Coin Collecting in the time of Coronavirus

Most collectors I know enjoy talking about "The Good Old Days", but they rarely mean "Last Year" when they say it! The coin hobby is currently staggering through the COVID-19 (Coronavirus) pandemic, along with most of the rest of the economy. People look back wistfully to those relatively care-free days, when you didn't need a mask to buy a cup of coffee, and you could get on an airliner without much thought of what was lurking on the exposed surfaces or in the air.
Large gatherings mostly ended in the U.S. by April 2020. This has included all the coin shows & coin conventions that I traditionally attend. I honestly miss all these events. For me, coin shows have become as much a chance to catch up with old friends and share gossip about great coins as they were about finding more coins. The sense of isolation is almost palpable. My coin club (EAC) first postponed this year's convention from May to Aug., and then finally relented and canceled the 2020 convention altogether. It was a wise and well-considered decision by the EAC board, but still a fiscal and emotional blow to club members. Fortunately, the annual EAC auction has been salvaged, with the auctioneers engineering an on-line real-time sale for members to participate in. This auction will provide EAC members with a welcome chance to participate in the hobby and (hopefully) add some useful new items to their collections. It will also provide EAC with the bulk of its revenue for this year (by virtue of the buyer's premiums on each lot).
Coin collecting has been impacted by Coronavirus in many ways. The loss of conventions is just one change that collectors had to cope with. For a number of weeks, during lockdowns in most of the nation, it was impossible to visit local coin shops. This was without doubt a hardship to the shop owners, the customers who regularly walked in to look at coins or just talk about them, and people with large coin accumulations to sell. Most shops have re-opened now, and their operations are largely the same (with some new restrictions). Coin auctions have largely retreated from in-person events to on-line only events. Other traditional bidding mechanisms (like mail-bid, FAX, and phone bids) also remain intact. The large on-line coin marketplaces (like ebay) did not require major changes to continue operating, and their platforms benefited from the large number of collectors isolated at home, with no other outlet for their collecting passion.
Prices for coins, at least the kind of coins that I look at, have not been negatively impacted by the virus. This might at first seem counter-intuitive, since a lot of economic damage was caused by the shutdowns, and resulting slowdown in the economy. One might reasonably have expected a recession to depress the price of most collectibles. However, it is important to note that the U.S. Federal Reserve responded quickly to the pandemic with a huge ($3+ Trillion) stimulus. This stimulus warped the economic models, resulting in some uncertainty in the prices of individual commodities (including coins). The anticipation of inflation that accompanied the Fed's stimulus measures has caused a spike in the prices of precious metals (Gold, Silver, etc.). Traditionally, coin prices have followed bullion prices when they rise. In a general sense, that is what is occurring now. The fluctuation in bullion prices leads to more attention from collectors & speculators, and this in-turn results in higher bids for coins of most types.
Where are we headed? That is unclear at this time. People are still adjusting to "the new normal". Work, shopping, vacations, and many other activities have required adjustment in the age of the virus. The development of an effective vaccine in a timely manner (eg. by the end of this year) could result in a big economic rebound, and resumption of life as we previously knew it. However, even under that rosy scenario, all the extra money that was injected by the Fed. will not be absorbed quickly. This implies that a bull market for coins could continue for awhile. Barring the rapid development and deployment of a vaccine, the pandemic existence that has prevailed since April is likely to continue. People are likely to re-prioritize what they do with their leisure time and their leisure dollars. It should be quite interesting. The historians and financial pundits will be busy for a long time trying to analyze this one!

The Douglas Bird Collection - A few personal highlights

Selections from the Doug Bird collection of Large Cents will be sold at auction by Ira & Larry Goldberg in Los Angeles, CA Feb. 16, 2020. This sale promises to join other legendary name sales by the Goldbergs - names like Ted Naftzger, Dan Holmes, March Wells, Paul Gerrie, Tom Reynolds, and more. The Goldbergs have an affiliation with copper like Midas had one for gold.

