"Originality"

“Originality.” It’s one of the most overused terms in all of numismatics. And it’s one of the most misunderstood as well. Given the choice, I believe that most people would rather own an “original” coin instead of one that has clearly had its appearance changed in recent years. With the help of some good quality images, I’d like to show some of the characteristics that I equate with “originality” and offer some suggestions on how to judge if a coin is original or not. The first coin that we are going to look at is an 1844-D quarter eagle graded AU55 by NGC. (Disclosure: this coin is currently in my inventory and it is currently for sale. I am not using this coin as an example in the hope that someone will buy it as I am certain someone will and I don’t need to go to this much trouble to sell it. I am using it to illustrate this report because I believe it represents what I believe is complete originality.)

One other quick topic before we review this 1844-D quarter eagle. My definition of an “original” coin is one that appears to have never been cleaned, lightened or in any way altered. I would be quick to point out that the flaw in this definition is that, of course, there is no way to make such a comment without having had access to this particular coin at all times since 1844. There is always the possibility that, in the 1850s or the 1860s (or even the 1960s), it may have been lightly cleaned. But there are some things to look for on a coin that I think gives a reasonably good assurance that it hasn’t been messed with. The most obvious is hairlines. If a coin has been improperly cleaned at one time, it is going to show hairlines. These may range from subtle to very obvious. If a coin has nice seemingly “original” color but it shows noticeable hairlines, this probably means that it was cleaned years ago and has subsequently retoned. Such a coin may have a natural appearance but, from the standpoint of semantics, it can’t truly be called “original.” You can also look for areas of cloudiness or haze. If a coin has these, the chances are good that something has been applied to the surfaces at one time.

In looking at this coin, there are a few points to note. The first is its depth of coloration. Take a look at the color on the obverse and the reverse and note how the hues in the fields are richer than in the protected areas. On coins with natural color this is generally going to be the case. On a coin that may have been dipped at one time, you are going to see the opposite; the color tends to be lighter at the centers and deeper at the peripheries. Also, note how on this 1844-D quarter eagle there is color present even on the high spots and relief detail. A coin that has been cleaned or dipped typically lacks color on these areas as they are the first places that the original color is lost. Finally, note the depth and intensity of the color. On natural coins, the color is “sharp” in hue and depth. On dipped or cleaned coins, the color tends to be “fuzzier” and less intense.

Secondly, note the patches of dirt or “crust” in the protected areas, especially on the letters in the reverse legend. On coins that have been lightened, this dirt is typically lost.

The third thing to note requires some specific knowledge of a series. This 1844-D quarter eagle has the “right” color for the issue. If you become familiar with the Dahlonega quarter eagle series, you will learn that the original color for the 1844-D tends to be either “bright yellow-gold, light orange-gold or dark coppery-gold.” (this quote is taken directly from my book on Dahlonega coinage, page 98). As you learn more about Dahlonega coins and see more examples in person, you learn what the “right” color is for each specific issue. The color for this 1844-D is as “right” as on any example that I have ever seen.

The second coin that we are going to look at is an 1840-O quarter eagle that is graded AU58 by NGC. This is another piece that is currently in my inventory and the reason that I purchased it was because I thought it had uncommonly attractive and original coloration.

On this coin, note the depth of the color. As they should be, the hues are deeper in the fields than at the borders. The color is very bold in its hue and can be seen with the same degree of intensity on the high spots as in the fields.

On page 52 of my book on New Orleans gold coinage I state that the color of the 1840-O quarter eagle is “a distinctive medium to deep yellow-gold.” The hues on this specific example are, in my opinion, more of a deep green-gold with reddish overtones. Why the discrepancy from the description in my book? This is a hard question to answer but my guess has to do with how this coin was stored. To me, it has the look of a piece that may have been housed in an old manila envelope or even in a leather pouch.

If you do not know this series well, you are probably thinking that this coin exhibits a considerable amount of wear at the centers and that this lightness may, in fact, be signs of an old cleaning. This is incorrect. Many 1840-O quarter eagles are weakly struck at the obverse and reverse center (this specific coin actually has a fairly decent overall strike) and have a slightly “sunken” look as a result. Although it is hard to tell from the image, this coin shows natural coloration even in the vertical shield lines which is another good indicator of its originality.

