Wednesday, November 3, 2010

The Rise of Early Copper Specialization

The Early American Copper club (EAC) is full of enthusiatic members, who each have their own ideas about how to approach collecting. There are nearly as many different collecting strategies as there are collectors! I believe this diversity strengthens and enriches EAC. In this post, I will suggest some of the reasons for the rise in early copper specialization, and discuss some consequences of the increase in specialty.

The collecting of Early Copper coins is itself a small niche within coin collecting (or numismatics). Early American Copper is generally regarded as cents and half cents coined by the U.S. mint from 1793 through 1857, or the various emissions authorized by the colonial state governments. The large cent series is divided into three main areas: 1. The Early Dates (1793-1814) 2. The Middle Dates (1816-1839) and 3. The Late Dates (1840-1857). Half Cents are another popular area among copper collectors.

For advanced numismatists of the late 19th century and early 20th century, it was not unusual to pursue all of the copper areas mentioned above. A few individuals were so smitten with the old coppers that they attempted to obtain full sets of all known varieties within one area. About a dozen people (so far) have completed the early-date cents by variety, known as a “full Sheldon set”. Some exceptionally hardy collectors have attempted full sets for more than one series of Large Cents. Intrepid collectors like Jack Robinson , Wes Rasmussen , and Dan Holmes accumulated and sold comprehensive variety collections of cents from 1793 – 1857.

While these large, broad-ranging copper collections have garnered lots of headlines, there has been a growing trend toward specialization within EAC for many years. There are several factors driving this trend, which I expect to continue for the foreseeable future.

Why Specialize?
Early copper specialization makes sense for a number of reasons. One of the biggest incentives is financial. Even low grade cents from the early-date series have racked up some impressive gains. Just for fun, I took out my dog-eared copy of Copper Quotes by Robinson (CQR) and added up the values for a full Sheldon set (no NC’s) in Avg. G5 condition. The total I got is a little more than $600,000! Furthermore, most collectors aspire to own coins that are nicer than G5. All of this has led to sub-specialties within the early dates. One example of early-date specialization is the 1794 collection (collecting ONLY cents from the year 1794). There is a group of EAC’ers who proudly call themselves the “Boys of 94”. The concept of collecting a single date works well for many other years between 1793 and 1857 (I personally prefer the years that are rich in the number of varieties available). The high price of early-dates has led many to consider middle-date cents and late-date cents. A full variety set of middle-date cents or late-date cents still represents a sizeable financial outlay, but these sets remain within the reach of a number of collectors.

Another reason for specialization is related to the general scarcity of the material. The number of collectors pursuing early copper coins (and related items) is constantly expanding. I believe the number of collectors actively seeking early-date large cents is ten times what it was when Dr. Sheldon was actively collecting. This not only brings more money into the game: it disperses the individual coins in more collections. This explosion in collecting interest is very good in many ways, but it also causes problems. One of the obvious problems is the simple fact that while the number of copper collectors has risen, there are no more early copper coins available now than there were in 1857 (the year that large cent and half cent mintage ceased). This implies more competition for the coins that come to the marketplace. In the face of this competition, it seems only natural for a collector to focus energy in one area (or a few areas) via specialization.

Another reason for specialization involves what I will call the human span of focus. When one considers the entire run of large cents (from 1793 to 1857) with an eye to obtaining all possible varieties, there is so much information to absorb and so much intellectual bandwidth (not to mention the financial resources) required to actively pursue them all at once, that the average human brain can get overwhelmed. For most collectors, it just makes more sense to parse the collecting of copper into a manageable task.

The development of a specialty area can also provide additional opportunities for camaraderie with like-minded individuals. One notable example of a club-within-a-club is the “Boys of 94” within EAC.

