The Availability of Original Southern Branch Mint Gold Coins - Part One

Need to get the rest of the article from Mary. In a recent blog (July 30, 2007) I discussed my criteria for what constitutes "originality." Using this criteria, how available are Charlotte, Dahlonega and New Orleans gold coins? In the first of what may be a multi-part series of articles, I’m going to look at C, D and O mint gold dollars and discuss their availability with original surfaces and color.

What Constitutes Originality?

The term “original” gets thrown around a lot these days. I should know; I probably use (and overuse) this term as much as anyone. But as much as this term is used, I think there is considerable confusion and disagreement over what original actually means. As it applies to 18th and 19th century United States gold, the concept of originality fits just a small percentage of actual coins. Unless you can trace a complete history of a coin, it is essentially impossible to state with certainty that it is truly original—i.e., it has never been cleaned or in anyway enhanced.

So what exactly do I think constitutes originality? I think it’s easier to explain what “isn’t original” than what “is original.”

A coin that is original has the right color for the issue. On rare gold coins, a give-away that a coin has “bad” color is when it is a bright orange or intense reddish-gold hue. This bad color tends to be artificially applied and it is generally done in an attempt to hide hairlines or surface problems. Original color tends to be a medium to deep green-gold or rose-gold hue. In all of the books that I’ve written, I’ve mentioned the color(s) that I’ve observed on specific gold issues. I highly suggest that you read these books when you are making a purchasing decision.

An original coin has surfaces that lack obtrusive hairlines. When a coin is cleaned, it tends to show hairlines. But here’s where a sticky subject comes up: what about a coin that was cleaned 75 or even 100 years ago and which has now naturally retoned in deep hues atop these hairlines. Is it original? Strictly speaking, no. Is it desirable? If the coloration is attractive and the hairlines are not too dense, absolutely. One has to operate under the assumption that virtually all 18th and 19th century United States gold coins have been cleaned at one time and light, unobtrusive hairlines can’t be considered as a detriment when calling a coin “original.”

An original coin also has luster that has not been significantly impaired (assuming, of course, that it does not have enough wear that the luster has been lost). When a coin is cleaned or processed, the luster is changed. Non-impaired luster has a circular or “cartwheel” pattern. When it is disturbed, the luster no longer rotates in a circular pattern. It becomes irregular and it appears to “jump” as opposed to spinning.

A coin that is original also does not have any sort of putty or “gunk” that has been applied to the surfaces in an attempt to hide imperfections. This can usually be determined by the presence of dull or whitish areas that can be seen when a coin is viewed in a good light source.

In summary, a coin that is original is none of the following:

It has not been recolored.

It is not unduly bright or shiny.

It does not have an abundance of hairlines, especially on both sides.

It does not have any foreign substances on the surfaces that were applied in an attempt to hide imperfections.

Given the fact that so few coins meet these stringent criteria, can the collector who favors original coins actually ever expect to find anything for his collection? I would say that the answer is yes.

There are still a decent number of coins that are either original or which have an “original appearance.” (Perhaps this last term is actually more accurate, given the fact that no one can state with absolute certainty that a 150 year old coin has or hasn’t been completely untouched in its long and winding road through numismatics and/or commerce).

Coins that have a good provenance tend to have an original appearance more often that coins that just happen to show up on Ebay. I think we can state with relative certainty that collectors like Mrs. Norweb and Louis Eliasberg were not sitting at home doctoring their gold coins.

Is original always best? That’s an interesting subjective question. There are gold coins with coloration that I refer to as “Euro” which have very dark hues caused by years and years of sitting undisturbed in bags in European vaults. This color is clearly natural but it can be pretty ugly; even to a purist like me who loves coloration on coins. In the case of a coin with dark Euro-grime on it, I could certainly see washing it in soap and water to remove the top layer of dirt. Once this is done, is the coin technically “original?” Or has it been processed? A smart dealer I know once told me that if a coin has been processed in a solution that isn’t lethal to humans upon drinking it is still natural. As you can see, this becomes a matter of semantics that is very difficult to answer.

The bottom line is that there IS clearly a “look” that coins that are perceived to be original do have. This look is appealing to sophisticated collectors and dealers and few coins display it.

The 1838 Eagle

One of my absolute favorite United States gold coins is the 1838 eagle. Here are some impressions I’d like to share about this fascinating issue. The ten dollar gold denomination was abolished in 1805, along with the silver dollar denomination. I’ve read in various coin books that the reason for this was “extensive melting by bullion dealers.” I’m a bit skeptical about this as a reason and would personally think that for Eagles, the reason had to do more with a lack of demand and/or available gold bullion.

After a thirty-four year hiatus, the eagle denomination was resurrected in 1838 and the task of designing the new coin fell to Christian Gobrecht. The new design featured a bust of Liberty facing left on the obverse and an eagle on the reverse. Liberty’s neck on the 1838 eagles is distinctly curved and the back of the neck ends in a curious, abrupt triangle. Another identifying factor is strands of hair over the ear which are swept-back in appearance and which cover much of the ear. The portrait is positioned quite a bit differently than on other Liberty head eagles. On the 1838 (and some of the 1839), the tip of the coronet is placed below the outside of the sixth star while the back of the neck is below the outside of the thirteenth star. On the later issues, the tip of the coronet is placed between the fifth and sixth stars while the back of the neck is located past the inside of the thirteenth star.

