PROTECTING YOUR COINS IN A DISASTER

by Scott A. Travers

Hurricane Katrina in 2005; Superstorm Sandy in 2012; Hurricanes Harvey and Irma in 2017; and the Napa Valley fires of 2017 have focused Americans’ attention over and again on the grim consequences of a potential disaster. Whether manmade or natural, the need to be prepared for such a catastrophe is of supreme importance.

The phrase “potential disaster” also encompasses such ominous black swan events as a nuclear weapon of mass destruction being unleashed by a terrorist force on a major U.S. city and an electro-magnetic pulse (EMP) attack that could potentially cripple a significant portion of the U.S. power grid and render useless unprotected electronic devices. A nuclear event or an EMP attack could lead to mass death and destruction of such insurmountable magnitude that it would pose a threat to all humanity.

Simple survival is the principal priority, of course. The U.S. Department of Homeland Security has made survival guidelines available for nuclear events. But beyond safeguarding your person, anyone who collects rare coins or has gold or silver bullion as a form of “insurance” should give careful consideration to how those coins or bullion would be safeguarded or accessed in an emergency–and how he or she would be protected against serious financial loss in the event these assets were lost, damaged or destroyed.

Unfortunately, disasters have become all too real for millions of Americans during the 21st century. Two of the worst, in fact, were virtually predicted by the Federal Emergency Management Agency (FEMA), the agency that coordinates disaster relief for the federal government.

In meetings before Sept. 11, 2001, FEMA identified three major catastrophic risks to the United States:

A terrorist attack against New York City;
A hurricane of cataclysmic proportions hitting New Orleans; and
A high-magnitude earthquake in San Francisco.

Since then, we’ve lived through the 9/11 terrorist attack on New York and, more recently, we’ve witnessed the devastation of superstorms and hurricanes. In 2005, New Orleans suffered tremendous loss of life and property from Hurricane Katrina. And though San Francisco hasn’t yet been subjected to another historic earthquake like the one in 1906, there have been smaller quakes in the California area to remind us of what has been – and what may yet happen again.

So now, in the face of terrorist attacks, flooding, wildfires and earthquakes, the question very clearly presents itself: What can be done to protect your coins against potential disaster?

Storage and security have always been vital concerns for people who collect and own rare and valuable coins – but in the current climate, the approaches and methodologies required to provide adequate protection have taken on a completely new dimension. It’s more important than ever to store your coins safely and securely, insure them sufficiently against potential loss or damage, including the risk of terrorism, and keep everything in perspective so that you’ll be able to continue collecting coins in the future.

Before even addressing how to react to catastrophe, the first thing you need to consider is insurance.

After Sept. 11th, premium rates for insurance against terrorism increased very significantly and reinsurance by secondary insurers became difficult or impossible for primary insurers to obtain. As a result, primary insurers canceled insurance in virtually all areas of American life, including insurance for rare coins. They simply could not afford to assume further exposure to this risk.

In November 2002, President George Bush signed into law the Terrorism Risk Protection Act, under which the Treasury Department would subsidize recovery costs in the event of a terrorist attack. This legislation makes it easier to insure numismatic items against acts of terror and also against some natural disasters.

In obtaining insurance, you should be absolutely certain that your policy does not exclude coverage for floods, other natural disasters or terrorism. As a matter of course, many home insurance policies contain exclusions for natural disasters. In New York City, for example, some of the largest insurance companies routinely exclude coverage for earthquakes, and you have to specifically request that coverage and pay extra to obtain it – perhaps a couple of hundred dollars per year on an average policy or $25 to $50 on a smaller policy.

Victor Gonzalez and Richard Cleland of Cleland & Associates Insurance Inc. in Dallas, Texas, who obtain primary coverage through the Travelers Insurance Company, offer an “All-Risk” numismatic policy which also is covered by reinsurance.

Suppose Sandy-related claims against such policies totaled $50 million. Since some of the business was “farmed out” to reinsurers, or secondary insurance companies, Gonzalex and Cleland said that Travelers’ liability would be substantially less than $50 million, so Travelers wouldn’t have to bear the full impact.

Upon renewal of their policies, however, customers holding such insurance could well face significantly higher premiums because the reinsurers would either raise their fees substantially or decline to accept the risk altogether, forcing Travelers to assume more of the risk and charge more for the coverage. Anyone with one of those “All-Risk” policies could see an extraordinary rise in the premium – 25 percent or more.

In these turbulent times, it’s advisable to insure yourself against loss before you even go into a place where there could be a risk of terrorism, a natural disaster or something else unexpected, especially when traveling overseas.

Carrying coins – en route to and from a coin show, for example – can be risky, and you should be insured against hazards such as loss, theft or damage which can occur at such times.

Simon Codrington is the international director for Hugh Wood Inc. of New York, one of the largest insurance brokers for coin dealers and collectors and the officially designated coin insurance broker of the American Numismatic Association. He says the risk of theft has been heightened considerably because of the very public way carry-on bags and attaché cases are now being examined by airport security personnel.

It becomes general knowledge who is carrying coins in this manner, and the dealers or collectors thus identified can then be targeted. More than ever, insurance – including coverage for coins in transit – is a must.

One ANA midsummer convention was held in San Francisco in July 2005, and, thankfully, it took place without any natural or manmade disturbances. But suppose the convention had been scheduled for the next month in New Orleans, a city that has hosted a number of national coin shows through the years. The losses could have been staggering.

If the unthinkable were to happen and you found yourself caught at a coin show in a city under siege, you might end up losing your coins, but appropriate insurance would keep you from losing your shirt as well. Above all, you must not lose your life.

It’s important to keep things in perspective when this kind of catastrophe strikes. Robert Brueggeman, the president of Positive Protection Inc. in Fallbrook, California, says you need to use common sense when it comes to saving your coins – even millions of dollars worth – in a disaster. Look out for your personal safety first, then worry about the coins. They won’t be any good to you if you’re dead.

In a situation similar to Hurricane Katrina, with a Category 5 hurricane battering the city and floodwaters rising dramatically, you should leave your coins on the highest shelf or floor available, if practicable, and escape with your life.

Common sense, of course, would dictate putting your coins ahead of time in a safety deposit box or an explosion-resistant, waterproof safe. But if you couldn’t do that, the next best thing, time permitting, would be to take out the one or two coins of the highest value, slip it or them in your hip pocket and make a run for it, while leaving the other coins behind. In rising floodwaters, even an additional five pounds can slow you down significantly, and you could lose your life in trying to save your coins. In such a circumstance, it might be imprudent to attempt to carry even a single coin on your person.

On the other hand, a different type of potential disaster, perhaps a breakdown of the financial system, might require that you use your bullion-related coins for barter purposes. This would require that those assets be accessible. I will cover this in another article.

Safes and safety deposit boxes can add an important layer of protection to your coins’ security. Insurance companies look very carefully at these safeguards and factor them into their rates.

One of the most highly recommended safes today is the one with a rating of TXTL-60. Many people shied away from buying this kind of safe in the past because of its relatively high cost, but lately demand has been growing because it can withstand fire and flame for extended periods of time. Also, prices have come down substantially.

In my book The Coin Collector’s Survival Manual, Revised Seventh Edition, I have some very good advice from Robert F. McLaughlin, a security expert who is highly knowledgeable about safes.

McLaughlin says you can buy a relatively strong security safe for as little as $1,000. He also explains that most insurance underwriters will require a safe that is approved by Underwriters Laboratories Inc. (UL).

All insurance underwriters have formal guidelines, and their willingness to insure the contents of your safe is dictated by the degree of security it offers against different types of attacks.

A TL-15 safe would offer the minimal acceptable protection against burglary. When attacked on the door only with a portable hand tool such as an electric drill or a pressure-applying device, a TL-15 safe will resist entry for 15 minutes. That’s minimal protection, and probably won’t get you much of a reduction in your homeowner’s policy premium.

If a Category 5 hurricane blows your way, a TL-15 safe is not going to do you much good.

A TL-30 safe has similar specifications to the TL-15, but resists attack for half an hour. A TL-30×6 safe offers the same protection as the TL-30, but resists attacks on all six sides.

Safes are also classified according to the protection they offer against fire. A Class A safe offers four-hour protection against fire at 2000° Fahrenheit. A Class B safe offers two-hour protection at 1850° F, and a Class C safe offers one-hour protection at 1700° F. The prices of these safes vary according to the level of protection – but in general, prices have come down substantially.

Keep in mind that a lot of coin holders melt at a few hundred degrees. Even Saflips, which are among the best coin holders, melt at 480° F. So if you have a safe that protects up to 500° F and you have a 2000° F fire, that safe isn’t going to help you much.

In the 1990s, a new generation of safes was designed for computer supplies such as floppy disks and magnetic media and CD ROMs and DVDs. These safes carry UL certification of 125, and they’re the among the best type still available today. In the event of fire, the inside contents of such safes will not rise in temperature past 125° F. So if you have a fire of 2000°, 3000° or 4000° F, your certified coins should be protected – not just the coins but the holders, too. You won’t even see tinging on the edges of an NGC or PCGS insert if you store your slabbed coins in a 125 UL safe.

Safety deposit boxes are another matter.

If you store your coins in a bank vault, my basic advice has always been to look carefully at your insurance policy. Many times, this form of storage isn’t covered unless you specifically request it. Many policies don’t include it, and banks are usually careful to point out that they do not provide insurance coverage for boxholders. Always read the safety deposit box rental agreement as well.

Similarly, if you store your coins in a safety deposit box at a hotel, the hotel in all likelihood will not provide insurance coverage and you’re going to need to have coverage on your own.

Insurance for such storage isn’t particularly expensive, but you need to ask for it.

Keep your proofs of purchase separately from your coins. If you’re in a disaster- or terrorism-prone area, store your proofs of purchase with relatives, friends or business associates in another state. Also, take digital images of your coins and store the images separately as well. If you’re not comfortable making arrangements with people that you know, there are independent services that will store your digital images and records offsite.

One of the biggest mistakes people make in disasters is not having records of what they paid for their coins. They end up having to reconstruct those records under circumstances that are less than advantageous.

Always count and inventory your coins. If someone sells you a roll of coins, count them. And when you put coins in a safety deposit box, make sure you know what’s there. If you ever file a claim, you’ll need to know.