Coins that are not original often have foreign substances applied to them in an attempt to hide imperfections such as obvious marks or strong hairlines. The foreign substance(s) may not be visible at the time the coin is sent to a grading service but it usually becomes noticeable after time has passed and its chemical composition has changed. Notice on this 1840-O quarter eagle how all the marks on the surfaces are plainly visible and nothing is being “hidden.”

Let’s look at one final coin that I believe is totally original. This is an 1856-S Type Two gold dollar. This is an issue that is very hard to find with original color and surfaces, especially in higher grades. There is strong motivation to make a properly graded AU58 magically become an MS60 or an MS61 as evidenced by the fact that Trends jumps from $6,500 in AU58 to $12,000 in MS60.

The first thing to note about this 1856-S gold dollar is the depth and evenness of the coloration. There isn’t a coin doctor alive who has figured out (at least yet...) how to make color on a 150+ year old gold coin look 150+ years old. Notice the warmth and the depth of the color that this coin has--that’s something that just can’t be faked. Notice also that there is a good deal of luster peeking out through the depth of the aforementioned coloration. This luster can be seen most easily in the image from around 9:00 to 12:00 on the obverse border, alongside the portrait, at the left reverse and inside the wreath. Notice as well how consistent the coloration is on the obverse and reverse. Often times when someone has recolored a coin, they are lazy and only enhance one side or if they do both sides, one is done better than the other.

If you are not familiar with the strike of 1856-S Type Two dollars, you are probably wondering why the hair around the face appears so flat. This has to do with the design of the Type Two gold dollar and it is the exact reason why this design was discontinued in 1856. The highest spot on the obverse was exactly opposite the highest spot on the reverse and this made it nearly impossible for Type Two gold dollars to be well struck. In fact, this 1856-S is actually very well struck by the standards of the date and the variety and it lacks the pronounced central weakness and heavy clashmarks that are so often seen on examples of this short-lived type.

One last point before I close. I have mentioned time and time again that you can not accurately grade a coin based on an image. But I do think you can get a good idea if a coin is original or not, provided that the quality of the image is as good as the ones on my website or on a few other dealer and auction websites. Please note that this article was NOT intended to try and teach you how to grade. It was intended to give you an idea of what I believe are very original coins and how such coins should look.

Grading Advice for Coin Collectors

More than ever, it is extremely important for coin collectors to learn how to grade AND to become knowledgeable in the field(s) in which they collect. Now this is easy for me to say. I’m a full-time coin dealer and have been since 1982. 25+ years of daily dealing has helped me learn how to grade pretty well and has made me very knowledgeable in a number of areas. But how does a collector with a full-time job, a family and real world responsibilities become a capable numismatist?

Learning how to grade and how to tell the difference between nice coins and not-so-nice coins is an important facet of enjoying the hobby. Because of the existence of PCGS and NGC, the newer generations of collectors have had a “crutch” to use when it comes to grading and, I believe, some collectors have taken shortcuts when it comes to proficiency this area. PCGS and NGC provide a great safety net as far as grading goes but there is clearly no substitute for personal expertise.

So how does a new collector learn how to grade? I think the first thing that is important to realize is that grading is a step-by-step process and that the first forays a collector takes need to be baby steps. In other words, a new collector is not going to be able to tell the difference between a PR67 and PR68 Barber quarter right away. It is far more likely that he will understand the difference between a PR64 and a PR65 than a PR67 and a PR68 as the differences on lower grade coins are more quantifiable (a PR64 coin has hairlines or marks that are easy to see while a PR67 might only have a single hairline that is very well-hidden).

I have a few suggestions for beginning collectors in regards to learning how to grade. The first is to immediately choose an area to specialize in. It is far easier to learn how to grade a single series (such as Barber quarters or New Orleans double eagles) than it is to try and learn all U.S. coins at once. The second suggestion I have is to try and find a mentor. When I was a young collector, I was fortunate to find two older, more experienced dealers who were incredibly helpful in teaching me how to grade the series I was collecting. Another suggestion is to look at as many coins as you possibly can—in person. You WILL NOT be able to learn how to grade from viewing images. I’ve got a few suggestions that relate to this which I will discuss below. A final suggestion is to begin collecting an area in which grade does not matter all that much. In other words, I don’t think a complete neophyte has any business trying to buy PR65 and finer Proof gold as he is beginning to learn how to grade. He would do much better choosing an area where the learning curve is easier—and far less costly - and then graduating to more difficult areas as he becomes more confident in his ability.