I have known Doug Bird personally for more than 3 decades. My first encounter with Doug was at a coin show in Portland, OR in the mid 1980's, where I was a novice collector and he was already an experienced dealer in early American copper. The two impressions that Doug made upon me that day were 1. how many wonderful coins he had for sale, and 2. how friendly and approachable the man himself was. Doug was ever-patient with my many uninformed questions, and he exhibited a wicked sense of humor about coins & about life! Doug sold me my first 1804 cent, and through the years the friendship has continued to enriched us both! Doug was a long-time denizen of Hermosa Beach, CA. When I became advanced enough to attend auctions in L.A. and shows in Long Beach, I often found that we were competing to own the same coins in auctions, and I never failed to stop at Doug's table, to see what was "new", or what I had missed on my last visit. Through the years I have had the benefit of Doug's enormous expertise and also enjoyed his camaraderie within the EAC (Early American Coppers club).

Doug's Feb. 2020 auction represents the creme-de-la-copper of his holdings. 179 little copper jewels will find new homes. I am making plans to be in attendance, and hope to make at least one of these little gems mine by the end of the sale. Below are a few of the highlight coins that will be offered from the Douglas Bird collection:

LOT 6 is a wonderful 1793 S-14 Liberty Cap cent. This is the variety with a spectacular bi-secting obverse die-crack. The Bird coin is the 2nd finest available.

LOT 22 is a choice 1794 S-64 Liberty Cap cent. This famous variety has a missing fraction bar on the rev. The Bird coin is problem-free, with just a touch of wear visible.

LOT 37 is another famous variety - the 1796 S-103 LIHERTY Draped Bust cent. The "B" in LIBERTY was first punched in backward, and then corrected, making the letter appear to be an "H". the Bird coin is easily the finest known of this famous variety.

LOT 67 is the finest known example of the 1800/798 Draped Bust cent with style-1 hair, S-190. Golden brown luster practically drips from this coin. Simply a superb example of early copper!

LOT 84 is another famous variety - the 1801 S-219 "3-Errors Reverse" cent. The Bird coin is once again the finest known for the variety.

LOT 140 is a beautiful 1811 S-287. This is not a rare variety. However, the Bird coin is so lovely that it merits mention for its outstanding eye appeal. The color appears wholly original and contains iridescent overtones of blue & olive on surfaces that still exhibit traces of mint-red.

LOT 141 is another fairly common variety in exceptional condition. This 1812 S-288 cent has radiant luster and choice red-brown color. Truly a coin for the aficionado to appreciate.

A Tribute to the EAC grading system

EAC grading is not perfect; it is just the best system we have today.

Attempts to systematize coin grading for U.S. coins began in the early 20^th century. The American Numismatic Association (ANA) was a leading proponent of this effort. Coin grading was deemed important because of the correlation between the amount of wear on the coin and its market value. Dozens of books have been published to describe various grading systems. Adjectives were assigned to describe progressive levels of wear (eg. ABOUT UNCIRCULATED, EXTREMELY FINE, VERY FINE, FINE, VERY GOOD, GOOD). Following the publication of a book called Early American Cents by William Sheldon in 1949, the adjectives used for grading coins were supplemented with numerical grades ranging from 1-70. The ANA published the first edition of ANA Grading Standards for U.S. Coins in 1977. Shortly thereafter (1979) ANACS (the ANA Certification Service) issued its first coin grading certificates. These certificates were intended to facilitate coin trading, and featured photos of both sides of the coin and a grade estimate, based on ANA grading standards. A useful history of the ANACS grading service has been published, and can be read here:

ANACS_1st_Grading_Service

Problems associated with grading continued to plague the coin market. In 1986, The Professional Coin Grading Service (PCGS) introduced the concept of grading & encapsulation, wherein the coin was graded, and encapsulated in a hard plastic holder, along with an insert upon which a certified grade was printed. The origin story for PCGS makes interesting reading, and can be found here:

PCGS_origin_story

Other companies followed the PCGS example, and today the coin market is heavily reliant on coins graded & encapsulated in holders from 3^rd party grading services. If 3^rd party grading had “solved” the problem with grading, no other system would be necessary. However, as we will discuss, that is not what happened.

Adjectival definitions for grades (eg. GOOD, FINE, VERY FINE, ABOUT UNCIRCULATED) have remained relatively constant over time. Likewise, the numerical grading scale (ranging from 1, for a coin just recognizable as to date & type, to 70 for a flawless coin) remains in place. However, the standards by which various grades are defined have not remained constant. This lack of permanence was the original justification for the 3^rd party grading services. Unfortunately, these services have not been able to maintain adequate consistency of their standards. This has resulted in much confusion in the market for 3^rd party graded coins. In addition, the increasing price spread between coins near the upper end of the grading spectrum gave rise to demand for increased precision in commercial grades. In response to this market phenomenon, PCGS introduced 11 discrete mint-state grades (MS60-MS70), and later added intermediate “+” grades, in an attempt to refine the definition of grade. In many cases, the difference between these 1-point grade spreads is too small to maintain with consistency (at least with human graders).