One of the most interesting and worthwhile developments in the coin field in recent years has been the emergence of coin conservation – a process by which damaged coins often can be restored to their original appearance with little or no evidence of the damage. This has been a godsend to collectors whose valuable coins have been exposed to harm in some form, especially through flooding.

We’ve learned that while grading-service “slabs” are sonically sealed and tamper-resistant, they generally are not watertight. In floods, water will often permeate these slabs and damage the coins inside. We’ve also learned, however, that this damage isn’t necessarily irreversible. And sometimes certain coins may not even be harmed.

A major flood hit the home of one of my clients, filling his basement and covering his first floor with water. When he went to survey the damage, he saw NGC-certified coins floating in their slabs and the coins themselves were unscathed. The other coins had sunk to the bottom, but these were floating.

Even if your coins are submerged in a flood, all hope may not be lost.

The first steps to take are to dry the coins, remove any foreign substances on their surfaces and neutralize the surfaces with pure acetone. It is advisable to take them out of their slabs first, but I would recommend having a professional do that for you.

In this case, I would recommend sending your coins through an authorized dealer to Numismatic Conservation Services in Sarasota, Florida, and having NCS experts attempt to restore them. They have an excellent laboratory where they have done remarkable work in restoring damaged coins.

In the case of my client whose house was flooded, he initially became so frustrated that he just bagged up many damaged coins and threw them away. He later showed me samples he had saved as souvenirs and I sent them to NCS. Miraculously, NCS restored most of them to their original pristine condition, and some even looked better than they had before.

It was a bittersweet experience for my client, because he had thrown away the other coins and NCS clearly would have been able to restore many of those as well.

I don’t advise collectors to try to restore their own coins. The process is delicate and painstaking, and really should be done by a professional. But many times, by removing a tiny, microscopic layer of metal from the surface of a coin, conservation experts can save that coin. It can then be put in a fresh new holder and sold into the marketplace very safely.

So all may not be lost. And to victims of Hurricane Katrina left with damaged coins after the storm, I recommended having them professionally curated. People who followed my advice were able to save a lot of them – especially gold coins, which tend to retain their luster almost indefinitely and can take a lot of abuse.

Disaster is a fact of life, and a greater concern today than ever before. But adequate preparation can make disaster’s aftermath far less disastrous for its victims.

Resources

Numismatic Conservation Services

Los Angeles Emergency Management

New York City Emergency Management

New York State Preparedness

State of California Emergency Preparedness

U.S. Department of State Travel Advisories

U.S. Homeland Security

The gold standard for coin information.™

THE UNSPOKEN TRUTH ABOUT RARE COIN AUCTIONS

by Scott A. Travers

Public auctions have long played a vital role in the sale of collectible coins–particularly coins of great rarity and value. This role was underscored in 2013 when an extraordinary 1794 Flowing Hair silver dollar sold at public auction for over $10 million. The coin was certified by the Professional Coin Grading Service (PCGS) as a Specimen 66.

Out of needless fear or ignorance, however, many collectors and investors tend to view auctions with suspicion, looking upon them not as opportunities but as traps. They worry that if they attended one, they might end up inadvertently buying a coin they didn’t want–simply because they raised their hand accidentally or sneezed or scratched their nose at the wrong time.

The danger of such mistakes has been magnified through the years by humorous vignettes in the movies and on TV. They seldom happen in practice and are rectified immediately when they do.

Once they overcome this unreasonable fear, collectors and investors soon discover that auctions are replete with golden (and silver and base-metal) opportunities for obtaining exceptional coins–or, conversely, for selling one’s coins advantageously.

It’s true that “auction fever” or a compulsion sometimes grips a gallery and propels bidding levels beyond the fair market value of certain coins. This, of course, is a plus if you happen to be the person who consigned those coins for sale, but something to be avoided if you’re a buyer.

There are easy, effective ways, though, to guard against being infected with auction fever. And once you become familiar with auctions’ idiosyncracies, there are ways to turn these sales to your advantage.

At the outset, it should be understood that the information contained in this article pertains only to auctions conducted by reputable firms and not “online only” auctions.

The first thing to determine when considering public auctions is whether you should buy at an auction at all–or, on the other hand, whether you should sell your coins in this manner.

Auctions are ideal venues for buying and selling certain kinds of coins, but totally unsuited for other types. To cite one outstanding example, auctions are a perfect place to buy and sell truly rare coins–especially those assembled as parts of first-rate collections. The publicity surrounding important auctions, the time that elapses before such sales take place, the eye-catching catalogs that typically are distributed–all these factors combine to build increasing interest, attract potential buyers and stimulate spirited bidding for genuine rarities.

Naturally, such interest helps drive prices higher– which makes it clear why people holding such material often choose to disperse it at public auction.

But buyers benefit, too. They have the reassurance that other informed collectors and investors were willing to pay very nearly as much to acquire those coins. They have the prestige of possessing rare coins with a pedigree–an intangible that can translate into added value later when they sell them. And often, the publicity surrounding major auctions will bring successful bidders offers to resell the coins immediately for a handsome profit.

Here are some examples of other coins that represent potentially good buys at public auctions:

Coins that come up for sale early in the morning or very late at night. Blockbuster auctions sometimes contain many hundreds of lots, requiring the auction company to schedule bidding sessions that start very early in the morning or run very late at night. Even with all of the advantages of Internet and absentee bidding, rival bidders may miss such sessions, making it easier for you to pick up bargains.

Coins that are offered for sale during a period of extreme heat or cold. The weather can work to your advantage. If there is a heat wave or the sale is taking place in the teeth of a raging snowstorm, fewer potential bidders will show up at the actual sale, increasing the odds in your favor.

Coins sold during downturns in the marketplace. Even auction fever can be blunted when the coin market is depressed. Since auctions tend to attract scarcer and more desirable material than other methods of dispersal, this can give you the chance to buy some truly exceptional coins for prices that are really quite reasonable.

Group lots. First-magnitude rare coins get suitably star billing at public auctions. Often, however, parts of the supporting cast end up being lumped into group lots. That’s because time constraints and required minimum-per-lot values don’t permit the sale of each and every coin as a separate lot. Much of the material found in group lots may be of no special distinction, but it isn’t unusual to find scarce and sometimes truly rare high quality coins to be a part of these these groups. And you can pick them up–as part of a group, of course–for under-market prices. There just isn’t enough time for everyone at an auction to look at Internet-only or group lots with meager descriptions in the back of the catalogue.

On the other side of the equation, there also are certain coins that you should avoid buying at public auctions, or check out very carefully before making a bid. You should be wary, for instance, about auction coins that have not been certified independently by one of the leading coin-grading services.

In my book, The Coin Collector’s Survival Manual, Revised Seventh Edition, David Hall, founder of the Professional Coin Grading Service, estimated that 50 percent or more of the uncertified coins appearing at auction have been tampered with in some way–doctored or altered. That’s food for serious thought. Now let’s examine some strategies you should consider when you buy coins at public auction.

If attending an auction in person, something done less and less these days, consider where you should sit in the gallery. Some people like to sit in the back, where they can see who’s bidding and where they can bid freely without being seen themselves by most of the other bidders in the room. Other people like to sit in the front row, so they can bid discreetly on the lots of their choice by giving the auctioneer a subtle signal.

Where you sit is largely a matter of comfort and style, though either the very back or the very front of the room can be strategically advantageous.

Wherever you sit, even if it’s in front of a desktop computer in the comfort of your home or office, I strongly recommend that you figure in advance the maximum amount you’re willing to bid for each and every coin in which you’re interested.

Set limits as to how much you will pay. Calculate these to the cent. And don’t budge one cent from that calculation. Don’t have a ballpark figure just in your mind, figuring you’ll attend the sale and see what everyone else is doing. If you do that, you’ll overpay.

Now that you have a basic idea of what to buy at auction–as well as what not to buy–and when and how to buy it, we come to an aspect that most people don’t even consider: the coins that you should, and should not, be selling at public auctions.

Let’s start by considering the coins you should not be selling at auction. Simply stated, you should not be selling generic or bullion-type coins. With millions of vintage Liberty head and Saint-Gaudens double eagles ($20 gold pieces) being dumped onto the U.S. market by European banks, common dates of these coins grading under MS-63 will be trading near melt for the foreseeable future.

First of all, the commissions charged by auction firms would eat up too much money. Dealers who make markets in bullion or generic coins often work on a margin of just a few percentage points. If you consigned such coins for sale at auction, though, you could end up paying a commission 20 percent or more. And you can be reasonably certain that the prices realized by those bullion coins or generic coins at an auction would not exceed what market-makers are willing to pay for them–and what they advertise publicly to pay for them.

Let’s take, for example, a 1924 Saint-Gaudens $20 gold piece graded MS-61 by PCGS. If you were to sell such a coin to a local dealer with gold valued at $1,300 an ounce, he would likely pay the melt value: $1,257.75, which represents the price for 0.9675 of an ounce of gold.

If you consigned that 1924 Saint to an auction, you would get $1,257.75 less the auction commission. Plus, you would have the marketplace risk–the risk that gold bullion could go down in value between the time you consigned your 1924 Saint and the time it was sold at auction. This cuts two ways, of course, as gold could increase in value between the time you consign your coin and the time it is sold.

When you sell to a dealer directly for the spot price of gold, you have immediate control; you can time your sale and use your best judgment in deciding when to sell. You can even sell a few coins at a time and sale average, if you have a quantity. When you sell at auction, you’re at the mercy of the marketplace–and with something as volatile as gold bullion-related coins, that risk can be substantial. The same logic applies to generic silver coins–which, while they may have a certain amount of value as collectibles, also are tied importantly to the value of the silver they contain.

These, then, are the coins you should not sell at public auction. What should you be selling at auction? Almost everything else. Rare coins. Scarce coins. Coins with questionable toning. Scratched coins. Worn coins. Major rarities. Semi-classic rarities. In The Coin Collector’s Survival Manua, I quote an executive of a leading coin auction company as saying that coin auctions are weighted in favor of the consignor. In other words, auction companies have a tendency to view the consignors, not the buyers, as their ultimate customers. This has been reflected in recent years by the trend toward shifting more of the burden of underwriting auctions’ costs from the sellers, or consignors, to the buyers. The standard buyer’s fee is now 20%. Some coin auctions have a buyer’s fee of 25%. Smart buyers know to place any bid with that 20 or 25% buyer’s fee carefully calculated in.