Areas of Specialization within Early Copper
I want to enumerate some of the possible areas of specialization within early copper without attempting a complete list of the possibilities (which would be tedious to read, and honestly is not possible). I will not go into great depth in any one collecting area. The journey is part of the fun, and is often as rewarding as the goal. Here is a short list of early copper specialties:
1. Colonials – these are generally considered to be the copper coinages authorized by the individual states during the period leading up to formation of the U.S. Mint, the proposed Confederation contract issues, and the Fugio federal contract cents. This specialty is imbued with a rich historical context, and enough variations in die style, planchet quality, technique of strike, and other random peculiarities to satisfy even the connoisseur of diversity. A nice introduction to the field can be obtained by reading the first 16 chapters of Walter Breen’s Encyclopedia of U.S. and Colonial Coins . Here, then, are a few possible approaches to Colonial collecting:
1.1. State (Type) collecting – Massachusetts, Vermont, Connecticut, and New Jersey state coppers are clearly represented, while New York (Nova Eborac) is often included.
1.2. State & Date collecting – the period between our Declaration of Independence (1776) and the Mint’s first production (1792) is most popular for colonials, and the majority of state coinages are dated from 1785 to 1788.
1.3. Variety collecting – Die life was generally short and highly variable during the colonial era, and as a result, colonial variety collectors are faced with the pleasant (though daunting) prospect of tracking down hundreds of different coins within a series that is scarce already! One of the more prominent collections of rare and high-quality Colonial copper coins was the portion of the John J. Ford Jr. Collection devoted to this series.
1.4. Errors – Error collecting appeals to anyone with a taste for the unusual or eclectic. The minting of coins involves a large number of steps, and each step requires meticulous attention to detail to avoid an error. Colonial coins were minted using fairly primitive tools and methods, and virtually all the work had to be done by-hand, so errors occurred with some frequency.
2. Half Cents – The Little Half Sisters were produced sporadically from 1793 to 1857. The half cent proved useful for small purchases, and it facilitated transactions between American coinage (in decimal denominations) and Spanish coins (where one Reale had an equivalent value of 12½ cents). Listed below are a few of the methods that are popular for half cent collecting:
2.1. Type collecting – There are five distinct type coins in the half cent series – namely, the Liberty Cap (head left) type of 1793, the Liberty Cap (head right) of 1794-1797, the Draped Bust type of 1800-1808, the Classic Head (or Turban Head) type of 1809-1836, and the Braided Hair type of 1840-1857. Many collectors also make a distinction between the Lib. Cap. Style of 1794 and that of 1795-1797, so they expand their type collection to six.
2.2. Date collecting – Even though a half cent collection spans the same time frame as a large cent collection, there are many gaps in the half cent mintage. This appears to be due to the fact that demand for half cents in the economy was much lower than demand for cents. The first half cent date gap includes 1798 and 1799. Mintage resumed in 1800, only to be suspended in 1801. A handful of half cents were produced in 1802, followed by heavier mintages in 1803-1808. A design change in 1809 was followed by the suspension of half cent coinage from 1812 through 1824. No half cents were produced in 1827 or 1830. Production of half cents for commerce again ceased in 1836 and did not resume until 1849. Proof half cents were produced (for collectors) in 1836 and also from 1840 through 1849. Opinion is divided about the inclusion of these proof-only dates in a date set of half cents. The proofs tend to be expensive, which is a deterrent to collectors of ordinary means.
2.3. Date & Variety collecting – The meager production of half cents is reflected in the relatively low die count used for the series. The date with the highest number of distinct half cent die varieties is 1794, with 15 varieties , followed closely by 1804, which has 12 known varieties.
2.4. Date specific – Collecting just a single date can work for half cents in the same manner that it is practiced for large cents.
