The 1878-CC Half Eagle

Having just acquired one of the two or three finest known examples of this date (a PCGS AU58 that is illustrated below) I thought it would be interesting to share some information about one of my favorite half eagles from this mint.

The 1878-CC is among the rarest Carson City half eagles, both in terms of overall and high grade rarity. It is not nearly as well known as the 1870-CC and it doesn't have the cult following that the rare and undervalued 1873-CC has. That said, it is still a coin that is very well respected by specialists.

A total of 9,054 were struck. When I wrote the second edition of my book "Gold Coins of the Carson City Mint" back in 2001, I estimated that there were just 60-70 known in all grades. A decade later this estimate seems a bit on the low side and I'd probably revise the total number known up to the area of 75-100.

As of May 2010, PCGS has graded a total of 64 examples in all grades with none in Uncirculated and a total of twenty in About Uncirculated including five each in AU55 and AU58. NGC has a total of 48 in all grades with one in Uncirculated (more on this in a second) and nineteen in AU including five each in AU55 and AU58. My previous estimate of just three to five known in About Uncirculated now seems very low but I believe that the PCGS and NGC populations for AU are significantly inflated by resubmissions. My best guess is that there are around ten or so properly graded AU's known today.

A few years ago, an example graded MS63PL appeared on the NGC population report. I have never seen this coin and am assuming it is a data entry error. If it does actually exist, it is one of the most significant Carson City half eagles in existence and it is a coin that I would really like to view in person.

The finest 1878-CC Carson City half eagles that I have seen are a small number (around three or four) that grade AU58 by today's standards. The all-time auction record for this date is Stack's 5/08: 4235, graded AU58 by PCGS, that brought $63,250.

The 1878-CC half eagle has a very recognizable "look" and it is an issue that can be distinguished from the Philadelphia and San Francisco half eagles dated 1878 with relative ease.

The 1878-CC has a somewhat fuzzy strike unlike the Philadelphia and San Francisco half eagles of this year which are very sharply impressed. This fuzziness is most evident around the borders and the denticles on a number of pieces are not fully formed. A number have significant weakness at 4:00 and 7:00 on the obverse border.

This is a hard issue to find with good luster. One of the things about the PCGS AU58 that is special for this issue is the fact that the luster is frosty and visible. This is clearly not the case on most 1878-CC half eagles which are not lustrous and have been stripped by processing. The coin shown above has some scattered marks in the fields bt these are fewer than usual for the issue.

The PCGS AU58 1878-CC half eagle shown in the photo above will be available for sale in a few weeks along with some other remarkable Condition Census CC half eagles from the same collection. For information on any of these coins please contact me via email at dwn@ont.com.

The Numismatic Double Play

Say the words "double play" and most people think of Jeter to Cano to Texeira. But in the world of gold coins, the concept of the double play has another meaning altogether. Back in the 1980's and the 1990's it was common to see large-sized U.S. gold coins marketed with the "double play" strategy. What this meant was that these coins had two inherent factors that contributed to their price structure: their intrinsic gold value and their numismatic value.

The double play concept became stale over the course of time and marketers moved on to find other way to peddle their product. But I believe that this is an idea with merit and one that should be revisited in today's value-conscious market.

People who buy U.S. gold coins typically fall into two camps: those who are investors and those who are collectors. What if a third category became a factor in the market; an investor-collector hybrid who focused on semi-scarce to scarce issues that sold for relatively small premiums above their basal value(s)?

There are basically two denominations that are perfect for the investor-collector hybrid: the ten dollar gold piece (or "eagle") and the twenty dollar gold piece (or "double eagle"). If you're with me so far, I'm going to suggest that we narrow our focus to two specific issues: the With Motto Liberty Head eagle (produced from 1866 through 1907) and the Type Two Liberty Head double eagle (produced from 1866 through 1876).

Here are some basic facts about these issues. The With Motto Liberty Head eagle weighs 16.718 grams and it contains 90% gold. As I write this article (in mid-April 2010) gold is trading for a touch above $1156 per ounce. The trading levels for eagles are as follows:

MS60: $700 MS62: $740 MS63: $1,210

It doesn't take a numismatic genius to immediately note that MS62 appears to be the best value grade for this type. At just a $40 premium above MS60 coins, you are talking around a 5% increase for what is generally going to be a much nicer coin. So for the sake of convenience, let's stick with the MS62 grade for this denomination.

The "base line" date for Liberty Head with motto eagles is the 1894 as it has the highest PCGS population in Uncirculated and in MS62. There have been 18,116 examples graded by PCGS or which 6,013 are in MS62. These numbers are, of course, swollen by resubmissions but the ratio of around one-third of all 1894's graded being in MS62 seems correct based on my experience.

There are a host of dates that we can compare with the 1894 but, again for the sake of brevity, let's focus on three of them. The first is the 1883. This issue has an original mintage figure of 208,700 (compared to 2,470,735 for the 1894). It isn't a remarkably interesting date but it is extremely rare in higher grades (PCGS has never graded an MS65 and only four have been graded MS64 by this service; in MS62 they have graded 261) and there is a big price jump between MS62 (current Trends is $865) and MS63 (current Trends is $2,500). Given the fact that the 1883 is, in theory, around twenty to thirty times rarer than the base line 1894 in MS62, it seems that its current $100-150 premium in this grade is pretty reasonable.

Let's look at another date, the 1900-S. I have always liked this date and think its a real "sleeper" in higher grades. PCGS has a current population of 31 in MS62 with just 16 better than this including a single coin above MS64. Given this coin's relative scarcity in Uncirculated, you'd figure it would have a pretty decent premium above the 1894, right? In MS62, current Trends is $1,100 (it jumps to a comparatively high $5,650 in MS63) and I have purchased examples in the last year for around $1,000. Now I understand that an MS62 1900-S eagle isn't going to be the Poster Child for U.S. gold coins anytime soon but it seems like awfully good value to me, given that a common, boring old 1894 in MS62 is worth around $750.

