Another encore performance for the Dan Holmes large cent collection was held on Jan. 30, 2011 by Ira & Larry Goldberg, with cataloguing assistance from M&G Copper Auctions.
Dan Holmes part-4 featured the late-date large cents from Dan's legendary collection (1840-1857). 689 lots were hammered down during a marathon auction session that stretched to about nine hours.
Live attendance at this sale was a little above average, but not door-busting. I do not think this indicates any lack of interest in these coins. Rather, the high costs associated with travel to the L.A. area, and the continued improvements that have been made in on-line bidding software made it realistic for early copper nuts to participate in the sale in the comfort of their own home, and many decided to do that. On-line bidding was a bigger factor in this sale than any other recent Goldberg auction that I can recall. In fact, many lots came down to an on-line bidding war, while the floor bidders became spectators. The increase in on-line participation is a boon to consignors, because it can improve the hammer price for lots that are not valuable enough to get a photo in the printed catalogue, and would likely sell at a discount to a floor bidder.
The sale contained many finest-known and condition-census-level (cc) coins, and yet there were not a lot of upside break-out bids to report. The average hammer price was about double the estimate (consistent with past copper auctions by the firm), and there were even a few coins that went for less than their pre-sale estimates!
With that brief introduction, I will describe a few of the lots that surprised me during this sale:
LOT 104 was an 1845 N9 (R2) graded MS64 RED by PCGS. The full red color and intense luster proved irresistible, and this coin soared to a winning bid of $11,500 vs. the pre-sale estimate of $2000-UP!
LOT 115 was an 1846 N1 (R1) graded MS64 BN by PCGS. However, the coin exhibited impressive proof-like surfaces (medium mirrors), and was even called PROOF-50 by Denis Loring. The hammer price was $2900 vs. estimate of $500-UP.
LOT 142 was a scarce variety (1846 N10, R5-) in a rare die-state (LDS, with rim cud break at 9:00 on the obverse. Though graded just VF20, this coin brought a winning bid of $390 (vs. est. of $50-UP).
This theme of strong bids for rare die-states continued through the entire sale. Other examples include: LOT 155 (1846 N15), LOT 164 (1846 N19), LOT 227 (1847 N26), LOT 302 (1848 N27), LOT410 (1850 N17), and LOT 521 (1852 N20).
LOT 179 was a beautiful mint-state 1847 N2 (a very popular 7-over-small-7 variety), with a provenance that included Robbie Brown. The winning bid of $6000 was 6x the estimate of $1000-UP!
LOT 244 was an 1847 N34 (R5+) graded AU50 (cc#3). The coin also had once been owned by Ted Naftzger. However, the top bid of $2600 was only half the pre-sale estimate of $5000-UP. The winning bidder must be very happy with that result!
Just a few lots later, LOT 256, the only-known 1847 N43 (R8+) was bid up to $12,500 (vs. est. of $5000-UP). For a unique variety, this does not seem like too much to pay (in my humble opinion).
LOT 531 provided another highlight. The coin was an 1852 N24 (R8- proof-only variety) graded PROOF-64 by PCGS. The high bid was $41,000 vs. an estimate of $20,000-UP.
I really enjoyed attending this sale, and getting a chance to chat briefly with Dan and his wife. At the end of the night, I had snagged 6 of Dan’s coins to add to my own modest late-date collection. Most important, a good time was had by all!
Saturday, March 12, 2011
Wednesday, November 3, 2010
The Rise of Early Copper Specialization
Introduction
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.
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!
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.
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!
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!
Friday, November 13, 2009
The Dan Holmes Sale (part-1): Finding the Bargains!
The recently-completed sale of the Dan Holmes early-date large cents (1793-1814) garnered so much attention, and set so many price records (including the highest price ever recorded for an American Large Cent, at $1.265 million, and the most valuable large cent collection ever sold at auction, $15.17 million) it might be hard to believe that anyone could find a bargain at this sale. Yet, believe it or not, some of the coins sold in this auction were legitimate bargains!
Prices overall for the Holmes early-date cents were very strong. In general, the headline rarities and coins in very high condition (strictly mint-state & high in the condition census) often exceeded pre-sale estimates by a wide margin. Meanwhile the NC (non-collectible) varieties and the scarce varieties in lower grades realized weak prices. However, there were many exceptions, so it is impossible to make sweeping statements with complete accuracy.
Below I will discuss about a dozen coins from the Holmes sale that I consider (with the benefit of my 20:20 hindsight) were great values for the winning bidders:
1. LOT 25 was the 2nd-finest of the two known 1793 NC-6 Liberty Cap cents. The winning bidder paid $35,000 (plus buyer's fee) to own this G4 coin. You might be asking: "How can a coin that cost $40K be considered a bargain?". Let me spell it out: R-A-R-I-T-Y! Consider that a few lots earlier, someone bid the 2nd-finest (of 3 known) strawberry leaf cents (LOT 8, 1793 NC-3) to $190,000! Sure, that was a strawberry leaf, and as a type, they are much scarcer than 1793 Liberty Caps. To tell the truth, $190,000 (plus buyer's fee) could easily turn out to be a bargain price for a strawberry leaf cent, given how legendary these rarities are. Still, since every serious collector needs a 1793 NC-6 to complete the 1793 NC's, and only two people at a time can do it, this coin looks like a good candidate to become more valuable!
2. LOT 75 was a 1794 S-46 (R3) in EAC MS60. This CC#2 coin (2nd finest known) was hammered for just $23,000. I know that is a lot of money for a cent - the point is that this is a MINT STATE 1794 cent! There are no more than a handful of MS 1794's around, period. There are probably more 1797 S-123's in mint-state known than ALL the 1794 varieties combined, and even an S-123 in MS condition will cost more than $10K (for example: LOT 222 in the Holmes sale). Is it a better investment to own the one CC#2 MS60 1794 S-46, or two MS60 1797 S-123's? The answer is left as an exercise for the reader.
3. LOT 117 was the finest-known 1795 S-73 (R5) by a wide margin, and a coin that once resided in Sheldon's collection. The winning bid for this VF35+ example was $28,500. Apparently circulated 1795 cents are the Rodney Dangerfields of the early copper world - they "can't get no respect". By contrast, the 3rd-finest 1794 S-36 cent (LOT 58, also a VF35 example of an R5 variety) hammered for $36,000. Of course, there are more people looking for 1794 large cents. Therefore, while this lot was not a screaming bargain, it should easily hold its value.
4. LOT 159 was another example of a rare, but circulated coin that failed to impress bidders. The finest-known 1796 NC-3 (R6+) in VF30 came with an impressive pedigree that went back to 1929. The coin was hammered for $21,000 vs. a pre-sale estimate of $20,000. This coin was a good buy at that level.