As I mentioned above, I have a few specific suggestions to make as far as improving your grading skills. The first, as I said before, is to look at as many coins as possible. I can’t think of a better place to do this than a major coin show and the two shows that come to mind are FUN and Summer ANA. If I were a collector I would make it a point of attending both shows and spending at least one full day at each looking at the coins in the auctions. Let’s say you collect Liberty Head double eagles. In the FUN or ANA sales you are likely to have the chance to view hundreds and hundreds of coins in a huge variety of grades. You can make the viewing process more of a challenge by covering the grades on each slab and testing yourself as if the coins were ungraded.

If a specialized collection in your area comes up for sale, try extra hard to view the lots. If I were a collector of, say, Dahlonega gold coinage, I would want to look at the coins being sold in an important specialized collection.

I mentioned trying to find a mentor. Let me add that in the context we are discussing, I would amend this to finding a mentor who can grade (!) If you could look at a specialized collection of Dahlonega gold coins with a very knowledgeable mentor, imagine what an incredible learning experience this would be.

In my opinion, the concept of grading and connoisseurship are more related than most people realize. To better understand grading and the level of preservation of a coin, it is very important to understand what makes an object beautiful and what makes it aesthetically desirable. A good connoisseurship class, offered by a museum or an art school, could impart some real insights.

Every year, the ANA offers a beginning and an advanced grading class at their Summer Seminar. I think these are very helpful for the beginning collector, especially as they offer hands-on experience and a chance to work with some top professional graders. The only problem with these classes is that they tend to focus on more basic coins like Morgan dollars and Walking Liberty half dollars. If you collect Charlotte or Dahlonega gold these classes are not going to address these specific coins.

Getting involved with an online group such as the PCGS or NGC message boards has some benefit to the new collector but I really like the idea of a specialized group. I am aware of specialized groups that post images and threads about Seated coinage, Bust coinage and Colonials and this seems to me to be a great place to learn about grading.

Two final thoughts. As a collector learns how to grade, I think it is more important to learn how to tell the difference between something that is choice and original (versus cleaned and/or processed) versus whether a coin is a 64 or a 65. The best way to learn about originality is to, obviously, look at fresh, original coins. These aren’t easy to find any more but truly fresh deals do pop-up at auction from time to time and they are invaluable “time capsules” for the specialist. Or, look at coins in museum collections. As an example, the gold coins in the ANA’s Harry Bass Museum collection are wonderfully fresh and time spent carefully looking at the surfaces and coloration of the pieces on display is invaluable.

I recently had a discussion with a good client who told me that the whole grading process was disheartening to him and that he had decided to sell his high-priced coins which had a good percentage of their value determined by their grade. He had decided to focus on less expensive coins in which one point on the grading scale wasn’t worth thousands (or tens of thousands) of dollars. I can see his point. If you find the whole grading process to be silly or too difficult to fathom, try and collect something like Tokens or Medals where the beauty and rarity of an object determines its rarity; not just its degree of preservation.

The 1864-S Half Eagle

Anyone with a passing knowledge of United States gold coinage is aware of the three rarest issues from the San Francisco mint: the unique 1870-S Three Dollar gold piece, the exceedingly rare 1854-S half eagle and the very rare 1854-S quarter eagle. But not everyone realizes what the next rarest gold issue is from this mint. Read on for the answer. The rarest collectible gold coin from the San Francisco mint is the unheralded 1864-S half eagle. I regard this as the second rarest collectible Liberty Head half eagle after the 1875 and the 1864-S also has the added value of not being available in Proof as the 1875 Philadelphia half eagle is.

There were a total of 3,888 half eagles produced at the San Francisco mint in 1864. While this is certainly a low mintage figure, it doesn’t really stand out in the Liberty Head half eagle series. In fact, there are 11 issues with lower production figures (1861-D, 1863, 1865, 1869, 1871, 1872, 1874, 1875, 1876, 1877 and 1887). Unlike the majority of these ultra-low mintage issues, the 1864-S has an incredibly low survival rate. In my opinion, there are about 20 examples known in all grades.

Not only is the 1864-S rare in terms of overall rarity, it is also extremely rare in high grades. Of the 20 or so known, I estimate that at least half grade EF40 or lower. The 1864-S is extremely rare in properly graded EF45 and it is exceptionally rare in About Uncirculated with an estimated four or five known. There is also one remarkable Uncirculated 1864-S half eagle in existence which will be discussed in greater detail below.