In 1838, only 7,200 eagles were struck. I estimate that 50-75 are known today and break these down as follows:

Very Fine and below................15-25

Extremely Fine.....................23-31

About Uncirculated.................10-15

Uncirculated........................2-4

Most examples of this date grade VF30 to EF40 and show clear evidence of considerable circulation. The surfaces are generally very heavily abraded with clusters of marks seen most often in the left obverse field. This issue has better luster than one might expect and higher grade pieces are sometimes quite reflective. Most show enough wear, however, that the luster is considerably impaired. The natural coloration tends to be a medium to deep greenish-gold hue. I have not seen many examples that have original color as most have been dipped or cleaned at one time. The strike tends to be reasonably sharp with good overall detail at the centers; some examples have weakness on the radial lines of the stars.

The 1838 eagle is scarce in all grades and it becomes truly rare in properly graded AU50 or better. Most AU examples are in the low end of this range and a solid AU55 to AU58 is very rare and extremely desirable. I have personally seen only a handful of nice examples in the last few years, the best of which is a PCGS MS63 that sold for $63,250 in the April 2002 Heritage auction.

There are also three Proofs known. One is in the Smithsonian and it grades PR63, one is in a private collection (ex: Cardinal Spellman) and is graded PR65 by PCGS and the final example is also graded PR65 by PCGS and is ex: Pittman. This coin last sold for $550,000 in 1998 and it would sell for considerably more than this if made available.

Pricing for the 1838 eagle is currently very inaccurate. Coin World Trends shows values for this date at $2,900 in EF40, $4,025 in EF-45, $6,250 in AU50 and $11,000 in AU55. If you can purchase a problem-free 1838 eagle in these grades for prices anywhere near these levels, you’ve found yourself an incredible bargain. I’ve noticed that in the last few years, lower and medium grade examples that have been offered for sale at auction have brought levels far, far greater than Trends.

So what is it exactly about this issue that I found so intriguing? I can think of a number of reasons. It is a first-year-of-issue coin and the first Eagle to be struck after the denomination was resurrected after a three-and-a-half decade hiatus. It is a low mintage coin that is scarce in all grades and very rare in higher grades. It is a unique and very different design that was used on this denomination for just two years. And last but not least, it is exceptionally undervalued at current price levels.

State of the Market: Carson City Gold Coins

For our next State of the Market Report, we’re going to take a look at Carson City gold coinage. How have the half eagles, eagles and double eagles from this ultra-popular western branch mint fared in the past few years? I. Overview

The number of serious Carson City gold coin collectors appears to have increased in the last few years. At the same time, at least three major collections have been sold (Old West, “Morgan” and the Washington D.C. collection that I sold privately in 2006). This has meant that some fantastic quality individual coins have been available with some record prices having been achieved. This has been slightly tempered by the fact that a group of significantly overgraded Carson City half eagles (and eagles) have been offered for sale at a number of auctions beginning in 2005. Until the bulk of these are removed from the market, Carson City gold in general will remain highly bifurcated and marked by huge value differences in similarly graded issues. This is truly a market where one AU55 1876-CC half eagle can be worth $17,500 while another can be worth $12,500.

II. Half Eagles

Of the three Carson City gold denominations, I would say that half eagles are probably the least popular right now. Prices for many Carson City half eagles have stayed fairly flat—or even dropped—in the last few years. There are certainly exceptions: choice, high grade examples of nearly any pre-1890 date are strong and even lower grade examples of the key issues (such as the 1870-CC, 1873-CC and 1878-CC) are in great demand in the VG to VF range. With coins that are priced at $20,000 and up, collectors are very fussy and will not generally purchase a coin which they or their trusted advisor(s) do not feel lives up to its stated grade.

I think that the market for Carson City half eagles will remain spotty over the next few years. My gut feeling is that exceptional coins will continue to do quite well and that many of the key issues from the 1870’s will see across the board demand. In my opinion, the most underrated Carson City half eagles right now are the 1877-CC, 1878-CC and the 1881-CC.

III. Eagles

Spectacular Carson City eagles have brought spectacular prices during the last few years. As an example, the finest known 1870-CC, graded AU55 by PCGS, sold for $115,000 in ANR’s August 2006 auction while a PCGS MS64 example of the more common 1890-CC was bid to $80,500 in Heritage June 2006 sale. But results for mediocre or low-end Carson City eagles have been quite soft in the past few years. This is mostly attributable to a group of overgraded, low-end coins (mostly valued in the $15,000-35,000 range) which an investor has had mixed success selling at auction during the last two years. I personally know of at least four or five collectors of high quality Carson City eagles and they are all looking for essentially the same type of coins right now: choice and original with good eye appeal.

I feel that once the last of the inferior quality Carson City eagles mentioned above are finally sold, the market for these coins will heat up. For collectors who enjoy a challenge (and who have an appropriate budget) this is a great series to collect. In my opinion, the most undervalued dates in this series are the 1870-CC, 1873-CC, 1877-CC and the 1883-CC.