5. LOT 236 was the unique (R8+) 1797 NC-8 stemless wreath cent in VF20+. While the hammer price of $32,000 accurately reflects the current market value of the coin, I believe the future will be bright for this problem-free high quality RARE large cent, unless more examples are discovered.
6. LOT 295 was a high-grade 1798 S-161 (NGC MS63 / EAC 55, and CC#3 in Bland's census). Perhaps the low rarity of this variety (R2) led to lower bids, but in my view, the price of $12,500 (plus buyer's fee) is pretty reasonable for ANY 1798 in mint-state. After all, there have not been any hoards of mint-state 1798's found (such as the Nichols find cents from 1796 & 1797). This coin might not have been an obvious bargain, but it was still a good value.
7. LOT 302 was a 1798 S-164 (R4) in F12. There was nothing particularly noteworthy about the coin. I chose to highlight this coin because it was one of the few low-priced bargains in this sale. Most of the Holmes coins worth under $1000 got bid well beyond their book value; probably by people seeking the Holmes provenance for one of their coins. This coin sold for just $340 - far less than the value of $750 listed for the coin in CQR.
8. LOT 321 was another high-grade example of a common 1798 variety - S-174 (R2) in NGC MS62 / EAC 55 and CC#2. The hammer price of $9750 does not seem to reflect the true scarcity of mint-state (or near-MS) 1798 cents - in other words, a bargain.
9. LOT 329 was the rare (R5+) 1798 S-178 (style-2 hair with REV of 1796) in F15, and sharper than any other S-178 I have ever seen. The hammer price was $5250 vs. a pre-sale estimate of $5000. More remarkable is the fact that the very next lot (S-178 in VG8, but with a little better color) was hammered for $7000! For my money that first S-178 represents a nice bargain.
10. LOT 356 was the finest known 1800/1798 NC-6 (an R6+ variety). The hammer price was $8750 vs. a pre-sale estimate of $10K.
11. LOT 415 was the finest known 1801 NC-2 (R7). This problem-free F15 coin with a provenance that included Naftzger and Rasmussen brought a winning bid of only $14,500. Once again a choice "NC" was shunned by bidders.
12. LOT 535 was the finest known 1805 S268 - a choice AU50 coin once owned by Virgil Brand, C. Doug Smith, and Ted Naftzger. The winning bid for this beauty was just $14,500 (vs. pre-sale estimate of $15K). Maybe the bidders were exhausted at this point (or, out of money!).
That wraps up my bargain hunt for the Dan Holmes early date sale. I doubt that everyone who reads this will agree with all my choices of bargains. In many cases only time will tell if the coins were, in fact true bargains. Every winning bid made sense to at least one person at the time! Sadly, I was not the winning bidder for any of the coins I just described. I did, however, take home the 1797 Sheldon-130 from the sale (pictured below), and even though I would not call it a bargain, it has found an appreciative new home right here. THANKS a million, Dan!
Prices overall for the Holmes early-date cents were very strong. In general, the headline rarities and coins in very high condition (strictly mint-state & high in the condition census) often exceeded pre-sale estimates by a wide margin. Meanwhile the NC (non-collectible) varieties and the scarce varieties in lower grades realized weak prices. However, there were many exceptions, so it is impossible to make sweeping statements with complete accuracy.
Below I will discuss about a dozen coins from the Holmes sale that I consider (with the benefit of my 20:20 hindsight) were great values for the winning bidders:
1. LOT 25 was the 2nd-finest of the two known 1793 NC-6 Liberty Cap cents. The winning bidder paid $35,000 (plus buyer's fee) to own this G4 coin. You might be asking: "How can a coin that cost $40K be considered a bargain?". Let me spell it out: R-A-R-I-T-Y! Consider that a few lots earlier, someone bid the 2nd-finest (of 3 known) strawberry leaf cents (LOT 8, 1793 NC-3) to $190,000! Sure, that was a strawberry leaf, and as a type, they are much scarcer than 1793 Liberty Caps. To tell the truth, $190,000 (plus buyer's fee) could easily turn out to be a bargain price for a strawberry leaf cent, given how legendary these rarities are. Still, since every serious collector needs a 1793 NC-6 to complete the 1793 NC's, and only two people at a time can do it, this coin looks like a good candidate to become more valuable!
2. LOT 75 was a 1794 S-46 (R3) in EAC MS60. This CC#2 coin (2nd finest known) was hammered for just $23,000. I know that is a lot of money for a cent - the point is that this is a MINT STATE 1794 cent! There are no more than a handful of MS 1794's around, period. There are probably more 1797 S-123's in mint-state known than ALL the 1794 varieties combined, and even an S-123 in MS condition will cost more than $10K (for example: LOT 222 in the Holmes sale). Is it a better investment to own the one CC#2 MS60 1794 S-46, or two MS60 1797 S-123's? The answer is left as an exercise for the reader.
3. LOT 117 was the finest-known 1795 S-73 (R5) by a wide margin, and a coin that once resided in Sheldon's collection. The winning bid for this VF35+ example was $28,500. Apparently circulated 1795 cents are the Rodney Dangerfields of the early copper world - they "can't get no respect". By contrast, the 3rd-finest 1794 S-36 cent (LOT 58, also a VF35 example of an R5 variety) hammered for $36,000. Of course, there are more people looking for 1794 large cents. Therefore, while this lot was not a screaming bargain, it should easily hold its value.
4. LOT 159 was another example of a rare, but circulated coin that failed to impress bidders. The finest-known 1796 NC-3 (R6+) in VF30 came with an impressive pedigree that went back to 1929. The coin was hammered for $21,000 vs. a pre-sale estimate of $20,000. This coin was a good buy at that level.
5. LOT 236 was the unique (R8+) 1797 NC-8 stemless wreath cent in VF20+. While the hammer price of $32,000 accurately reflects the current market value of the coin, I believe the future will be bright for this problem-free high quality RARE large cent, unless more examples are discovered.
6. LOT 295 was a high-grade 1798 S-161 (NGC MS63 / EAC 55, and CC#3 in Bland's census). Perhaps the low rarity of this variety (R2) led to lower bids, but in my view, the price of $12,500 (plus buyer's fee) is pretty reasonable for ANY 1798 in mint-state. After all, there have not been any hoards of mint-state 1798's found (such as the Nichols find cents from 1796 & 1797). This coin might not have been an obvious bargain, but it was still a good value.