2.5. Variety specific – For me, the idea of collecting a single variety seems a little obsessive. However, there are some varieties that provide sufficient variety (by way of multiple die states) to form a very nice collecting thesis. One such variety in the half cent series is the 1804 C6. Manly recognizes 12 distinct die states for 1804 C6, as the reverse die degenerates from essentially perfect to an almost continuous rim cud around half the circumference.
2.6. Modified Variety strategy (Die collecting) – The definition of a variety is a coin produced with a unique combination of dies (keep in mind that there can be three possible dies utilized; one for the obverse, a 2nd for the reverse, and a third for the edge). An alternative to the full variety set is to collect one example of all the known dies, without extending it to all the known combinations of the dies. For half cent collectors, the “B-girls” of 1794 (the varieties known as Cxxb, where xx=01 to 06) can be prohibitively expensive, and so a modified strategy that does not involve the edge is adopted.
2.7. Die-state collecting – The early U.S. mint utilized the best available equipment and the most advanced techniques known at that time. However, the state-of-the-art in die manufacturing, especially the method for hardening die steel was not as advanced as today. During use, the dies for early copper coins failed in a large number of different & fascinating ways. The coins minted from these dies retain the evidence of the state of the dies at the moment they were struck. The coins provide a rich source of clues to present-day numismatists. Collecting different die-states has been gaining momentum in recent years, and today there are many specialists pursuing scarce die states (even for so-called common varieties).
2.8. Errors – Error collecting is the ideal pursuit for advanced collectors and those who thrive on things that are different. The recently-concluded Davy Collection auction presented error collectors with 368 lots of half cent error coins.
3. Large Cents – Collecting large cents has been popular since the middle of the 19th century, and a rich numismatic history has grown up around this series. Listed below are just a few of the ways to enjoy large cent collecting:
3.1. Major Type collecting – The major large cent type coins are identified as follows: Chain Cent (1793), Liberty Cap Cent (1794-1796), Draped Bust Cent (1796-1807), Classic Head (Turban Head) Cent (1808-1814), Coronet Cent (1816-1839), and Braided Hair Cent (1839-1857). There are lots of sub-types available, and many collectors pursue these to some degree. For example, Liberty Cap cents come with lettered edge and plain edge (and, of course, there is one famous variety with reeded edge, S-79).
3.2. Date collecting – A basic date collection (1793 to 1857, except 1815, when there were no large cents minted) was my own initial goal as a copper collector. This collecting strategy not only captures the historical sweep of the series, but it is a natural extension of collecting techniques that are applied to other series (such as Indian Cents or Lincoln Cents). Some collectors can stop there, while others become beguiled and continue.
3.3. Early Dates / Middle Date / Late Dates collecting – Many people that I know in EAC profess to pursue one of these three major areas. These collectors might be satisfied with a type collection or a date set for large cents that are outside their specialty. However, in their area of specialization, they are looking for varieties in one form or another, as outlined below.
3.3.1. Variety Collecting - Early date cents (1793-1814) are usually catalogued according to their Sheldon number. Sheldon enumerated 295 varieties (S1-S295). Some varieties have variations in edge treatment (S11a-b-or-c, S18a-or-b, S19a-or-b, S76a-or-b, S120a-or-b, and S121a-or-b), and the addition of these means that a full Sheldon numbered set comprises 302 coins. In addition, there are just over 50 more Early Date cent varieties that have been classified using the “NC” moniker (to designate non-collectible). EAC opinions vary concerning the inclusion of the NC’s in a Sheldon set.
Middle Date cents (1816-1839) and Late Date cents (1840-1857) are catalogued according to date and Newcomb number One big advantage of the Newcomb system of classification is that it accommodates the discovery of new varieties with relative ease – just add another N# for that date! The middle date series is considered to comprise 246 distinct die varieties. Only four of these are truly rare (1830 N9 and 1839 N15 are considered R6, while 1822 N14 and 1834 N7 are R7). A full set of Late Date cents is considered to be composed of 386 unique die varieties. The relative uniformity of the design on late dates makes attribution challenging for some folks, and makes late date collecting ideal for those who like to pay attention to detail.