Let’s take a look at how auctions are conducted–their mechanics. This is a subject rarely discussed, and I do so from a perspective that is unique, for I not only buy and sell coins at auctions for my clients but also was a licensed auctioneer for many years. My firm conducted private offering competitions known as Lightning Sales, which were not auctions.

The nucleus of a public auction–the centerpiece of the sale, from the auctioneer’s standpoint–is “the book,” the list of bids obtained before the sale from people who can’t or won’t attend. With a successful book, an auction firm doesn’t really need to have many people physically present at the sale. With the advent of advances in Internet online bidding, most people bid online. One recent sale I attended in New York that was conducted by a highly reputable firm had only a dozen active bidders in the room.

People in the room are told that bidding will open at a small increment over the second-highest book bid. And reputable auctioneers scrupulously adhere to this rule. Let’s say that on a certain lot, before the auction begins, there are only two bids–one for $500 and the other for $5,000. These book bids form the basis for the start of the public bidding.

In this particular case, the bidding might open at $550–10 percent more than the second-highest book bid, which is $500. If no one on the floor is willing to bid more money, then the person who bid $5,000 will get this coin for $550. This kind of disparity between the two top book bids isn’t likely to happen in practice; theoretically, however, it could. And knowing this, some people are too liberal with their book bids. This can have costly consequences. Let’s say two different people take this approach on the same coin, and both bid about $5,000. In that case, bidding would probably open at about $5,500–10 percent more than $5,000–and both of these bidders would be stunned.

The lesson is to use proper caution in submitting a book bid, and not to offer more than you would if you were in the room.

When consigning coins to an auction house, astute sellers insist that the firm maximize both the coins’ presentation in its catalog and how it describes those coins. Astute sellers seek to have the coins submitted to the grading service that will assign the highest grades to them.

The old adage used to be, “If you don’t know your coin, know your dealer.” That has now been modified to state: “If you don’t know your coin, know your grading service.” Typically, the auction firm charges a commission to both the consignor and the buyer of each coin. From the seller’s standpoint, however, this is negotiable, and sellers with good negotiating skills can obtain advantageous terms. I use my carefully honed negotiating skills to good advantage in obtaining auction contracts for my clients, and I will not reveal those secrets here. If you hire my firm, you will find out how it’s done.

Often, I receive my compensation directly from the auction house, and the compensation is tied to a percentage of the prices realized. For that reason, I’m in the same corner as my clients, pushing to maximize how much their coins realize.

You should keep in mind, however, that you won’t necessarily come out farther ahead on every coin just because you’re paying an advantageous commission. That’s because savvy buyers take the commission structure into account on every single lot, as discussed earlier.

Buying and selling coins at public auction can be a rewarding experience in more ways than one. It’s exciting and enjoyable, and often witnesses moments of both high drama and very high monetary stakes.

Knowing the tricks of the trade can add to both your pleasure and your profit.

And that’s a combination that’s hard to beat.

RARE COINS IN YOUR POCKET – CAN YOU STILL HOPE FOR THAT SURPRISE TREASURE?

by Scott A. Travers

Coin collectors often complain that there’s nothing worthwhile left to find today in pocket change. Indeed, this is often cited as one of the major reasons for a widely perceived failure to attract new collectors–particularly youngsters–to the hobby.

Without a doubt, there are far fewer scarce-date, premium-value coins in circulation today than there were when COINage magazine began publication in 1964. And one of the major reasons for this is a watershed event that occurred at about the time the magazine first appeared: the introduction of “clad” coins with little or no silver content. Up to then, silver coins dating back 30 years or more were commonplace in pocket change, but after that they vanished–along with all the rest of the silver coins.

It would be a mistake, however, to conclude that the COINage years–the three decades during which that magazine has been published–constitute a vast waistland in terms of circulation finds. It may not be as easy to find “a fortune in pocket change” as it was when B. Max Mehl coined that phrase back in the good old days, but plenty of desirable, valuable coins are still out there today for fortune-hunters with patience and perseverance. And many of them have come into being during the last 30 years.

Any kind of treasure hunt is easier and more fun when you have a map to guide you, so I’ve drawn up a list of 10 of the more intriguing coins you have a realistic chance to find–today, this very minute–in the change in your pocket or purse. Every single one has been issued by the U.S. Mint since 1964.

For a fuller discussion of these coins and others like them, I recommend that you read my best-selling Dell paperback One-Minute Coin Expert. It contains a wealth of detail on how to spot scarce and valuable coins not only in pocket change but also in old accumulations.

Here, then, are 10 top circulation finds still out there today from the COINage years:

The 1970-S “Atheist” cent.

The motto IN GOD WE TRUST has appeared on the Lincoln cent right from the coin’s inception in 1909. But in 1970, small numbers of cents from the San Francisco Mint seemed to have been sabotaged by a devil’s advocate: The words WE TRUST were covered by a blob of metal. Part of the metal on one or more obverse dies had broken off, causing what is known as a “cud,” or lump of metal, to appear on that part of the coin instead of the regular imprint of the design. Because this error impaired the tribute to the Almighty, the coin was promptly dubbed the “Atheist” cent. It isn’t a great rarity, but it’s certainly an interesting conversation piece, it’s worth a few dollars–and it’s findable in ordinary pocket change.

The 1970-S small-date Lincoln cent.

Most collectors know about the small- and large-date varieties of the 1960 Lincoln cent, but fewer are aware that similar varieties occurred a decade later. And, once again, the one with the smaller date proved to be scarcer and more valuable. Actually, the 1970-S small date is worth several times as much as the far more highly publicized 1960-P small date. To identify this variety, check the tops of the numbers in the date: In the large date, the tops of the 9 and the 0 are higher than the top of the 7; in the small date, the tops of all four numbers are uniform.

The 1972 doubled-die Lincoln cent.

By 1972, silver coins were all but gone from circulation and so were the pre-1959 Lincoln cents with the “wheat ears” design on the reverse. Then, out of the blue, just as many collectors were bemoaning the lack of worthwhile coins in circulation, sharp-eyed hobbyists began turning up newly struck cents with obvious doubling in the date and inscriptions on the obverse. These “doubled-die” cents have commanded impressive premiums–upwards of $100 apiece–ever since. And since they’re Lincoln Memorial cents and thus haven’t been subject to indiscriminate withdrawal from circulation (as the “wheaties” cents have), there undoubtedly are still more examples waiting to be plucked from pocket change.

The 1983 doubled-die Lincoln cent.

With coin errors, lightning can strike not only twice but many times. So it was that in 1983, Lincoln cents with doubled features turned up once again–this time with the doubling on the reverse. Mint-state examples of this particular error coin are valued today at about $200, circulated pieces roughly half that much. And more are almost certainly waiting to be found in circulation.

The 1984 doubled-die Lincoln cent.

You just can’t get too much of a good thing. In 1984, for the third time in a dozen years, the Mint produced a cent with obvious doubling. In this case, it appeared on the obverse. This coin’s premium value is parallel to that of the other two.

The 1964 Jefferson nickel with the motto E PLURIDUS UNUM.

Most people are familiar with the motto E PLURIBUS UNUM on U.S. coins, even though many don’t know what it means (it’s a Latin phrase meaning “Out of many, one,” and signifies that out of my states, one nation has been forged in this country). But often, familiarity breeds inattentiveness. That’s why many collectors didn’t notice at first when 1964-D Jefferson nickels appeared with PLURIBUS misspelled as PLURIDUS. Heavy polishing of one or more dies had caused the center of the letter “B” to become obliterated, leading to this interesting error.

This isn’t a high-priced rarity, but it does bring a modest premium. And it underscores the importance of paying close attention to the coins you find in change: Many of the pieces that command premium value will do so because of just this kind of detail. So you’ll need a sharp pair of eyes–and a magnifying glass would be helpful, too. An inexpensive glass with 5-power magnification would be fine.

The 1982 no-P Roosevelt dime.

Up until 1980, dimes produced at the Philadelphia Mint never carried a mint mark. Starting that year, a small letter “P” was placed on Philly dimes just above the date–and just two years later, a major error occurred when the mint mark was omitted from a small number of dimes made at that mint. Collectors have determined that the number was small indeed, and as a result this coin is now worth well over $100 in mint condition. Circulated examples bring somewhat less–but still, it would be well worth your while to find one. And if you look hard enough, you just may!

The 1989 no-P Washington quarter.

Unlike the error dime seven years earlier, the no-P quarter of 1989 seems to have resulted from dirt or grease in the die, rather than someone’s failure to stamp the mint mark into the die to begin with. Essentially, the clogging caused the letter “P” to be missing, or barely visible, on some of the P-mint quarters struck that year. There has been some controversy over just how significant this particular error coin may be. There’s no disputing, though, that many examples have changed hands for $50 or more. That should be incentive enough for you to seek this coin in your pocket or purse.

The 1972-D Kennedy half dollar without the designer’s initials.

Frank Gasparro, former chief sculptor-engraver of the United States Mint, designed the reverse of the Kennedy half dollar, which features the presidential coat of arms. And, as is customary, he was permitted to place his initials on the coin as a form of “signature.” The letters “FG” can be found just to the right of the eagle’s tail. Occasionally, however, overzealous die polishing led to the production of Kennedy halves without these distinctive initials. One such instance took place at the Denver Mint in 1972.

Some of the issues with missing initials are relatively common, but the 1972-D is fairly scarce–and, as a consequence, it brings a higher premium. Here again, a 5- power magnifying glass will enable you to identify the error quickly and easily. Other Kennedy halves known to have been struck without the “FG” include the 1966, the 1973 and the 1982.

Incidentally, Frank Gasparro’s initials also appear on the reverse of the Lincoln Memorial cent, another of his creations–and also FAIL to appear on some of those because of similar die-polishing errors. It almost makes you wonder whether someone at the Mint had it in for him!

The 1974-D doubled-die Kennedy half dollar.

On small numbers of Kennedy halves minted at Denver in 1974, there’s doubling on the obverse. This can be seen most easily in the mottos, rather than the date–and possibly for that reason, this particular error didn’t come to light until quite recently. It appears to be a rare variety, and that is reflected in its price tag of several hundred dollars.