IV. Double Eagles

If you had asked me a few years ago if Carson City double eagles were overvalued I would have probably said yes. If you ask me the same question today I would still probably say yes but with less reservation than in the past. When compared to half eagles and eagles from this mint, Carson City double eagles appear to be overvalued. But (and this is a big, big “but”) the double eagles from this mint have a sexiness factor that is greater than nearly any other series of United States coin. Let’s face it: even if you don’t really care about coins, it is pretty hard to resist the allure of a big, attractive gold piece that saw duty in the most romantic era in the history of this country. And because of this fact, Carson City double eagles will always be very, very popular.

My biggest complaint about this series is that while prices have shot up in the past few years, grading standards have decreased. I often see coins like 1871-CC double eagles in AU50 holders that a few years ago would have graded EF45; or even EF40. Given the fact the Trends for an AU50 1871-CC is now $40,000, I have a hard time spending this kind of money on an example for my inventory which has tons of bagmarks and/or a near-absence of luster. The same goes for dates like the 1872-CC, 1873-CC, 1878-CC and 1879-CC. These are now $10,000++ coins in AU50 and higher grades and if a new collector is going to be spending this kind of money on these dates, I would hope he is getting a nice quality coin.

That said, I think there is still some value to be had in this series. I will continue to buy nearly any attractive, original AU55 to MS61 Carson City double eagle I can find for under $5,000. I also like very choice and reasonably original examples of the key dates but, as I said above, I usually pass on examples that I think have inferior eye appeal.

Coin Buying "Tricks"

As a dealer who has spent over $100 million on rare coins, what are some of the “tricks” that I have learned that can help you when you are buying coins? Read on to see some of the ones that I think you will benefit most from. When I buy a coin I am looking to sell it immediately for a profit. This makes my needs as a buyer slightly different than yours as a collector. But your ultimate goal, I would hope, is to sell your coins for a profit. What are a few of the most obvious but most important parameters to consider each and every time you buy a coin?

1. Buy Coins That Are Pretty

Numismatics has always been a highly visual hobby. But the advent of the Internet has made the visual aspects of numismatics more significant than ever before. When I look at coins now one of the first questions I ask myself is: will it image well on my website? Coins that are pretty are very easy to sell.

The term “pretty” is somewhat semantic. I tend to like gold coins that are dark and dirty and find these to be aesthetically appealing. Not everyone agrees me. Some people like gold coins that have bright, dazzling luster while others prefer coins that two-tone contrast between the devices and the fields. But I think most people can agree that a certain percentage of coins are, for lack of a better term, “special.” This does not necessarily mean “expensive.” I have seen circulated $100 Bust dimes that I thought were really pretty. The bottom line is that you should try and have as many pretty coins as possible in your collection.

2. Buy Coins That Are Popular

There are many coins that no matter how many examples I have purchased over the years, I have never lost money on them. As an example, I have probably owned twenty 1838-D half eagles in the past decade, ranging in grade from VF25 to MS62. Every time I’ve owned one, it has sold quickly to a happy collector and I’ve made a decent amount of money on each transaction. It’s obvious to me why this date sells quickly: it’s a first-year-of-issue, it’s a one-year type, it has a neat design, it’s a Dahlonega coin and it is relatively affordable.

In the last few years, key date coins in virtually every series have shown dramatic increases in value. There is a good reason for this: they are very popular and this creates a constant level of demand for these issues. In some cases (like 1901-S quarters or 1907 High Reliefs) prices are now probably too high and these key issues are currently overvalued. But I would personally rather have a collection (or inventory) that was full of popular coins than ones that were too esoteric and hard to sell.

3. Buy Coins That Are Problem-Free

I’m pretty staggered at how unappealing most coins are that I see these days. As I look through other dealer’s inventories at coin shows or at auction lots, nearly every coin I pull out has some sort of problem. It has been dipped. It has funky color. It has hairlines from an old cleaning. That’s why when I see something that I really like, I try and aggressively pursue it.

In certain 18th and 19th century series, it is likely that 90-95% of all the coins currently on the market have some sort of problem. If you can patiently and carefully assemble a collection that focuses on the remaining 5-10% of the coins that are what I would call high end and choice, you will have a truly significant coin collection.

4. Buy Coins That Pre-Sell Themselves Every time I’ve made a big mistake purchasing a coin for inventory, it’s been a coin that I had to give myself a hard sell on. I’ve found that my first impression regarding a coin is inevitably correct. If I see a coin and it makes me gasp because it’s so pretty or it’s so above-average an issue that usually comes with bad eye appeal, I’m inevitably going to buy this coin no matter what. If my first reaction is “I don’t really like this” or “It’s OK except that spot in the right obverse field sort of bothers me” that doesn’t strike me as the sort of coin that is going to go flying out of my inventory when it is imaged and described on my website. As a rule, if you don’t like a coin the first time you see it, don’t buy it.

5. Buy Coins That Have Been Pre-Screened

Never, never, never buy expensive coins sight-unseen or based solely on a mediocre quality image with no return privilege. It’s one thing if someone is trying to sell you a generic MS63 St. Gaudens double eagle sight-unseen; even if the coin is low-end it is essentially a commodity and what it looks like is not especially important. But I can’t tell you how many times I’ve had clients send me expensive coins that they have purchased sight-unseen out of an auction and how many times I’ve had to politely tell them that it is very low-end. If your dealer insists you buy coins sight-unseen, find another dealer. If you think you can buy nice coins sight-unseen out of auctions, swallow your pride and hire a trusted representative to view the coins in person for you.