According to the most recent population figures from PCGS, they have graded a total of 14 examples in all grades including three in AU (two in AU50 and one in AU53) as well as a single example in Uncirculated. NGC has a total population of ten coins with three in AU (one each in AU53, AU55 and AU58). I have personally seen two or three coins that I regard as AU. One of these is Bass III: 500 ($23,000; as PCGS AU53) which I am fairly certain is the same piece as the NGC AU58 which is now in an eastern dealer’s inventory. Another was sold back in the 1980’s in a PCGS EF45 holder but which would certainly grade AU50 or better by today’s standards.

The 1864-S half eagle is easily distinguishable by its obverse strike. This includes weakness on the stars at the left and considerable flatness on the hair at the top of the head, the bun and the tip of the coronet. The curls around the face are usually very weak as well. Interestingly, this weakness does not fully correspond to the reverse. The upper portion of the reverse is quite sharply detailed while the lower portion is not quite as sharp with weakness noted on the arrowheads and arrow feathers, the talons and the lower part of the mintmark. The surfaces are usually abraded and may show light mint-made striations in the fields. The luster tends to be dull and grainy and most are worn to the point that little—if any—natural mint luster is present. The natural color is a medium to deep orange-gold. As one might expect, this is an incredibly hard issue to find with original color and surfaces and I doubt if more than three or four original pieces remain.

As I mentioned above, there is one truly remarkable 1864-S half eagle known. This piece is graded MS65 by PCGS and I think the grade is extremely conservative as the coin is virtually “as struck.” This coin first surfaced in 1956 when it sold in the Melish sale for a whopping $70. It was purchased by the Norwebs and it remained in their collection until 1987 when it was purchased at auction by Harry Bass for $110,000. It was last sold in 1999 when it realized what I thought was, at the time, a very reasonable $176,000 in the Bass II auction. It was purchased by a Southern collector who, to the best of my knowledge, does not own any other San Francisco Liberty Head half eagles and, for that matter, may not have more than a handful of Liberty Head gold coins from any mint in his holdings. To his credit, he realized what a great coin this Gem 1864-S half eagle was and he was determined to purchase it, whatever it took.

In looking back at my Bass II catalog, I noted that my reaction when I saw the coin for a second time (in 1999) was “world’s coolest San Francisco gold coin.” This half eagle is certainly not worth anything close to an 1854-S but it is probably my single favorite San Francisco gold coin of any date or denomination. It is the only known Uncirculated example of an extremely rare issue and it just happens to be a Gem. One has to wonder how it survived. My guess is that it was an assay coin that was sent to Philadelphia and kept by someone there as a souvenir.

Despite the extreme rarity of this date, it is still relatively affordable. The last example to sell at auction was a decent PCGS EF45 which brought $19,550 when Heritage auctioned it as Lot 3489 in their 2006 FUN sale. Coin World Trends for an AU50 is $45,000 which, again, seems pretty reasonable when one considers that only six examples have been slabbed in AU50 or better between the two services combined.

Attack of the 1839-C Quarter Eagles!

At the Heritage 2008 FUN sale it was the Attack of the 1839-C Quarter Eagles as there were no less than a dozen (!) examples of this popular Classic Head issue available for sale. How did these coins do and what nuggets o’ information can be gleaned from the auction results? The 1839-C quarter eagles in question ranged in grade from a low of PCGS VF30 to a high of NGC MS61 and included ten coins in NGC holders, one in a PCGS holder and one orphan in an ANACS net AU50 holder that had been cleaned.

Two interesting things can be determined right away from the statement made in the paragraph above. The first is that 1839-C quarter eagles are pretty difficult to define as “rare” if eleven examples appear in one sale (although if you read the rest of this blog I contend that a certain type of 1839-C quarter eagle is, in fact, quite rare...) and that secondly, NGC seems to have the market cornered on this date. I’ll let you draw your own conclusions about this (cue raised brow...)

One last thing before we analyze. If I were a consignor I’m not sure I’d be thrilled that my 1839-C had to share the spotlight with eleven of its cousins. But, to Heritage’s everlasting credit, these giant auctions continually prove to me that there are enough people looking at the coins that quality typically trumps quantity.