3.3.2. Major Variety collecting (Red Book set) – If a large cent date set does not sate one’s appetite for copper, but a full variety set is too daunting, a collection of major varieties might be the ideal solution. The question then is: “what is included in a set of major varieties?” One definition that has evolved into a standard of its own is a “Red Book variety set”. The Red Book lists (and often illustrates) all of the readily observable varieties in the large cent series. Things like overdates, die-making errors, large vs. small date numerals, and small vs. large lettering, edge variations, and different head styles are all mentioned. Things like die states or mint errors other than die blunders are not mentioned. A Red Book set of early date cents contains 63 varieties (not counting the extreme rarities), while a Red Book set of middle date cents has 48 varieties, and a late date set has 32 varieties.
3.3.3. Die-state collecting – Just as half cent collectors have nifty varieties, such as 1804 C6 on which to focus their collecting energy, large cent collectors have a number of fascinating die varieties of their own. Some early date varieties, such as 1793 S14 and 1794 S35 offer spectacular bisecting obverse die cracks, while others, like 1797 S130, 1798 S153, and 1807 S271 (The Comet) develop peculiar cud die breaks. Among the middle date cents, the 1831 N12 provides a fascinating study in progressive die failure, as a circular obverse die break that connects all the stars ultimately develops into a huge cud that “swallows” two stars! The 1839/6 (N1) develops a cool bisecting obverse break, while the terminal die state of 1827 N12 is quite phenomenal. One of the more intriguing late date die progressions involves the formation and growth of the famous knob-on-ear of the 1855 N9. This variety challenges the 1804 C6 for the number of recognizable die states, the variety is not rare (also like 1804 C6), so a die-state collection can be assembled for a reasonable sum of money.
3.3.4. Date specific collecting – This topic has been discussed pretty thoroughly already. While 1794 offers 56 Sheldon numbered varieties, it is followed closely by 1798 with 44 varieties, and 1796 with 39.
3.3.5. Variety specific collecting – This refers to specialized collecting of a single variety. It is also possible to include a specialized single-variety collection (like a die-progression of 1855 N9) within a more general large cent set.
3.3.6. Errors – Large Cent errors are highly prized numismatic rarities, and they can either add visual diversity to any collection of cents, or constitute a fascinating specialty collection. From my experience, it seems that the year 1795 produced more errors (as a fraction of the mintage) than any other date.
3.3.7. Collecting By Color – Old copper comes in a variety of colors, from the full range of browns, to olive green, charcoal gray, and occasionally (rarely) in shades of red. Some collectors strive to assemble date sets or type sets, with all the coins matched for color (and/or surface quality). Others pursue the widest diversity of colors possible. None other than Dr. Sheldon assembled a 66-piece “color set” which he sold intact to Dan Holmes, and which was again sold intact as LOT 571 of Dan’s Early Date sale .
3.3.8. Collecting By Provenance – Coin collecting is a little bit like investing in history, and the hobby of early copper collecting is steeped in a rich numismatic heritage. I personally like the idea of holding an early copper coin that once belonged to a “famous” collector. Whether the name is Robbie Brown, William Sheldon, Henry Norweb, or T. Harrison Garrett (or one of many others) one gets the sense of a bond that spans multiple generations of collectors.
4. Novel Approaches:
4.1. Counterstamps – It was fairly common to punch one’s own initials, or a commercial message into the soft metal of an early copper coin. These days, counterstamps provide a good unifying theme for a collection of old copper coins. Collecting of countermarks is popular enough to have a reference book .
4.2. Specific Damage collections – Early copper coins found many non-numismatic uses. Coins were fabricated into gears, rings, washers, or hum dingers (a coin with two adjacent holes, made to resemble a “button”.
4.3. By Subject or Event – This is somewhat related to date-specific collecting, but in this case, the overriding purpose is to commemorate some event or subject of interest. Examples are coins minted during the Lewis & Clark Expedition (1804-1806), or during Andrew Jackson’s presidency (1829-1837).