Comparing PCGS & NGC Population Statistics

As a dealer, I hear a lot of comments about how PCGS and NGC grade rare gold coins. I thought it would be interesting to compare the population statistics for two commonly traded series, Charlotte half eagles and Dahlonega half eagles, using recent published population figures from the PCGS and NGC databases. Before I get into the numbers themselves, I think a few background tidbits are necessary. I chose Charlotte and Dahlonega half eagles because these are two branch mint series that do not have a lot of problematical issues that are extremely hard to grade (unlike, say, Dahlonega quarter eagles which are especially hard to grade). Also, the market accords relatively similar value levels to Charlotte and Dahlonega half eagles in either services’ holder (unlike, say, high quality Mercury Dimes which are clearly more valuable in PCGS holders). Finally, I chose these two series because they have comparatively high numbers of coins that have been graded, which makes the population sample we are looking at more relevant than more esoteric series that have had few coins graded.

A few more quick points. The Charlotte half eagle series consists of twenty-four coins, including the 1842-C Small Date and Large Date. For both services, I included only these twenty-four issues. For NGC coins only, I also included 1850-C and 1854-C which were designated by that service as “Weak C.” PCGS does not make this differentiation. The Dahlonega half eagle series consists of twenty-six coins, including both varieties of 1842-D, the 1846-D/D and the 1848-D/D. I also included coins designated by NGC as “Weak D.”

I. Charlotte Half Eagles

As of June 2007 PCGS had graded a grand total of 2,626 Charlotte half eagles in all grades. A breakdown of these is as follows:

Very Fine and lower, 636 (24.21% of the total graded)

Extremely Fine, 889 (33.85% of the total graded)

About Uncirculated, 930 (35.41% of the total graded)

Uncirculated, 165 (6.28% of the total graded)

As of June 2007 NGC had graded a grand total of 2,877 Charlotte half eagles in all grades. A breakdown of these is as follows:

Very Fine and lower, 288 (10.21% of the total graded)

Extremely Fine, 750 (26.06% of the total graded)

About Uncirculated, 1506 (52.34% of the total graded)

Uncirculated, 321 (11.15% of the total graded)

Before I analyze these numbers, I think there are a few very important points to make. Both PCGS and NGC have an inherent flaw with their population figures: these numbers are inflated (often severely) by resubmissions. PCGS does a recently good job of clearing the deadwood off their report and they offer submitters a “bounty” for each used coin insert that ensures that a decent number of labels will be returned. NGC, unfortunately, does not offer a bounty and this discourages certain large submitters from returning their old inserts. When I look at the NGC population figures for Charlotte half eagles, what strikes me is the large number of coins graded AU55 and higher. I think these numbers are greatly inflated due to resubmissions.

So, what do I deduct from these numbers? First of all, I am struck by the nearly equal number of total coins graded by PCGS and NGC; 2,626 for the former and 2,877 for the latter. I would have predicted that the total number would have been much higher for NGC and much lower for PCGS. Secondly, I find it very interesting that PCGS has graded around 42% of all the Charlotte half eagles submitted to them in AU and higher grades while NGC has graded slightly over 63% in AU and higher. I find it very hard to believe that over six in ten of all Charlotte half eagles grade AU50 and better, even factoring in gradeflation. One final statistic that I think is very interesting is that NGC has graded nearly twice as many Charlotte half eagles in Uncirculated than PCGS. Even factoring in the inflated population figures at NGC due to submitters not returning duplicate tags, I am still intrigued by this disparity.

II. Dahlonega Half Eagles

As of June 2007 PCGS had graded a grand total of 3,355 Dahlonega half eagles in all grades. A breakdown of these is as follows:

Very Fine and lower, 749 (22.32% of the total graded)

Extremely Fine, 990 (29.50% of the total graded)

About Uncirculated, 1329 (39.61% of the total graded)

Uncirculated, 261 (7.77% of the total graded)

As of June 2007 NGC had graded a grand total of 3,266 Dahlonega half eagles in all grades. A breakdown of these is as follows:

Very Fine and lower, 313 (9.58% of the total graded)

Extremely Fine, 781 (23.91% of the total graded)

About Uncirculated, 1824 (55.84% of the total graded)

Uncirculated, 338 (10.34% of the total graded)

In looking at these two sets of numbers, there are two areas where great disparity can be quickly noted: with coins graded VF and lower and with coins graded AU. What accounts for this?

In regards to the lower graded coins, my guess is that there are two major reasons. The first is that PCGS tends to be a bit more generous than NGC in terms of what they will or will not encapsulate in this grade range. PCGS will often net grade a lower quality Dahlonega half eagle while NGC will tend to either not grade such a coin or place it in an NCS holder. The second reason is that these lower grade coins tend to appeal more towards pure collectors than investors or speculators and these individuals often prefer to have their coins in PCGS holders.

How can the great disparity between NGC and PCGS for AU grade Dahlonega half eagles be explained? I think there are two important things to consider. The first is that the NGC populations for Dahlonega half eagles graded AU55 and (especially) AU58 are hugely inflated by resubmissions. If NGC were to clean-up their populations figures, I think the number of AU coins would be reduced by at least 200-300+. The second reason is probably due to the fact that the NGC grading line for AU Dahlonega half eagles is a bit looser than PCGS’. In my opinion, a number of AU50 Dahlonega half eagles graded by NGC would not qualify as such at PCGS.