How about a date that actually has a degree of collector demand? Let's take a quick look at the 1901-O. It is one of the more available New Orleans eagles in higher grades but it has the appeal of being from a popular southern branch mint. The current PCGS population is 103 in MS62 with 61 better including just a single coin above MS64. I doubt if more than 125-150 properly graded MS62 examples exist yet current Trends is just $865 in MS62 (it jumps to $2,750 in MS63). Given the fact that a 1901-O eagle in MS62 is popular, reasonably scarce in this grade and is probably not a bad looking coin at this grade level, its very small premium above the common 1894 is fairly baffling to me.

What if someone were to promote the 1901-O in MS62? Given the fact that a year's worth of quiet, under-the-radar buying would probably only produce 40-50 coins, it hardly seems worth the effort. That said, it seems like an easy coin to promote up to the $1,250-1,500 level in MS62.

What are some of the MS62 Liberty Head eagles that I would recommend as good double-play issues? Some of the dates I like include the 1879, 1882-S, 1884, 1884-S, 1886, 1890, 1893-O, 1894-O, 1895-O, 1897-O, 1899-O, 1900-S, 1906-O, 1906-S and 1907-S.

The second type of U.S. gold coin that offers double play potential is the Type Two double eagle. But this series is different than the With Motto eagles that we discussed above. Type Two double eagles are more popular with collectors and they tend to be be rare to very rare in Uncirculated grades.

The base line issue for this type is the 1873 Open 3. It has an original mintage figure of over 1,000,000 and a high survival rate with probably more than 10,000 coins known in all grades. PCGS shows a current overall population of 4,027 of which 1,356 have been graded from AU50 to AU58.

The trading levels for AU55 to MS60 1873 Open 3 double eagles are as follows:

AU55: 1400-1500 AU58: 1500-1600 MS60: 1650-1750+

Let's look at two slightly better dates and see if the double play concept makes sense. The first is the 1867. This is a relatively popular issue with collectors that has an original mintage of just over 250,000. PCGS has graded 304 in all grades of which 131 are in the various AU grades and another 24 are in MS60. In grades above MS61 to MS62, the 1867 is extremely scarce, so nice AU's tend to be popular with specialists in the series.

The current Trends levels for the 1867 are $2,000 in AU55, $2,500 in AU58 and $4,000 in MS60. The premium in MS60 is high enough that it is not a good double-play issue. But in AU55, the premium is fairly low over the base line 1873 Open 3. My conclusion is that a nice AU55 to AU58 1867 double eagle in the $2,000-2,250 range is a great value for the double play investor-collector.

The second date is the 1872-S. This is a date that is regarded as semi-common; not quite at the level of the base line of the 1873 Open 3 but certainly nowhere as scarce as such earlier San Francisco issues as the 1866-S, 1867-S, 1869-S or 1870-S.

The mintage figure for the 1872-S is 720,000. The survival rate is quite low as most were melted over the years and I doubt if more than 2,500 pieces exist. PCGS has graded 551 in all grades including 343 in About Uncirculated. To give you an idea of this coin's rarity in higher grades, of the 52 that PCGS has graded in Uncirculated, only four are better than MS61 and none are higher than MS62.

You can buy a nice 1872-S in AU58 for around $2,000-2,250. As I mentioned above the base line for an AU58 Type Two double eagle is in the $1,500-1,600 range.

The Type Two double eagles in AU grades that I feel are good double play issues include the 1867, 1868-S, 1869, 1869-S, 1870-S, 1871, 1871-S, 1872, 1872-S and 1873-S Open 3.

The double play strategy may or may not prove to be fruitful for the hyrbrid investor-collector. But with the premiums for genuinely scarce issues like the ones mentioned above at very low levels (some of the lowest premiums that I can remeber, in fact) I think it is a strategy with minimal downside.

The Best Values in Todays Rare Coin Market

There are many issues that face collectors in the coin market of 2010. A lack of quality coins is driving many collectors to seek new areas of specialization. Both PCGS and NGC have recently added “plus” grades which will no doubt change certain areas of the market as well. More than ever, collectors are gravitating towards areas that offer value. The days of new collectors and uninformed wealthy investors arbitrarily throwing money at plastic rarities are over and we appear to be back to a collector-oriented market. So what are some of the areas in this new market that offer the best value to collectors? I have chosen three price ranges ($1,000-5,000; $5,000-10,000 and $10,000 and up) and included some of the series and/or types that I feel are especially good values. Some are currently popular; some are not. What I have tried to focus on are coins that are actually available in some quantity and issues that I gladly buy to put into my own inventory when they are available.

1. $1,000-5,000

a) Gold Dollars, 1865-1872: The eight year run of gold dollars produced at the Philadelphia mint from 1865 through 1872 doesn’t include any real rarities but nearly all of these coins are scarce and undervalued in MS63 to MS64 grades. Most are priced in the area of $1,500-2,000 in MS63 and $2,000 to $3,000 in MS64 (the 1865 is rarer and more expensive in both grades) and they seem like good value to me. Take the 1872 as an example. Just 3,500 business strikes were made and only a few hundred exist in all grades. In MS64 this coin is worth around $3,000 yet it might take me months to find a decent example in this grade. Yes, gold dollars are small but this is a very collectible series and one with a number of really undervalued issues.

b) Classic Head Quarter Eagles: I’m a big fan of this series in properly graded AU55 to MS62 grades. Note that I stress properly graded as many of the coins that I see are either low end or unappealing due to having been processed. The Philadelphia issues, with the exception of the rare and much undervalued 1839, are affordable in this grade range with pieces valued at $1,750 or so at the lower end and around $5,000 at the higher end. The mintmarked coins are, of course, far more expensive and are not necessarily “good values” although I am an avid buyer of any mintmarked Classic Head quarter eagle in EF40 and better that is choice and original. For collectors at the lower end of this budget range, a nice set of About Uncirculated Classic Head Philadelphia quarter eagles is a fun and challenging endeavor.