7. LOT 302 was a 1798 S-164 (R4) in F12. There was nothing particularly noteworthy about the coin. I chose to highlight this coin because it was one of the few low-priced bargains in this sale. Most of the Holmes coins worth under $1000 got bid well beyond their book value; probably by people seeking the Holmes provenance for one of their coins. This coin sold for just $340 - far less than the value of $750 listed for the coin in CQR.
8. LOT 321 was another high-grade example of a common 1798 variety - S-174 (R2) in NGC MS62 / EAC 55 and CC#2. The hammer price of $9750 does not seem to reflect the true scarcity of mint-state (or near-MS) 1798 cents - in other words, a bargain.
9. LOT 329 was the rare (R5+) 1798 S-178 (style-2 hair with REV of 1796) in F15, and sharper than any other S-178 I have ever seen. The hammer price was $5250 vs. a pre-sale estimate of $5000. More remarkable is the fact that the very next lot (S-178 in VG8, but with a little better color) was hammered for $7000! For my money that first S-178 represents a nice bargain.
10. LOT 356 was the finest known 1800/1798 NC-6 (an R6+ variety). The hammer price was $8750 vs. a pre-sale estimate of $10K.
11. LOT 415 was the finest known 1801 NC-2 (R7). This problem-free F15 coin with a provenance that included Naftzger and Rasmussen brought a winning bid of only $14,500. Once again a choice "NC" was shunned by bidders.
12. LOT 535 was the finest known 1805 S268 - a choice AU50 coin once owned by Virgil Brand, C. Doug Smith, and Ted Naftzger. The winning bid for this beauty was just $14,500 (vs. pre-sale estimate of $15K). Maybe the bidders were exhausted at this point (or, out of money!).
That wraps up my bargain hunt for the Dan Holmes early date sale. I doubt that everyone who reads this will agree with all my choices of bargains. In many cases only time will tell if the coins were, in fact true bargains. Every winning bid made sense to at least one person at the time! Sadly, I was not the winning bidder for any of the coins I just described. I did, however, take home the 1797 Sheldon-130 from the sale (pictured below), and even though I would not call it a bargain, it has found an appreciative new home right here. THANKS a million, Dan!
Monday, June 29, 2009
EAC Grading
The subject of grading by EAC (Early American Copper) standards has been a recent topic among aficionados of these classic early American coins.
History
The 70-point grading system (widely used today) owes its existence to a founding member of Early American Coppers - Dr. William H. Sheldon. Dr. Sheldon was captivated by early U.S. large copper cents. He studied them extensively, and ultimately published the results of his research in a classic book called "Early American Cents", published in 1949. Later editions of this work were called "Penny Whimsy". In his book, Dr. Sheldon introduced the 70-point grading scale. On this scale, a coin can be graded anywhere between "1" on the low end (Basal State, recognizable as to coin type) and "70" on the high end (Flawless Mint-state, exactly as the coin left the coining press). The novel feature of this scale was that it could (at that time) be used to estimate a coin's value in dollars. A common cent variety dated 1794 with a grade of "12" would thereby have a value of about $12. Cents of higher rarity were assigned a higher Basal-state value (2 or 3, for example), and this factor was used to multiply the grade to arrive at the value for the scarce variety.
Grading by Sheldon's system became so popular that it was soon extended to all the other series of U.S. coinage. Other authors published grading guides that followed the 70-point scale. Most notable among these guides are the work of Brown & Dunn, and the American Numismatic Association (ANA) Grading Standards. The latter text is still widely available, and is considered a classic reference to grading for U.S. coins.
Time passed, and the Sheldon 70-point grading scale endured. During the late 1970's a period of high inflation was endured in the U.S. During this time, coin collectors began to develop a strong preference for coins that were graded on the high end of Sheldon's grading scale (60 and higher). This emphasis on high quality, and the growing awareness of the investment potential of rare coins, led to increasing price premiums for coins in the highest grades (65 and above). Collectors of early copper coins were largely oblivious to these market developments, since virtually all early copper falls into circulated grade categories (ie. grades below 60). However, silver dollars and other popular series experienced unprecedented demand in grades above MS60. Many coin dealers succumbed to the temptation to inflate the grade of coins in their stock by a point or two. At the height of the boom in 1980, a great deal of knowledge and effort was necessary to obtain an accurately graded (by A.N.A. grading standards) mint-state U.S. coin. The coin bubble eventually burst, and the subsequent market contraction was compounded by a concurrent tightening of grading standards. Many coin investors were disappointed, and a large number of people simply left the rare coin market.
The lesson from this debacle was not lost on the rare coin industry. In 1986 one of the industry leaders (a man named David Hall) formed a new grading service called the Professional Coin Grading Service (PCGS for short) with the goal of "solving the rare coin grading problem". PCGS maintained strict grading standards for U.S. coins, and introduced the concept of a sonically sealed clear plastic holder, which encased and protected the coin. A coin inside a PCGS holder received an endorsement that was on par with the "Good Housekeeping Seal"® for consumer products. Demand for PCGS-graded coins soon exploded. The results were predictable: First, prices rose rapidly for graded & encapsulated mint-state coins. Second, other grading services arose to compete with PCGS - most notable among these being Numismatic Guarantee Corp. (NGC) and ANACS (formerly the American Numismatic Assoc. Certification Service). The generic term "slabbed coins", or simply "slabs" came to describe the graded & encapsulated coins. In response to the widening price gap between successive mint-state grades, the grading scale for mint-state coins was further refined. Where numerical levels of MS60, MS63, and MS65 had once been sufficient, the full scale from 60-70, in 1-point increments was now utilized. Unfortunately, this innovation in the assignment of grades implied a precision in grading that was not really consistently achievable. The next rare coin market peak, fueled by strength in slabbed coins, occurred in 1989.
The economic recession in the United States in the early 1990's was accompanied by a crash in the certified rare coin market. There were definitely financial reasons for the market fall, but it was also a period of sobering up from the slab grading "party" of the 1980's. Perceptive people in the rare coin market began to observe that there were subtle but important differences in the grading standards from the various services. Furthermore, because coin grading continued to be more of an art than a science, individual coins might receive different grades from the same service on different days! This created uncertainty in the market (which was not generally desired by market makers). It also created opportunities for knowledgeable people with a "good eye" for slabbed coins with the potential to be cracked out of their existing holder and submitted for a possible higher grade. The "Crack-out" game was on! All of the grading services made adjustments, in an effort to create a stable & predictable rare coin market, and also to win market share. PCGS published a population report, showing how many coins of each denomination, type, date, and mint-mark they had graded in each grade category. This information greatly enhanced the amount of data available to rare coin buyers, and led to several adjustments in the marketplace, as the rarity (or lack of rarity) of each U.S. coin began to become known. The population reports have proven to be very a valuable resource for rare coin collectors and investors, enabling informed decisions to be made about coin acquisitions. A period of rationality began in the rare coin market, and this continues to the present.