An interesting place to begin is with Lots 3809 and 3810. The former was in an old green label holder and was called VF30 by PCGS (I graded it AU50 or thereabouts but noted in my catalog that it had been cleaned at one time) while the latter was in an NGC 45 holder and was, in my opinion, pretty marginal for the grade. The PCGS VF30 coin sold for $4887.50 while the NGC EF45 brought $4,600. This result wasn’t really a surprise but it doesn’t point out that when someone analyzes the Heritage auction archives they should assume that the 1839-C quarter eagle that they own in VF30 is worth $4,887.50.

The next pair to compare are the two examples graded AU53 by NGC, Lots 3812 and 3813. The result of these coins was interesting to say the least. The former sold for $20,700 while the latter brought $5,750. How is it possible for two coins graded the same by NGC to bring such a gigantic difference? The coin that sold for $20,700 was gorgeous. It was in an old “fatty holder,” had lovely original color and I thought it was a very solid AU58. As nice as the coin was, I was pretty surprised it sold for essentially MS60 to MS61 money. The other AU53 in the sale? It wasn’t very nice and the fact that it had to compete against the Lovely Lot 3812 couldn’t have helped.

No less than four NGC AU58’s were in the sale and every one of them brought $12,650. With Trends at $18,000, this seems a little bit cheap, no? Well actually I think the numbers were pretty right on when you consider that all four of the coins were not exactly high end for the grade. I was a bit surprised that Lot 3085 sold for the same as Lot 3082-3084. Lot 3085 was what I call on “OOG” coin. This acronym stands for “original overgraded.” Which means that although I didn’t think the coin passed the Winter Test as an AU58, it did at least have natural color and a decent overall appearance for the issue. Had this been the only 1839-C in AU58 in the sale perhaps it might have brought an extra 5-10%.

Neither the MS60 or MS61 examples in the auction sold. I didn’t think either one was very nice and both were reserved too high; never a great combination.

Remember earlier in this blog when I mentioned that despite there being twelve examples in the sale, a certain type of 1839-C quarter eagle was still rare? I think the fact that only one of these twelve coins had original coloration and was high end for the issue says something important. Most 1839-C quarter eagles have been cleaned or processed at one time and the one-in-twelve ratio for originality seems accurate in my experience.

So what did I learn about this issue as the result of The Attack of the 1839-C Quarter Eagles? Well, for one I learned that NGC AU58 examples are worth $12,650. I also learned that nice, original coins still bring great prices even when “lost” in huge sales and when competing against multiples examples of the same date. And I learned that if I had a nice 1839-C quarter eagle in an old holder, I would resist temptation and sell it “as is.”

1804 Eagle

One of my favorite early United States gold coins is the 1804 eagle. I was recently able to purchase a nice PCGS AU55 example in the Heritage 2008 FUN auction (it’s already been placed in a specialist’s collection) and as I was preparing to ship the coin to its new owner it got me to thinking more about this interesting issue. The 1804 eagle has a reported mintage figure of 3,757 but it is believed that as many as 1,000-1,250 of these were dated 1803 so the actual number of eagles produced with this date may be more in the area of 2,500-2,750.

I believe that there are an estimated 65-75 or so known. This includes around 45-55 pieces in the VF-EF range, 10-15 or so that grade AU and maybe another half dozen that are properly graded as Uncirculated. The finest two that I am aware of are a pair of MS63’s. One of these is an NGC MS63 owned by the Pogue Family while the other is the MS63 (last seen in an NGC holder but it may now be in a PCGS holder) from the Pittman collection that was last sold as ANR 6/05: 1016. The specimen in the ANA Museum (from the Bass core holdings) is also outstanding for the issue and would probably grade MS62 to MS63 by today’s standards.

In comparing the rarity of the 1804 to the other dates in the early Eagles, it is clearly rarer than the 1795, 1797 Heraldic Eagle, 1800, 1801 and 1803. I think it is comparable to the 1796 (perhaps it is very slightly scarcer) but it is clearly less rare than the 1797 Small Eagle and both varieties of 1798.

All examples with the exception of a small number of Proofs (more on these below) are instantly recognizable by having a Crosslet 4 in the date.

Most 1804 eagles are very softly struck at the center of the obverse. This is usually best seen with considerable weakness on the face of Liberty (most specifically Liberty’s chin, lips and the tip of her nose) as well as odd ridges in the obverse fields that resemble swelling of the dies. The example which is shown below is much better struck than usual for the date and the Bass core collection example (which is illustrated in the Bass/Dannreuther early gold book on page 528) is perhaps the most fully struck piece I have ever seen.

