this much more interesting than Morgan Dollars or Buffalo Nickels.

The Bass 1855-C Quarter Eagle

2009 isn’t even two months old and I’ve already had the good fortune to handle some pretty special coins. I’d have to say that one of the very best that I’ve handled so far is the Bass 1855-C quarter eagle, graded MS65 by NGC, which is shown below. Let’s take an in-depth look at this specific coin and analyze where it fits into the Pantheon of Great Charlotte Quarter Eagles.

I regard the 1855-C as the second rarest Charlotte quarter eagle, trailing only the 1843-C Small Date. Of the 3,677 coins originally produced, an estimated 85-105 are known. This date tends to be found in the EF-AU grade range and it does not appear to have circulated with the intensity of other dates from this era which are more often found with considerable wear. At one time, the 1855-C was exceedingly rare in Uncirculated and when I wrote the first edition of my Charlotte book back in the 1980’s I was not aware of a single Mint State piece.

Due to gradeflation and new discoveries, the 1855-C has become a more available coin in Uncirculated and today there are as many as six or seven known. There are two really great pieces accounted for: the Bass coin and an example in a private collection graded MS64 by NGC and owned by dealer Harry Laibstain back around 2000-2001.

The Bass 1855-C is unquestionably the finest known 1855-C quarter eagle and it is one of just a handful of Gem quarter eagles from this mint (more on this later...). I had no idea that this coin even existed until I saw it when I viewed the Bass III sale in October 1999. Bass had supposedly obtained the coin via private treaty on August 31, 1977. When it made its initial auction appearance it was graded MS64 by PCGS but, according to my comments in the catalog, I graded it MS65 and described it as follows: “GEM!!!” After the sale, the owner cracked it out of its PCGS holder and sent it to NGC where it, rightfully, was upgraded to its current MS65 holder.

When viewing this coin, there are a few things that really stand out. The first is this coin’s amazing luster. I doubt that the image above will capture the subtleties of this coin’s incredible hybrid frosty/reflective texture. This issue is sometimes seen with good luster but on this example it is so dynamic that it gives the coin a unique “crisp” appearance that very, very few branch mint coins of any era possess.

There is some weakness of strike seen on the stars at the top and on the eagle’s right leg. This weakness is typical for the issue and, in fact, the overall detail seen is better than average. The surfaces are exceptionally clean with a virtual absence of marks. There are some raised die striations in the obverse fields and some mint-made roughness around the eagle on the reverse that add character to the overall appearance. Both sides have some light to medium rose and orange-gold color that is attractive as well.

When this coin was last sold at public auction in October 1999, it realized $41,400. It was later sold to a North Carolina collector and it has been off the market for close to a decade. I just sold it to an anonymous collector who specializes in Charlotte coins and it is regarded as one of the current highlights of his collection.

There are four Charlotte quarter eagles known to me that are decidedly better than all the other surviving examples from this mint. These are the only four Charlotte Liberty Head quarter eagles that I regard as Gems and it is pretty remarkable to think that out of the 217,833 pieces produced between 1840 and 1860 that only three Gems exist.

The Charlotte quarter eagle that I regard as the unquestionable finest known of any date is the Elrod 1842-C, graded MS65 by PCGS. This piece sold for $90,850 back in February 1999 and it is now owned by a Southern collector who is well-known for his discerning eye. The coin has also been graded MS65 by NGC. What is even more impressive about this coin is the fact that the 1842-C is an extremely rare coin in high grades and the Elrod coin is the finest of just three known in Uncirculated.

The 1843-C Large Date is among the more available Charlotte quarter eagles in Uncirculated and there are two Gems known. The first is currently graded MS66 by NGC and it was earlier in a PCGS MS65 holder. What is remarkable about this coin (besides its grade) is the fact that it was once in an ANACS MS64 holder and it sold at auction for a paltry $5,500 back in September 1997. The second Gem 1843-C Large Date is a PCGS MS65 that is currently owned by a North Carolina specialist. I have had the chance to view this coin and it is a bona-fide Gem with superb luster, color and surfaces. The fourth and final Gem Charlotte quarter eagle is, of course, the Bass 1855-C.

Are there other Gem Charlotte quarter eagles known? It is possible that a few pieces might exist in shipwrecks, hoards or old collections but I would be surprised if many turn up in the coming years. It is more likely that one or two of the very nice MS64’s will “morph” into MS65’s.