EAC Grading
Early American Copper (EAC) grading also follows Sheldon's 70-point scale. The vast majority of copper large cents and half cents are circulated, and grading them involves understanding how much wear they have experienced. The generally recognized circulated grades include: FR2, AG3, G4, G6, VG8, VG10, F12, F15, VF20, VF25, VF30, VF35, EF40, EF45, AU50, AU55, and AU58. From the standpoint of wear alone, a strict adherence to ANACS grading standards for circulated grades will come very close to approximating EAC standards. There are many complicating factors, which are related to the peculiarities of the Large Cent and Half Cent series. These complications make grading the sharpness of early copper a little more difficult than most other coin series. For example, there are many die varieties of early copper with known weaknesses or die flaws in one or more places, which compromise the sharpness of the design. Another cause of weakness involves die failure, which results in early die-state coins having sharp features, while late-state coins appear weak, in spite of being well struck. For this reason, EAC grading involves both the understanding of what each grade on the numerical scale should look like (ideally) and the knowledge of each specific date & variety in the series, and how each of those varieties might deviate from the norm.
What really complicates EAC grading is the concept of "net grading". I will attempt to explain this concept, but I must be candid: EAC grading is an intellectual challenge, and mastery usually involves a lot more than reading & memorization. The most competent EAC graders have been looking at early copper for 10 years or more, and have evaluated many thousands of individual coins. Net grading involves determining the "sharpness grade" of the coin, and then deducting from this grade in order to account for any problems the coin might have. These problems are numerous, and they vary in severity. Problems include (but are not limited to): Cleaning (of a harmful nature), scratches, rim bumps, corrosion spots, porous surfaces, tooling (moving the metal on the coin with a tool), bends, holes, planchet flaws, and non-copper substances on the surface. If a coin has been subjected to only wear, and there are absolutely no problems beyond what is expected from circulation, then the net grade will equal the sharpness grade. The net grade reduction is a function of the number (and severity) of the problems, and the baseline sharpness grade. A lower grade coin (eg. VG) spent a lot more time in circulation, and therefore would be expected to have a lot of wear, and also a number of light ticks & scratches (so-called "circulation marks"). However, these circulation marks should have natural toning, and must not disturb the basic eye appeal of the coin. A higher grade coin (eg. EF or better) should have natural color and essentially flawless surfaces and rims in order for the net grade to be the same as the sharpness grade. A single hairline scratch on an EF coin could result in a 5-point deduction from the sharpness grade (if the scratch is fairly easy to see). On a VG coin, the same scratch would result in only a 1-point deduction. A deep scratch will result in a larger deduction to arrive at the net grade (about -10 points for an EF coin, and -3 points for a VG coin). Problems like rim bums and porous surfaces are treated in a similar manner for net grading purposes - if the problem is minor, the deduction is small (-5 points for EF, and -1 point for VG) and if the problem is severe, the deduction is doubled (at least). Coins with multiple problems receive multiple deductions. One can envision how a coin with excellent sharpness (EF details) can be net graded at only VG or lower! (for example "EF40 sharpness, scratched and having large areas of corrosion on both sides and two large rim bumps on the obverse, net VG10").
The factor that will dictate a particular coin's desirability within its grade designation is the eye appeal. EAC graders have developed a unique set of standards for eye appeal: these standards range from "scudzy" to "average" to "choice". Intermediate levels of "AVG-" and "AVG+" are often utilized to express eye appeal that is between the three basic levels. A coin that is called "average" meets all the criteria (eg. color, surfaces, number of marks, and overall eye appeal) for the designated sharpness grade. A "choice" coin has the eye appeal of a higher sharpness grade. A "scudzy" coin has one or more problems that cause its eye appeal to suffer.
EAC net grading is part science and part art. The old adage "Beauty is in the eye of the beholder" can certainly be applied. One person is likely to deduct more for cleaning than another person. The same can be said for any of the numerous problems that can afflict copper coins. For this reason, legitimate differences of opinion exist about the net grade of any particular coin. However, there is a general consensus among EAC experts about what differentiates a choice coin from an average coin, and there is also general agreement about coins that are scudzy. There is also almost no argument about what constitutes a problem - only how much the grade should be reduced from the sharpness grade to arrive at the net grade.
One advantage to the EAC net grading system is that it works for any genuine copper coin. The major grading services (notably PCGS & NGC) have often returned problem coins as "ungradeable". These two services now offer encapsulation for coins with problems, but a PCGS "Genuine" holder does not tell a potential buyer much about the coin (except that it is a real U.S. mint product). The EAC net grade is intended to indicate the market value of the coin.
A Net Grading Example
So, a natural question at this point would be: "How does one use EAC net grading, in a practical situation (such as trying to make a deal on a coin bourse floor) in order to decide what a coin is worth?". After all, the academic subject of grading can be debated forever, but ultimately coin collectors are interested in acquiring new coins for their collection at reasonable prices. I will describe the net grading process (the way I practice it), but I am not sure how well my words will express the experience. For readers who would like to explore the subject a little further, I suggest that you obtain a copy of Copper Quotes By Robinson (known as CQR within EAC), and read Jack's well-chosen words on this subject, found at the beginning of the book. The contents of CQR will also be extremely valuable as a guide to the value of early copper, by date and variety (and, of course, by grade).
Let us assume that you are standing at a coin dealer's table at a convention, and you spot an early copper coin in a holder that indicates only the date and a price.
You ask the dealer politely if you can take a closer look at the coin, and he hands you the coin.
Your first impression of the coin you are holding is very significant. Your reaction to the overall "look" of this coin can typically be described by one of the following words: "Wow!", "OK", "Yuk!", or "Hmm?". What do these reactions mean, and why are they so significant? Wow! - means you like the coin. OK - means there is nothing obviously wrong, and the coin could be worth consideration at the right price. Yuk! - means there is something wrong with coin, and you should strongly consider NOT trying to buy it. Hmm? - means there could be something wrong with this coin, but it is subtle. This is an important danger signal that you must not ignore - the coin just does not "look right" to you. Is it genuine? Have the surfaces been altered? You might want to seek professional advice before you proceed with your evaluation of the "Hmm?" coin. If your first reaction to the coin is either "Wow" or "OK", then you can move ahead (we will consider the "Yuk!" and the "Hmm?" coins soon).