c) Three Dollar Gold Pieces: After a few years of collector and investor popularity, this series has recently gone quiet. I don’t necessarily believe that all three dollar gold pieces are good value. In fact, I feel that some formerly undervalued issues are now marginal value at best (primarily due to the fact that many are grossly overgraded and have absolutely no eye appeal). What I do like about this series is that prices are actually down versus where they were five to seven years ago; which is pretty remarkable when one considers that gold has essentially doubled in price since then. Given the lack of collector interest, a new collector can buy PQ quality three dollar gold pieces for a very small premium right now. There are many coins on the market and with some patience, a really nice partial set of Threes could be assembled. The dates I still regard as undervalued include the 1858, 1862, 1864, 1870-72 and the ultra-low mintage issues from the 1880’s.

d) No Motto Half Eagles and Eagles: In the $1,000-5,000 range there are few areas in the United States gold coin market that offer better value than No Motto half eagles from the Philadelphia mint in the higher About Uncirculated grades. As an example, I frequently sell very nice common date AU58 half eagles from the 1840’s for under $750. That might not seem like a big thing until you consider that an ultra common With Motto half eagle in AU58 is worth $350 or so. In the case of the eagles from this era, many of the common date issues from the 1840’s are still available in nice AU58 for less than $1,500. I love the idea of a large size, visually attractive U.S. gold coin that was made well before the Civil War being highly affordable.

e) Crusty Original Charlotte and Dahlonega Quarter Eagles and Half Eagles in Extremely Fine: It will be very interesting to see what percentage of Charlotte and Dahlonega quarter eagles and half eagles receive a “plus” designation from PCGS and NGC in the coming years. If they are strict with their standards I believe that the number could be as low as 10-15% of the total submissions. As someone who is a strong buyer of nice, affordable branch mint gold I can tell you that choice, original pieces with natural color and surfaces have become exceptionally hard to locate. You can still buy nice Extremely Fine Charlotte and Dahlonega quarter eagles and half eagles in EF40 and EF45 for less than $3,000. I think these are wonderful values given their history and rarity.

2. $5,000-10,000

a) Early Half Eagles in Choice, Original About Uncirculated: Given the fact that early half eagles have doubled in price in the last five to seven years, I’m not certain that calling them “undervalued” is the right term. But even at current levels, I like the values that Bust Right (1795-1807) and Bust Left (1807-1812) half eagles offer in the higher AU grades. These are exceptionally historic issues and they are instantly appealing to virtually any new collector or investor who has the resources to afford them. These individuals might not want to assemble a date set of Bust Left half eagles but at $9,000-11,000+ for a high quality About Uncirculated example it is likely that these will become a centerpiece of any new collection. As with the Extremely Fine C+D coins I mentioned above, it will be interesting to see what percentage of early half eagles are given a plus designation by PCGS and NGC.

b) Affordable Uncirculated Dahlonega Half Eagles: If I had to choose the quintessential Dahlonega gold coin for the new collector, I’d select something like an 1847-D or 1853-D half eagle in properly graded MS61 to MS62. These coins are big, rare, attractive and reasonably priced at less than $10,000. What’s even more interesting about coins like this is that they are priced at essentially the same level as they were in the late 1990’s/early 2000’s. Yes, gradeflation has pushed many AU58 coins into MS61 and MS62 holders. But the popularity of Dahlonega half eagles is as high in 2010 as at any point I can remember. If you can locate a few CAC or “plus quality” Dahlonega half eagles in MS61 to MS62 at today’s levels, I’d suggest that you jump on them.

c) No Motto Half Eagles and Eagles in MS62: MS62 is the “sweet spot” for most No Motto gold. The coins in MS60 to MS61 holder are often questionable as to their “newness” but most MS62 gold from this era tends to have a pretty nice overall appearance. What’s most interesting about this grade is its price point. Take, for example, a common No Motto half eagle like the 1847. In MS62 it can be purchased for around $3,000. In MS63, the same issue is going to run at least $6,000. In the eagle series, the price differences are more extreme. An 1847 eagle in MS62 is a $7,500 coin but in MS63, if available, it could cost $20,000 or more. I believe that more collectors will begin to focus on high quality No Motto gold from the 1840’s and 1850’s in the near future and there are still many issues that a $5,000-10,000 per coin budget can secure a piece that is not that far removed from the Condition Census.

d) Type Two Liberty Head Double Eagles: The Type Two series has sort of fallen through the cracks in recent years. Type One double eagles are remarkably popular with collectors and the Type Three series seems to be an area that is a marketer’s delight right now. That has left the Type Two series as a sort of void. There are two areas in this market that I currently like as good values. The first are the scarcer date Philadelphia issues from 1866 to 1872 in About Uncirculated and above. The second are choice, original common dates in MS62 to MS63. The scarce Philadelphia issues have retained most of their value despite not having promoted in the last few years; imagine what an influx of new collectors might do to prices for these coins. Common dates in MS62 and MS63 are scarce and have dropped quite a bit in price from their highs of a few years ago. At $3,500-4,000 for a choice MS62 and $11,000-13,000 for a nice MS63 I like the value that these offer as type coins.

3. $10,000-25,000

1. Capped Head Quarter Eagles: In this price range, it is hard to beat the Capped Head quarter eagles (produced between 1829 and 1834) for value. All of these issues were produced in limited quantity and even the most “common” date (the 1829) has considerably fewer known than the early half eagles and eagles in this price range. After the market highs of 2006 and 2007, prices on Capped Head quarter eagles have dropped around 15-20% but few pieces have been available at the new lower levels. I especially like choice, original examples that grade between AU55 and MS62. In this grade range you are typically getting an aesthetically appealing coin. A nice About Uncirculated pieces will cost in the mid-teens while an MS62 that is properly graded will run in the low to mid 20’s. The “sleeper” date in this series is the 1833 while the 1832 is tougher than many people realize as well.

