The Charlotte Gold Market, 1987-1997: A Decade Brings Radical Changes

In 1987, my book "Charlotte Mint Gold Coins: 1838-1861, A Numismatic History and Analysis" was published by Bowers and Merena Galleries. In the ensuing decade, the changes in the Charlotte market have been so radical that I have been compelled to rewrite and totally update this book. In preparing my new book on Charlotte gold coins (to be published in 1998 by DWN Publishing), I have been amazed at the breadth of the changes which have characterized this market in the past decade. My first book on Charlotte has become so out-of-date that when people inquire as to its availability, I tell them not to buy it and to wait for the revision.

As I have been researching the various Charlotte issues, I have made some interesting observations. The following areas represent, in my opinion, the biggest changes which have pervaded the Charlotte market (many of these changes can also be applied to the "rare date gold" market as a whole).

I. The Advent of Certified Grading

The population and Condition Census data in the 1987 edition of my book was based on research done in the mid-1980's. This was before the creation of PCGS and NGC. Needless to say, the changes brought about by these two services have had profound effects--both good and bad--on the Charlotte market and on numismatics as a whole. Some of the changes are obvious. After ten years of grading Charlotte coins, enough pieces have been seen by the services to create a useful population and grade distribution database. Everyone knows that the numbers in the PCGS Population Report and the NGC Census Report are skewed due to resubmissions, crossovers, etc. However, this data is far more advanced than anything available in 1987. For the first time, it is possible to get meaningful comparative rarity data. As an example, the population reports are best used in determining how rare an 1840-C half eagle in Extremely Fine-45 is relative to an 1850-C half eagle in the same grade. In 1987, this data was far more speculative and open to interpretation. Today, the collector can easily find out if the information he is being told about a specific coin or date is accurate.

II. An Increase in the Population of High Grade Coins

For a variety of reasons, the number of important high grade Charlotte gold coins has dramatically increased in the past decade. Some of the reasons for this include the following: rising prices have brought new coins into the market, many old collections have been sold and some previously unknown hoards or accumulations have quietly entered the market. Population "explosions" for a few dates are readily noticeable. One example of this is the 1838-C quarter eagle. When the 1987 edition of my book was released, I estimated that only three to four were known in Mint State. In the 1998 edition, my estimate of Mint State examples has been revised upwards to seven or eight coins. In 1987, I estimated the number of Mint State 1844-C half eagles to be two or three; today, I can account for five separate pieces. These numbers may not sound significant when compared to very common coins but in a narrow, tightly traded field such as Charlotte gold, these increases are dramatic.

III. An Increase in Prices

Many series of coins have seen dramatic downward movement in prices when viewed as a whole from 1987 to 1997. Collector-based series such as Charlotte gold, on the other hand, have seen very solid increases. The following chart takes the most common dates in all three denominations from this mint and compares the 1987Redbook prices with those in the 1997 edition of this book.

DATE/DENOM. 1987 REDBOOK PRICES 1997 REDBOOK PRICES EF-40 AU-50 MS-60 EF-40 AU-50 MS-60 1851-C $1.00 500 825 2,000 700 1000 2,500 1847-C $2.50 450 900 2,500 900 1,900 5,750 1847-C $5.00 750 1,000 3,000 1200 3,000 10,000

As this chart shows, the prices for even the most common Charlotte coins rose considerably in the past decade. Many coins doubled in price and one, the 1847-C half eagle in MS-60, tripled. These prices are even more dramatic when one examines the levels for rarer dates or for extremely high grade coins (i.e., Mint State-62 and above). Simply put, high grade examples of Charlotte gold have proven to be an excellent investment during a coin market which has seen a lot more downswings in price than upward movement (at least since 1990).

IV. A Change In Grading Standards

The most important thing to remember about grading is that, despite claims to the contrary, it remains highly subjective. It is hard enough to get a group of experts to agree on Mint State common date Morgan Dollar grades; let alone complex issues such as Charlotte coins. In the late 1980's/early 1990's, PCGS and NGC began grading significant amount of Charlotte gold coins. For the most part, the grading standards of that era tended to be very conservative. Today, standards have relaxed considerably. In my opinion, the EF-45 of the late 1980's is an AU-50 (or even an AU-53) today. And the AU-55 of the late 1980's is an MS-60 (or even an MS-61) today. The primary effect of this is to provide an unrealistic picture of availability for certain issues. As an example, as of September, 1997, PCGS had graded 41 1849-C half eagles in the various About Uncirculated grades. In the forthcoming revision of my Charlotte book, I estimate that the total number of 1849-C half eagles known to exist in all AU grades is 35-37. It is my opinion that many of the 17 coins graded AU-50 by PCGS (as well as some of the 10 coins graded AU-53 by this service) are coins which would have graded Extremely Fine a decade ago.

