The San Francisco Surprise

Around four or five months ago, I got wind of a soon-to-be-conducted rare gold coin auction in San Francisco that sounded interesting, to say the least. I heard that it contained long date runs of Liberty Head gold and it featured such rarities as an 1854-S quarter eagle and an 1856-O double eagle. I live for "secret deals" like this. I'd fly to Fog City, spend in the high six figures, make a ton of money on my new purchases and have fun in the process. It was going to be SO easy... Except for one big thing. There are no "secret auction deals" anymore. The internet has made all information so accessible that deals like this tend to attract just enough of the big players in a specialized field like rare gold that they are extremely competitive. No, the San Francisco Surprise was going to be a bloodbath.

There were a number of factors that made this auction unusual. For one, it was being conducted by a stamp company (Schuyler Rumsey) and it would be interesting to see how they handled their foray into a new field.

So how did the sale do? And what does this sale tell me about the market and the rare coin auction market? The answers are interesting; far more so, in my opinion, than merely going over some auction highlights.

I thought prices for the sale ranged from sort of weak (for the very common pieces and the generics which probably would have been better sold outside of the auction venue) to exceptionally strong (for the very rare date $10 Libs). The few six figure coins in the sale were a touch on the weak side (they probably would have brought 10% more in a Heritage auction) while coins that appeared to have potential for upgrading or "improving" were strong to exceptional.

Did the heirs to this collection make a mistake choosing a stamp company and not going with an experienced coin firm like Heritage or Stacks Bowers? Typically I would have said a resounding "yes" but I thought Schuyler Rumsey did an outstanding job in nearly all respects. Their catalog was a bit amateurish but in the end this made no difference. Its hard to say for certain but I think many of the coins in this sale actually did better in this little, obscure auction than they would have at a major auction. Heritage may have 400,000+ registered members in their community and unparalleled technology but Rumsey reminded me of a few important facts about the auction business in general.

First, as I said above, if you get the right five to ten dealers in the room (or on the phone), the number of registered bidders or the number of hits on your website mean nothing. At least 50% of the value of the sale went to these five or ten dealers. The best way to make money in this sale would have been to lock these guys in their hotel rooms.

Secondly, Rumsey's technology was far, far better than I would have expected. It was easy to bid on their website and, to be honest, it seemed to be faster and every bit as efficient as Heritage's. It might not have had all the bells and whistles that Heritage's system has but let's not forget that Rumsey is located in San Francisco and with Silicon Valley technology available to the firm they clearly have figured out how to effectively run an IT system.

Thirdly, in the words of Mr. Costner, if you build it, they will come. The sale contained some really rare coins (issues like 1863-1865 half eagles, 1861-D gold dollars and half eagles, Civil War date eagles plus an 1873 and 1876 eagle). Avid collectors know how rare these coins are and either they or their advisers found them. Many of these rarities sold to phone bidders and, in the case of at least a few bidders, they were sold sight unseen.

Which leads me to the next point. Rumsey was smart enough to know that they weren't coin experts. So they got some good advice. Smart move: they sent most of the coins to PCGS so this gave bidders confidence. Smarter move: they advertised the sale in Coin World and gave out catalogs at the Long Beach show. Smartest move: they got at least one bidder to look at all the coins before the sale and give them bids on nearly all the lots. I feared that $10,000 coins would open at $2,000 and we'd sit through interminable slogs waiting for them to hit their true value. This didn't happen. Three weeks ago I attended a coin auction put on by a firm that has 30+ years of experience and it was so maddeningly slow that I left early in fear that I was going to have an anxiety attack. The Rumsey sale was smoothly run and almost hitch-free.

Another point: the fight against coin doctoring must not be going all that well because I saw people paying pretty confident prices for coins that needed "help." As an example, there was a cleaned 1861-D half eagle (Lot 661) that seemed to me to not only be a "no grade" but to be one that would have to be extensively resurfaced to ever get in a holder. It had the detail of an AU55 but I thought it was a risky purchase at much more than $20,000. It sold for $40,250. The person who bought this coin--and he is a smart, veteran dealer--obviously thinks this coin can be fixed, it can wind up in an AU55 or AU58 holder and it can be sold for more than $50,000. Caveat emptor....