2. Classic Head Half Eagles in MS63 and MS64. I’ve already mentioned Classic Head quarter eagles in the first part of this article. I also like high grade Classic Head half eagles. In MS63 and MS64 this type is scarce and when these coins are nice they typically have great cosmetic appeal with lovely coloration and surfaces. Classic Head half eagles were made from 1834 to 1838. The commonest issues are the 1834 Plain 4 and the 1835. If you’d like an example of this design for type purposes, you are very likely going to buy an 1834 or an 1835 but the 1836 and 1838 are much scarcer and priced at just a 10-20% premium in the MS63 to MS64 range. Current price levels are around $11,000-12,000 for a nice MS63 and $18,000-20,000 for a nice MS64. Considering that a full Gem MS65, if available, will run around $60,000-65,000+, I think these MS63 and MS64 examples offer really good value.

3. Condition Census No Motto Issues: This area is a pretty narrow focus, I admit, but I think some of the best values in the entire coin market are in the $10,000-25,000+ Condition Census quality No Motto issues. This includes half eagles and eagles produced in the 1839-1866 era. I would throw the quarter eagles from this era into the mix as well. If you can find them, very high grade (in this case MS63 and higher) Philadelphia gold coins from the 1840’s and 1850’s seem like the best values in this area. The coins tend to be very well made, very attractive and genuinely rare in this grade. Given the fact that there are not many date collectors of these coins, they need to be viewed more as type issues. But it is hard to argue with their rarity in high grades, especially due to the fact that most smaller denomination Philadelphia gold coins struck prior to the Civil War are unknown in Gem and excessively rare even in MS64.

Some Thoughts on PCGS’ New Secure Plus Program

PCGS recently released the details on their new Secure Plus program. Instead of summarizing it here, I’d suggest that your go to their website and play the video link that will explain their interpretation of the new program. I’d like to share with you some of my thoughts and feelings about it. You can essentially split this new program down the middle and look at it as two distinct facets. To me, the “Secure” aspect is a no-brainer. In a nutshell, PCGS has basically harnessed the technology that will enable them to make a record of all the coins that are submitted to them under this new program. They claim it will end coin doctoring and stop gradeflation in its tracks.

As someone who has been pretty public in his disgust with coin doctoring for many years, I’m glad that PCGS is instituting this program. By the same token, it seems sad to me that a) this had to happen and b) that it took as long as it did. In some areas of the market, there are barely any “original” coins left. PCGS’ step is sort of like making a decision to preserve Bison in 1937: great idea but a little late in coming.

I have always partially attributed coin doctoring, to some degree at least, on PCGS and NGC. If these services had rewarded originality from the beginning and had been really, truly consistent this would have eliminated a lot of the doctoring that has occurred for the last twenty+ years. In the area that I specialize in, United States gold produced from 1795 to 1900, “bright and shiny” has always trumped “dark and crusty.” The irony here is that, finally, dark and crusty is becoming in style. After decades of coins being dipped, dunked, doctored and debilitated (catchy, no?) the coins with character that many people want are exceptionally hard to find.

While PCGS is not really publicizing this, I think the security aspect will be very important in their future efforts to fight counterfeit coins and holders coming in from China. I can’t possibly imagine that some clever guy in Shanghai isn’t already coming up with remarkably good quality early type coins or better date dollars. All it takes is a good distribution system for these to flood the market and by PCGS making it harder for these coins to make it through, that has to be a big positive.

One thing I am a little baffled about is what are we to make of the millions and millions of coins already graded by PCGS? Obviously, the nicest coins are going to be placed into the new Secure Plus holders. But what about the 1% or 2% of the coins that are outright mistakes? What about the coins that people, for whatever reason, decide not to resubmit/regrade? This is going to create a number of secondary markets and it will be certain to cause confusion.

The “Plus” aspect of this new PCGS service is more controversial, in my opinion. What the plus grades will do is to take an area that is already subjective and make them even more so. Now this isn’t necessarily a bad thing. PCGS is essentially decimalizing grading (a subject that I wrote about a number of years ago) and this is something that I believe that very good graders can do. But it puts a lot of pressure on PCGS (and NGC’s) graders to be very consistent and very accurate. Will a PCGS grader who is rushing through a cart full of coins to grade be able to figure whether an early type coin is a 63.8 and follow this coin up with a Saint that he has to determine if it’s a 65.8? It can be done but not easily.

The pricing of Plus coins is going to be very interesting. I’ve written extensively on how broken the price reporting mechanism in the coin market is and how badly it needs to be fixed. So, if we can’t accurately get the value for an MS63 Charlotte half eagle, how are we going to get the value for a 63+? And how consistently graded will the Plus coins be? Will one MS63+ Charlotte half eagle be a 63.7 while another is a 63.9? PCGS expects there to be sight-unseen trading for these coins so I’m hoping they will be graded with enough consistency for this to occur.

Getting back to the pricing issue for a second, it will be very interesting to see how the market values Plus coins in split grades where there is a huge difference in values. As an example, a common date Indian Head half eagle in MS64 is worth around $3,500. An MS65 is worth around $15,000. What does that make a 64+ worth? $4,000? $6,000? 9,000? Until there have been a few hundred Indian Head half eagles graded 64+ by PCGS and they’ve traded I’m not sure that will be a good answer.

It’s been sort of lost in the hype that NGC is working on a plan of their own. I am pleased that NGC is adopting the same plus system that PCGS is. Can you imagine how confusing it would be to have two different grading services using two different grading standards?

I’ve seen a lot of changes in the rare coin market in the last few decades and, for the most part, I’ve been an early adapter to those changes that I liked and believed in. I’m taking a bit of a wait and see approach with PCGS’ new system; mainly because I’d like to see a significant number of newly-graded coins. If I like the system, I will become an enthusiastic convert. But from what I can tell so far, these changes are being done with good intentions and they are destined to have a major impact in 2010 and beyond.