V. The Fall and Decline of "Crust"

I am a fan of original surfaces on gold coins. To my eyes, there is nothing more attractive than a Charlotte piece with layers of old "crust." (I define "crust" as original toning over a heavy layer of natural "skin" on a coin's surface which develops over the course of time). To me, originality provides great eye appeal. Unfortunately, the two grading services have unwittingly contributed to the destruction of a great number of gold coins by penalizing them for originality. It is my experience that if you submit a "crusty," original AU-50 coin, it is invariably graded EF-45. But, if you take the same coin, scrub off the crust and make it bright, it will grade AU-50 to AU-55. Ironically, the financial incentive for submitters is to destroy their coins in order to maximize their value. This is especially true in a market such as Charlotte gold where the difference between an EF-45 and an AU-50 can be thousands of dollars. As time passes, I think the number of truly original Charlotte coins will continue to shrink. The few remaining coins with original surfaces will invariably trade for strong premiums among knowledgeable buyers and unwitting new collectors and investors will get stuck with the overgraded, unnaturally bright dregs.

VI. A Shift in the Supply and Demand of Charlotte Gold

One of the major reasons why common coins have dropped significantly in price in the 1990's is the fact that more and more come onto the market while fewer collectors, investors and dealers are around to absorb them. Charlotte gold coins are one of the few series where the supply/demand ratio has been such that enough new collectors have come into the market to absorb the coins which have come onto the market. A typical "common date" Charlotte half eagle has a surviving population of 150-200 pieces. At least half of these coins are in very low grades and, therefore, are of little interest to collectors. Another large group are either in museums or tightly-held private collections and are off the market. Suddenly, an original population of 150-200 may now have shrunk to twenty or fewer coins which are of the quality which an advanced collector will find acceptable. If there are 50-100 serious collectors of Charlotte gold (and my guess is that the actual number is greater than this), than there exists a demand for coins which is two to five times greater than the actual supply. The result is that prices for Charlotte gold coins have risen and should continue to do so as fewer and fewer coins are chased by more and more collectors.

VII. Many Major Collections are Sold and ManyNew Players Enter the Market

In the decade from 1987 to 1997, many of the finest collections of Charlotte gold coins ever assembled have been sold. Important collections sold at auction include Norweb (Bowers and Merena, 1987-1988), Willard Blaisdell (Stack's, 3/90), Billy Fuller (Heritage, 7/93) Reed Hawn (Stack's, 10/93), James Stack (Stack's, 10/94), R.T. Wilder (Stack's, 11/94) Ed Milas (Stack's, 5/95 and Stack's/RARCOA/Akers, 11/95) and the forthcoming Pittman sale (Akers, 10/97). In addition, the Stanley Elrod collection, which is recognized by experts as the final complete set of Charlotte coins ever assembled, was sold intact and then broken-up and sold individually from 1995 to 1997. Coins from these sales now dominate the revised Condition Census listings for Charlotte gold coins and this will be reflected in my forthcoming book.

At the same time, there has been a change of leadership in the Charlotte market; both from the standpoint of the sellers and the buyers. Of the ten leading dealers in Charlotte gold in the current market, at least half of them were not active in 1987 and others, such as myself, have only recently had the financial resources available to compete in the higher end market. Of the ten leading collectors of Charlotte gold in 1987, at least half of them are either deceased or no longer active. Many of the most significant buyers had never seen a Charlotte gold coin in 1987, not to mention the fact that they were unable or unwilling to spend serious money on their current passion a decade ago.

VIII. Summary

Collectors of Charlotte gold who have been active since the mid-1980's are, no doubt, marvelling at the tremendous changes that they have seen in the past decade. The number of high grade rare coins which have been made available to them, especially in the 1990's, has been nothing short of incredible. As one collector recently said to me, half-jokingly, "it's like they reopened the Charlotte Mint for a few years and decided to give us a second chance at the really nice, rare pieces we needed for our collections. Conversely, the prices which these same collectors now have to pay for choice pieces makes the prices of 1987 seem very, very reasonable. In 1987, the collector of average means could afford to put together a nice Extremely Fine to About Uncirculated set. Today, this set is out of the price range of the lower budget collector.

Nearly all of the major collections which have been formed since 1987 have been built around slabbed coins. Unless a Charlotte coin is from an old-time collection and is being sold at auction, the chances are good that it if it is unslabbed, it has a problem.

In my opinion, the future for collector-oriented series such as Charlotte gold coins looks very bright. Assuming that my new book creates even a moderate number of serious new collectors, the supply/demand ratio will become even more skewed. If three or four major players decide to assemble high grade sets of Charlotte gold in the next two or three years, the supply will noticeably dwindle. This will lead to further price increases and, perhaps, even more radical market changes than the ones discussed above.