In addition to seeking this coin in circulation, you also should examine any 1974 uncirculated coin sets–or “mint sets”–that you may have in your safety deposit box or dresser drawer. There have been reports of examples turning up in such sets. And since those particular coins are in mint condition, their premium value is maximized.

The fact that this error wasn’t identified, or at least widely publicized, for more than a dozen years should encourage you to intensify your treasure-hunting efforts. It underscores my point that valuable coins are indeed out there waiting to be found–and in some cases literally waiting to be discovered.

Half dollars in general could prove to be a fertile hunting ground, since they haven’t seen much use in daily commerce and therefore haven’t been subject to the same intensive scrutiny as lower denominations. Also, many people apparently don’t realize that Kennedy half dollars retained silver content–although a reduced amount–from 1965 through 1970. Kennedys of those dates are encountered in rolls and bags, and even in regular pocket change, more often than you might imagine. Your best bet here might be to obtain some rolls from your neighborhood bank, since half dollars really don’t circulate in most areas.

Here’s another tip: Of all the current coins, the Jefferson nickel offers the greatest hope of finding a scarcer date, as opposed to a variety whose value is tied to a mint error. That’s because with the exception of the silver “war nickels,” Jeffersons have remained essentially the same in design and composition since the series started in 1938.

All of the other current U.S. coins have undergone crucial changes that led to the withdrawal of earlier examples from circulation. Pre-1959 Lincoln cents have disappeared because of the design change that year, and pre- 1965 Roosevelt dimes and Washington quarters and pre-1971 Kennedy halves have been hoarded because of their silver content.

With Jeffersons, you stand a legitimate chance of finding a scarce date like the 1938-D and S, 1939-D and S and 1950-D. Admittedly, that chance is small–but at least you have the advantage that if the coins are out there, they’ll look like all the rest of the nickels around them and someone else won’t beat you to the punch for a strictly generic reason having nothing to do with the rarity of the dates.

Looking for treasure in pocket change is fun and can be rewarding in a tangible sense, as well. Best of all, the price of the coins you find is unbeatably low.

Circulation finds were exciting 30 years ago, and they’re still exciting today. Why not grab some pocket change and find out for yourself!

POCKET CHANGE LOTTERY

by Scott A. Travers

All that glitters is not gold. Then again, gold isn’t all that glitters.

There are golden opportunities to find worthwhile coins in pocket change today–even though there is little or no silver, much less gold, in the coins that now appear in Americans’ pockets and purses.

Pay very close attention to the coins that pass through your hands, and you may be pleasantly surprised–and greatly enriched financially–by what you discover.

I’ve drawn up an illustrated list of 6 fascinating coins. Most are highly unlikely to turn up. But all have one thing in common: They blend in readily with all the coins around them in the piggy bank or in your change because they have the same basic designs.

You may not always enjoy the thrill of discovery, but you’re bound to derive pleasure and satisfaction from the hunt. And who knows: If you seek, you just may find.

Two years ago, media reports emerged about an Idaho man who claimed his wife spent a 1943 “copper” cent that was sitting in a pocket-change dish. The ensuing publicity caused a nationwide frenzy, with millions of Americans searching for a 1943 “copper” cent.

Although popularly termed “copper,” this coin is actually made from bronze–an alloy of copper, tin and zinc. By 1943, copper was urgently needed for battlefield uses. To help conserve the supply of this critical metal, the U.S. Mint suspended production of “copper” cents and made over a billion cents instead from steel with a coating of zinc. These “white” cents rusted rapidly and today are of little value.

Apparently, at the end of production of the “copper” cents in 1942, a small number of bronze coin blanks – possibly fewer than forty – were in the hopper and somehow got stamped along with the new steel cents in 1943. The rarest examples carry the “D” (coin manufactured in Denver) or “S” (coin manufactured in San Francisco) Mint-marks underneath the date.

On February 24, 2003, a Choice Uncirculated 1943 “copper” cent carrying the “D” Mint-mark sold at auction to a collector for $212,750.

The U.S. Mint officially stopped the manufacture of silver Roosevelt dimes in 1964. So virtually every Roosevelt dime you find dated “1965” will not be silver; it will be composed of copper and nickel “clad.” This rare 1965 dime mistake is made of 90% silver and, as such, is 1 of only a few accounted for. You can tell silver from clad by examining the coin’s edge: The rare silver coin has a silver edge; the common clad coin has a strip of brown around the edge. Experts believe that a small number of 1965 silver dimes were manufactured by mistake at the Mint, and many of those are still waiting to be discovered hiding in piggy banks and cookie jars. One recently found circulated example was sold at auction for nearly $9,000 in July 2003.

Doubling is visible on the front or “obverse” of the coin. The “die” (engraved master impression that strikes the coin) was engraved twice; the coin’s metal or “planchet” was not actually stamped twice. Noticeable doubling is visible on the words LIBERTY and IN GOD WE TRUST, as well as on the date. Other Lincoln cents with valuable obverse doubling errors include 1955, 1969-S, 1970-S, 1984 and 1995. Although nobody knows with certainty how many 1972 Doubled Die cents the Mint manufactured, several thousand are estimated to exist. The demand by thousands of Lincoln cent collectors has outstripped the supply, and these coins range in value from $50 (used or well worn) to $600 (pristine Gem uncirculated). There are other types of doubling that are not as prominent or valuable, including on these dates. In order to command the high values, the doubling needs to be as prominent as the example shown here—and should be authenticated by an expert.

This 1913 Liberty head nickel, acclaimed as the finest of 5 examples struck, was sold privately for about $3 million in the summer of 2003. Until recently, experts could account for only 4 of the 5 specimens. A million-dollar offer led to the discovery of the “missing” fifth specimen. It had been stashed in a closet in North Carolina for many years after one of the nation’s oldest and largest coin firms looked at it in 1962 and incorrectly concluded that the date had been altered. Re-examination by a blue-ribbon panel revealed it was genuine and unaltered after all. Its owners claimed an immediate $10,000 reward and are expected to realize well over $1 million if and when they sell it.

Instead of being ejected after it was struck, this coin stayed in the coining chamber and was struck again. This type of quarter is very much in demand and quite dramatic with its doubled Statue of Liberty. Collectors willingly pay $3,000 or more for choice specimens such as this. This type of Mint error is rare. Collectors eagerly snap up these “defective” coins for up to $1,000 each. Part of the reason for these coins’ demand is that the minting process rarely produces coins with defects that are attracted to a magnet.

NEVER CLEAN YOUR COINS. Cleaning a coin will remove details of the coin’s design—details that can never again be restored.

VIEW YOUR COINS CAREFULLY. Be careful not to talk over a valuable coin. A tiny spray of saliva can spot an otherwise pristine example.

HOLD COINS CORRECTLY. Hold the coin firmly by the edge between thumb and forefinger over a soft surface. A perspiration-soaked hand or thumb touching a coin can significantly lower the value. Scott Travers advises emptying your purse, wallet or piggy bank onto a piece of velvet when searching for pocket-change rarities—not holding the coins in your hands.

CERTIFICATION

The Professional Coin Grading Service (PCGS) of Newport Beach, California certifies as genuine and grades coins on a 1-70 scale and then encapsulates them in sonically-sealed, tamper-resistant holders. 1 refers to a coin which is so well worn it is barely identifiable. 70 refers to a perfect coin.

The Numismatic Guaranty Corporation (NGC) of Sarasota, Florida also certifies as genuine and grades coins on that 1-70 scale and then encapsulates them. Coins that are contained in grading service plastic “slabs” assist consumers by allowing them to know independent, informed opinions, as opposed to the opinions of an unknowledgeable party.

Scott Travers Videos

Scott Travers makes news around the world with appearances on television and on the internet

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Meet The Expert: Scott Travers

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Investing In Gold

Beware Of These Coin-Collecting Scams!

THE EXCITEMENT OF PUBLIC COIN AUCTIONS

By SCOTT A. TRAVERS

Public auctions represent one of the most important–and one of the most exciting–methods by which rare coins are bought and sold. Using this method successfully, though, requires constant awareness of changing market conditions and modification of buying and selling strategy.

Over the years, I have been one of the greatest supporters of selling rare coins through public auction; as a consumer advocate, I have viewed this as a medium that was generally pro-consignor. I haven’t been as bullish on buying coins at auction because there are perils and pitfalls that require more expertise on the part of prospective buyers. But I have encouraged collectors seeking to sell their coins to go the auction route, provided they negotiated suitable terms of sale with the auction house of their choice.

From the mid-1970s through the late 1980s, it was said with considerable accuracy that where the action was, in the rare coin market, was where the auction was. Time after time during that period, the biggest, most valuable, most glamorous collections were dispersed at public auctions. Consider these examples:

In 1977, the John Andrew Beck Collection brought more than $3.2 million at a public auction conducted by Abner Kreisberg of Beverly Hills, California.
In 1982, the gold portion of the fabulous Louis Eliasberg Collection fetched $11.4 million at a glittering auction conducted by Bowers and Ruddy Galleries of Los Angeles under the simple title, The United States Gold Coin Collection. Two of the 1,074 lots–an 1822 half eagle (or $5 gold piece) and an 1870-S $3 gold piece–were hammered down for prices of $625,000 apiece.
In 1983 and 1984, Bowers and Merena Galleries of Wolfeboro, New Hampshire, successor firm to Bowers and Ruddy, sold coins from the collection of numismatic legend Virgil Brand for a total of more than $3.3 million at two public auctions. In 1983, Virgil Brand’s library was sold by George Frederick Kolbe, a California dealer in numismatic literature, for $20,500.
In 1984, coins from the collection of Texas newsman- numismatist Amon G. Carter Jr.–one of the greatest collections of all time–realized more than $8 million at a spectacular auction conducted by Stack’s of New York. Carter’s outstanding collection of U.S. paper money was sold at fixed prices by various dealers.
In 1986, the Robinson S. Brown Jr. Collection brought hammer prices totaling nearly $1.3 million at an auction held by Superior Galleries of Beverly Hills. That same year, Superior sold the Wayne Miller Collection of U.S. silver dollars at another memorable auction for more than $1.2 million, including the 10-percent buyer’s fee charged on each lot.
In 1987 and 1988, the storied Norweb Collection realized a total of more than $18 million at a three-part auction sale by Bowers and Merena. The company’s marvelous catalogs contributed significantly to the sale’s success.
In 1988, the Herman Halpern Collection of U.S. large cents–one of the finest ever assembled–went on the block at an auction conducted by Stack’s and realized nearly $2 million. That same year, Congressman Jimmy Hayes’ phenomenal collection of high-grade U.S. type coins brought nearly $1.2 million–an average of approximately $10,000 per lot. Again, outstanding cataloging served to enhance the coins’ appeal– and, in all likelihood, the prices they attained.
From late 1979 through early 1981, in a four-part sale that remains the greatest coin auction of all time, the Garrett family collection realized more than $25 million for Johns Hopkins University of Baltimore, which had received the coins in a generous bequest from the Garretts. The sale, conducted by Bowers and Ruddy Galleries, included such rarities as an 1804 silver dollar, a proof 1795 silver dollar and two 1787 Brasher doubloons, one of which changed hands for $725,000–an auction record that stood for nearly a decade.