The most important thing to remember about these numbers is that they are subject to any number of interpretations. If you are pro-NGC, you will form your own conclusions while if you are pro-PCGS you will, no doubt, reach another conclusion.

Where Have All The Nice Coins Gone?

If you talk to nearly any dealer or read nearly any numismatic newsletter you’ve no doubt heard a similar complaint for many years: it has become incredibly hard to buy “nice coins.” Clearly, this is true. But the reason(s) why nice coins have become so hard to buy are somewhat less obvious. I have a few theories as to where all the nice coins have gone and why it is so hard in today’s market to find others. The first reason has to do with the increased size and scope of the rare coin market. There are far more deep-pocketed collectors than ever before and certainly far more than most people realize. There are many reasons for this: the increased appeal of numismatics as a result of the Internet, the explosion of wealth in this country and around the world and the lack of good investment alternatives as in years past. Simply put, tens of thousands of very high quality coins have left the market as a result of new collectors.

The second reason is a little less obvious. It is my opinion that more formerly-nice coins have been ruined by cleaning and processing than we realize. Let’s take a typical common date Dahlonega half eagle as an example. Let’s say that there are 200-300 examples known of this date in all grades. Even before the mania for cleaning coins began, at least 75% of these coins had either been harshly cleaned, damaged or very heavily worn. This leaves us a pool of approximately 25-50 original or semi-original “nice coins.” Now let’s say that this number has been reduced another 50% in the last decade as dealers have given into the temptation of taking a crusty EF coin and turning it into an ugly AU coin. Now we are talking about maybe as many as 15-25 nice original examples of this supposedly common date. This number is further diluted by the fact that most of the choice examples of scarce, popular collector coins are off the market in tightly-held collections. At the end of the day, we are talking about a tiny pool of nice, original coins available for the new collector.

Here’s another theory of mine which we’ll call reason #3. Veteran observers of the rare coin market (like me) became jaded by the proliferation of great collections which came to the market in the 1980’s and the 1990’s. Eliasberg, Bass, Pittman, Norweb...the list goes on and on. We were spoiled by these great old collections and now that hardly any other great old collections await us, our reaction is that “there are no more nice coins left.” I find it interesting that the coin market of the 2000’s has become more democratized than the market(s) of the past. Instead of one person owning huge numbers of great coins (i.e., Harry Bass), there are now many collectors who own smaller numbers of the good stuff. Old School dealers like me are just going to have to get used to the fact that the auctions we will be attending in the future are not likely to be Eliasberg-esque.

One final reason comes to mind. The rare coin market has become watered-down by modern coins. As recently as a decade ago, no one collected coins made during their lifetime; let alone paid huge premiums for coins struck a year or two ago. A number of dealers (and collectors) who used to be active in the market for “nice coins” jumped ship and are now focusing on modern issues. Moderns also get a lot of publicity these days while the day-to-day trading of attractive classic issues is done with less fanfare. Ironically, there’s a whole new generation of collectors who are a lot more excited by a PR70 American Silver Eagle from 1999 than by a superbly toned PR67 Barber Quarter from 1899. As always, what is “nice” is a matter of perspective...

I think the bottom line is this: in 2007 we are seeing a lot more collectors competing for a lot fewer nice coins. It was never easy to buy nice coins. In some ways, I’d love to turn back the clock to 1987 but when I really stop and think about the market twenty years ago, nice coins weren’t growing on trees back then and when you did have them, they were a lot harder to sell.

State of the Market Report: Early United States Gold Coinage

In the last five years, early United States gold has been one of the most active areas in the coin market. In this article, we will examine each of the major types of pre-1834 gold coinage and see how the market has performed. In addition, we will look at some future trends and make some predictions which may be of interest to the specialist. Early coinage has always been a popular area with collectors but all pre-1834 gold types have been just about the most avidly collected area of the coin market since the beginning of the current bull market. I think this is attributable to a number of factors including the following:

* In 2000, the oldest early gold coins became three centuries old which added a sense of age that was very impressive in comparison to more modern issues.

* Some excellent books and specialized research tools made these coins more accessible to new collectors.

* A number of dealers (myself included) steered many wealthy new collectors into this area of the market due to the "coolness factor" of these coins. The resulting spike in demand significantly reduced the already limited availability of these coins, resulting in an increase in price.

* Some important old-time collections (Pittman, Bass and others) came on the market, making a number of seldom-seen early gold pieces available to collectors. This spurred interest and a number of new collections were begun as a result.

I. Quarter Eagles, 1796 to 1834

A. Draped Bust No Stars, 1796 Only

As one might expect, this celebrated one-year type has seen a huge increase in price and demand in the past five years. In 2002, it was possible to find a nice AU example in the $60,000-70,000 range. Today, a similar coin is going to cost a collector $125,000 to $150,000.

I wouldn’t have a problem with this price increase except for the fact that grading standards for this type have become very lax in the last few years. Most of the 1796 No Stars quarter eagles that I see in AU holders are very low-end, unoriginal coins that would have been graded EF as recently as a few years ago. I still love this type and would recommend it to a wealthy collector as a blue-chip investment vehicle but I think great caution has to be taken when buying $100,000+ examples of this type.