Coin grading has been described as part art & part science. For circulated coins, it is straightforward to define points along the continuum of wear – this is the “science” part of grading for circulated” coins. The “art” part involves accounting for differing striking pressure, which will also affect the amount of detail in the resulting coin. Another important aspect of the “art” of coin grading is deciding how particular defects (eg. rim bumps, scratches, abrasive cleaning, etc.) will impact the value (or grade) of a coin. The location and the severity of the problem will impact the coin’s value, and is unique to each and every coin graded. For coins that are strictly uncirculated (ie. No wear visible) it is theoretically possible to define points on the scale of beauty that involve the quality of the luster and the number of marks acquired by the coin during handling at the mint (or elsewhere) – this is the “science” part for uncirculated coins. The “art” part involves assessing the “eye appeal” that each uncirculated coin possesses within the context of its particular coin series.

The EAC grading system evolved within the Early American Copper community as a unique answer to the grading conundrum for problems experienced with circulated coins. The vast majority of early copper coins are circulated. The EAC system uses two numbers to define the grade of any coin. For a circulated coin, the first number defines the “sharpness” of the coin (on a 1-60 scale). For EAC grading the second number is called the “net” grade of the coin, after accounting for the impact of any problems. The net grade is either equal to, or lower than the sharpness grade. For uncirculated coins, the same two-number system is used. The 1^st number (from 60-70) is related to the color, luster, and eye appeal of the coin. The second number is the “net” grade, which will be equal to or lower than the first number, and accounts for any problems the coin has.

The EAC system grading scale looks the same (on the surface) as the other grading systems. The same grading adjectives are also utilized. The most important differences are as follows:

The EAC standards for sharpness on circulated coins are a little stricter than commercial grading standards. A coin that grades “40” at a commercial grading service is likely to have too much wear to qualify for the sharpness grade of “40” by EAC standards. It will more likely have an EAC sharpness grade of “30”.

Problems are handled completely differently within the EAC system than by the commercial grading systems. For a coin graded using EAC standards, there is a 2^nd number, derived from the sharpness grade, which accounts for any issues on the coin (eg. cleaning, scratches, damage, rim bumps, etc.). For a coin graded commercially, there will be no 2^nd number. If a coin has issues, but they are deemed to be “minor” by the grading service (ie. Below the threshold that will prevent assignment of a numerical grade), the “net” grade (sharpness minus some allowance for the issue(s)) will be put on the holder. If the issues are above the “threshold” level, then the grading service will encapsulate the coin in a holder marked “Genuine”, usually with an adjectival description of sharpness, and an indication of the problem(s). For example “AU Details / CLEANED”.

The EAC grading system is not simple. There are just too many variables involved in grading for a simple system to work. However, the EAC system is consistent and capable of delivering trustworthy guidance about the market value of copper coins. Coin market participants who utilize EAC grading have made a concerted effort to sustain the grading standards that have been in use since the 1960’s. The consistency and time invariance of the EAC grading system renders it more useful today than any other grading system. The book devoted to describing (and illustrating) the EAC grading system is called “Grading Guide for Early American Copper Coins”. The first edition of this book has sold out, and must now be purchased on the secondary market.

EAC_grading_guide

Jim Neiswinter and Dan Trollan

Just a few weeks ago, the Early Copper community was jolted by the news that two of our superstar collectors plan to team up and offer coins from their collections for sale in early 2019.