All these auctions, and others from that period, as well, were true “happenings”–dramatic highlights that stirred great excitement throughout the rare coin market. However, these auctions occurred in a different kind of marketplace. The marketplace of yesterday, the marketplace of the Seventies and the Eighties, had far more stability than the marketplace of the Nineties and thus was more conducive to longer-range planning.

During that period, a collector could consign his or her coins to an auction firm for sale months later–and sometimes even years later–and the marketplace stability would permit the firm to plan that sale carefully, in loving detail, over many weeks without undue concern that market volatility would jeopardize its success. Thus, it was not only possible but routine for major auction sales to feature lavish catalogs in the grand-format style, filled with breathtaking photographs of the coins. And waiting periods of three or four months, and sometimes even longer, were normal between the time a collector consigned the coins and the auction firm sold them.

Even then, to be sure, three- or four-month waits created some inconveniences and occasional market-related problems. But in those days, these weren’t insurmountable; they tended to be annoyances, rather than grave concerns. Those memorable sales of the not-so-distant past provided opportunities for latter-day hobbyists to build collections rivaling those that were being dispersed. People like Harry Bass and Ed Trompeter seized those opportunities to acquire great rarities. In the process, they engaged in sometimes fierce but more often friendly bidding competition which reinforced the mystique of those great auctions. It created an ambiance of elegant excitement. At the same time, it reinforced the perception of marketplace stability. And, of course, it played a key role in pushing price levels to unprecedented heights in those crowded and exhilarating auction rooms.

The marketplace today is significantly different–and as a result, I am no longer as bullish as before on selling rare coins at public auction. The current marketplace is volatile, unstable and speculative, and under these conditions there is markedly greater risk in consigning your coins for sale at auction.

In the mid- to late 1980s, we witnessed the development and rapid growth of sight-unseen trading in the coin market. Coins that had been “slabbed”–that is to say, certified and encapsulated in sonically sealed, tamper-resistant holders– came to be treated virtually like commodities because they were viewed as being interchangeable in many instances. This commoditization of coins led to large-scale purchases by limited partnerships and investment funds, and as the scale increased, so did the market’s volatility.

Because of the wide and fast price swings, the risk was substantially higher that you might consign, say, $1 million worth of coins for sale at an auction three or four months down the road–and by the time the sale took place, those coins’ market value might have declined precipitously, perhaps by half or more. That was a risk–a very significant risk–that just didn’t exist a few years earlier.

As this is written, in early October 1992, the coin market as a whole remains extremely sluggish. Yet, even now, volatility is high, and no one can say with any assurance that prices won’t be sharply lower (or, for that matter, sharply higher) three or four months from now. Stability, in short, is a thing of the past.

I don’t mean to paint an entirely black picture of coin auctions’ potential as a sales vehicle. They do have important pluses, even today. Those pluses are so important, in fact, that if you can overcome the very great obstacle of marketplace risk–the risk that your coins will decline in value dramatically before the gavel comes down–public auctions remain one of the very best ways to sell your coins.

The primary advantage is the competition public auctions stimulate. If you try to sell your coins directly to a dealer, you’re quite likely to get a low offer. Dealers have a vested interest in the outcome of such a transaction. But auction houses routinely receive commissions from the sale of consignors’ coins–so if you sell at auction, the auction firm will have the same interest at heart as you do: It will want your coins to bring the highest possible prices so that it can maximize its commissions.

Auctions alleviate half of the sale risk: the risk that you’ll be offered prices far below your coins’ actual value. The other half of the sale risk is that your coins will lose value between the time you consign them and when they’re sold.

Public auctions maximize the price a coin brings at the exact time the gavel falls. If the auction firm is reputable and has brought together a representative cross-section of bidders, the chances are good that you’ll get top dollar for your coin–top dollar, that is, in terms of the current market. That’s because competition will drive up the price. Another advantage to selling your coins at auction is the fact that auction houses generally create beautiful catalog. These not only help attract bidders, but also serve as keepsakes and records of the sales. Besides being helpful to consignors, these catalogs also benefit the marketplace as a whole by stimulating interest and serving as a stabilizing force.

Auctions sometimes do well even at times when the market as a whole is in a slump. The fact is, auctions sometimes invent buyers and create demand by conjuring up an air of excitement–by transforming the sale of coins into a real event. That happened, for example, at the Eliasberg sale; the market was shaky, but the auction was spectacular. Bowers and Ruddy and, more recently, Bowers and Merena, have done a phenomenal job of creating such events over the years. Unfortunately, public auctions also have disadvantages, at least from the perspective of the consignor. The big one, already mentioned, is the risk that your coins may go down in value before an auction takes place. There are, however, other negative factors, as well.

One is the fact that you have to wait so long to get your money. Typically, that wait includes not only the three or four months before the auction, but also 45 days afterward. That’s the time auction firms normally give successful bidders to pay for their purchases.

Auction firms to provide cash advances to consignors; as
a rule, they’ll advance up to 50 percent of the estimated value of a coin. But, in such instances, the interest rate is normally quite high–18 percent, customarily. So unless you negotiate a low interest rate for such an advance, this won’t be a very attractive alternative.

To guard against excessively low bidding, a consignor has the option of buying back his or her coins. In that case, however, the auction firm will usually charge its regular fee of 10 or 20 percent of the coins’ prices realized. So buying back coins can become an expensive proposition. Also on the downside, auction sales cannot be canceled by a consignor except in unusual cases where special contractual provisions have been made. Thus, the auction company will proceed with a scheduled sale even if the marketplace is all but devoid of money.

You can protect yourself against some of these risks, especially if you are consigning many thousands of dollars– even millions of dollars–worth of coins. In such cases, auction firms have the incentive to make accommodations. For one thing you need to be sure that every coin you’re selling has a reserve on it. That way, if it doesn’t bring this minimum amount, you can buy it back and sell it at a later, better time.

You can seek an arrangement whereby you will pay a smaller-than-usual fee–perhaps 5 percent or even less–when you buy back your coins.

And, if you are a major consignor to a sale, you can seek a cancellation clause giving you the option to have the sale postponed, without penalty, if–in your sole discretion- -market conditions mitigate against putting the coins on the block on the scheduled date.

Given the market’s volatility, it’s advisable to cost- average the coins you consign for sale at auction. In other words, don’t put all your “eggs” in a single sale; sell your coins at various sales over a period of time to minimize the risk that they’ll all hit the market at precisely the wrong time.

Selling coins at auction can be a rewarding experience, in terms of both psychic income and prices realized. But to maximize your pleasure and profit, and minimize your risk and potential loss, you need to take steps to protect your interests.

If you take the necessary precautions, you may very well find that auctions are the place where the action is for you.

THE BEST S.S. CENTRAL AMERICA DOUBLE EAGLE

THE BEST S.S. CENTRAL AMERICA DOUBLE EAGLE

By SCOTT A. TRAVERS

A precious piece of history changed hands recently when Scott Travers Rare Coin Galleries brokered the sale of a superb 1857-S double eagle plucked from the wreckage of the storied SS Central America. The glittering $20 gold piece, graded Mint State-67 by the Professional Coin Grading Service, may well be the finest specimen retrieved from the doomed steamer’s watery grave – and the finest Type I Coronet double eagle in existence.

The coin, an example of the scarce “bold-S” variety, is one of just three such pieces in the Central America cache, and 11 of any kind from the ship’s spectacular cargo, to receive the lofty grade of MS-67 from PCGS. It remains in the original gold-foil-insert holder used by the company to showcase coins from the ship and signify they were subject to no additional restoration after their recovery from the wreck and initial curation – a crucial consideration in assuring their high quality is pristine. The specimen was hand-picked by Scott Travers and John Albanese, a longtime professional numismatist who played a key role in the founding of both PCGS and the Numismatic Guaranty Corporation of America (NGC) and who now serves as an independent consultant. According to Albanese, it is possibly the finest-known Type I double eagle – the kind produced from 1849 to 1866 without the motto IN GOD WE TRUST on the reverse. In all, only 12 have been graded MS-67 by PCGS, and none higher. The value is in excess of $100,000 – and the Certified Coin Dealer Newsletter has a sight-unseen listing of $90,000 for a coin of this date, type and grade.

The cargo of the SS Central America included thousands of gold coins and hundreds of gold bars and ingots when the 280-foot sidewheel steamer left Panama on Sept. 3, 1857, bound for New York. The coins had been struck at the three-year-old San Francisco Mint with ore from the California Gold Rush. The bulk of the 477 passengers and 101 crew members also had come from San Francisco. In that era before the Transcontinental Railroad and the Panama Canal, it was common practice to transport passengers and cargo from the U.S. West Coast by ship to Panama’s Pacific coast, then across the isthmus by train to the Atlantic side, where a new ship picked them up for the trip to New York and other Eastern ports. On Sept. 9, the ship encountered an unexpected storm; three days later, it sank off the Carolina coast, carrying 425 souls and its rich cargo to a tomb at the bottom of the sea.

In 1981, Tommy Thompson and other adventurers formed the Columbus-America Discovery Group to seek the ship’s grave and recover its treasure. They located it on Sept. 11, 1987 – almost exactly 130 years after the Central America was swallowed by the sea. After more than a decade of painstaking salvage operations and complicated legal maneuvers, the treasure finally reached the marketplace several years ago. And now, with the recent sale by Scott Travers Rare Coin Galleries, one of the ship’s most breathtaking coins has found a new home where its history, beauty and rarity will be appreciated and preserved by the legacy’s latest custodian.