Are Auction Prices Wholesale or Retail?

Until a few years ago, the vast majority of coins that sold at auction were purchased by dealers. It was a safe bet to say that the prices realized at auctions were wholesale and collectors could assume that they would typically pay 10-20% more than what coins were selling for at auction. But this has all changed. One of the key elements to Heritage's rousing success in the coin auction business has been to make sales more collector-friendly. Today, a sizable amount of the coins that sell at auction are going directly to collectors. So, are auction prices now representative of the wholesale or retail markets? The answer is not as easy as you might think...

The answer is actually, as you might have, guessed, "answers." Nothing in the coin market is cut and dry anymore and the new auction market and the prices that coins fetch in an auction conducted in 2010 can have a broad range.

The first thing that has to be analyzed is what coin is being sold. If it's something that's extremely collector-friendly (like a rare date Type One Liberty Head double eagle) the price realized is likely to represent a retail level as it is likely to have been sold to a collector. If it's a widget or a low-end coin that sells cheaply we can assume that a bottom-feeder dealer bought it and the price it brought is clearly at the wholesale level.

The next thing that has to be gauged is the quality of the sale itself. One of the most amazing things about the Bass sales, in my opinion, was the fact that virtually all the coins were bought by dealers. If the Bass sales were to be held today (and conducted by a technologically savvy firm like Heritage) I would venture to guess that over 50% of the coins would be sold for retail as opposed to wholesale prices.

Is the coin in an auction a grading play? (In other words, is it an AU58 in an older holder that would upgrade to MS61 to MS62?) In this case it is a virtual certainty that the coin sold to a dealer. But there is an immediate asterisk that must be applied to the sales price. If the coin is worth $5,000 in AU58 and $13,000 in MS62, it is highly possible that at least two ramblin' gamblin' dealers would pay $10,000-11,000 for the coin. In such an instance, the collector needs to be careful not to assume that just because one AU58 coin sold at auction for $10,000-11,000, the next one(s) will as well.

Auction records are most useful when they occur with some degree of frequency (two or three examples per year) and when any anomalies can be discarded.

Let's say, for example, that a certain Charlotte quarter eagle in AU55 has sold at auction five times since 2007. The prices realized have been $3,500, $3,750, $2,650, $8,000 and $4,000. We can pretty much immediately boot the $8,000 auction record as we can assume that this was a severely under-graded coin with a large spread to the next highest grade(s). We can also boot the $2,650 record as this may have been for an extremely low end coin or it may have been in a "bloodbath" auction that, for a host of reasons, saw very low overall prices in specific areas of the market. This leaves us with three prices: $3,500, $3,750 and $4,000. A quick assumption can now be made that this AU55 Charlotte quarter eagle has a value in the range of $3,500 to $4,000. Another way of looking at this is that the wholesale value might be $3,500 while the retail value might be $4,000.

I have a theory that auction firms give collectors just enough information to do damage to themselves. They provide an archive of auction prices which show what coins have sold for and with a little bit of digging, the collector can determine if the coin sold on the floor, over the phone or to an Internet bidder. But unless someone really follows the market carefully, all of this "information" can do little more than serve as an easy way for the neophyte to make major mistakes. I have long said that hiring an auction representative for 5% is far and away the best value in all of numismatics. This fee (which amount to a whopping $250 on a $5,000 coin) is a small price to pay to have a specialist explain to you why a certain auction record is valid or not valid.

So 700+ words later, I'm back to my basic question: are auction prices wholesale or retail? As you can plainly see, there is no quick answer to this and I urge collectors, new or experienced, not to be lulled into a false sense of security based on what seems like unquestionable information.

America's Forgotten Rarities: The 1842 Quarter Eagle

In the second part of this series on coins that I believe are truly rare but not fully appreciated I am turning my focus on an issue that is very interesting to me: the 1842 quarter eagle. 1842 is, in general, an interesting year for quarter eagles. Four mints produced these coins: Philadelphia, New Orleans, Charlotte and Dahlonega. The mintage figures ranged from a low of 2,823 at Philadelphia to a high of 19,800 at New Orleans. With the exception of the 1842-O, all four are quite scarce in any grade and each is very rare in high grades.

Although it is not the most highly valued quarter eagle dated 1842 (that honor goes to the 1842-D), the 1842 is the rarest, both in terms of overall and high grade rarity. There are an estimated 35-45 known in all grades with most in the Very Fine to Extremely Fine range. I believe that there are six to eight in properly graded About Uncirculated and I think this date is unique in Uncirculated.

The most recent PCGS/NGC population figures show a combined total of fifty graded. This includes two in Uncirculated (more on these in a moment...) and eighteen in About Uncirculated. The population figures are, as usual, inflated, especially the AU coins listed by NGC.

This is generally a well made issue which shows good overall detail at the centers and borders. The luster tends to be semi-reflective but most 1842 quarter eagles are either worn to the point that they show no luster or they have been stripped and display little if any original surface. Most of the pieces I have seen have been abraded and at least a few are either damaged from having been scratched or show evidence of rim filing. The natural coloration is a bright yellow gold.

The finest known 1842 quarter eagle is a piece in a Midwestern collection that has been graded MS62 by PCGS. It first came to the market as Superior 9/99: 1863. I bought it for $31,050 and immediately sold it to a collector in Nevada. A few years later, when I handled the sale of his collection, I placed it privately with the Midwestern collection referenced above.

A few quick words about this PCGS MS62 1842 quarter eagle. I think this is one of the truly great Liberty Head quarter eagles of any date. No, its not a Gem. But it is so head and shoulders better than the next finest piece that it is an unbelievably important coin and certainly one of the less well-known but really significant pieces known from this era. Not to mention the fact that it is choice, original and very attractive as well.