Jim Neiswinter, a native of New York and a member of EAC since 1981 has pursued the CENTS OF 1793 since purchasing his first one in 1983. That first coin was a 1793 Wreath cent (a variety called Sheldon-11a). It was not until Feb. of 1986 that Jim acquired the 1793 cent that ultimately led to our meeting. On Feb. 1, 1986 Kagins Numismatic Auctions sold the Phillip Van Cleave collection. It was, at the time, the first complete Large Cent collection (by Sheldon numbers) sold at public auction. LOT 5017 was the famous (and rare) 1793 Sheldon-15 Liberty Cap large cent, and Jim was the winning bidder. Sheldon called the S-15 the "The aristocrat among the Liberty Cap cents, and therefore an aristocrat of aristocrats among the Large Cents". He called it thus due to the astonishing rarity of this coin. At the time Sheldon wrote Penny Whimsy (1958) there were just 5 examples of S-15 known. Today the census has expanded to 13 known. Jim's coin is the 7th finest (with the #1 coin permanently impounded in the ANS museum). This acquisition motivated Jim to do extensive research on S-15, and publish a wonderful book called "The Aristocrat" in 2013. Inexplicably, I waited until 2017 to visit Jim at his table at the EAC convention in Philadelphia to introduce myself, and obtain a copy of The Aristocrat (along with the author's autograph). This book has become one of the "keys" to my numismatic library. I now count Jim as one of my EAC friends. Jim ultimately obtained all of the Sheldon varieties for 1793 (16 specific die parings, and 3 distinct edge variations of Sheldon-11, called S-11a, 11b, and 11c).

Dan Trollan is a business man from Durango, Colorado, who happens to love Large Cents. He joined EAC in 1989 (just a few years before I joined in 1992). By the time I met Dan, which I think was at the 2001 EAC convention in Fredericksburg, VA, he was deeply involved with the CENTS of 1794. The two things that struck me most vividly about our first encounter was how doggone approachable Dan was, and how bushy his mustache was! Dan is a prominent member of an EAC sub-group known as "The BOYZ of 94". Dan went on to assemble a complete Sheldon set of 1794 cents, comprising not just the 58 collectible Sheldon-number varieties, but also the 11 Non-collectible (NC) varieties. Dan is just the third person to achieve this level of completeness for 94's!

The sale of the coins from these two esteemed members of EAC is scheduled for late Jan. 2019 in Los Angeles. Goldbergs, in collaboration with M&G Auctions are expected to conduct the copper auction on Jan. 27,2019. The occasion leaves me with some strong and conflicting feelings. On the one hand, it is going to be a very important auction, attracting bidders from all across the country, and promising many bidding highlights. On the other hand, it feels as if two of my "contemporaries" in the world of copper are preparing to "pass the torch" to a new generation of copper enthusiasts. This is certainly appropriate and timely. The economy seems strong, and the coin market has never been better poised to absorb coins of such quality and significance. And yet, it is hard to avoid the sense, that in some way an era is passing. However, I can look back to the Walter Husak sale in 2008. That auction produced at least as much "electricity" as any other copper sale I have attended. And, Walter remains very active in EAC. Likewise, Chuck Heck sold his wonderful collection of 1794 Cents in Feb. 2017, and he remains prominent in EAC affairs. I hope that the same can be said for these two fine gentlemen.

Apple Cheek Love

I rarely devote a post to just one coin. I want to make an exception this time, for the sake of one exceptional copper coin. Next week, Stacks Bowers will be offering this beautiful 1794 large cent (Sheldon-24, called the "Apple Cheek" variety by Dr. William Sheldon in his book on the subject of early cents).

The coin is graded MS-65 BN by PCGS. The provenance (as might be expected) includes numerous early copper luminaries, including T. Harrison Garrett, Walter J. Husak, and D. Brent Pogue.

Here is a link to the Stacks Bowers description (LOT 2176 in their Baltimore March sale).

LOT_2176_Stacks_Bowers_Baltimore_auction

This coin ranks CC#3 in the Early American Copper census for the variety. It is certainly a visual treat. I was lucky enough to see the actual coin at lot preview earlier this month. I will not be bidding for this beauty, but whoever ends up being the winning bidder can be proud to own a historic piece of Early American Copper.

Goldbergs Pre-Long Beach sale of the GREEN TREE half cents

The Green Tree half cents comprised the first 236 lots of the Goldberg's pre-Long Beach auction, held Sunday Feb. 18 in Los Angeles. These are my post-auction impressions from the sale.
The majority of the coins stayed relatively close to pre-sale estimates, and met expectations. However, as usual there were both upside surprises and also some coins that fell far short of their estimates. The general theme that emerged was that scarce & rare varieties that were in mid-to-low grades did not do very well (price-wise). Here are a few of the most notable examples:

LOT 15 was a 1794 C-7 (R5+) graded EAC F12 (PCGS F15). It was hammered for $2650 vs. an estimate of $5000.