THE TOP 10 COLLECTIBLE GOLD COINS

ALL THAT GLITTERS IS GOLD

By SCOTT A. TRAVERS

Gold has always held tremendous fascination for mankind. Its beauty, rarity and durability combine to give it timeless appeal and great value.

Coin collectors appreciate these attributes even more than most people, for they share special insights into the glorious history not only of the metal itself but also of the time-honored coins produced from the glamorous yellow metal.

Gold coins, like all coins, are hand-held pieces of history. They outshine virtually all other coins, however, because their main component is so coveted, so admired and so prized.

Many U.S. gold coins rank high on collectors’ wish lists and want lists, and it would be difficult to single out 10 as the most significant. Rather than address their significance alone, then, I’ve picked out 10 that I believe to be the most collectible–the ones that for various reasons possess the greatest attraction for collectors.

Your list of 10 might be totally different from mine–but after you look mine over, I think you will agree that all of the coins on my list are truly special.

(1) The Saint-Gaudens double eagle.

During the 90 years since its introduction, the “Saint” has assumed a place high in the pantheon of U.S. numismatics. Many–if not most–observers of U.S. coinage consider it the greatest coin this nation has ever issued.

Its designer, Augustus Saint-Gaudens, was a giant in U.S. sculpture, and his coinage work clearly revealed him to be a master of small-size art as well as massive statues. This $20 gold piece, intended as a reflection of ancient Greek art, measures up to that challenge and, indeed, compares favorably with the ancients’ classic creations. The first-year coins of 1907 include a mere 11,250 struck for circulation in high relief.

A 1908 example that carries a grade of Mint State-64 displays a sharpness of detail on these early dates that make them particularly ideal showcases for Saint-Gaudens’ stunning artwork.

The relief was reduced in 1907 because its original height was impractical for everyday coinage. Even the subsequent regular-relief issues in this series have exceptional beauty, however. This coin’s vibrant luster is apparent and highly appealing.

Saint-Gaudens double eagles contain very nearly a full ounce of gold, making them attractive not only as works of art but also as stores of precious metal. And while the series does include a number of great rarities worth many thousands of dollars, common-date Saints are extremely affordable, even in mint condition.

MS-65 common-date Saints currently are listed at less than $1,000–and these are certified coins, graded and encapsulated by one of the major grading services. At this writing in 1997, the sight-unseen bids are $900 for Saints graded MS-65 by the Professional Coin Grading Service (PCGS) and $850 for MS-65 pieces graded by the Numismatic Guaranty Corporation of America (NGC). In MS-64, the corresponding values are $560 and $555, respectively.

(2) Indian Head eagle.

The sheer majesty of Augustus Saint-Gaudens’ magnificent double eagle tends to overshadow the almost equal greatness of the second U.S. gold coin he created: the Indian Head eagle, or $10 gold piece.

Some critics consider this smaller companion gold piece to be even more attractive than the lordly double eagle because its design possesses greater simplicity. And whether you agree with them or not, there’s surely no denying that this coin, too, ranks among this nation’s most beautiful examples of numismatic art.

The 1907 Rolled Edge eagle illustrated here is an awe-inspiring coin obviously worthy of its lofty designation as a PCGS MS-66. The price is also correspondingly high.

Collectors with limited budgets needn’t despair. In lower mint-state grades, the 1908-1933 type is available at very affordable levels, and that helps make them extremely collectible. You can get a lovely MS-63 example for $600. And a very attractive MS-62 example, free from major abrasions, would cost you less than $400.

(3) Proof gold coinage.

The Liberty Head double eagle ($20 gold piece) illustrated here is a Proof-64 dated 1862, and it’s not only gorgeous but rare: Just 35 proofs were made of this coin with that date.

Proof gold coins in general are properly regarded as the Rolls-Royces of U.S. numismatics. Many have mintages of 50 or 100–certainly no more than a few hundred–and only a handful survive today in pristine condition.

Proof gold coins with cameo contrast between the fields and devices have irresistible allure, and feverish demand has always existed for these highly sought-after coins. The golden pond-like reflectivity of the fields and lovely frosted nature of the devices combine to make these coins incredibly desirable–and, of course, exceptionally collectible.

In Proof-66, Liberty quarter eagles ($2.50 gold pieces) carry current sight-unseen bids of $13,500 for NGC-graded specimens and $13,250 for those graded by PCGS. In Proof-65, the corresponding values are $9,100 and $9,000. Back in May of 1989, the same coins would have cost $55,000 in Proof-66 and $32,250 in Proof-65.

(4) 1915-S Panama-Pacific commemorative quarter eagle.

Commemorative gold coins add yet another dimension to the collector’s enjoyment: They have a direct link with the person, place or thing that they commemorate, giving them even greater significance from a historical standpoint.

The five coins issued for the Panama-Pacific Exposition of 1915 had such a link to one of the most important events in U.S. history: the completion of the Panama Canal, which helped thrust this nation into the forefront of international affairs and, in the process, gained global recognition for U.S. technical know-how and ingenuity.

Three of those five coins were made of gold, and usually people focus on the largest of these: the round and octagonal $50 gold pieces. They are, after all, the only such coins ever issued by Uncle Sam.

But the “baby” of the family–the quarter eagle (or $2.50 gold piece) deserves recognition as well. And, in fact, collectors have always liked this coin.

One of its attractions is its unusual, metaphorical design: It portrays the goddess Columbia, representing the United States, seated on a hippocampus–a mythological seahorse. In her hand is the caduceus, representing the triumph of medicine over yellow fever during the construction of the canal.

The beautiful Panama-Pacific quarter eagle depicted here grades MS 65 and has a market value of slightly more than $3,000. In May of 1989, this coin would have cost about $11,000.

Relatively few gold coins were issued during the traditional era of U.S. commemorative coinage, from 1892 to 1954. And this coin is among the most fascinating. The sophistication of its design and the significance of its subject combine with its precious-metal content to make it an unusually collectible coin.

(5) Capped Bust eagle.

The classic and highly artistic Capped Bust series of eagles, or $10 gold pieces, lasted barely a decade, but left an enduring legacy for collectors.

This was, after all, the very first gold coinage issued by this nation (along with the Capped Bust half eagle), so it has unusual appeal historically. It’s also extremely rare, with total mintage for the entire series coming to only about 65,000.

And its very appealing design, with a right-facing bust of Liberty on the obverse and either a small eagle or a heraldic eagle on the reverse, perfectly reflects the era of its origin both artistically and symbolically.

The example illustrated here is a Gem 1799 eagle with a heraldic eagle on the reverse. This is one of the most common dates in the series, but in absolute terms its mintage of 37,449 would qualify as scarce–even rare–by just about any yardstick. And as a Gem, this coin is a major rarity.

Market values for these early U.S. gold coins are quite stable–not nearly as volatile as those for generic, fungible coins such as the Saint-Gaudens double eagle. These coins are viewed more like snowflakes, each of them being different from every other.

You can expect to pay about $2,800 for a coin of this type graded About Uncirculated-55 and $11,000 for one that is MS-60. Those are not inconsiderable sums. Then again, these are extraordinary coins.

(6) Augustus Humbert eagle.

The California Gold Rush spawned numerous private issues of “territorial” gold coins. There was, after all, no federal mint in the region until the establishment of the San Francisco Mint in 1854. And there was certainly plenty of raw material.

Among the most interesting–and important–of the private gold issues were those produced by Augustus Humbert, a New York watch-case maker who won an appointment as U.S. assayer in California shortly after the gold rush got under way.

Humbert was responsible for a series of gold coins, and his $50 “slugs” tend to get the most attention. However, many collectors also admire–and covet–the round $10 coins, or eagles, issued under the assayer’s imprimatur.

The one illustrated here, issued by Humbert in conjunction with Moffat & Co., is especially intriguing because it bears the overdate 1852-over-1. Its grade is Fine-12. Even in that relatively low grade, this coin commands a four-figure premium.

Collectors and non-collectors alike appreciate coins that have a story to tell–and this one certainly does. It’s often used, in fact, to illustrate books and articles concerning the California Gold Rush or the history of gold in America. All this greatly enhances its status as a collectible.

(7) Liberty Head eagle.

Liberty Head $10 gold pieces, also sometimes designated as Coronet eagles, were part of American life for nearly three-quarters of a century. True, the average American seldom got to handle gold coins during those years, when $10 might have represented the better part of a week’s pay. But these coins were familiar and much admired.

Common-date Liberty $10’s have tended to hold their value much better than most U.S. coins. And they have one characteristic that makes them extremely attractive to many collectors, as well as many investors: When gold bullion moves up in value 10 to 20 percent, common-date Lib $10’s tend to rise by multiples of that.

This remarkable coin is worth over $10,000, putting it out of the price range of most collectors. But don’t despair: You can obtain a common-date mint-state coin, still possessing great appeal, for just several hundred dollars.

(8) Indian Head half eagle.

The MS-65 illustrated here showcases the beauty of this unusual coinage type. It also shows why Indian Head $5 gold pieces and their smaller $2.50 companions are so difficult to grade.

Unlike other U.S. coins, these popular gold pieces have their design incuse, or recessed below the surface. This requires graders to approach them from an entirely different perspective and makes it devilishly tricky to grade them consistently with accuracy.

In some cases, the difference between an AU-58 coin and an MS-65 may be almost imperceptible to the eye. But the difference in price can be tremendous. For the average collector, then, it might be prudent to stick with coins that are graded AU-58, or a lower mint-state level. These coins are still extremely collectible, but the risk of overpaying is removed.

An MS-65 example might cost you $10,600. But you can buy one grading MS-60 or even somewhat better for $300 or less. That’s a very good value for a mint-state $5 gold piece with such an attractive design certified by a leading grading service.

The Indian $5 gold piece is high on the list of collectible U.S. gold coins. In fact it is among the most collectible of all coins.

(9) Liberty Head double eagle.

The Liberty Head $20 gold piece doesn’t get the same attention, or admiration, as its Saint-Gaudens successor. But this is nonetheless a very desirable coin.

Like the Saint, it contains very nearly a full ounce of gold. Its size is impressive and appealing. And while its design may not evoke comparisons with the artworks of ancient Greece, it’s a handsome and aesthetically interesting coin.