The high water mark for this issue was in June 2005 when a superb PCGS MS65 example sold at auction for $1.38 million.

B. Draped Bust With Stars, 1796-1807

Five years ago, it was still possible for the collector of slightly above-average means to purchase a respectable example of this type. Today, the rarity of the With Stars quarter eagle type has been widely acknowledged and it is almost impossible to find a problem-free example for less than $15,000-20,000.

That said, I still think that this type is a great value and that it is undervalued when compared to the half eagles and eagles of this era. I am especially fond of the 1790’s dated issues. They have clearly risen in value, although nowhere near as much as the 1796 No Stars. As an example, I purchased a decent PCGS AU53 1797 quarter eagle in an auction in 2003 for around $50,000. Today, this coin would sell for around $70,000-80,000. An AU 1798 was worth around $30,000 five years ago and today it might sell in the $50,000-60,000 range. My gut feeling is that nice quality examples of these two dates aren’t going to be available for much longer at these levels and they should be purchased if and when they become available.

The 1802/1, 1804 14 Stars, 1805 and 1807 are the more common dates of this type. All four of these have become nearly impossible to locate with original color and surfaces. A common “type” example of one of these dates in the MS61 to MS62 range was reasonably available five years ago for around $20,000. Today, such a coin would cost $30,000-35,000 but most of the pieces I see in MS61 and MS62 holders are very unappealing. I have been advising collectors for many years that this type is undervalued and, despite the price rise in the past five years, I still believe that this is the case.

C. Capped Bust Left, 1808 only

As with all significant one year early type coins, the value of the 1808 quarter eagle has risen dramatically in the past five years. Today, a solid AU example is worth in the $100,000-150,000 range. Five years ago, it was possible to find an AU priced in the $40,000-50,000 range.

I wouldn’t have any qualms with the new price levels for this date if I actually liked many of the 1808 quarter eagles that I have viewed in the past year or two. The days of finding choice, original pieces in EF and AU holders may well be over, although I have seen a few examples in the last year graded AU55 and AU58 that I thought were acceptable for the grade.

I would expect that there will be some leveling off on prices for this issue in the coming year or two, if only because levels have risen so dramatically since 2002-2003. That said, I think a choice, attractive 1808 quarter eagle is a great coin to purchase. As long as there are collectors assembling type sets of early gold, there always is a very strong demand level for this one-year type.

D. Capped Bust Large Size, 1821-1827

Five years ago, I was literally begging clients to purchase examples of this type. This was one area of the early gold market that $10,000 would go a long way and this figure would buy you an impressive example of a legitimately scarce coin. The rap against early quarter eagles back then was that the coins were “too small” and that they were “too rare for their own good.” I thought these were silly reasons for these coins to be undervalued and, today, they seem positively quaint, given the new level of respect and interest that early quarter eagles command. Nevertheless, I still feel that quarter eagles of this type remain the most undervalued early U.S. gold coins.

The sort of coin that was available five years ago for $10,000+ is now more realistically a $20,000+ coin; not to mention the fact that it has become very hard to locate. But I still feel that any date in this series is an excellent value. I especially like the underrated 1821 and the low-mintage 1826.

I don’t think that the future of this type is date collecting as these coins are simply too challenging for most collectors. I think that the future is as a type coin and I would anticipate that five years from now it will be very difficult to find a nice, problem-free Capped Bust Large Size quarter eagle for much less than $30,000+.

E. Capped Bust Small Size, 1829-1834

The quarter eagles produced between 1829 and 1833 have also seen a surge of interest in the past five years. In 2002, you could buy a nice AU example of any of these dates for $7,500 or so. Today, a similar coin will cost you $12,500-15,000. Five years ago, an MS63 example of this type could be purchased for around $15,000-20,000. Today, a similar coin is more likely to cost in the area of $30,000-35,000.

I’d like to think that at least part of the reason that this type has shown such strong price increases in the last five years is due to the continual urging I’ve given clients to buy these coins. I have often written that I felt these were the best values in the early gold market. I still feel this way, although I have been pretty disappointed at the quality of a number of the coins I have seen lately in MS60 to MS63 holders.

That said, I think the future of this series remains very bright. Despite small original mintage figures, these coins exist in large enough numbers to make collecting by date a possibility. The stopper in the series remains the 1834 which, curiously, has become impossible to locate. I am not aware of a single example of this date appearing at auction since October 2004 and only two separate problem-free pieces appearing at auction since 2000. The last piece to sell was a PCGS AU55 which brought $35,600. Today, the same coin could bring as much as $65,000-75,000.

II. Half Eagles, 1795 to 1834

A. Draped Bust Small Eagle, 1795-1798

This type includes two relatively obtainable issues (the 1795 Small Eagle and the 1796/5) and three rarities (the 1797 15 and 16 Stars and the 1798 Small Eagle).

The 1795 has become one of the most popular early United States gold coins and for good reason. It is one of the first two gold coins struck by this country, it is charmingly designed and generally well produced and it can be found in relatively high grades. Five years ago, a collector could expect to find a nice AU for around $15,000 and a properly graded MS62 for around $50,000. Today, a nice AU should cost in the area of $40,000-50,000 while an MS62 will run around $100,000. I still recommend purchasing this issue in nearly any grade, as I feel it is a coin that will always be in great demand. I would definitely caution the new collector to seek an example with good eye appeal, nice surfaces and as much original coloration as possible. Nice, original coins are becoming extremely hard to find and I think they will begin to command a huge premium in the coming years.