Now, evaluate the sharpness grade of the coin (from 1 to 60). Take into consideration any knowledge you have about the specific die characteristics and normal wear patterns for this series, this date, and this variety. Now, you have a baseline (sharpness) grade.
Next, account for any problems that the coin may possess: Cleaning, rim bumps, scratches, etc. Use a magnifier, if this enables you to conduct a thorough technical evaluation. The key to this exercise is to remain objective about the coin. You do not own it (yet), and it is emotionally (and financially) much better to see a problem before price is negotiated than after the deal is made.
Determine the Net Grade for the coin. This will depend on the nature of the problem(s), and the sharpness grade. Minor problems will result in a small grade deduction for a mid-grade coin (about 3 to 5 points down, for a F12 to VF25) coin. For a high-grade coin (EF40 or higher), even minor problems can result in a large grade deduction (10 points or more). For a low-grade coin (G4 or VG8), minor problems typically cause only a tiny deduction (1 or 2 points). To-date, there are no expressly written rules for net grade deductions, and even experts will disagree about the net grade impact of certain types of defects. There should be some room for personal interpretation, based on your level of tolerance for certain problems (for example, I have trouble tolerating large rim bumps, but others seem to tolerate them. I have friends in EAC who hate dark color & corroded surfaces). Major problems always result in a lower net grade, and often the net grade will be less than half the sharpness grade (typical example: EF40 sharpness, but net VG10 due to heavy porosity and dark color). Actual experience with real copper coins and conversations with early copper experts provide the best opportunities for learning to net grade. Doug Bird and Steve Carr (both members of EAC) hold periodic EAC grading seminars - these are great fun, and valuable experiences.
At this point, you have a coin that you are interested in acquiring, and you have ascertained (to the best of your ability) its net grade. Now, using the net grade, you must determine the value of the coin. For this step, you will need either an encyclopedic knowledge of early copper, or the help of a price guide. I use a price guide. There are several of these available. The one that works best for me is Copper Quotes by Robinson (CQR). Other guides include the Coin Dealer Newsletter (known as the Greysheet by dealers), the Coin Market guide (published monthly in Numismatic News), and Penny Prices (available from Bill Noyes of EAC). PCGS maintains an on-line price guide - however, this guide is relevant only for coins that have been graded and encapsulated by PCGS, whose standards are not the same as EAC standards.
Remember the initial step, where you noted your first impression of the coin? Now, you can use this information to "adjust" the price you are willing to pay for this particular coin. Is the coin choice for the grade? If it is, then you should be prepared to pay a premium (often a substantial premium) above the price of an average coin. If the coin is average, then the value you have determined should be a good estimate. If this coin is a scarce variety, you may want to consider paying some premium for the "opportunity" to add this coin to your collection (only you can decide how long you would be willing to wait for another chance to own this variety, if you pass on this one). If the coin is below average, and it is a common variety, you should insist on a good deal - if the dealer says "no", you will get other opportunities to own the variety. If the coin is below average, but it is rare, you might still consider buying it, if the price is low enough.
Now, you need to compare the price that the dealer has on the coin with the value that you have just determined. If the coin is not priced, now is the time to ask the dealer how much it will cost. If the price is close to your estimated value, or below it, then you are on your way to a new acquisition for your collection. If the price is higher than your estimate of value, you must decide whether it is worth negotiating to a fair price, or whether you should pass on this one. If the coin is choice, or if the variety is scarce, you should be prepared to "stretch" a little in order to acquire it. The secret to success at this stage is keeping your emotions in check - the dealer is interested in making a sale, and your job is to make sure that if a deal is made, it happens at a fair price.
What about those "Yuk!" and "Hmm?" coins? Earlier, I suggested that you stop considering these coins immediately, and not proceed with the net grade evaluation or price determination. This remains pretty sound advice, but it might be a little harsh. If the particular variety you are considering is rare (R5 or higher), then you might want to consider buying a coin with problems. It all depends on the following: 1. Is the coin being priced fairly to account for the problems? 2. Can you live with the coin, even with the problem(s)? 3. How long is it likely to be before you get a chance to buy this variety in problem-free condition? Personally, I can tolerate a scarce variety with a problem (if the price is really good) until I can find one without a problem.
History
The 70-point grading system (widely used today) owes its existence to a founding member of Early American Coppers - Dr. William H. Sheldon. Dr. Sheldon was captivated by early U.S. large copper cents. He studied them extensively, and ultimately published the results of his research in a classic book called "Early American Cents", published in 1949. Later editions of this work were called "Penny Whimsy". In his book, Dr. Sheldon introduced the 70-point grading scale. On this scale, a coin can be graded anywhere between "1" on the low end (Basal State, recognizable as to coin type) and "70" on the high end (Flawless Mint-state, exactly as the coin left the coining press). The novel feature of this scale was that it could (at that time) be used to estimate a coin's value in dollars. A common cent variety dated 1794 with a grade of "12" would thereby have a value of about $12. Cents of higher rarity were assigned a higher Basal-state value (2 or 3, for example), and this factor was used to multiply the grade to arrive at the value for the scarce variety.
Grading by Sheldon's system became so popular that it was soon extended to all the other series of U.S. coinage. Other authors published grading guides that followed the 70-point scale. Most notable among these guides are the work of Brown & Dunn, and the American Numismatic Association (ANA) Grading Standards. The latter text is still widely available, and is considered a classic reference to grading for U.S. coins.
Time passed, and the Sheldon 70-point grading scale endured. During the late 1970's a period of high inflation was endured in the U.S. During this time, coin collectors began to develop a strong preference for coins that were graded on the high end of Sheldon's grading scale (60 and higher). This emphasis on high quality, and the growing awareness of the investment potential of rare coins, led to increasing price premiums for coins in the highest grades (65 and above). Collectors of early copper coins were largely oblivious to these market developments, since virtually all early copper falls into circulated grade categories (ie. grades below 60). However, silver dollars and other popular series experienced unprecedented demand in grades above MS60. Many coin dealers succumbed to the temptation to inflate the grade of coins in their stock by a point or two. At the height of the boom in 1980, a great deal of knowledge and effort was necessary to obtain an accurately graded (by A.N.A. grading standards) mint-state U.S. coin. The coin bubble eventually burst, and the subsequent market contraction was compounded by a concurrent tightening of grading standards. Many coin investors were disappointed, and a large number of people simply left the rare coin market.