LOT 21 was a 1795 C-3 (R5+) graded EAC F15 (PCGS VF25). It was hammered for $4250 vs. an estimate of $8000.

LOT 90 was a 1805 C-2 (R5) graded EAC VG10 (PCGS F12). It was hammered for $3750 vs. an estimate of $8000.

LOT 100 was a 1806 C-3 (R6) graded EAC G4+ (PCGS G4). It was hammered for $3000 vs. an estimate of $6000.

It was apparently a good day to be bargain hunting among rare half cent varieties!
As I mentioned above, there were also some surprises on the upside of prices. A few of these include:

LOT 125 was a 1809 C-2 (R3) graded EAC VF35 (PCGS AU53). It was hammered for $2100 vs. an estimate of only $600!

LOT 172 was a 1825 C-3 (R1) graded EAC MS64 (PCGS MS65RB). It was hammered for $4000 vs. an estimate of only $2000.

LOT 201 was a 1849 C-1 (R2-) graded EAC MS63 (PCGS MS64RB). It was hammered for $3000 vs. an estimate of only $1000!

LOT 205 was a 1851 C-1 (R1) graded EAC MS65 (PCGS MS66BN). It was hammered for $4000 vs. an estimate of only $2000.

Note that all these coins rank very high in the condition census. The trend that emerges from these high-side surprises is that Quality is still King!
I will try to share some impressions from the large cent portion of the sale a little later.

The Goldbergs FEB 2018 Pre-Long Beach auction preview

It is that time of year again. Time to shake off the snow from winter, and head to sunny Southern California for a week of coin activity. The Long Beach coin convention begins Thur. Feb. 22. In addition to the huge bourse floor (over 400 dealers attending), Heritage will hold a big coin auction. But, the Sunday before Long Beach, copper collectors will have a chance to participate in the Goldberg's pre-Long Beach sale.
Goldbergs have a great lineup of more than 600 lots of U.S. copper coins (and hundreds of coins in other U.S. series as well) up for sale. The headline collection for the sale is a large high-quality collection of half cents, called the Green Tree Collection.
The Green Tree Collection comprises 236 lots of half cents (1793-1857), and an additional 16 lots of U.S. cents. Many of the Green Tree coins are in stellar condition, but there are also a number of mid-grade and collector level coins that should entice a lot of online bidding action.

LOT-1 is a choice 1793 C-1 (PCGS AU50 / EAC 40+). A real beauty.

LOT-18 is a choice AU 1795 C-1 (Lettered Edge / PCGS AU58 / EAC 55)

LOT-144 is a nice looking 1811 C-1 with the famous 4-star break (PCGS F12 / EAC 10)

While the Green Tree Collection lacks a 1796 half cent, there are two opportunities to obtain a 1796 C-2 (with-pole) in the session that follows.

LOT-267 is a 1796 C-2 (PCGS F15 / EAC 12).

This would make a welcome addition to any half cent collection.

LOT-287 is an example of the ultra-rare 1811 C-1 half cent with a 2-star die-break

Moving to large cents:

LOT-303 is a high-grade 1794 Head-of-93 S-11b (NGC MS61 / EAC 50+)

LOT-404 is a beautiful 1817 N-16 (The famous 15-star variety) that is an obverse brockage. This is a real conversation-starter!

LOT-470 is a high-grade 1839/6 N-1 (PCGS XF45 / EAC 35)

LOT-488 is a well-preserved PROOF 1843 N-12 (PCGS PF65 BN)

LOT-490 is a nice PROOF 1844 N-1 (PCGS PF63 BN)

There are three 1799 cents (S-189) to choose from in the sale, and a single 1804 (S-266a). Opportunities abound for half cent and large cent collectors in this sale. Unfortunately, the selection of colonial coins is very limited (only 11 lots).

I plan to attend the Goldberg sale. I will be very interested in seeing how well the coins do with regard to price realized. The market for copper has been fairly quiet for the last 6 months. The last large copper auction was the Heritage Padula sale (SEP 2017). That sale featured a full Sheldon set of large cents. However, many of the coins were in low grade, and they sold at modest prices. This Goldberg sale should have a different character, since there are a number of high-grade coins that have appeal to both copper addicts and type collectors. Check out the sale on-line at the Goldberg web site, and have fun bidding in the sale!