[Most Recent Quotes from www.kitco.com]

 
   

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Confronting Problems in the Industry: Counterfeiting and Coin Doctoring:

 

Every industry has its bad actors and there are a few in the coin business.  It’s been gratifying, therefore, to see positive movement on the two biggest issues: counterfeiting and coin doctoring.  In the area of counterfeiting, the major threat is Chinese counterfeits frequently introduced to the US market via EBay.  We view EBay’s recent move to exclude listings for all copies and facsimiles, whether so noted or not, to be very helpful.  They had already banned outright counterfeits.

On the coin doctoring front, a major industry organization (Professional Numismatists Guild) recently adopted a uniform definition of coin doctoring.  An industry standard definition should help in the prosecution and elimination of the “coin doctors”.  Here is the PNG definition:
“Coin doctoring refers to the alteration of any portion of a coin, when that process includes any of the following:
“Movement, addition to, or otherwise altering of metal, so that a coin appears to be in a better state of preservation, or more valuable than it otherwise would be. A few examples are plugging, whizzing, polishing, engraving, ‘lasering’ and adding or removing mint marks.
“Addition of any substance to a coin so that it appears to be in a better state of preservation or more valuable than it otherwise would be. The use of solvents and/or commercially available dilute acids, such as Jeweluster, by qualified professionals is not considered coin doctoring.
“Intentional exposure of a coin to any chemicals, substances, or processes which impart toning, such that the coin appears to be in a better state of preservation or more valuable than it otherwise would be. Naturally occurring toning imparted during long-term storage using established/traditional methods, such as coin albums, rolls, flips, or envelopes, does not constitute coin doctoring.”

Should you ever have questions regarding the authenticity or possible alteration of a coin, please feel free to contact us, whether you bought the coin from us or not.  There are plenty of authentic, undoctored coins available – there’s just no reason to take a chance.

 

How Many Early American Coppers Still Exist? Where Have The Rest Gone?

 

By Steve Carr

A total of 156,288,744 large cents were struck and issued between 1793 and 1857, or about the monthly output of cents today. A miniscule number of half cents, only 7,865,226, were struck and issued during these years.

Today, large cents and half cents are available at most coin shops and shows. While there is merit to the thought that you see far fewer coppers today as compared to ten years ago, the fact remains that early American coppers are available to collectors. But how many exist? And what happened to all the others?

First, let’s see what happened to these coppers. The same factors that wear out our current coinage were also at work when the early coppers circulated. Wear and tear naturally occurred on them. An unknown number just wore out, passing from hand to hand. In addition, many large and half cents were simply lost, misplaced or dropped. Some of these coppers are found in the ground today, while others turn up in old desks and dressers.

Other cents were exported, never to return to the United States. Many of these coins went to Canada, with some returning years later. Others went to South America. Again, no total number of large cents exported is available, but it is known that the Venezuelan government ordered a million cents from the Mint in 1835.It is impossible to estimate the number of early coppers lost in this manner. With virtually no data available for these type losses, perhaps no one can.

Other losses of early coppers can be documented, at least for large cents. Melting is one such loss. One source, the United States Mint, recorded melting a total of 38,386,687 large cents from 1857 until 1953, when separate records for large cent redemptions were stopped. Of these 38 million large cents, 84,781 were redeemed and melted by the mint after 1930! The last recorded redemption was for 290 large cents in 1953.

Redeeming large cents at the Mint began when the new flying eagle cents were offered to the public, in exchange for old coppers or Spanish silver, in February 1857. Thousands of large cents returned to the Mint that first day and large numbers were redeemed until the start of the Civil War.

Commercial melting of early coppers also occurred. When the intrinsic value of copper exceeded one cent, private melting occurred. Records of private melts are virtually non-existent, but research done by Craig Sholley estimates the number of cents melted at several different times. He estimates that 10-12 million were melted between 1800 and 1820 and a further 32.5 million during the Civil War.