The lesson from this debacle was not lost on the rare coin industry. In 1986 one of the industry leaders (a man named David Hall) formed a new grading service called the Professional Coin Grading Service (PCGS for short) with the goal of "solving the rare coin grading problem". PCGS maintained strict grading standards for U.S. coins, and introduced the concept of a sonically sealed clear plastic holder, which encased and protected the coin. A coin inside a PCGS holder received an endorsement that was on par with the "Good Housekeeping Seal"® for consumer products. Demand for PCGS-graded coins soon exploded. The results were predictable: First, prices rose rapidly for graded & encapsulated mint-state coins. Second, other grading services arose to compete with PCGS - most notable among these being Numismatic Guarantee Corp. (NGC) and ANACS (formerly the American Numismatic Assoc. Certification Service). The generic term "slabbed coins", or simply "slabs" came to describe the graded & encapsulated coins. In response to the widening price gap between successive mint-state grades, the grading scale for mint-state coins was further refined. Where numerical levels of MS60, MS63, and MS65 had once been sufficient, the full scale from 60-70, in 1-point increments was now utilized. Unfortunately, this innovation in the assignment of grades implied a precision in grading that was not really consistently achievable. The next rare coin market peak, fueled by strength in slabbed coins, occurred in 1989.
The economic recession in the United States in the early 1990's was accompanied by a crash in the certified rare coin market. There were definitely financial reasons for the market fall, but it was also a period of sobering up from the slab grading "party" of the 1980's. Perceptive people in the rare coin market began to observe that there were subtle but important differences in the grading standards from the various services. Furthermore, because coin grading continued to be more of an art than a science, individual coins might receive different grades from the same service on different days! This created uncertainty in the market (which was not generally desired by market makers). It also created opportunities for knowledgeable people with a "good eye" for slabbed coins with the potential to be cracked out of their existing holder and submitted for a possible higher grade. The "Crack-out" game was on! All of the grading services made adjustments, in an effort to create a stable & predictable rare coin market, and also to win market share. PCGS published a population report, showing how many coins of each denomination, type, date, and mint-mark they had graded in each grade category. This information greatly enhanced the amount of data available to rare coin buyers, and led to several adjustments in the marketplace, as the rarity (or lack of rarity) of each U.S. coin began to become known. The population reports have proven to be very a valuable resource for rare coin collectors and investors, enabling informed decisions to be made about coin acquisitions. A period of rationality began in the rare coin market, and this continues to the present.
EAC Grading
Early American Copper (EAC) grading also follows Sheldon's 70-point scale. The vast majority of copper large cents and half cents are circulated, and grading them involves understanding how much wear they have experienced. The generally recognized circulated grades include: FR2, AG3, G4, G6, VG8, VG10, F12, F15, VF20, VF25, VF30, VF35, EF40, EF45, AU50, AU55, and AU58. From the standpoint of wear alone, a strict adherence to ANACS grading standards for circulated grades will come very close to approximating EAC standards. There are many complicating factors, which are related to the peculiarities of the Large Cent and Half Cent series. These complications make grading the sharpness of early copper a little more difficult than most other coin series. For example, there are many die varieties of early copper with known weaknesses or die flaws in one or more places, which compromise the sharpness of the design. Another cause of weakness involves die failure, which results in early die-state coins having sharp features, while late-state coins appear weak, in spite of being well struck. For this reason, EAC grading involves both the understanding of what each grade on the numerical scale should look like (ideally) and the knowledge of each specific date & variety in the series, and how each of those varieties might deviate from the norm.
What really complicates EAC grading is the concept of "net grading". I will attempt to explain this concept, but I must be candid: EAC grading is an intellectual challenge, and mastery usually involves a lot more than reading & memorization. The most competent EAC graders have been looking at early copper for 10 years or more, and have evaluated many thousands of individual coins. Net grading involves determining the "sharpness grade" of the coin, and then deducting from this grade in order to account for any problems the coin might have. These problems are numerous, and they vary in severity. Problems include (but are not limited to): Cleaning (of a harmful nature), scratches, rim bumps, corrosion spots, porous surfaces, tooling (moving the metal on the coin with a tool), bends, holes, planchet flaws, and non-copper substances on the surface. If a coin has been subjected to only wear, and there are absolutely no problems beyond what is expected from circulation, then the net grade will equal the sharpness grade. The net grade reduction is a function of the number (and severity) of the problems, and the baseline sharpness grade. A lower grade coin (eg. VG) spent a lot more time in circulation, and therefore would be expected to have a lot of wear, and also a number of light ticks & scratches (so-called "circulation marks"). However, these circulation marks should have natural toning, and must not disturb the basic eye appeal of the coin. A higher grade coin (eg. EF or better) should have natural color and essentially flawless surfaces and rims in order for the net grade to be the same as the sharpness grade. A single hairline scratch on an EF coin could result in a 5-point deduction from the sharpness grade (if the scratch is fairly easy to see). On a VG coin, the same scratch would result in only a 1-point deduction. A deep scratch will result in a larger deduction to arrive at the net grade (about -10 points for an EF coin, and -3 points for a VG coin). Problems like rim bums and porous surfaces are treated in a similar manner for net grading purposes - if the problem is minor, the deduction is small (-5 points for EF, and -1 point for VG) and if the problem is severe, the deduction is doubled (at least). Coins with multiple problems receive multiple deductions. One can envision how a coin with excellent sharpness (EF details) can be net graded at only VG or lower! (for example "EF40 sharpness, scratched and having large areas of corrosion on both sides and two large rim bumps on the obverse, net VG10").
The factor that will dictate a particular coin's desirability within its grade designation is the eye appeal. EAC graders have developed a unique set of standards for eye appeal: these standards range from "scudzy" to "average" to "choice". Intermediate levels of "AVG-" and "AVG+" are often utilized to express eye appeal that is between the three basic levels. A coin that is called "average" meets all the criteria (eg. color, surfaces, number of marks, and overall eye appeal) for the designated sharpness grade. A "choice" coin has the eye appeal of a higher sharpness grade. A "scudzy" coin has one or more problems that cause its eye appeal to suffer.
EAC net grading is part science and part art. The old adage "Beauty is in the eye of the beholder" can certainly be applied. One person is likely to deduct more for cleaning than another person. The same can be said for any of the numerous problems that can afflict copper coins. For this reason, legitimate differences of opinion exist about the net grade of any particular coin. However, there is a general consensus among EAC experts about what differentiates a choice coin from an average coin, and there is also general agreement about coins that are scudzy. There is also almost no argument about what constitutes a problem - only how much the grade should be reduced from the sharpness grade to arrive at the net grade.
One advantage to the EAC net grading system is that it works for any genuine copper coin. The major grading services (notably PCGS & NGC) have often returned problem coins as "ungradeable". These two services now offer encapsulation for coins with problems, but a PCGS "Genuine" holder does not tell a potential buyer much about the coin (except that it is a real U.S. mint product). The EAC net grade is intended to indicate the market value of the coin.