Yet another point: this was a fresh deal and the market is STARVED for fresh coins. Note that I didn't say it was a nice fresh deal. I thought around 10% of the coins were really nice and another 20-30% were kind of nice. But many of the coins were downright ratty. These didn't seem to matter to buyers. Nor did the fact that many of the not-very-nice coins were hard to sell as is and would become even harder to sell when they were scrubbed (or re-scrubbed) and upgraded.

A few highlights and my comments:

Gold Dollars: The 1855-D in PCGS VF35 sold for $12,650. It was a decent coin but nothing great. I guess this means that "basal value" for any example of this date in a holder is now in the low five figures. The nice AU53 1861-D gold dollar sold for $51,750 to a phone bidder who, I'm told, never even saw the coin. It's an AU55 and you paid an awful lot for it...

Quarter Eagles: The 1842 in PCGS 45 was estimated at $750-1000. It sold for $5,175. If only it was even remotely attractive. The very nice 1848 CAL in PCGS 55 sold for $63,250. I liked the 1849-C in PCGS 55 (I graded it a solid 58) but someone liked it better and it brought a solid $12,650.

Half Eagles: The only early half eagle I liked was the 1814/3 in AU58 but I was not willing to grade it MS62 like the successful bidder did at $25,300. The C+D half eagles were decent and I bought the coins I liked the best; sometimes at considerably less than my maximum bid. The Civil War coins were pretty schlocky but they brought strong prices anyway; the 1862 in AU55 was bid up to $12,650.

Eagles: Uggghhh...did I get blown away. I thought there were some pretty nice coins in this part of the sale. So did everyone else. The great AU55 1852-O? It sold for $18,400 (!) The undergraded 1865-S Normal Date in EF45? (I thought it was an AU53). It brought $24,150. The lovely EF45 1870-CC that I graded AU53? How about $97,750? Many, many price records were set.

Double Eagles: It was back to reality as prices for this denomination were strong but not insane like the Eagles. The nice 1856-O in EF45 sold for $276,000 which seemed like the "right" number. The 1861-S Paquet in VF35 sold for $51,750 while the 1866-S No Motto in AU55 went very strong at $83,275. There were some very pleasing CC double eagles in the sale and they all brought strong prices.

1858-S $20.00 NGC AU53 CAC

The 1858-S is sort of an overlooked date but it is actually rather scarce in the lower AU grades and very hard to find with nice color and surfaces. This fresh "Euro" example shows rich pinkish-gold, green and orange hues with deeper highlights on the relief areas. It has the body and detail of an AU55 but just a few too many ticks in the fields to grade it as such.

1856-S $10.00 PCGS AU50

Medium S mintmark. A fresh European example recently graded by PCGS in their Paris office and notable for strong luster, light even wear and nominally abraded surfaces. Not really a rare coin in this grade but a pleasing, wholesome piece which is desirable as an affordable early SF mint eagle.

1854-S $10.00 NGC AU55

As a rule, I like coins with real historic significance and the 1854-S eagle certainly falls into this category as it is the very first Liberty Head eagle struck at the San Francisco mint. Unlike the exceedingly rare quarter eagle and half eagle dated 1854-S, the eagle is a relatively obtainable issue although it is uncommon in AU55, rare in AU58 and extremely rare in Uncirculated. This example is clean for the issue with just a few small marks noted on the obverse. The light gold surfaces retain a bit of luster and the strike is very sharp for the issue.

Collecting 'Transitional' Coins

Throughout the history of gold coin production in the United States there have been a number of instances where two different designs were produced simultaneously, or at least within the same year. I call these “transitional” coins and I think they would make for a very interesting collecting focus for the gold coin specialist.In the gold dollar denomination, the most obvious transitional issue occurred in 1854 when both the Type I and the Type II issues were produced. Both of these are relatively common although the Type Two becomes scarce in the higher grades and rare in MS64 or better. In 1856 two designs were produced: the Type Two and the Type Three. Since the Type Two was only made in San Francisco this year and there are no 1856-S Type Three gold dollars this isn’t a transitional issue in the sense of the 1854. There are some very interesting transitional issues in the quarter eagle denomination. In 1796 both No Stars and With Stars designs were produced. Both of these are rare in all grades and because of price constraints they would be considered one of the stoppers of a transitional set. The next transitional issue occurred in 1834 when both the Capped Bust and the Classic Head quarter eagles were struck at the Philadelphia mint. The former is an extremely rare coin in all grades while the latter is common in grades up to and including MS63.