There are two nice AU 1842 quarter eagles that come to mind. The first is ex Bass II: 340 where it was graded AU55 by PCGS and it sold for $13,800. I known that this coin subsequently upgraded to AU58 when it was sent to NGC; I am not aware what its current grade is. The other is ex Pittman II: 1736 where it was conservatively graded "XF" by David Akers. It sold for $12,100 and was later graded AU58 by NGC.

I believe that this date is extremely undervalued. The most recent Trends prices are $3,250 in EF40, $5,000 in EF45, $6,250 in AU50 and $10,000 in AU55. As befits a coin of this rarity in high grades, there is no published valuation over AU55.

A quick check of my records shows that I have handled a whopping three 1842 quarter eagles in the last five years with the most recent being a PCGS EF45 that I sold a few months ago to an advanced collector.

I doubt if this date will ever get the attention it deserves. Its a quarter eagle, its a Philadelphia issue and its too rare to ever promote. That said, the 1842 quarter eagle is a coin that I have great respect for.

America's Forgotten Rarities: The 1863 Eagle

Beginning with this article, I'm going to focus, from time to time, on issues that I regard as "forgotten rarities." These are coins that are truly rare but which, for a variety of reasons, do not get the fanfare that they deserve. I plan on featuring a selected gold rarity once every month or so. The first issue that I want to discuss is the 1863 eagle. I'm going to try to avoid "condition rarity" issues in this series. In other words, I'm featuring coins that are rare in the most absolute sense of the word. And I think the 1863 eagle has this concept of rarity absolutely nailed.

There were only 1,218 eagles produced at the Philadelphia mint in 1863. For all denominations other than the double eagle, mintages were extremely low this year, which makes sense given the economic conditions of the Civil War (at the beginning of the year it was still not readily known if the Union forces would prevail). The low mintage of this issue, combined with a generally low survival rate for gold coins of this era, meant that the 1863 eagle was a rarity from the time it was struck.

I regard the 1863 as the third rarest business strike issue in this entire series, trailing only the 1875 and the 1864-S. I believe that there are around 30-35 known in all grades. As of March 2010, the combined total of coins graded at PCGS and NGC was 37 but this figure is clearly inflated by resubmissions; NGC, as an example, shows eight coins alone in AU58.

The surviving examples tend to be in the VF-EF grade range. Eagles of this era were clearly used in commerce and those that were not later melted tend to show numerous abrasions and signs of rough handling. I can't recall having seen more than three to five 1863 eagles that had original color and reasonably clean surfaces. Many have been cleaned or processed and properly graded AU examples are very rare.

Since 2000, there have been only six auction records for 1863 eagles that have not been damaged, harshly cleaned or ungradable by PCGS and NGC. The most recent record of note was Heritage 1/05: 30496, graded AU58 by NGC, that realized $28,750. This coin was not choice for the grade, in my opinion, yet it was still a bargain given its rarity and comparatively high degree of preservation.

The finest known 1863 eagle is a coin that has been graded MS63 by both PCGS and NGC and it appears in both firms population reports as such. The coin was last sold as Bass IV: 683 for $52,900 in 2000. Harry Bass purchased it out of the 8/91 Mid American sale where he paid a then-strong $104,500. It is one of the very few coins in the Bass collection that was sold at a significant loss and, in retrospect, it was one of the single best values in any of the four Bass sales conducted between 1999 and 2000.

There is a second Uncirculated 1863 eagle. It has been graded MS62 by NGC and it was uncovered in the treasure of the S.S Republic.

The valuation of the 1863 eagle is way off the mark, in my opinion. The most recent Trends shows values of $9,000 in EF40, $12,000 in EF45, $17,500 in AU50, $25,000 in AU55 and $32,500 in AU58. Given the paucity of recent trades, it is hard to state with certainty exactly what this issue is worth. But it seems to me that $12,000 for an EF45 example of a coin as rare as this is very good value, especially when compared to other less rare eagles of this era.

One of the ways that I can determine the true rarity of a coin is by how many that I have handled in the last few years. After checking my records, I see that I have not handled an 1863 eagle since 2005 and I've only had a total of two in the last dozen years. Considering the fact that I've handled probably a dozen 1870-CC eagles in the last decade (if not more), this shows me that the 1863 eagle is an incredible rarity.

I'd love your suggestions about which gold coins are "forgotten rarities." If you have any suggestions for future pieces in this series please email them to me at dwn@ont.com.

Value Compression: A New Trend in the Dated Gold Market

In the past few years, I've noticed an interesting trend in relation to the pricing of rare date gold coins. I refer to this as "value compression." Let me explain what I mean. When I mention this term I am referring to a small price premium between grades. The classic value-compressed issues have long been the Iowa and Roanoke commemorative half dollars. According to the most recent CDN Greysheet , the difference in value between an MS60 and MS65 Iowa half dollar is a whopping $12 (!) while a Roanoke shows a value increase of just $70 between MS60 and MS65.

This phenomenon has begun creeping into the United States gold market as well. Areas which appear susceptible to value compression include common date St. Gaudens double eagles, gold dollars, lower grade Carson City double eagles and early gold in the EF45 to AU55 grade range.

Why do values compress in certain series? The most basic explanation has to do with current grading standards and appearance; a secondary reason is based on the actual design and size of a coin.

As an example, an 1851-C gold dollar is a $1,250-1,350 in EF45 in today's market. In AU53 it is worth in the area of $1,500-1,600. Why is there such a small difference for what should be a pretty hefty increase in grade? This is mainly due to the way that these coins are now graded. There is no longer much aesthetic difference between an EF45 and an AU53 gold dollar and the market recognizes this by compressing the price spread between these two grades. In the case of the 1851-C dollar, the value is even more compressed between an AU50 and an AU53 or an AU53 and AU55. Simply put, if a collector can see no discernible difference between two grades, then why pay a premium.

In no series is this compression more evident than with common date St. Gaudens double eagles. If you take a random sample of freshly graded MS62 coins and freshly graded MS64's, there is probably going to be little difference. In fact, the 62's might even be nicer than the 64's. This inconsistency of grade is why an MS62 is currently worth $1,450 and an MS64 is worth just $1,600. Back in the days when there was an appreciable difference between the two grades, there was an appreciable price difference.