A Net Grading Example
So, a natural question at this point would be: "How does one use EAC net grading, in a practical situation (such as trying to make a deal on a coin bourse floor) in order to decide what a coin is worth?". After all, the academic subject of grading can be debated forever, but ultimately coin collectors are interested in acquiring new coins for their collection at reasonable prices. I will describe the net grading process (the way I practice it), but I am not sure how well my words will express the experience. For readers who would like to explore the subject a little further, I suggest that you obtain a copy of Copper Quotes By Robinson (known as CQR within EAC), and read Jack's well-chosen words on this subject, found at the beginning of the book. The contents of CQR will also be extremely valuable as a guide to the value of early copper, by date and variety (and, of course, by grade).
Let us assume that you are standing at a coin dealer's table at a convention, and you spot an early copper coin in a holder that indicates only the date and a price.
Saturday, February 7, 2009
The Sale of The Naftzer Middle Date Cents
The Goldbergs sold the Middle Date Large Cent collection of Ted Naftzger on Sunday, FEB 1, 2009 in Beverly Hills. To say the least, this was a landmark sale of early copper.
The anticipation had been building for months among the EAC faithful. The catalogue went out a little more than a month before the sale - plenty of time for us to drool over these beauties, and plot a strategy for how to take home a few of them.
The Naftzger middle dates were everything that they were billed to be. Virtually every coin was in the condition census, if not the finest known of the variety. Unlike the Naftzger early date set (which had been beset by legal challenges and decimated by hasty sales in the 1990's), this set was still more-or-less intact when Ted passed away last year.
I traveled to Beverly Hills on the day before the sale, to preview the coins. About 99% of the coins were in PCGS holders, which provided a nice opportunity to calibrate my personal grading scale to both EAC grading (courtesy of McCawley & Grellman) and PCGS standards. I looked at every coin, and lingered a little on the rarities and the particularly choice examples of more common varieties. One thing that became evident was that Ted was an ultimate connoisseur of copper. While the set contained plenty of coins with mint red showing, there were a lot of truly choice coins with dark brown color, and also a number of greenish-gold coins and full green coppers. I think Ted had a soft spot in his heart for "Greenies". These distinctive coins display varying shades of green & brown, often in beautiful iridescent overtones that can hypnotize a collector. The Naftzger collection held many beautiful Greenies. The over-riding theme of the Naftzger collection was quality. Minimal marks, originality, and mint bloom were some of the hallmarks of these cents.
On the day of the sale, there was nothing out of the ordinary about the auction venue or the pre-sale ritual. I looked around the room, and identified a number of "the usual suspects" from the early copper community. In addition to the EAC dealers (out in force for this one), there were a few of the high quality type-coin dealers who are known to cross over to copper from time-to-time. There was even a pretty good cross-section of early copper collectors from the So. Cal. area (I count myself among these). I even spoke to one fellow who had come all the way from Michigan! The room was relatively full, but not overflowing, when the first lot was called.
I want to re-cap some of the highlights from this sale. I will try to be brief, but the list of highlights is fairly long (as you might expect).
LOT 2, an 1816 N2 graded MS64RD by PCGS was hammered down for $13,000 (this is a Randall Hoard coin that books out for around $1550 in MS64 RB).
LOT 12, an 1816 N7 (tied for finest known, and featuring beautiful autumn leaves golden brown color) went for a bid of $12,000 (PCGS MS66BN).
LOT 28, the finest-known 1817 N7 (with prominent mouse top) was hammered for $27,000 (vs. an estimate of $5000-up).
LOT 34, an 1817 N9 called the "King of the Greenies" by C. Doug Smith (graded MS66BN by PCGS) went for an astounding bid of $31,000 after a furious bidding war.
LOT 47, one of the finest 1817 15-star coins (N16) brought a winning bid of $44,000 (PCGS MS65BN). This was indeed a beautiful 15-star cent, in my humble opinion.
LOT 60 was the finest 1818 N4 (graded AU58 by PCGS & an EAC EF40) - it was hammered down for $18,500.
LOT 114, a magnificent proof 1821 N1 (PCGS PF65BN) brought a winning bid of $42,500.
LOT 116, an 1821 N2 graded MS64RD by PCGS went for a bid of $34,000 (this coin tied for finest known).
Both LOT 124 and LOT 125 were 1822 N4, and each coin was graded MS65BN by PCGS. However, one discriminating bidder was willing to bid $21,000 for the first coin, while the 2nd coin went for a bid of just $7000! So much for slab grading!
The two 1823 N2 cents in this sale provided some high drama:
LOT 139, an amazing gem 1823 N2 (PCGS MS65BN) was bid to a high of $110,000 after spirited floor bidding.
LOT 140, also a gem 1823 N2 (PCGS MS66BN) became the object of desire for two phone bidders, who took this coin to a top bid of $260,000!
At this point, Tony Terranova injected an amusing comment, by asking the auctioneer whether he might want to re-open the previous lot!
LOT 152, an 1824 N3 (graded MS65RB by PCGS) brought a winning bid of $26,000.
LOT 153, an 1824 N4 (graded MS66RB by PCGS) was even more popular, bringing a winning bid of $32,000. (Maybe slab grading CAN have an influence on bidders!)
LOT 183, the finest known 1826/5 N8 was hammered for $34,000.
LOT 214, the finest known 1828 N10 (small date) brought a top bid of $24,000 (vs. an estimate of just $3000-up)! That was pretty much how the bidding went through the entire sale - forget the estimates if you want to own these coins!
LOT 229, a gem 1829 N8 (PCGS MS66BN) with an amazing long list of luminary previous owners that reached back to 1900 was bid to $44,000.
LOT 242, the finest 1830 N6 (small letters REV) (PCGS MS67BN) went home for a high bid of $50,000.
A few lots later, LOT 246, an 1830 N10 Proof (PCGS PF65BN) was bid to $160,000. This coin had been discovered in 1986 in London by Jerry Bobbe, who sold it to Ted.
LOT 269, the finest known 1831 N12 in late die-state (aka "The Harpooned Whale" state) (PCGS MS64RB) was hammered down for (a relative bargain) $15,000.
LOT 290 was an incredible full red 1833 N6 (graded MS65RD by PCGS) - the winning bid was $14,500.
One of my personal favorites in the sale was LOT 309, an 1834 N6 (Lg. Date / Lg. Stars / Lg. Lett.) graded MS64RB by PCGS which was hammered for just $6000.