More than most other early Eagles, this issue is exceptionally hard to locate with nice coloration and original surfaces. Most 1804 eagles that I have seen have been cleaned and processed and display virtually no originality. In addition, the aforementioned weak central obverse strike makes locating pieces with good eye appeal extremely challenging.

An extremely small number of Proof 1804 eagles were produced around 1834-1835 for use in diplomatic presentation sets. The Proof 1804 Eagles have a Plain 4 and were struck in a close collar as opposed to the coins struck in 1804 which were produced using an open collar. An NGC Proof-65 example of this issue recently sold for a record price of $5 million. It will be curious to see if this price has an effect on values of business strike 1804 eagles, as the sale of the 1933 double eagle raised the price levels on 1933 eagles after the former was sold for a record price a few years back.

After the mint struck eagles in 1804, this denomination was discontinued until 1838.

Despite some strong price increases in recent years, the 1804 remains an excellent value when compared to the more popular and better known eagles from the 18th century. I was very excited to have the chance to handle the PCGS AU55 shown above and hope that I am able to purchase other examples of this date in the near future.

2008 FUN Show Recap

After the dust settles from a major coin show and a major auction, there are always a number of things that can be learned. I learned a lot from the 2008 FUN show and, more specifically, from the Heritage FUN auction.

1. If someone is wealthy and they really want a coin, price no longer appears to be an object. Case in point: the 1805 quarter that was sold as Lot 2775 in the Platinum Night 2008 session. It was graded MS66 by NGC and it brought an absolutely incredible $402,500. What is even more incredible is the fact that this exact coin sold for $74,750 one year ago (almost to the day) in Heritage’s 2007 Platinum Night session. With the click of a mouse, even the most inexperienced collector could have determined this, thanks to Heritage’s unparalleled degree of transparency. Clearly the coin market is strong right now but a nearly-six times increase in the price of a neat but not world-class coin? Gulp. And you want to know something even more amazing about this sale? The two collectors battling it out for the 1805 quarter were bidding on line and, in all probability, never saw the coin in person or had an independent dealer look at it for them. In fact, they may not have even had a bidding strategy other than: “I want this coin and must have it no matter what it sells for.” And this was just one of many prices in this sale that I regard as absolutely amazing.

2. The last time that coins sold for numbers like this at auction may well have been at the 1979 and 1980 Garrett sales. There is one HUGE difference between those numbers and today’s seemingly crazy auction prices. In 1979 and 1980 the end users for most of the six and seven figure coins that were selling at auction were dealers. Today it is virtually all collectors. That makes me think that the coin market of 2008 is a lot healthier than the admittedly twisted market of 1979 and 1980.

3. Heritage has created a model that rich new collectors trust and that they obviously find entertaining to use. Collectors can bid live on their computers even if they are in a hotel room in Kuala Lampur and they know the reserve and/or opening bid level for every coin in the auction. Unlike at most other coin auctions, these collectors know they aren’t going to get jerked around at a Heritage sale and that’s why we are seeing something unparalleled in numismatic history beginning to emerge in 2007 and 2008: exceedingly wealthy people who will never set foot in a coin show and whose identity will never be known to more than a small group of industry insiders are quietly dominating the high end of the market like never before.

4. Previously dormant areas of the market can turn around very quickly. As an example, Proof silver coins from the 1840’s and the 1850’s were extremely tough sales for many years. In fact, I can remember dark, overgraded coins from the Starr sale in 1992 languishing in the market for at least five to eight years and some of the less attractive coins from the Pittman sales taking years to find homes. Out of the blue, these early Proofs are now selling for huge prices. In the Platinum Night session, a group of four very rare Proof quarters (1841, 1844, 1845 and 1850) brought a remarkable $1,322,500 including $460,000 for the 1850 in NGC PR68. Before the auction I would have guessed that these four coins would have brought in the area of $750,000 collectively. From what I hear, there are now two or three deep-pocketed collectors who have suddenly started to put together date sets of business strike and Proof Seated coins. That fact, plus the availability of some very rare and really exceptional issues in the FUN sale created a Perfect Storm scenario and ignited a formerly-dead series. Which formerly dead series will be next?