Carson City Gold Coinage: 1999 Update

In 1994, the book "Gold Coins of the Old West" was published. This book, which I co-wrote with Dr. Lawrence Cutler and which was based on research from 1992-1994, immediately became the standard reference for Carson City gold coinage. In the ensuing years, there have been some important changes in the Carson City gold coin market; enough that I am planning to rewrite my book and release a new version of it sometime in the year 2000. Following are some observations from the past few years that I feel are important for collectors of Carson City gold coins. These observations are limited by the size of this article and they will be discussed in much greater detail in my upcoming book.

I. An Important Hoard Hits the Market, 1992-1997

The single most important hoard of United States gold coinage of all time was quietly released into the market between 1992 and 1997 (these dates are based on my own observations and may not be accurate). It is unknown exactly where these coins were from or what dates were included. What is known is that this hoard contained thousands of Carson City pieces and that the rarity levels for certain dates were changed forever.

It appears that this hoard contained more Carson City double eagles than half eagles or eagles. Some of the double eagle dates that were dramatically affected by this hoard include: 1872-CC, 1873-CC, 1874-CC, 1876-CC, 1877-CC, 1882-CC, 1883-CC, 1884-CC, 1890-CC and 1893-CC.

Just how significant were these hoards? The 1876-CC double eagle is an excellent example. In Jnauary 1993, the first third-party graded Uncirculated example of this date, a PCGS Mint State-61, was sold in a Bowers and Merena auction for $13,750. A few months later, a group of forty or so Mint State-60 to Mint State-61 1876-CC double eagles entered the market. I can remember being offered a number of these coins in the $3,500-4,000 range; good value for me, but not such good news for the person who bought the B & M PCGS Mint State-61. Interestingly, prices for this date (and many of the others affected by the hoard) have recovered from their market lows of 1994. Today, a third-party graded 1876-CC in Mint State-60 is worth $4,000-4,500, while a Mint State-61 would easily trade in the $5,000-6,000 range.

II. Supplies Dry Up, 1997-1999

The hoard described above was truly a once in a lifetime occurrence in terms of the availability of Carson City gold coinage. And, for the most part, the truly rare Carson City issues (especially those struck prior to 1880) have remained just as rare as they were when "Gold Coins of the Old West" was published. When comparing the Condition Census listings of 1994 versus the listings of 1999, it is interesting to note just how little change there is for the rare pre-1880 issues. This is an interesting contrast to the Condition Census listings for Charlotte and Dahlonega coinage. I have attempted, since 1991, to keep a database with Condition Census listings for all 19th century branch mint United States gold coins. For certain Charlotte and Dahlonega issues, the coins which comprise the Condition Census are almost entirely new since my books on these two mints were published in 1997 and 1998, respectively. Why is this so? The most important answer has to do with the fact that prices on Charlotte and Dahlonega coins have gone up so much in the past few years that many old-time collectors are selling them and they are being supplanted by investors who, as a rule, hold coins for a much shorter period of time.

III. The Strike vs. Wear Conundrum

Certain Carson City gold coins, especially half eagles and eagles made from 1870 to 1875, are extremely hard to grade. These issues were poorly produced and they have strikes that are unique to their respective issues.

As an example, 1873-CC half eagles generally come with very poor detail on the obverse and it is not uncommon for the obverse of a coin to appear Very Fine while the reverse looks close to About Uncirculated. At the time my book was published, I can remember the constant struggle I had to get these rare dates in the "right" holder when I would send them in for grading. It seemd that both PCGS and NGC would never learn the difference between strike and wear. Coins I was convinced were real About Uncirculated-50's would always come back as Extremely Fine-45's and I would sell them begrudgingly.

Today, the services are much better at grading the difficult Carson City issues. They have learned the difference between strike and wear and tend to put coins in the "right" holders. In fact, in some cases they have become overly liberal and put coins in AU-50 and AU-53 holders that would not have graded higher than EF-45 a few years ago.

IV. Double Eagles Become the Coins Everyone Wants

Carson City double eagles have always been popular with collectors. But after thousands of them became available in the mid-1990's (see #1 above), their popularity (and price) levels dropped significantly. I can remember going to coin shows in 1994-1995 and having other dealers telling me that they didn't even want to look at any Carson City double eagles I might have brought with me.

Demand for Liberty Head double eagles began to pick up considerably by 1996. As a result of promotions by large-sized marketing firms, Liberty Head double eagles, in particular, became one of the hottest areas of the rare coin market in 1997.

Carson City double eagles have proven to be one of the most promotable areas within this denomination. There are a number of reasons why these coins are very easy to promote: they have a great story behind them; they are big, attractive coins that can easily be appreciated by the novice; they are scarce, but not so much so that they can't be marketed in small to medium sized quantities; they are a short, completable series (unlike Philadelphia double eagles), etc.