People love large gold coins with high intrinsic value. In fact, people of affluence frequently buy coins such as this in quantity, because they represent so much wealth in such a concentrated–and attractive–form. It gives them a feeling of security.

The Lib $20 series is divided into three types: the no-motto type from 1849 to 1866 and two different types with the motto IN GOD WE TRUST.

A Type 1, minted from 1849-1866, costs about $6,000 in MS-63. A similar Type 2, issued from 1866 to 1876, costs about $4,700. A common-date Type 3, minted from 1877 to 1907, can be purchased for about $600 in the same grade. That’s an excellent value for a mint-state coin with nearly $400 worth of gold.

(10) $3 Indian Head gold piece.

Three-dollar gold pieces were issued for a span of only 35 years, from 1854 to 1889, and their mintages tended to be extremely low–generally below 10,000 and sometimes even below 1,000. Clearly then, these are highly collectible coins–a status reinforced by their interesting Indian Princess design.

The coin illustrated here is an MS-65 example of the 1854, a popular first-year issue. Its mintage of 138,618 is by far the highest in the series–indeed, the only one to top 100,000. That, of course, makes it more affordable and consequently more collectible.

Investor demand for these coins pushed up their prices to astronomical levels in the late 1980s. The premium-quality MS-65 coin shown here would have cost $30,000 in May of 1989, but today it can be bought for one-third that amount.

Three-dollar gold pieces are not for the low-budget buyer. But considering their rarity, $10,000 seems quite reasonable for a gorgeous MS-65 specimen. And for only about $4,000, you can obtain an example graded MS-64, with very nearly the same great appeal.

Throughout this article, I have talked for the most part about coins in mint condition. For those who find these beyond their financial reach, circulated gold coins are an excellent alternative. They won’t have the same exquisite detail and radiant luster–but they also won’t have the same high price tags.

You can get scarcer-date Saint-Gaudens double eagles in circulated grades for just a tiny premium over melt price. What could be more collectible than a coin that old and that beautiful–with almost an ounce of gold and a scarce date–for just a nominal cost above melt.

GO FOR THE GENERIC GOLD A LOOK AT GOLD COIN INVESTMENTS

By SCOTT A. TRAVERS

Gold has begun to glitter again, and gold bugs are exhorting us to climb aboard and strap ourselves in for a rocket ride to the Moon.

There’s no way of knowing how high this hopeful boomlet will carry the yellow metal. Before we get too comfortable on the launching pad, however, we ought to reexamine the events of recent years, especially in the market for generic gold coins.

It will soon become apparent that far from embarking on a rocket trip, those who buy gold coins today could actually be in for a roller-coaster ride.

The fact of the matter is that over the last half- decade, gold coins have risen in value dramatically in many cases, only to lose that added value in a relatively short period of time. 1990 W Gold $50 American Eagle NGC PF 70 Ultra Cameo

The gold coin marketplace has been shattered by volatility and by sharp ups and downs that often have little or no correlation to the current price performance of the yellow metal itself. This has served to magnify the risks for those who venture into this market. But at the same time, it also has created opportunities for those with the savvy and wherewithal to use the peaks and valleys to their advantage. At the very outset, it’s crucial to understand the difference between “generic” gold coins and those that are genuinely rare.

Generic coins are those which exist in sufficient quantities to be traded as like-kind units–very much like commodities.

These coins may be in high levels of preservation; more often than not, in fact, those traded frequently in the current marketplace are in mint-state condition. But they’re readily available in those grades, so buyers and sellers have quick access to sources of supply. And one is treated much like any other, so that these coins are interchangeable. Common-date Saint-Gaudens double eagles ($20 gold pieces) are viewed, for example, as generic coins.

By contrast, truly rare coins are one-of-a-kind pieces, and each has its own personality. Low mintage, not high quality, is the key determining factor in their value. Some, of course, possess not only rarity but also exceptional quality–and that combination greatly enhances their value. But unlike generic coins, truly rare coins are treated first and foremost as collectibles, not commodities; they’re regarded as distinctive, rather than interchangeable.

No-motto Liberty Head half eagles ($5 gold pieces)– those minted between 1839 and 1866 without the motto IN GOD WE TRUST on the reverse–fall within this category. They’re very scarce as a group, with mintages generally well under 100,000, and flat-out rare in a number of individual instances.

Precious-metal content forms an important part of generic gold coins’ value–much more so than it does in the case of rare gold coins. This is particularly true for coins in high circulated grades such as About Uncirculated-55 or 58, and in low-end uncirculated grades such as Mint State-60 through 62. In these levels of preservation, generic gold coins are virtually “bullion” coins: They command just a modest premium over the market value of the metal they contain, and they rise and fall in value as the precious metal itself goes up or down in price.

The price differential widens considerably as the grade level moves up to Mint State-63 and above. And at times when the market is bullish, the differential balloons even more. Conversely, when conditions are adverse, the differential contracts.

Since May of 1989, when the coin market scaled its last major peak, high-grade generic gold coins have fallen in value sharply–even though gold itself actually went up in value slightly during that time: The average price of gold was $372 an ounce during May of 1989, and this July it averaged just under $400. But during that span of more than four years, there have been a number of well-defined points when these coins rallied. And those who were shrewd and/or fortunate enough to ride the up-and-down waves in the marketplace, buying at low ebb and selling at high tide, could have made–and, in some instances, did make–very substantial profits.

Let’s look at a few examples:

The Certified Coin Dealer Newsletter (or Bluesheet) of May 26, 1989, assigned a value of $3,950 to common-date Saint-Gaudens double eagles graded Mint State-65 by the Professional Coin Grading Service (PCGS). In early June 1993, those same coins were valued at $1,440, meaning they were worth only about 36.5 percent of their 1989 peak value. But they didn’t fall to that point in a straight line. On July 3, 1992, for example, the Bluesheet listed them at just $1,010, only about 25 percent of their May ’89 peak–so between then and June of this year, they actually rose in value nearly 50 percent. And similar swings, quite dramatic percentage-wise, have occurred throughout the four-year period.
On May 26, 1989, the Bluesheet set the market price at $2,400 for Indian Head eagles ($10 gold pieces) graded MS-63 by PCGS. In June 1993, those coins were worth $1,400, or 58 percent of the peak. But in July 1992, they had been worth only $790, or less than one-third of the peak. Thus, between then and June of this year, they rose in value nearly 80 percent
On May 26, 1989, the Bluesheet valuation was $3,050 for Liberty eagles with IN GOD WE TRUST graded MS-63 by PCGS. In June 1993, those coins had a market value of $1,240, or roughly 40 percent of the peak. But that was still more than 40 percent higher than their value in July 1992, when the Bluesheet listed them at only $875.

Not all generic gold coins fell as far as these, or have fluctuated as greatly during the last four-plus years. But many have experienced significant swings in value, creating opportunities to buy and sell advantageously–even though the coin market has remained depressed throughout this period, relative to its status in May 1989. 1922 Saint-Gaudens double eagle graded PCGS/CAC MS64

Rare gold coins, by contrast, have had no similar intermediate ups and downs; rather, they have remained unremittingly depressed. The reason for this is simple: Being unavailable in quantity, rare coins cannot be promoted profitably–manipulated, if you will–by numismatic entrepreneurs, the way their generic cousins can be. Thus, they don’t enjoy the temporary boosts in value generated by what might be called artificial market stimulation. Instead, they lie dormant until the market regains more permanent underlying strength.

Truly rare coins benefit more dramatically than generic ones when market conditions are bullish–and I consider them much better buys from the standpoint of long-term investment. Just as their malaise is more persistent and pronounced during market slumps, their performance is also more spectacular and sustained when the good times roll. They have the potential to soar in value far faster and higher when the inevitable turnaround occurs–and justifiably so, since they are more elusive and desirable.

But, as we have seen since 1989, the coin market–like any other segment of the economy–is subject to its share of slumps, and these can be protracted. And during such periods, it’s comforting and challenging for action-oriented “players” to know that there is still some ferment in the marketplace and they still have a chance to realize meaningful profits on a short-term basis without having to wait for the possibly distant light at the end of the long-range tunnel.

Anyone who purchased rare gold coins during the last four years has probably incurred paper losses; those coins are very likely worth less today–perhaps a great deal less– than when they were acquired. And their prices have trended consistently downward, furnishing little or no window of opportunity for selling them at a profit along the way. With generic gold coins, on the other hand, handsome profits could have been made through judicious buying and selling.

Many generic coins lost 50 percent of their value between May 1989 and May 1990, then regained roughly half the lost value before sinking lower again. This ebb-and-flow pattern was subsequently repeated twice more. Let’s say a certain coin was worth $10,000 in May 1989 and you bought it a year later for $5,000. You could have sold this coin for $7,500 when the market rebounded temporarily, then bought it back for $5,000–or even less–at the next bottom and sold it again at a profit when it went up. By doing this several times, you could have doubled or tripled your money during the four-year period–in the very teeth of a raging bear market.

A word of caution: This is a gambler’s game–one that can be extremely risky. In a sense, it’s like playing musical chairs with your money, and it’s not something an ordinary consumer can be expected to do. In fact, even expert dealers have trouble doing it successfully.

Having said this, the fact remains that most of the profit-making opportunities in the coin market during the last four years–short of waiting years for the market as a whole to turn around–have existed in the area of generics. While other coins were dropping in price like rocks and then simply staying low and flat, generics were behaving more like bungee-jumpers–bouncing up after each plunge and giving people a chance to cash in their chips.

In this sense, volatility can be–and has been–the investor’s best friend in time of need. And if ever coin investors needed a friend, the last four years have been the time.

If you decide to try your luck and gamble on generic gold coins, I urge you to limit your investment to totally discretionary funds–money that isn’t essential to your economic well-being.

To play this market properly, you should buy at times when both gold itself and generic gold coins are relatively low-priced, compared to near-past levels, and sell at times when prices are trending upward without economic justification.

Let’s say a certain generic gold coin has increased from $200 to $500–and we’ve seen this happen with a number of gold coins in the last couple of years–and the coin is a relatively common one of which thousands of examples are available in a comparable level of preservation. If the only apparent reason for the price increase is the fact that a certain company is promoting this coin, then you should sell it and take your profit (assuming that you purchased it while the price was lower). Then, when the price comes down again after the promotion, as it almost certainly will, you can buy the coin again and wait for another chance to repeat the sell-buy cycle.