The 1796/5 half eagle is many times scarcer than its 1795 Small Eagle counterpart but it does not command as much of a premium as one might expect. This has to do with the fact that it is not a first-year issue and, thus, is not as “sexy” a date. The 1796/5 has proven to be very rare and it is generally only offered at major auctions. I highly recommend this issue and feel that it is still an excellent value at its current level of $50,000-60,000 for a solid AU coin.

The great rarity of this type is the 1798 Small Eagle of which only seven or eight pieces are currently known. The last example to sell was a PCGS EF40 that brought $264,500 at auction in June 2000. I think this coin would easily sell for $500,000 today and I think a slightly nicer example, if available, could break the $1 million mark with ease.

B. Draped Bust Large Eagle, 1795-1807

For most collectors this type is dividable into at least two groups: the issues struck from 1795 to 1799 and those produced from 1800 to 1807.

The 18th century Draped Bust Large Eagle half eagles have proven to be extremely popular with collectors in recent years. As one can readily guess, they became especially popular around 2000, once they turned three centuries old. The two reasonably available issues are the 1798 and the 1799. These have both seen dramatic price increases in the last five years. As an example, a nice AU 1799 half eagle was worth $7,500-10,000 in 2002. Today, such a coin is valued at $15,000+. The increase in value is more dramatic in higher grades. Five years ago, with some careful searching, it was possible to find an MS63 1799 half eagle for around $40,000. Today, if such a coin became available (good luck convincing the guy who bought one in 2002 to sell his today!) it would sell for $65,000-75,000. Despite the new, higher levels, I still like the concept of an 18th century half eagle and would advise collectors to be on the lookout for nice 1798 and 1799 half eagles in EF45 and higher.

The common date half eagles from 1800 to 1807 have also shot up in value. Five years ago, nice AU coins were easily located in the $4,000-5,000 range. Today, similar coins are worth $10,000-12,500. I have mixed feelings about the value levels of these coins. Clearly, at around $5,000 they were very fairly priced. At $10,000 they are no longer cheap, especially when one considers the relative availability of these coins. I will no longer buy these common date half eagles for inventory unless they are wholesome, choice original coins with very good eye appeal. If they are bright-n-shiny, riddled with adjustment marks or vastly overgraded, low end coins, I will almost always pass.

What about higher grade common dates of this type? Five years ago, you could have purchased a common date in MS63 for around $12,500-15,000 and an MS64 for around $20,000-22,500. Today, the former costs around $25,000 and the latter runs $40,000-50,000+. I have mixed feelings about these. I think a fresh, original MS63 in the mid-20’s is still an excellent purchase and would recommend it to a collector or an investor. I’m a little less excited about a common date in MS64 at around $50,000 unless the coin is extremely high end and looks like it could gradeflate to an MS65 someday.

C. Capped Bust Left, 1808-1812

The Capped Bust Left half eagles are the most available and affordable early gold issues. They have proven to be remarkably plentiful in the AU50 to MS62 grade range and this makes them popular with collectors. For some reason, this type has never really appealed all that much to me. I don’t really care for the design and the relative availability of these coins make them seem like the Morgan Dollars of early gold.

In spite of my obvious early gold snobbery, this type has proven to be popular with collectors. It is the only series of early half eagles that could be realistically completed by date and there are a number of interesting varieties as well. In 2002, a nice AU type example was easily purchased for $3,500-4,500. Today, a nice AU commands $7,500-9,000+. Five years ago, a really nice MS63 common date was worth $12,000-14,000. Today, this same coin is worth $20,000+.

My opinion has changed on the desirability of this type. I generally like the quality of slabbed AU examples more than I do for the earlier Draped Bust type and I think any nice, original AU example that can be purchased for less than $10,000 is pretty decent value in today’s market. I have mixed feelings about higher grade examples. If I’m going to buy a $20,000+ MS63 for my inventory, it had better be a high end, attractive coin with original color and surfaces. Same holds true for an MS64, especially since we’re talking $40,000+ for a common date.

D. Capped Bust, Large Size 1813-1829

It’s hard for me to discuss this series without getting passionate as Fat Head Fives are probably my favorite series in the early gold issues. Why? Well, it’s clearly not the beauty of the design as this is arguably the most homely United States gold coin ever struck. For me, it’s all about the rarity and these coins are amazingly rare. When you kick out the “common” 1813 and 1814/3, the coins in this series range from downright rare (1818, 1820 and 1823) to virtually impossible (1819, 1821, 1824-1829). And we won’t even begin to mention the classic rarities like the 1815, 1822 and 1825/4.

The really rare coins in this series are hard to monitor as they trade so infrequently. When I look back at what prices were like in 2002, they seem amazingly cheap by today’s standards. As an example, in February of that year, a PCGS AU58 1827 sold in the Goldberg’s Benson II auction for $19,550. Today, a properly graded example is worth triple this amount.