I mentioned above that there were other reasons besides current grading conditions that influenced value compression. Two of these are a coin's size and a coin's design. Small coins are hard to see and harder to appreciate differences in quality. It makes sense that gold dollars, as an example, are a series in which values are likely to become more and more compressed as collectors become older and less likely to be able to see a small mark in the obverse field or a tiny reverse dig. Certain coins have designs which makes subtle grading differences very hard to detect. The Iowa and Roanoke half dollars have extremely busy designs which make it hard to detect marks. An example of a gold type with a "complicated" design is an Indian quarter eagle. There are still fairly good-sized price spreads between grades in this series (especially in MS63 to MS64, MS64 to MS65 and MS65 to MS66) but the spreads between lower Mint State coins are small and getting smaller.

I mentioned two other areas that are showing value compression: lower grade Carson City double eagles and early gold. These are interesting case studies for two different reasons.

For an 1875-CC double eagle, the current Trends values for lower grade coins are as follows: VF20 is $1,750, EF40 is $1,850, EF45 is $2,000 and AU50 is $2,250. Think about this: only a $500 spread between a VF20 and an AU50! No matter how sloppy grading gets, there will always be an appreciable difference between the VF20 and the AU50; certainly enough to justify paying an extra $500 for the higher quality coin. I think the value compression is related to two factors. The first is that Trends is behind the market on CC double eagles. The second is that the collector base for an 1875-CC tends to favor an EF or AU coin and shies away from the VF, making for a small demand factor for the low end coin.

Early gold is a bit more interesting to look at. I recently purchased an 1805 half eagle in an old green label PCGS AU50 holder. It was a lovely coin with original color and surfaces and a "lock" AU55 in today's environment. I had to pay $9,250; a strong price but one that I was comfortable. If I broke the coin out of its old holder and it regraded AU55 it would have been worth around $9,500-10,000. Which basically meant that I had around $250-500 upside. My ultimate decision? I left it in the old holder and sold it "as is" for $9,750.

Why are the values of early gold becoming so compressed? I'd have to say its a function of inconsistent grading, especially in the AU grade range. I often see recently graded AU50 or AU53 Capped Bust Right and Capped Bust Left half eagles that appear essentially no different to me than coins in AU55 and AU58 holders. Clearly, other players in this market agree with me and they have adjusted their buy levels up for nice AU coins and down for schlocky ones. Others areas in the early gold market that appear to have the same thing happening are small size Capped Head Left quarter eagles (1829-1833 issues) and Capped Bust right eagles (1799-1803 issues). In the case of the former its a size and design issue; in the case of the latter its clearly a function of grading standards.

My guess is that for the time being you'll see more and more value compression and in some areas that formerly seemed "uncompressable." I already note areas like Charlotte and Dahlonega half eagles where I'll pay more for a really nice crusty EF45 common date than I will for the same issue in scrubbed-up, ugly AU50.

Philadelphia No Motto Half Eagles From the 1840’s: A Date by Date Analysis

The Philadelphia mint began producing the familiar Liberty Head half eagle design in 1839. After a quick modification in 1840, this issue continued without change until 1866 when the motto IN GOD WE TRUST was added to the reverse. The branch mint No Motto half eagles from the 1840’s are very popular with collectors. But their Philadelphia counterparts have lagged behind, both in price and level of demand. I would not be surprised to see this change a bit over the coming years given the fact that the Philadelphia issues are much more affordable and a complete “by decade” set from the 1840’s is within the budget of most gold coin collectors.

Here is a date by date analysis of the Philadelphia half eagles from the 1840’s, to assist new collectors.

1840: Mintage: 137,822. This is one of the more common issues from this decade. There an estimated 400-500+ known and they are easily located in all circulated grades. In Uncirculated, the 1840 is scarce. I believe that there are around fifteen to twenty known with most in the MS60 to MS62 range. There is one Gem. It is originally ex Pittman I: 947 where it brought $41,250 as a raw coin. It last appeared as Heritage 2/06: 1853 where it sold for $43,125. It has been graded MS65 by both PCGS and NGC.

There are two varieties known. The more common has a Narrow Mill (or diameter) while the scarcer has a Broad Mill. The Broad Mill variety seems to be considerably harder to find in higher grades, especially in Uncirculated. The Broad Mill has an extremely distinct appearance and it is much easier to distinguish from the Narrow Mill than on the New Orleans and Dahlonega issues of this year.

1841: Mintage: 15,833. The number of half eagles produced at the Philadelphia mint in 1841 is the fewest of the decade. This is the second scarcest date in this subset but it has an interesting grade distribution. There are an estimated 125-150 known and this issue is generally seen in Extremely Fine or in the MS62 to MS64 range.

There was a hoard of 1841 half eagles that was found a few decades ago. Most are in the MS63 to MS64 range and are characterized by sharp strikes, excellent luster and rich golden coloration. I have personally seen at least four MS64 examples and believe that there are a few more known. In all, probably 10 to 15 exist in Uncirculated. The finest is Bowers and Merena 12/04: 2635, graded MS65 by NGC, which sold for a record-setting $27,600. PCGS has not graded any pieces higher than MS64 and their current listing of eight examples is certainly inflated by resubmissions.

1842: Mintage: 27,432. The 1842 is far and away the scarcest Philadelphia half eagle from this decade and it is an issue that is comparable in rarity to all but a handful of the branch mint half eagles from this era. There are two distinct varieties known: the Small Letters and the Large Letters.

Small Letters: This is the rarer of the two 1842 half eagles and it is by far the hardest coin to find in the Philadelphia half eagle series from the 1840’s. I regard it as one of the most underrated coins in the whole Liberty Head half eagle series. There are probably not more than fifty or so known with most in the VF to EF range. I doubt if more than ten exist in About Uncirculated. In Uncirculated, I am aware of just one piece, the Pittman I: 957 coin (which sold for a relatively cheap $17,600 back in 1997). I believe it appears as both an MS63 and an MS64 in the PCGS Population Report.