5. In the area of branch mint gold, it was interesting to see the very strong performance of many issues. The strongest prices realized were for the key date or one-year type issues that have been in great demand for the last few years. In the gold dollar series, a very nice PCGS AU58 1855-D sold for $37,375 (Trends for this issue in this grade is $35,000). The fact that this piece was choice, original and well struck helped propel it to what has to be a record price for an 1855-D dollar in this grade. There were some very attractive 1861-D half eagles in the sale and this is an issue that has shown great demand in the last few years but very few pieces have been available. A PCGS AU58 sold for $43,125 (Trends is just $35,000) and a spectacular PCGS MS63 brought $207,000 which is a record auction price for any Dahlonega gold coin.

6. When I was discussing the “how to” details about the Carolina Circle collection with its owner, one of the most important decisions to make was whether to regrade the pieces that had been slabbed years ago or to leave them as is. Given how hard it is to find a fresh deal these days, I made the decision to keep them in their original holders. Was my choice right? At this early point, it’s hard to say with certainty as you can rest assured that virtually every one of the old holder coins will be broken out of the original holder and sent to PCGS or NGC to be regraded. But given the prices that many of these coins brought, I’d have to say that people are going to have to hit some pretty major Grading Home Runs. Here are just a few examples. An 1841-C $5.00 in an old PCGS AU53 holder sold for $13,800. With AU58 Trends at $12,000 this means the coin will have to grade at least MS61 to be a decent deal. An 1846-C in PCGS AU53 brought $12,650. With AU58 Trends at $14,000 this coin will need to grade at least AU58 and even at that level the dealer who purchased it won’t make any money. A very attractive PCGS AU50 1851-C sold for $12,650 which is considerably more than AU58 Trends. To be even a marginal deal for the buyer this coin will have to grade at least MS60 to MS61. One final half eagle of interest was a lovely PCGS AU58 that brought a rousing $17,250. With MS62 Trends at $15,000 this coin will have to grade at least MS63 to be a good deal. From AU58 to MS63 seems pretty optimistic to me...

7. The appearance of CAC coins in the FUN sale was of great interest to many market observers, myself included. I am planning to write an in-depth analysis of their performance in my next blog but the early results seem pretty strong with premiums ranging from a low of 10% to a high of well over 50%.

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.

Winter's Law of Numismatics

I was recently having a conversation with a long-time client about coin investing and our discussion turned to one of Winter’s Laws of Numismatics. Which basically says that the typical coin investor almost never makes money while the typical collector, often in spite of himself, tends to do just fine from a financial standpoint. At DWN, I tend to regard “investing” with a raised eyebrow. If someone who I do not know calls me up out of the blue and starts talking about coin investment, I give him a lecture which basically states that coins are not good investments and that if he insists on looking at coins strictly as investments, he probably should be dealing with XYZ Coins instead of my firm.

But this isn’t totally true. Coins CAN be a good investment. Let’s say that as a knowledgeable collector you went to the Pittman sale in 1997 and spent $50,000 on some nice lots. The chances are pretty good that you would have done just fine from a financial standpoint.

Before we go further, I suggest you re-read the last paragraph. Notice that I said if you had “gone to the Pittman sale in 1997.” This presumes at least three important points. First, that you knew enough about the coin market that you (or an advisor) were able to determine that the Pittman sale contained good coins. Second, you were able to hold on to your coins for a long period of time (hard to believe that the Pittman sale was ten years ago, isn’t it?). And thirdly that you were able to select nice enough coins for them to be “investment quality.”

The trouble with coin investing is that virtually all coin investors buy the wrong coins from the wrong people at the wrong point in time.

When I look at the typical “rare coin portfolio,” I am usually struck by a few things. The coins tend to be very common and very boring; things like common date Walkers in MS66 or common Saints in MS65. Coins like this will never be good investments because they are too common. The second thing I am struck by is that the coins in these portfolios (the very word “portfolio”, when it comes to coins, makes me cringe...) are invariably overpriced. Even coins like MS66 common date Walkers or MS65 common date Saints which have a well-known buy/sell spreads tend to be dramatically overvalued in these portfolios. Another thing I notice is that these common coins are usually bought at exactly the wrong time; usually when a common series is in the midst of a promotion.

Getting back to the point I was making earlier, collectors often make excellent investment decisions even though, many times, they don’t really know they are making them. The smartest things collectors can do are to buy coins that are pretty, coins that are rare and coins that are in demand. An investor is not likely to know which coins qualify as such and the “advisor” that he speaking to likely does not know either.