What about the common 1813? Five years ago, a nice AU example would have cost you $4,000-5,000. Today, you’d have to pay around $10,000. In my opinion, this date is still a great value at less than $10,000. In 2002, a nice MS63 1813 would have been priced at around $12,500. Today, the same coin is worth $20,000. Again, I think it is an excellent value as it is the only reasonably obtainable date of this rare type and properly graded MS63’s are far, far scarcer than common date Capped Bust Left and Capped Bust Right half eagles despite being similarly priced.

E. Capped Bust, Small Size 1829-1834

As rare as the Large Planchet type of Fat Head half eagles is, the Small Planchet is even rarer. At least with the earlier type, the collector has a chance to buy such relatively common and affordable issues as the 1813 and the 1814/3. But the Small Planchet type offers no such chance for collectors with limited budgets. This is a series with seriously rare coins with seriously high price tags. And rightfully so.

If you were smart enough to be purchasing 1829-1834 half eagles in 2002, give yourself a large pat on the back. You are smart and you made yourself a lot of money. Let’s say you decide that you want to start buying these coins in 2007. How does the future of your investment look? I’d say pretty good. Now that nearly everyone understands how rare these coins are and appreciates them, I think the levels for the series will continue to soar. I’d just give my usual warning on expensive coins: if you are going to pay $50,000+ for a fat Head half eagle, make certain you know what you are doing. Buy a coin that is attractive for the date and grade and which is original as possible.

So there you have it: the DWN State of the Market Report on early gold coinage. I doubt if anything I wrote in this article is terribly surprising to people who read my articles on a normal basis. I’ve always loved early gold and I will continue to be an active participant in this market for as long as I am a coin dealer.

State of the Market: Three Dollar Gold Pieces

In the fourth installment of my series of State of the Market articles, I take a look at the popular Three Dollar Gold piece series. How has this cult favorite fared in the past few years and what does the future look like for this denomination? After years of neglect, interest in the Three Dollar series spiked dramatically in 2004 and 2005. This can be directly attributed to two reasons: the publication of the first book on Three Dollar gold pieces (written by myself and the legendary Q. David Bowers) and expert marketing and promotion of the series by a few firms which introduced many new collectors to this interesting series.

For a variety of reasons, the promoters who focused on Threes moved on to other series in the middle of 2006 and the last year or so has seen a fairly dramatic drop in prices in the series. I would estimate that high grade common dates Three Dollar gold pieces have dropped between 30 and 50% while rare dates have seen price drops more in the range of 10-30%.

Perhaps the most dramatic price decreases in the entire series have been for common dates in MS64. These can now be bought for $6,000-7,000 but they were priced at $12,000-14,000 around two years ago. MS63 common dates are now $5,000 to $6,000; they used to be $9,000 to $11,000. MS62 common dates now sell for $3,500 to $4,500 and were priced at $6,000 to $7,000 at the height of their popularity.

In my opinion, common date Three Dollar gold pieces are a great value right now if they can be bought at around $6,000. These coins are generally very nice and if you can find a high end example with good color and luster as well as minimal marks at the low end of the current value range, I think this is an excellent coin to put away for a while. I find it a little strange that an MS64 common date is selling for just a $2,000 premium over a common date in MS62. My gut feeling is that an MS62 is not a great deal at this level.

The rarer date mintmark issues in this series are, for the most part, doing rather well. There is strong collector demand for issues such as the 1855-S and the 1857-S and the 1860-S seems to have become extremely hard to locate in grades above AU55.

One issue that is especially interesting to follow is the 1854-D. I have always thought of this as being a coin that, while technically a Three Dollar gold piece, is totally different from the other issues in this series. The reason for this is obvious: its primary source of demand is from Dahlonega collectors, most of who will never aspire to own another Three Dollar gold piece besides this date. Nice AU examples seem to have formed up considerably in the last six months and I would say they are worth between 5 - 15% more than when they hit a comparatively low level last summer.

Another interesting issue is the 1854-O. This date has become the most two-tiered Three Dollar gold piece in terms of value. It is clear to me that NGC tends to be considerably more liberal when it comes to the 1854-O in AU, especially in the upper ranges of this grade. A nice PCGS AU55 or AU58 1854-O is really quite a rare coin and it now commands a strong premium over the typical NGC graded AU55 or AU58. I have also noticed that 1854-O Threes with original color and surfaces and good strikes are commanding strong premiums over bright-n-shiny, processed examples.

So what lies ahead for this denomination?

I think Threes are far too interesting and far too collectible to stay inactive for long. My prediction is that you will see some of the marketing companies that dropped out of the series a few years ago get back in. It’s hard not to like a Three Dollar gold piece that was priced at $10,000 as recently as a few years ago when it is now priced at $7,000.

My guess is that you will see the greatest new interest in the series occur with the most interesting coins. These include the following:

1854-D, all grades

All San Francisco issues (except for the 1856-S) in AU50 and above

Civil War issues, all grades

Rare low mintage dates such as the 1858, 1865 and 1877 in all grades

Issues with mintages of less than 1,000, AU50 and above

When you take a hard look at this series, it’s easy to see what happened in 2005 and 2006. Prices went up too quickly, too many coins came on the market and the speculators who were driving the market bailed. My best guess is that, starting soon, the Three Dollar gold series will go back to being mostly collector-driven and it will regain its spot as a popular, oddball gold denomination that has long been in demand.