Large Letters: This is the more available of the two varieties but it is still a very scarce coin in all grades. There are as many as 75-100 extant with most in the VF to EF range. Properly graded AU examples are quite rare with probably no more than fifteen known. This variety is very rare in AU55 to AU58 and it appears to be unique in Uncirculated. The finest known is ex Milas: 442 and it is currently in a PCGS MS66 (it was once graded MS65 by PCGS). This is one of those “how the heck does that actually exist” coins and I would have to think it would be a six-figure item today if it came onto the market.

1843: Mintage: 611,205. Beginning with this issue, the half eagle mintage figures from Philadelphia increased dramatically and this denomination became a workhorse issue in commerce. The 1843 is actually a bit scarcer than its large mintage figure would suggest. There are at least 750-1000+ in all grades; possibly quite a bit more when one factors in low-quality or damaged pieces. In all circulated grades this date is easily available although choice, original AU58’s are becoming harder to find. In Uncirculated there are an estimated three dozen known. I have never seen a Gem and just two or three that I regard as MS64. The highest graded is an NGC MS65 that sold as Lot 3380 in the Goldberg 9/09 auction for $25,300. The nicest I can recall was the Milas coin.

This issue has a distinctive appearance with most displaying frosty luster which is typically interrupted by extensive surface abrasions. The natural coloration ranges from deep orange-gold to a medium green-gold shade. Most are well struck and well produced.

1844: Mintage: 340,330. This is a scarcer date than the 1843, which makes sense given its smaller mintage. There are at least 500-750+ in all grades but, as with all of these higher mintage issues from the 1840’s, there might be hoards overseas or large numbers of lower grade coins of which I am not aware. The 1844 is relatively available in Uncirculated with around three to four dozen known; mostly in the MS60 to MS62 range. This date is scarce in MS63, very rare in MS64 and exceedingly rare in Gem. By far the best I have seen is Stack’s 5/05: 1692, graded MS65 by PCGS, which brought $50,025. That coin, by the way, is one of the two or three best No Motto half eagles of any date that I am aware.

The 1844 half eagle is a well produced issue that can be found with excellent frosty luster, attractive rich green-gold color and a nice, sharp strike. Some pieces have excessive marks on the surfaces but the patient collector should be able to locate a really nice piece at an affordable price.

1845: Mintage: 417,099. The 1845 is similar in overall rarity to the 1844. There are an estimated 500-750+. This is a more common date in higher grades than the 1844 with as many as four to five dozen extant in Uncirculated. Most grade in the MS60 to MS62 range. This is a rare issue in properly graded MS63 and an extremely rare one in MS64 with perhaps as few as four or five known. I am not aware of any Gem 1845 half eagles. The two best that I can recall seeing are Bass II: 943, graded MS64 by PCGS, which sold for $16,100 in October 1999 and Milas: 458, graded MS64 by NGC, which sold for $17,100 all the way back in October 1995.

This is another issue that is generally seen well made. Higher grade examples can show excellent thick, frosty luster and the natural coloration is often a very handsome medium to deep greenish-gold or canary yellow-gold.

1846: Mintage: 395,942. In my experience, the 1846 is a tougher date than the 1843, 1844 or 1845. It is typically seen in lower grades than these other three issues and it is quite a bit scarcer in higher grades. There are around 500-700+ known. Two major varieties exist.

Large Date: This is by far the more common of the two varieties. It is common in VF and EF grades and only slightly scarce in the lower AU range. It becomes fairly scarce in AU58 and it is rare in Uncirculated. I have never personally seen one better than MS63 and only one or two in this grade. There are a number of MS63 and MS64 examples from the S.S. New York which have seawater surfaces.

Small Date: This is the scarcer of the two varieties. It has only been recognized by PCGS for a few years so the population figures are a bit on the low side. I think it is at least two to three times scarcer than the Large Date in circulated grades and much scarcer in Uncirculated. The highest graded 1846 Small Date is Stack’s 7/08: 2068, graded MS63 by NGC. It is from the S.S. New York and has sweater surfaces. It sold for $18,975.

1847: Mintage: 915,981. The 1847 is the most common Philadelphia No Motto half eagle from the 1840’s by a fairly considerable margin. There are at least 1,500-2,500+ known in all grades and this estimate may actually be quite conservative. It is common in all circulated grades and fairly available in the lowest Uncirculated range with around 150-200 extant in Mint State. This date becomes scarce in MS63 and it is very rare in MS64. The finest known is a remarkable PCGS MS66 that is ex ANR 11/04: 1804 ($92,000), Pittman I: 981 ($110,000). A strong case could be made for calling this the finest No Motto half eagle of any date.

There are a number of interesting varieties known. A few exist with repunching on the date numerals, including one with a sharply repunched 7. There is also a fascinating misplaced date variety with a 7 located in the denticles well below the date. There is also a very interesting variety with the 7 punched in the throat of Liberty.

1848: Mintage: 260,775. The number of half eagles made in 1848 is significantly less than in 1847 and this date is much scarcer. An estimated 500-700+ are known with most in the EF40 to AU50 range. Nice higher end AU coins are somewhat scarce and this date in rare in Uncirculated with two to three dozen known. The two best I am aware of are Bass II: 986 (graded MS64 by PCGS) that brought $24,150 in October 1999 and Milas: 471, graded MS64 by NGC, that sold for $23,100 in October 1999.

The appearance of this date tends to be different than that seen on the 1846 and 1847 half eagles. The surfaces are more striated (mint-made) and the luster is less “pillowy” and a bit more satiny in texture. The natural color is often a rich reddish-gold or orange-gold hue, unlike some of the earlier dates from this decade which are more green-gold in hue.