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An Amazing Gem 1869 Half Eagle

If you are a regular reader of my blogs, it’s a pretty safe assumption that you are interested in United States gold coins. And if you like, I don’t think I’m going too far out on a limb to state that you probably like to see photos of and read about special pieces. Well, I’ve got the skinny on one of the more amazing 19th century issues I’ve seen in some time; a one-of-a-kind coin that recently passed through the portals of Douglas Winter Numismatics. The coin in question, shown below, is an 1869 half eagle that has been graded MS64* by NGC. I’m going to start out by giving you some background about this issue, then about the specific coin and, finally, some thoughts as to how and why this remarkable coin exists.

I think the 1869 half eagle can best be described in two words: “forgotten rarity.” There were a scant 1,760 business strikes produced of which perhaps as many as four dozen are known. This issue is generally seen in the EF grades and it is rare in properly graded AU50 or better. I believe that there are around a dozen known in AU. PCGS has graded a total of thirty-three with the finest a single coin in AU58; NGC has graded a total of thirty-five with two different coins in Uncirculated: the present example and another, which grades MS64PL.

The present example was first offered at auction in the October 1999 Bass II sale where it brought $33,350 as Lot 1166. At the time, it was housed in a PCGS MS64 holder and according to my notes in the original catalog I called the coin “amazing!” Harry Bass had purchased the coin via private treaty from a source identified in the catalog as N.K.S. on June 8, 1971. He had kept his ownership of it a secret as it was unknown to both Breen and Akers when they wrote their books on, respectively, United States coins and half eagles.

The Bass 1869 half eagle next appeared for sale as Heritage 5/00: 7668 in an NGC MS64 holder where it brought $22,425. After this, it was sold into the Ashland City collection where it remained until it was offered as Heritage 1/03: 4815 (still in an NGC MS64 holder) realizing $28,750. I recently resubmitted the coin to NGC where it was given a star designation because of its exceptional eye appeal. I also had NGC delete the Ashland City pedigree and reinstate the Bass pedigree as I felt it was far more appropriate to a coin of this stature.

If you study the photo above, you will note that the quality shown by this 1869 half eagle is quite amazing. The surfaces are mostly prooflike with more than enough frost to clearly indicate that this piece was made for commercial usage. It is extremely well struck and attractively toned in light orange-gold hues. A few small scuffs can be seen in the left obverse field with the primary identifying mark being a tiny mint-made strike-through near the southeastern point of star four.

How does such a remarkable 1869 half eagle exist? There were no date collectors of business strike half eagles in 1869 and any well-heeled collector of this denomination in the 19th century would have preferred a Proof to a business strike. My theory is as follows.

Every year, the Assay Commission met in Philadelphia to examine a group of current coins to determine whether or not they conformed to legal requirements. Although I can’t prove this for a fact, my belief is that, from time to time, someone on the Assay Commission (of which there were approximately two dozen members) saw an interesting coin and decided to “keep it” as a souvenir. I am assuming that if a commissioner chose to, he could trade an older “used” half eagle for a brand new one. There are a small number of gold coins from the 1860’s and 1870’s that are just so much nicer than any other example from this date/denomination that it seems highly possible that they originate from the Assay Commission.

There is another possibility, although it is not as glamorous as the one posited above. It is possible that this 1869 half eagle might have somehow been “put away” by a Philadelphia area collector or non-collector in 1869 and through random chance been passed down through generations without having been melted, sold, cleaned or lost. I have handled spectacular gold coins that have been rediscovered by a family member after fifty or a hundred years and I know that these things happen from time to time.

The Bass 1869 half eagle is a beautiful and fascinating coin that deserves more attention than it has received in the past. I know that collecting Philadelphia half eagles by date is not “fashionable” but it seems hard to believe that this coin is worth about the same as a High Relief double eagle in the same grade range despite the latter coin being dirt common in comparison.

Bass Collection Dirty Little Secret

If you ask ten United States gold coin experts what the most important pedigrees are, you are certain to have the Bass collection mentioned nearly every time. Clearly, the Bass collection was among the greatest collections of United States gold ever assembled. But I’ve learned a dirty little secret about some of the Bass coins that I’d like to share with you. Harry Bass was a pretty compulsive buyer and many of his coins came from the major auctions of the 1960’s and 1970’s. When these coins were shipped to Harry, they were enclosed in the clear plastic "flips" that were popular during this era. What we now know is that these flips were made with polyvinylchloride (or PVC) which is an oil-based chemical that imparts a residue on coins.

I don’t know this for a fact but I believe that many of the Bass coins were stored in PVC flips for many years; in some cases as long as two or even three decades. During this period, a lot of PVC "grime" got onto the surfaces of the Bass coins.