Implications of Increasing Specialization
How might increasing specialization within early copper impact the market, the hobby, and the club? First, with regard to copper prices - specialization enables collectors to concentrate their resources in a narrow area, and this permits them to budget more money to each specimen they add to their collection. Specialization can lead to greater demand for common varieties in higher grades – if you only need to own a single draped bust cent, then you want it to be a nice one! Specialization can also increase demand for scarce varieties – for example, what would happen to the price of 1794 Cxxb (xx=01 to 06) half cents if half cent collectors follow the lead of the “Boys of 94”? Both of the price trends just mentioned have been working for so long in the copper market that they are regarded as articles of faith by collectors & dealers.

Increased specialization can result in deeper levels of investigation and more research, by enabling collectors to focus more energy on evaluating the coins in their collection (rather than acquiring more and more coins for the collection). This elevates the collection from being the end goal to a being part of the process of expanding our knowledge.

Another possible result of more specialization is increasing fragmentation of EAC, as small groups focus energy in just one area to the exclusion of all else. The trend to specialization thus far has not harmed EAC, but rather has actually enabled the club to thrive (in my opinion). This is because the club still serves the needs of each specialist better than any alternative – there are opportunities to find the coins they need, and like-minded individuals are also in EAC. EAC must remain aware of the collecting activities of all its members, and be responsive to their needs.

Tuesday, July 13, 2010

Dan Holmes part-2 Highlights

The 2nd sale of the Dan Holmes collection was held by Goldbergs Coins & Collectibles in Beverly Hills, CA on May 30, 2010. This sale, of Dan's middle-date large cents (1816-1839) followed the triumphant sale of his early dates in Sept. 2009 (during which the first U.S. large cent was sold at auction for more than $1 Million!). Two more sales are planned for the remaining Holmes coins - the error coins will be sold in Fall 2010 and the late-date cents (1840-1857) will be sold in early 2011.

Dan Holmes is a copper connoisseur of the 1st order, and his collection of middle-date cents is a strong reflection of his tastes - many condition-census coins and finest-known coins can be found among the 654 lots that were sold.

I was fortunate enough to attend this sale, and I even managed to bring home a few of the lots. Attendance for the auction was very much in line with what I have seen at past auctions of major copper collections. The bidding was generally strong, but not incredibly impressive. The median hammer price was about 40% higher than the pre-sale estimate. There were a number of coins that brought many multiples of their pre-sale estimates, and yet some of the marquee coins in the sale fell short of their pre-sale estimates.
Below I will attempt to capture some of the "surprises" in the Holmes part-2 auction, from my perspective. Please keep in mind that, while the reported hammer prices reflect reality, the opinions are mine alone.

  • LOT 20 provided an early surprise. This 1816 N8 (R3) in PCGS MS64 RB had a lot of flash, and plenty of red color. After spirited bidding, it was hammered for $9750 (vs. an estimate of only $1000).
  • LOT 56 was an 1817 N12 (R3) in a very rare terminal die state (with a large cud die break connecting stars 1-3). Although it was only graded G-5, this coin sold for a hammer price of $2800.
  • Just a few lots later, LOT 71, an 1817 N17 (R4) graded G-6, but in terminal die state was hammered for $1650. I concluded that these die-state collectors mean business!
  • LOT 73, a relatively problem-free G-5 example of the very rare 1822 N14 (R7) brought a winning bid of $18,000 (vs. an estimate of just $8000).
  • LOT 254 (1827 N12 (R5) graded only VG-7 but in terminal die-state) and LOT 267 (1828 N8 (R3+) graded only G-6 but in terminal die-state) continued the theme of extremely strong bids for rare die states.
  • LOT 322 and LOT 323, both 1830 N9 (R6+) were surprises because of the weakness of the bidding for these rarities. LOT 322 was hammered for $15,000 (vs. estimate of $20,000-up) while LOT 323 realized a hammer price of $6500 (vs. estimate of $8000-up).
  • LOT 398 was one of the marquee coins in this sale - a very rare proof-only 1834 N7 (R7) and tied for finest known. I was surprised when the bidding for this wonder-coin stopped at $43,000 (vs. a pre-sale estimate of $50,000-up). Rest assured the winning bidder is very satisfied with his purchase.
  • The 1839/6 (N1) Cents in the Holmes sale (three beautiful coins, representing different states of the famous obv die-break) provided some drama. The first coin (EDS in EF-45) surprised on the down side when it was hammered at just $14,500 (vs. an estimate of $25,000). However, the 2nd coin (MDS in EF40) met expectations(with a hammer price of $17,500 vs. an estimate of $15,000), while the 3rd coin (LDS in choice VF35) provided an upside surprise when it was hammered at $19,500 vs. an estimate of only $10,000.