More transitional issues exist in the early half eagles than in virtually all other denominations combined. The reason for these transitional issues tends to be different than, say, for the 1854 Type One and Type Two dollar when the design was changed to facilitate improved striking.

There are two types of half eagle dated 1795: the Small Eagle reverse and the Large Eagle reverse. The former was actually produced in 1795 and it is relatively common. The latter was struck in either 1797 or early 1798 using a backdated obverse die. Only 1,000 or so 1795 Large Eagle half eagles were made and this clearly would be one of the stoppers to a transitional set.

A similar circumstance exists with 1797 half eagles. Small Eagle reverse coins from this year are known with both fifteen and sixteen stars on the obverse. These are very rare but not impossible to locate. There are also 1797/5 half eagles with the Large Eagle reverse. These are extremely rare and include two die varieties that are presently unique and housed in the Smithsonian.

Another transitional year occurs in 1798. A small number of half eagles (probably no more than 400-500) were made using the Small Eagle reverse. This is a very rare coin today with only seven or eight examples known. The more common 1798 half eagles have the Large Eagle reverse. These are moderately scarce in terms of overall rarity but they can certainly be found with much greater ease than their Small Eagle counterparts from this year.

Yet another transitional year for half eagles occurred in 1807. This is a direct result of a design change. The first issues struck this year had the Heraldic Eagle reverse while the latter issue employed the new Capped Bust obverse and John Reich’s new reverse. Both of these issues are relatively common in all grades up to MS63.

1834 saw another design change in the half eagle denomination and the transitional collector has two issues to focus on: the rare Capped Bust (or “Fat Head”) and the more common Classic Head. The Capped Head is found with two varieties (the Plain 4 and the Crosslet 4) as is the Classic Head. Interestingly, on both design types the Crosslet 4 is significantly rarer.

The next transitional half eagle occurs in 1866 when the San Francisco mint produced coins with and without the motto IN GOD WE TRUST on the reverse. Despite having a much lower mintage, the No Motto coin is actually comparable in overall rarity to the With Motto issue. Both are very rare in the higher AU grades and virtually non-existent in Uncirculated.

The final transitional issue in the half eagle denomination occurred in 1908 when the design changed from the old Liberty Head to Bela Lyon Pratt’s new Indian Head design. Both of these issues are very common and the transitional collector with a virtually unlimited budget could aim as high as MS66.

In the early eagles there is only a single transitional year: 1797. The first 1797 eagles used the Small Eagle reverse. Only 3,615 were struck and around five to six dozen are known. This issue is typically seen in circulated grades and it becomes extremely rare in anything approaching Mint State.

Later in the year, the new Heraldic Eagle design was first used on this denomination. Slightly over 10,000 examples were produced and this is a relatively available coin, although it is very rare in grades above MS61 to MS62.

One of my favorite pair of transitional eagles are the two types of 1839. The first, also known as the Type of 1838, is easily distinguished by Liberty’s neck being very curved and ending over the right side of the final star. It is the more common of the two and while relatively available in most circulated grades, it is very scarce in AU55 and better and rare in Uncirculated. The second variety is known as the Type of 1840. On this issue, Liberty’s neck is less curved and it ends well before the final star. It is very scarce in all grades and rare in AU.

In 1866, the San Francisco mint was not informed of the changeover to the With Motto reverse until they had struck 8,500 pieces with no motto. The 1866-S No Motto eagle is a rare coin in all grades today. The With Motto variety is also rare although it is a bit more obtainable in the AU grade range. Both are unknown in Uncirculated.

1907 saw a changeover from the Liberty head design to the new Indian Head design. The transitional collector has some difficult decisions about which coins to include in his collection as three major variations of the Indian Head eagle from 1907 exist: the rare Wire Edge, the very rare Rolled Edge and the common No Motto.

In 1908 there are no less than two transitional Indian Head eagles. The Philadelphia and Denver mints both struck No Motto and With Motto coins. Luckily for transitional collectors, all four of these are relatively common except in Gem Uncirculated. The 1908-D No Motto is the rarest of the four and this issue is extremely rare in properly graded MS65.

The United States twenty dollar gold coinage contains more interesting transitional coins for the specialist. The first of these is the 1866-S No Motto and With Motto. The former is a very scarce coin in all grades and it remains unknown in Uncirculated. The latter is fairly common in circulated grades and scarce in Uncirculated with nearly all of the two to three dozen known in Uncirculated grading MS60 to MS61.