So as an investor, what can you do to improve the chances that you will actually make some money? My answer is simple: learn to think like a collector. Learn something about the coin market. Realize that coin collecting involves a lot more than checking “past performance” charts and analyzing statistics.

State of the New Orleans Gold Coin Market

I was discussing the State of the New Orleans Gold Coin Market yesterday with a collector and he pointed out something very interesting to me. In the calendar year of 2007, there were probably fewer important high grade New Orleans eagles sold than any other gold denomination from this mint. This got me thinking and the more I looked into this statement, the more I realized that it was true. 2007 began with a bang for New Orleans eagle collectors when Stack’s sold the Morgan collection. Included in this collection were coins such as the only Uncirculated example of the 1879-O (an NGC MS61 that I purchased as an agent for a California collector for a record $52,900) and the third finest known 1880-O (also graded MS61 by NGC; I purchased this for the same collector for $16,100).

After the strength of this sale, I expected the proverbial flood gates to open and a number of important, high grade New Orleans eagles to become available.

Shortly thereafter, I was able to offer the magnificent Pinnacle Collection of New Orleans gold which contained a number of Condition Census pieces in all denominations. With the exception of double eagles which were never a focus of the original owner, the eagles in this collection were probably the weakest denomination, at least from the standpoint of grade. There were some truly lovely eagles in this collection but unlike the quarter eagles and half eagles (which were virtually all MS60 and better and which included numerous coins high in the Condition Census) the eagles were mostly nice, original AU55 and AU58 coins.

After this flurry of activity in January, the New Orleans eagle market was very dry until Heritage offered a small but interesting group of pieces in the ANA sale. Of particular note were the second finest 1882-O (a PCGS MS63) that sold for a record $37,375, one of the finest known 1897-O (a PCGS MS64 that realized $14,950)and the third finest known 1899-O (an NGC MS64 that went for a reasonable $12,663). Another important piece in this sale was a very high end PCGS MS63 1892-O that sold for a record-setting $10,350.

And then...nothing. The year ended with virtually no important New Orleans eagles appearing at auction and this trend appears to be continuing into 2008. Having just reviewed the FUN offerings from Bowers and Merena, Heritage and Stack’s I noticed a virtual absence of any significant New Orleans eagles.

So where are all the coins and why are they not coming up for sale? These are good questions and while I do not have definitive answers, there are a few reasons that I suspect are the root cause.

The first is pretty obvious. Many New Orleans eagles (especially the No Motto issues) are very rare in high grades. When you are talking about a coin like an 1842-O eagle in properly graded Uncirculated, you are looking at an issue with maybe three or four known. Coins that are this rare do not trade with a great degree of frequency.

Especially when we look at reason number two. The New Orleans eagle market is still in its infancy in terms of development and the “players” in this market tend to be buyers at this point as opposed to sellers. This means that many of the really cool pieces that exist are in tightly-held collections and are not likely to be sold at any time soon.

Another not-so-obvious reason is what I call the “spillover effect.” New Orleans eagles have a number of specialized collectors and these individuals are often competing with Liberty Head eagle specialists when important coins come up for sale. I know of at least three collectors who are working on completing high grade sets of Liberty Head eagles. This means that if, for example, a high grade 1846-O eagle were to become available, the New Orleans eagle specialists would be duking it out with the Liberty Head eagle specialists (not to mention the generalists who like interesting coins) creating an unusual amount of competition.

One other reason for the lack of available coins has to do with poor price reporting. I would contend that a coin like the aforementioned high grade 1846-O eagle is worth a lot more today than it was in, say, 2003. But Trends and CDN Bid levels are essentially the same as they were five years ago. Since this very rare coin shows no “paper profit,” what motivation would its owner have to sell it unless he needed money? Until Trends and Bid show accurate values for coins such as high grade 1846-O eagles, the people who own them have no real motivation to sell.

There were a few other interesting New Orleans eagles that sold privately in 2007. I sold Condition Census examples of dates such as 1843-O, 1849-O, 1859-O, 1881-O, 1883-O, 1894-O and 1904-O. I would assume that some other pieces were sold by dealers who specialize in rare gold coins as well.

It will be interesting to see if these market conditions continue for New Orleans eagles in 2008 and beyond. I see a strong new level of demand for this denomination and expect some deep-pocketed new collectors to focus their attention on New Orleans eagles. I just wonder if they will be able to find enough coins to satisfy their hunger.