With the imminent sale of choice and gem quality Type One double eales from the S.S. Central America, it is possible that many more collectors will become interested in double eagles. The demand for choice and rare pieces from the Carson City mint should increase accordingly.

V. Some "Impossible" New Coins Become Available

Some Carson City coins that I would have formerly thought could not have existed have entered the market since the publication of "Gold Coins of the Old West." There have been a number of viable reasons for the sudden availability of such coins: an increase in price bringing out "hidden" coins, old time collections becoming available due to the death of their owner and accidental discovery. Some of the more important Carson City gold coins that have come into the market since the publication of my book in 1994 include the following:

1870-CC $5.00, PCGS Mint State-61. This coin was discovered by a non-collector in 1995 and it was later purchased by a Nevada coin shop. It was sold to a collector in Reno. It is the only unequivocally Uncirculated example of this date that I have seen and it is a superb coin with deep, original color over "crusty" surfaces.

1871-CC $5.00, NGC Mint State-63. This coin first surfaced in 1996 or early 1997 and it was offered as Lot 7686 in the 1997 ANA sale. After trading hands a few times, it is now owned by a pair of midwestern dealers. It is the only known Uncirculated example of this date and it is one of the finest Carson City coins of any issue from the 1870's.

1870-CC $10.00, PCGS About Uncirculated-50. Until this piece was discovered in the midwest early in 1999, the 1870-CC eagle was unknown above Extremely Fine-45. This coin was sold by the author to a New Jersey collector for a mid-five figure price in February 1999.

1870-CC $20.00, PCGS About Uncirculated-50. This is another issue that until recently was unknown above Extremely Fine-45. However, in the past few months I have had the pleasure of handling two 1870-CC double eagles in About Uncirculated-50. Both were sold to Universal Coin and Bullion in Beaumont, Texas who, in turn, placed them with appreciative new collectors.

VI. Pricing Information Remains Vague & Outdated for High Grade Coins

I have recently had the opportunity to handle some high quality Carson City half eagles and eagles and have noticed that published pricing information for these coins is either outdated (due to a paucity of auction records or reported private sales) or non-existent. I would like to suggest the following price levels for the rare pre-1890 half eagles and eagles, based on transactions of which I am aware of or have participated in.

HALF EAGLES, 1870-1884 DATE AU-50 AU-55 MS-60 HIGHER 1870-CC 25,000 35,000 100,000 --------- 1871-CC 10,000 17,500 --------- MS-63: $95,000 1872-CC 20,000 35,000 --------- --------- 1873-CC 30,000 50,000 80,000 --------- 1874-CC 11,000 19,000 40,000 --------- 1875-CC 12,500 23,500 55,000 --------- 1876-CC 15,000 27,500 --------- --------- 1877-CC 12,500 25,000 --------- --------- 1878-CC 20,000 35,000 --------- --------- 1879-CC 3,000 6,000 15,000 MS-61: $20,000 1880-CC 1,250 4,000 12,000 MS-61: $15,000 1881-CC 7,500 11,500 25,000 MS-61: $35,000 1882-CC 600 1,500 6,000 MS-61: $8,000 1883-CC 3,000 7,500 17,500 MS-61: $21,500 1884-CC 2,500 4,500 17,500 ---------

EAGLES, 1870-1884 DATE AU-50 AU-55 MS-60 HIGHER 1870-CC 50,000 --------- --------- --------- 1871-CC 15,000 20,000 AU-58: $30,000 --------- 1872-CC 22,500 --------- --------- --------- 1873-CC 30,000 --------- --------- --------- 1874-CC 7,500 15,000 AU-58: $25,000 --------- 1875-CC 27,500 40,000 --------- --------- 1876-CC 25,000 --------- --------- --------- 1877-CC 15,000 --------- --------- --------- 1878-CC 20,000 30,000 AU-58: $35,000 --------- 1879-CC 25,000 35,000 AU-58: $40,000 --------- 1880-CC 1,500 3,500 12,500 MS-61: $15,000 1881-CC 900 1,250 7,000 MS-62: $10,000 1882-CC 3,000 6,000 17,500 --------- 1883-CC 2,000 4,000 15,000 --------- 1884-CC 2,000 3,750 12,500 MS-62: $20,000

It is my opinion that current pricing information for Carson City double eagles, while not perfect, is comparably accurate. This is due to the fact that enough pieces trade that it is easier to compile and track price levels.

VII. Conclusion

The future looks excellent for Carson City gold coins. This is an area where the classic rules of supply and demand are in effect: an ever-dwindling number of choice and/or rare coins are being pursued by an increased number of affluent, serious collectors.

The publication of my new book on Carson City gold coins in 2000 should provide a further impetus to prices. In my admittedly biased opinion, I'd strongly suggest that collectors who are interested in beginning a set of Carson City gold coins do so immediately - while they can still find some coins.