That is 81 – 83 million large cents melted by the Mint and privately, or more than half the total mintage! And this doesn’t take into account those lost.So, how many early American coppers still exist? The number of large and half cents in existence today can not be determined exactly, just as we can not determine exactly how many were melted or lost. It is also impossible to see and count all the large cents that are known. Duplications would occur and come coppers would be missed. Thus, we must rely on estimates. These estimates are always based on data from a small sample that is extrapolated to cover the entire series of large and half cents.

R.H. Williamson was one of the first to present an estimate on the number of surviving early American large cents. In the July 1949 issue of The Numismatist. Williamson suggested that several million large cents still existed (in 1949) in all conditions. He based his estimate on the number of cents he had seen.In the early 1950s, William Sheldon and Walter Breen intensely studied the cents of 1794 and concluded that 3% still survived. Sheldon and Breen did not suggest their findings applied to all other dates of large cents, but if we were to assume that 3% of the mintage survived for all years, that would mean there were 4.7 million large cents existent.

In the first issue (September 1967) of Penny Wise, the journal of the Early American Coppers club, Warren Lapp “guesstimated” the number of surviving large cents at between 767,000 and 1.57 million, much lower than earlier estimates. Lapp used rarity ratings and data from random purchases by W.E. Johnson, a copper dealer, to reach his conclusions. More recent estimates have used data accumulated from a large number of collections, long kept records, and eBay. In the late 1990’s, Red Henry studied the survivorship of cents dated 1800 – 1807. His conclusions, published in Penny Wise, suggested that cents from this era survived at a rate of about 1%. If extrapolated to the entire large cent series, this would mean about 1.5 million survivors.

Several studies of survivors were published by Ron Manley in Penny Wise in 2001. These included estimates that less than 1% of middle date cents and slightly more than 1% of late date cents had survived. After further study, Manley suggests that only about 570,000 large cents exist today, or about 1/3 of 1% of all those minted!Bill Eckberg, has been studying half cent survivors. His research, published in Penny Wise in 2000 and 2001, estimates that only 140,000 half cents survive, or a little less than 2% of the total mintage.

Early American coppers were struck to promote commerce in our young nation. They did this admirably, serving as a medium of commerce, as a source of metal, and even as heirlooms and collectibles. Most were melted or lost, but a few survived. When you look at your next early copper, think about what it has been through and marvel at the fact it survived.

 

California Pioneer Fractional Gold Coins – The Kansas Connection

 

By Doug West & Brad Welles

When the California rush started in 1848 it created a new found wealth for many. As usual, this new wealth was spent on the wants and needs of life. Until modern times, the U.S. has been plagued witha chronic lack of coinage (species) to take care of day to day transactions and California of the 1850’s was no exception. California was a very long way from the mints of Philadelphia and New Orleans and not enough coinage and currency made it that far West. Out of this shortage, the California Fractional gold coins were born.

California Fractional gold or Cal Fractional, as they are known, are coins minted by private individuals, typically, a manufacturer of jewelry. They were legal up until 1864. As time progressed from the early days of the 1850’s up until the early 1900’s the purpose and style of the coins changed. During the 1850’s and 1860’s Cal Fractionals were used as a money substitute to take care of everyday transactions.

After the 1860’s, the small gold coins became typically underweight and the designs began to vary significantly from that of the U.S. coins. Due to the reduction in the gold purity of the coins from this period, a coin exchanged at face value netted the manufacturer a tidy profit.  In 1854 the U.S. Mint in San Francisco began production of large quantities of silver coins. This effectively ended the need for the fractional gold coins as a money substitute. By the 1860’s the utility of the California Fractional gold moved from a money substitute to that of a novelty or jewelry charm.

Manufacture of California gold coins was not limited to California. In 1871, a well established jewelry firm in Leavenworth, Kansas named Hershfield & Mitchell began production of “California Gold”. The firm was offered California Fractional coins for resale at 40% below face value by a firm in San Francisco.  However, upon assay it was determined that the coins could be manufactured onsite for considerably less.  Distinctive dies with an H “mintmark” were created by a gentleman named Fredenburg, and production commenced in April.  Jacob Switzer, the local bar owner, purchased $125 face value of the coins for $100 and gave them in change to his customers.  Local sales also consisted of shirt studs and charms made from the coins, and a company in St. Louis bought them as prizes to put in their candy boxes.