LOT 363, an 1837 N3 in Proof (PCGS PF65BN) with hypnotic violet-brown color brought a winning bid of $60,000.
LOT 437, a fantastic mint-state 1839/6 N1 (PCGS graded MS65BN) went home for a top bid of $230,000.
The Naftzger Middle Date sale was a quality auction for a quality collection. I have nothing but the highest praise for Chris McCawley and Bob Grellman, who catalogued the sale, and for Ira & Larry Goldberg, who conducted the auction. The Naftzger Part-2 auction catalogue is destined to be a "must-have" in the library of every dedicated middle-date cent collector or numismatic bibliophile. It was my privilege to attend.
The anticipation had been building for months among the EAC faithful. The catalogue went out a little more than a month before the sale - plenty of time for us to drool over these beauties, and plot a strategy for how to take home a few of them.
The Naftzger middle dates were everything that they were billed to be. Virtually every coin was in the condition census, if not the finest known of the variety. Unlike the Naftzger early date set (which had been beset by legal challenges and decimated by hasty sales in the 1990's), this set was still more-or-less intact when Ted passed away last year.
I traveled to Beverly Hills on the day before the sale, to preview the coins. About 99% of the coins were in PCGS holders, which provided a nice opportunity to calibrate my personal grading scale to both EAC grading (courtesy of McCawley & Grellman) and PCGS standards. I looked at every coin, and lingered a little on the rarities and the particularly choice examples of more common varieties. One thing that became evident was that Ted was an ultimate connoisseur of copper. While the set contained plenty of coins with mint red showing, there were a lot of truly choice coins with dark brown color, and also a number of greenish-gold coins and full green coppers. I think Ted had a soft spot in his heart for "Greenies". These distinctive coins display varying shades of green & brown, often in beautiful iridescent overtones that can hypnotize a collector. The Naftzger collection held many beautiful Greenies. The over-riding theme of the Naftzger collection was quality. Minimal marks, originality, and mint bloom were some of the hallmarks of these cents.
On the day of the sale, there was nothing out of the ordinary about the auction venue or the pre-sale ritual. I looked around the room, and identified a number of "the usual suspects" from the early copper community. In addition to the EAC dealers (out in force for this one), there were a few of the high quality type-coin dealers who are known to cross over to copper from time-to-time. There was even a pretty good cross-section of early copper collectors from the So. Cal. area (I count myself among these). I even spoke to one fellow who had come all the way from Michigan! The room was relatively full, but not overflowing, when the first lot was called.
I want to re-cap some of the highlights from this sale. I will try to be brief, but the list of highlights is fairly long (as you might expect).
LOT 2, an 1816 N2 graded MS64RD by PCGS was hammered down for $13,000 (this is a Randall Hoard coin that books out for around $1550 in MS64 RB).
LOT 12, an 1816 N7 (tied for finest known, and featuring beautiful autumn leaves golden brown color) went for a bid of $12,000 (PCGS MS66BN).
LOT 28, the finest-known 1817 N7 (with prominent mouse top) was hammered for $27,000 (vs. an estimate of $5000-up).
LOT 34, an 1817 N9 called the "King of the Greenies" by C. Doug Smith (graded MS66BN by PCGS) went for an astounding bid of $31,000 after a furious bidding war.
LOT 47, one of the finest 1817 15-star coins (N16) brought a winning bid of $44,000 (PCGS MS65BN). This was indeed a beautiful 15-star cent, in my humble opinion.
LOT 60 was the finest 1818 N4 (graded AU58 by PCGS & an EAC EF40) - it was hammered down for $18,500.
LOT 114, a magnificent proof 1821 N1 (PCGS PF65BN) brought a winning bid of $42,500.
LOT 116, an 1821 N2 graded MS64RD by PCGS went for a bid of $34,000 (this coin tied for finest known).
Both LOT 124 and LOT 125 were 1822 N4, and each coin was graded MS65BN by PCGS. However, one discriminating bidder was willing to bid $21,000 for the first coin, while the 2nd coin went for a bid of just $7000! So much for slab grading!
The two 1823 N2 cents in this sale provided some high drama:
LOT 139, an amazing gem 1823 N2 (PCGS MS65BN) was bid to a high of $110,000 after spirited floor bidding.
LOT 140, also a gem 1823 N2 (PCGS MS66BN) became the object of desire for two phone bidders, who took this coin to a top bid of $260,000!
At this point, Tony Terranova injected an amusing comment, by asking the auctioneer whether he might want to re-open the previous lot!
LOT 152, an 1824 N3 (graded MS65RB by PCGS) brought a winning bid of $26,000.
LOT 153, an 1824 N4 (graded MS66RB by PCGS) was even more popular, bringing a winning bid of $32,000. (Maybe slab grading CAN have an influence on bidders!)
LOT 183, the finest known 1826/5 N8 was hammered for $34,000.
LOT 214, the finest known 1828 N10 (small date) brought a top bid of $24,000 (vs. an estimate of just $3000-up)! That was pretty much how the bidding went through the entire sale - forget the estimates if you want to own these coins!
LOT 229, a gem 1829 N8 (PCGS MS66BN) with an amazing long list of luminary previous owners that reached back to 1900 was bid to $44,000.
LOT 242, the finest 1830 N6 (small letters REV) (PCGS MS67BN) went home for a high bid of $50,000.
A few lots later, LOT 246, an 1830 N10 Proof (PCGS PF65BN) was bid to $160,000. This coin had been discovered in 1986 in London by Jerry Bobbe, who sold it to Ted.
LOT 269, the finest known 1831 N12 in late die-state (aka "The Harpooned Whale" state) (PCGS MS64RB) was hammered down for (a relative bargain) $15,000.
LOT 290 was an incredible full red 1833 N6 (graded MS65RD by PCGS) - the winning bid was $14,500.
One of my personal favorites in the sale was LOT 309, an 1834 N6 (Lg. Date / Lg. Stars / Lg. Lett.) graded MS64RB by PCGS which was hammered for just $6000.
LOT 363, an 1837 N3 in Proof (PCGS PF65BN) with hypnotic violet-brown color brought a winning bid of $60,000.
LOT 437, a fantastic mint-state 1839/6 N1 (PCGS graded MS65BN) went home for a top bid of $230,000.
The Naftzger Middle Date sale was a quality auction for a quality collection. I have nothing but the highest praise for Chris McCawley and Bob Grellman, who catalogued the sale, and for Ira & Larry Goldberg, who conducted the auction. The Naftzger Part-2 auction catalogue is destined to be a "must-have" in the library of every dedicated middle-date cent collector or numismatic bibliophile. It was my privilege to attend.
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