The termination of the Liberty Head design in 1907 meant that an interesting group of transitional coins from this year are available. The 1907 Liberty Head issues were produced at the Philadelphia, Denver and San Francisco mints and all three are common in grades up to MS63. The 1907-S is very rare and underrated in Gem Uncirculated.

Augustus St. Gaudens’ redesign of the double eagle was introduced in 1907. Most transitional collections would include one High Relief from this year as well as a 1907 No Motto. Both issues are readily available in Uncirculated grades and the latter is abundant even in MS65 to MS66.

To assemble a complete set of the various Transitional coins that I discussed above would be an amazing accomplishment, given the rarity and prohibitive cost of many of the issues. That said, I think this would be a great set that would be a fun challenge for the collector who is up to it.

1857-S Gold Dollar

One of my favorite under-the-radar U.S. gold issues is the 1857-S gold dollar. This is a coin that is really hard to find yet nice examples can still be purchased for less than $2,000. Read on for some “need to know” information about this interesting issue.

San Francisco only produced gold dollars for a total of seven years. The 1856-S is probably the best known of these issues due to its being a popular one-year type but, ironically, it is probably the most common gold dollar from this mint. The 1870-S is the rarest of these in terms of its overall availability but it is actually more obtainable in Uncirculated than generally realized. The dates that are the hardest to locate in higher grades are the 1857-S, 1858-S and 1859-S and it is my belief that the 1857-S may be the toughest of the three.

A total of 10,000 1857-S gold dollars were struck of which I would estimate that 150-200 are known. This date is seldom found below EF40; this is due to the fact that the small size of the gold dollar did not make it a coin that could easily circulate for many years and subsequently become heavily worn. Most of the survivors are in the EF45 to AU55 range. The 1857-S becomes scarce in properly graded AU55 to AU58 and it is quite rare in Uncirculated.

As of March 2008, PCGS has graded seven 1857-S’s in Uncirculated including one in MS64, two each in MS63 and MS62 and another two in MS61. NGC has graded sixteen in Uncirculated with one each in MS64 and MS63, two in MS62, nine in MS61 and one in MS60. I believe the NGC figures are inflated by resubmissions and I also believe that the NGC MS64 and PCGS MS64 are the same coin. In my best estimation, there are around ten to fifteen truly Uncirculated 1857-S gold dollars with most of these in the MS60 to MS62 range. I know of only two really choice pieces:

      -Bowers and Merena Bass II: 121 (10/99) @ $16,100. This coin was graded MS63 by PCGS in the Bass sale and I believe it may be in an MS64 holder today.

      -David Akers Pittman I: 880 (10/97) @ $13,200. I purchased this coin in the Pittman sale and it graded MS62 at PCGS; I believe that this coin is in an MS63 holder today.

The 1857-S is generally a well struck date, as are all of the San Francisco gold dollars. There are some pieces known that show weakness on the curls below LIB in LIBERTY and the date can occasionally show light weakness on the tops of the 85.

The quality of the surfaces for this issue tends to be somewhat below average. I have seen a number with mint-made lintmarks and others that show die deterioration at the NI in UNITED and/or the C in AMERICA that weakened these areas.

The luster is most often satiny with a slightly grainy texture. A few are known with semi-prooflike luster but this tends to be on circulated coins with abrasions, resulting in sub-standard eye appeal.

The natural coloration ranges from rose-gold to orange-gold and I have seen some 1857-S gold dollars with very attractive color. As one might expect, such coins are becoming harder and harder to find as more are being dipped and/or brightened.

As I mentioned above, I feel that this is a considerably undervalued coin. In fact, I think all of the Type Three gold dollars from this mint are great value in comparison to Charlotte and Dahlonega gold dollars. As an example, I recently sold a nice PCGS AU55 1857-S gold dollar (the coin imaged above) for less than $2,000; the same price level I would have gotten for a far more common 1851-C in a lower grade.

Uncirculated examples of this date are remarkable good value in my opinion. An MS61 is likely to trade in the $5,000-6,000 range while an MS62 would bring around $7,000-8,000 if available. Again, in comparison to the more popular C & D mint gold dollars of this era, the 1857-S seems like really good value to me.