    In reflecting upon this sale, I have this to say:
    As always, quality & rarity ruled the day, but there were many surprise bargains among the marquee coins in this sale. One of the biggest surprises for me was the strength in low-grade coins in rare die-state. This is an area of early copper to watch closely!
  • Thursday, May 6, 2010

    EAC 2010 convention

    EAC2010 has ended, but the pleasant memories should last for the rest of this year. I enjoyed myself more this year than any other EAC convention I have attended. There are many possible reasons:
    I spent more time chatting about copper with old EAC friends than at prior conventions
    I met more new EAC friends than I usually meet
    I overcame my fear of a mistake and “stretched” my budget just enough to obtain a few special coins
    I participated in many of the activities that were planned & brought about by generous EAC members just for our enjoyment.

    A few of the personal covention highlights include:

    >attending the grading seminar with Doug & Steve – this is a very entertaining and informative seminar, with the added bonus that the knowledge that is obtained can save many thousands of dollars!

    >attending ALL the happenings – The large cents on display were awesome (as usual), the bust coinage die-state progressions were fascinating, and I was quite gratified to learn that my humble 1850 half cent earned a few complimentary comments.

    >lot viewing for the EAC sale – There happened to be a number of half cent collectors in the room when I was viewing the lots, so the conversation tended to be dominated by speculation about the value of an 1811 C1 half cent with a 2-star break, or what might possess someone to modify a high-grade 1804 half cent to an (impossible) 1801. I found it all pretty fascinating, and I also located a few nice coppers to "shoot for" during the EAC sale.

    >lot viewing for the Dan Holmes middle dates – although all the lots were present & available, it just so happened that Dan himself was also available, so I was happy just to grab a copy of the catalogue and spend some time talking to one of the “masters of our universe”. It helps to know the coins will also be available later, in Beverly Hills. The sale of the Dan Holmes middle-date cents is scheduled for May 30th, and it promises to be another BIG copper event (sorry - bad pun).

    >prowling the bourse floor – Although the bourse is typically all about “buying & selling the coins”, there are plenty of interesting & useful diversions as well. I found this year’s exhibits to be fascinating & informative. I was especially enthralled by Jim Neiswinter’s 1793 Lib Cap cents. The guys from Heritage had a wonderful bit of Washingtonia on display at their table. This year, my “mission” was hunting down some decent, affordable 1796 Liberty Cap. Varieties to add to my meager holdings. I guess that I can claim some success, with three new varieties purchased during EAC, and I can now (for the first time) report that I hold an example of all 11 1796 Lib Cap varieties!

    >late night lobby sessions – after dinner on Sat. night, I shared a couple of rounds beers with a few EAC buddies. Some old copper was soon on the table, and the lubrication seemed to improve our grading skills as the evening wore on!

    >the EAC auction – this is often the marquee event for the convention, and once again this year we had a very successful sale. Bob & Chris produced a fantastic catalogue and a very smooth auction. The auctioneer maintained a blistering pace through most of the sale, which meant that snoozing could be potentially costly! I managed to snag 7 lots in the sale, which is better than average. Bob later announced that the EAC auction generated $273K in sales. A special note of thanks to ALL the volunteers who helped with the production of the EAC sale!

    >the annual meeting – Denis Loring has piloted the EAC ship with grace & discipline, and he did an excellent job of giving credit where it was due for this terrific EAC convention.

    So, that about wraps it up, at least for EAC2010. Brett Dudek (and his team) earned a standing ovation for this year’s event in Annapolis! Next year's convention in Portland faces a mighty challenge to top this year's event!