If you believe the price increase resulted not from promotion but rather from genuine economic justification, and you believe the justification will last, then you should consider turning your attention to coins with greater long- term potential–rare gold coins, for example. Those should do far better in the long run.

Factors that would constitute true economic justification include inflation, an expanded money supply and increased federal spending. Generic gold coins WILL go up in value in times of high inflation, just as gold itself will go up. But truly rare coins will go up even more, so that’s where you should turn your attention at such times. Gold may not be heading to the Moon anytime soon, so it’s probably premature to make a reservation on the gold bugs’ rocket ride.

But roller-coaster rides can be exciting, too–and possibly even rewarding. So while reconstruction continues on the coin market’s launch pad to outer space, why not enjoy one of the most stimulating rides now being offered here on Earth:

Go for the generic gold!

THE TEXT HAS NOT BEEN CHANGED SINCE 1993. BUT PHOTOS HAVE BEEN ADDED

EARLY DOLLARS STARTING TO TURN CARTWHEELS

By SCOTT A. TRAVERS

The 1804 silver dollar is always in the news, so it seems. This “King of American Coins” has long been not only one of the most valuable United States coins but also one of the most publicized.
This great numismatic rarity surely deserves the attention and acclaim that it receives; after all, just 15 examples are known, and one of those currently holds the all-time auction record of $4.14 million (a record I helped create as an active underbidder at the time of its sale on Aug. 30, 1999).

But other early dollars from the very first years of U.S. coinage also are extremely scarce and desirable. And lately, these have been getting some much-deserved attention as well from dealers and collectors who recognize their scarcity and potential. Prices are strong and rising, and there’s good reason to look for sharp growth in interest and performance in the months and years to come.

“Early” U.S. dollars generally are considered to be those produced from 1794 through 1804. Actually, all 15 dollars dated 1804 were struck decades later, as researchers have documented in great detail. Dollar production did take place in 1804, but all of the dollars minted that year are thought to have been dated 1803 and possibly 1802.

There are three major varieties of these early dollars.

* The very first ones issued, in 1794 and part of 1795, bore a “Flowing Hair” portrait of Liberty with a small, rather puny-looking eagle on the reverse.
* Partway through production in 1795, the Flowing Hair obverse was replaced by a more polished and matronly “Draped Bust” likeness of Liberty, with the “Small Eagle” reverse being retained.
* Then, in 1798, the reverse was changed to a “Heraldic Eagle” portrait – this time with the obverse remaining as it was, with the Draped Bust interpretation of Liberty. This final version continued through the end of the series.

Like other early U.S. coins, the Flowing Hair and Draped Bust dollars came in numerous die varieties – more than 100 have been identified – and this reinforces and enhances their appeal to the small but growing number of hobbyists who pursue them.

The profusion of die varieties might seem to indicate high production levels, with new dies being needed as old ones wore out from use. On the contrary, the mintages were modest – even minuscule, in some cases, with just 1,758 dollars being made in 1794 and 7,776 in 1797. The dies wore out not because of high volume but because of the stress and strain of making such large coins with the relatively primitive equipment in use at the time.

At 39 to 40 millimeters in diameter, these were the largest regular-issue coins ever issued by Uncle Sam. Noted coin dealer-author Q. David Bowers is fond of referring to them as “the dollars of our daddies” – and given their impressive size, they might also be aptly described as the daddies of all dollars.

Their unusually large surface area makes it easier for collectors to identify and study the many die varieties they exhibit, and even discover new ones on occasion. Collectors who specialize in smaller-size coins, such as early copper cents and half cents, and particularly dimes and half dimes, might well be jealous of that.

The late Walter Breen, a brilliant numismatic researcher, once bemoaned the absence of definitive reference books on early dollars – books that might illuminate the series in the same way Dr. William H. Sheldon did (with Breen’s collaboration and that of Dorothy I. Pascal) in the classic book Penny Whimsy.

“Were some future researcher to produce a book on this series in a class with Sheldon on 1793-1814 cents,” Breen wrote, “these silver dollars would eventually rival the cents’ popularity.”

Bowers made a major contribution to interest in early dollars through the authoritative section on this subject in his magnificent book Silver Dollars & Trade Dollars of the United States, published in 1993.

More recently, the series has attracted new interest – and new buying activity – because of the popularity of the “registry” set programs now being conducted by the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation of America (NGC). These programs, which stimulate competition among collectors to form high-grade sets of certified coins, have created new awareness of just how scarce the early dollars are in all collectible grades, and especially in mint condition.

Later silver dollars have attracted large constituencies over the last few decades. Morgan dollars have been among the most widely collected of all U.S. coins. Peace dollars have been extremely popular, too. And even Liberty Seated dollars have had a substantial following. But early dollars have lagged far behind – overlooked and very much underappreciated, considering how much they have to offer.

There are understandable reasons for this. One is the sheer rarity of these coins, which has long translated into extremely high prices. Even in higher circulated grades, such as extremely fine, these coins can cost thousands of dollars. In reality, these prices have been bargains, considering how few of these coins survive in the upper grades, particularly mint condition.

Then, too, early dollars haven’t benefited from organized hobby activity as early cents and half cents have done, for example, through the membership of specialists in Early American Coppers, a club where they rub shoulders, compare notes and gain insights from such renowned experts as Denis W. Loring. EAC has done a great deal to advance hobby interest in large cents and half cents, but up to now there has been no comparable stimulus for early silver dollars.

Besides being expensive, early dollars also can be highly elusive, especially for those who seek to collect them by die varieties. It’s almost impossible to find a dealer who stocks these coins by die varieties; for that matter, it isn’t all that easy to find a dealer who carries a decent stock of early dollars at all.

If you pick up a mailer from a large coin company or look at its Web site on your computer, you’re not going to see early dollars listed by specific die varieties. It takes tremendous determination to track down these coins, and considerable financial resources to buy them.

Overall, early dollars are far scarcer, more expensive and more elusive than early cents and early half dollars, two series that traditionally have enjoyed greater popularity.

For these reasons, they are likely to continue to trail behind these other series in terms of the number of people who collect them. Lately, however, we have seen a significant increase of interest in the series and some really extraordinary price appreciation for nice examples.

When I wrote Travers’ Rare Coin Investment Strategy in 1986, I included a section entitled “How to Calculate the Market Premium Factor,” and nothing could be more relevant to the current market status of early silver dollars than the market premium factor.

Those who compile price guides have great difficulty determining accurate values for coins of exceptional rarity. The reason is simple: Because they are so rare, and those who own them are reluctant to part with them, these coins change hands infrequently. Months – even years – may pass before certain coins appear in the marketplace. But that doesn’t mean their value is remaining static during that time; on the contrary, they might bring far higher premiums the next time they appear than they did the time before.

Price-guide compilers have no way of gauging how much these coins might bring if they were offered for sale, so they have to make educated guesses based upon the most recent sales – which could have been years before. As a result, the price guides are often far off base in their valuation listings for really scarce coins – including some of the early silver dollars.

That’s where the market premium factor comes into play.

A coin listed in a price guide at, say, $500 might actually be worth $1,000 in terms of the price an actual informed buyer would pay an actual informed seller, with both under no particular pressure to complete the transaction. This higher percentage can be expressed in terms of a market premium factor, or MPF, a concept devised by Maurice Rosen of Plainview, New York, a longtime coin dealer who publishes the award-winning Rosen Numismatic Advisory. In the example given here, the MPF would be 100 percent – the amount by which the real fair market value of $1,000 exceeds the price-guide valuation of $500.

The MPF can work in reverse, as well. If a coin listed in the price guide at $500 decreased in value in the marketplace to $250, its MPF would be minus 50 percent.

Whether the MPF is positive or negative, it is determined by the same algebraic formula: x over y minus 1 times 100 equals the MPF, with x representing the price required to secure the coin and y being the price guide valuation.

What we’ve seen lately is an unbelievable – and positive – market premium factor for early U.S. dollars.

Recently, I sold a 1795 Draped Bust dollar (Center Bust) graded Mint State-63 by PCGS for a price approaching six figures. The PCGS Population Report lists no MS-68 examples for this coin, no 66s, five 65s, three 64s, seven 63s, five 62s, three 61s, and no 60s. In AU condition, only three have been graded by the service.

This is the kind of coin where you may see just one public sale every few years, and people compiling price guides are forced to scramble to verify unconfirmed trades in order to come up with a meaningful valuation. It can be complicated to establish an accurate value for such coins.

The Coin Dealer Newsletter Quarterly lists this particular coin at $47,500 in MS-63. That’s about half what it traded for – and the buyer was pleased to acquire it at that price.

In another recent transaction, I sold a 1795 Flowing Hair dollar of the three-leaves variety – a coin graded Mint State-61 by PCGS – for a price approaching $60,000. The Coin Dealer Newsletter Quarterly lists it at $45,000 in Mint State-63 – two grade levels higher. Once again, the buyer was satisfied, for this is another coin that is difficult to locate and purchase at any price. Further, several other buyers were willing to purchase this coin at the same—or higher—level.

There are far more varieties in the first two early dollar types – the Flowing Hair with Small Eagle reverse and the Draped Bust with Small Eagle reverse – than in the third and final type, which mates the Draped Bust with the Heraldic Eagle. In addition, the mintages from 1798 onward, consisting of this third design combination, were generally higher than in the first four years.

That’s not to say they’re “common”–far from it. From beginning to end, the early silver dollars present a real challenge, even to those without monetary restrictions. It takes more than money to put together a set of these desirable coins; it takes perseverance, contacts and luck.

More collectors are taking the time and trouble to look for these coins today than in the past, and the registry set programs have accelerated this process by sending people scurrying to find high-grade examples of U.S. coins in general – including early dollars.

Some of the coins being purchased by these registry-set collectors represent dubious value. It’s questionable, for instance, whether very high-grade examples of fairly common Jefferson nickels are worth four-figure prices. Collectors acquiring mint-state examples of early silver dollars can rest assured, however, that they are obtaining coins of legitimate rarity which may, if anything, be underpriced at current market levels.

The 1804 dollar may be hogging the limelight, but the rest of the early dollars constitute a strong supporting cast.