So how can you tell if a Bass coin has PVC grime on it? Generally, gold coins with this residue develop a sort of cloudy whitish film that seems to become thicker with the passing of time.

The coins that appear to have the most noticeable residue are in PCGS holders and have "original" Bass pedigrees. If a Bass coin was removed from its original holder but resubmitted later to PCGS (in an attempt to upgrade it) it was still given a Bass pedigree but to distinguish it, it was designated as "Bass" on the insert by PCGS. Coins that are in their original "first generation" Bass holder have a pedigree on the insert that states "Harry W. Bass Collection." There are also NGC coins that have Bass pedigrees. These were in the Bass collection but were cracked out of their original holders. Ironically, I have never seen an NGC Bass gold coin with any PVC grime on its surfaces.

How serious of a problem is this PVC? I am not a chemist and would defer the chemistry-related issues inherent to this question to someone else. From what I do know about gold, it is a very inert metal and one that is far more forgiving than, say, silver or copper. If the Bass collection had been copper coins and they had been stored in PVC flips for years, I think the coins would have been at considerable risk. Being gold coins, I think they were at far less risk. I’m not certain if the residue from these plastic flips did any long term damage but in the instances that I have seen coins on which the residue was removed, the underlying surfaces seemed just fine.

For me, the biggest problem with these coins is aesthetics. Some of the Bass coins in their original holders that I have seen with this PVC grime simply aren’t very attractive. If you purchased coins from the Bass sales in 1999-2000 and you haven’t inspected them recently, I’d suggest you take a quick peek and see how they look.

"Cornering the Market" on Specific Gold Issues

Does it ever make sense to attempt to “corner the market” on a specific gold coin issue? I have seen a number of collectors and dealers do this over the years. Some of these attempts were spectacular successes while others failed miserably. Anyone who collects coins is probably a little eccentric in the first place. Deciding to focus on one or two specific dates and to hoard these isn’t necessarily more eccentric…just a bit, how should I say this, more “compulsive.”

Collectors decide to hoard a specific date for a number of reasons. A student of varieties like Harry Bass owned multiple examples of certain dates because each represented a specific variety or die state that he was researching. A speculator might find a date that he feels is undervalued, buy up all the pieces he is able and have price levels rise due to continually paying more at auction. An example of this was recently accomplished with 1843 quarter eagles in which a clever dealer accumulated a few dozen of these, made prices rise significantly and then sold into a stronger market. Other collectors just fall in love with a specific date, for whatever reason. I remember helping a collector assemble a hoard of 1888-O eagles in Uncirculated that grew to over 100 pieces before he passed away.

If I were going to hoard a specific issue, I would choose one that does not have an unlimited supply. The gentleman who decided to hoard 1888-O eagles eventually came to realize that he was going to have to buy hundreds of pieces to have an impact on the supply. His decision was made more difficult by the fact the fact that this wasn’t a hugely interesting issue.

I would also look to hoard an issue that was relatively cheap. The decision to hoard 1843 quarter eagles made sense because most of these were available in the $500-$2,500 range.

Most importantly, I would choose an issue that had numismatic significance. Back in my collecting days, I was attracted to 1822 Dimes. I thought this date was much undervalued given its rarity and price structure. It was a key date in a reasonably popular series; another important factor to consider. I eventually owned fifteen or so examples but my relatively small budget meant that most of these were in the Good to Fine grade range.

If I were going to focus on a specific issue today, I might look at something like the 1845-O quarter eagle, a coin with a very low mintage figure, a relatively high level of collector demand and its marketability as the key issue in the short, highly collectible New Orleans quarter eagle series. Or, I might focus on the 1841-O eagle, a date with a very small mintage figure and the numismatic significance of being the first Liberty Head eagle produced at the New Orleans mint.

You can also own a couple of examples of one of your favorite issues without being a hoarder in the classic sense of the word. If I owned a nice 1861-D gold dollar and I had the chance to buy another that was equally nice, I might consider salting it away. This coin could be used as an interesting piece of trade bait at some point in the future.

One final suggestion. If you are hoarding a specific issue (or issues) have an intelligent exit strategy. An investor who put together a very large position of circulated 1893-S dollars recently decided to sell them. The good news was that he ran prices up considerably and that, at least on paper, he made a lot of money. The bad news is that he basically decided to dump them all at once and there are now dozens and dozens of examples on the market. This will probably erode a good portion of his profits.