Unfortunately for these Kansas entrepreneurs, the Secret Service office in Kansas City was situated much closer to Leavenworth than to San Francisco, and the Secret Service soon became aware of this activity in their back yard.  U.S. Marshall Houston investigated, and charges were filed before U.S. Commissioner Samuel Lecompte.  He stated the defendants possessed “An unimpeached character, which amounts to much when the question is one of fraudulent purpose, but not to much when it is one of a misjudgment as to the right to do a particular thing.”  No fraudulent intent was proven, but the judge did find the principles to be in violation of the Act of 1864 which out-lawed production of private coinage.  They were released pending trial on $2000 bond each. The case never came to trial and both men escaped prosecution, however, the legal fees were quite expensive and their equipment and inventory was confiscated.  Production of California gold in Kansas came to an abrupt end less than five months from its beginning. It is estimated that there are approximately 400 Hershfield & Mitchell California Fractional gold coins surviving today.

On Friday, August 18, 1871, one week after the charges were brought, the Leavenworth newspaper The Commercial reported the following incident.  “A collision occurred on the corner of Delaware and Fourth streets last evening between Mr. Mitchell, of the firm of Hershfield & Mitchell, and L. Collins, the keeper of the fruit stand under Laing’s Hall.  The difficulty was caused by the latter calling to Mr. Mitchell as he passed to redeem some of the gold coins, manufactured at his establishment, and which he (Collins) had in his possession.  An angry altercation ensued, in which the parties came to blows, and the fight was stopped by the prompt arrest of both parties.”  Mr. Mitchell was released and Mr. Collins was fined $5.

By this time the U.S. Secret Service was actively pursuing prosecution and closure of all manufactures of the Cal Fractionals. As a result of the illegal nature of these coins, the number of types and quantities available had declined. Many of the coins minted during this period were given earlier dates to obscure their actual date of manufacture.

All of the California Fractional gold coins are rare when compared to modern coinage standards. The Breen-Gillio catalog lists a rarity scale with R1 being the most common, this is for coins with over 1250 known to exist. Compare this with the 1877 Indian Head Cent. The original mintage of this coin was 852,000, but, only 5,500 are estimated to have survived. So what this tells us is that the most common California Fractional Gold coin is rarer that the key date 1877 Indian Head Cent.

References:
“California Pioneer Fractional Gold” by Walter Breen and Ronald J. Gillio, 2nd Edition, 2003, Published by Bowers and Merena Galleries

“Standard Catalog of World Coins 1801-1900, by George Cuhaj (editor), 6th Edition, Published by Krause Publications.

“The Commercial”, Leavenworth, Kansas, news articles dated August 10, August 11, and August 18, 1871.

 

Introduction to California Fractional Gold Coins

 

The origins of the small fractional gold coins from California came about in 1848 with the discovery of gold in California. Once this discovery became known the rush was on to California to strike it rich. It is estimated that over 300,000 people traveled to California to begin their careers as gold miners. Some were successful and many were not. With this sudden influx of people there was a boom in demand for the necessities of life, such as, a place to eat, sleep, and have some fun. Early in the gold boom, a pinch of gold was used to purchase a beer at the local saloon; this method of payment didn’t work all that well. Until modern times, the US has been plagued with a chronic lack of coinage to take care of day to day transactions. The California of the 1840’s and 1850’s was no exception. Out of this shortage of small currency, the California Fractional gold coins were born.

California Fractional gold or Cal Fractional gold, as they are known, are coins minted by private individuals, typically, a manufacture of jewelry. They were legal up until 1864. As time progressed from the early days of the 1850’s up until the early 1900’s the purpose and style of the coins changed. The study of these coins is broken down into three time periods. Period one is for coins struck between 1852 and 1856. These coins closely resemble the US gold dollars issued during this period. See figure 1 for an example of a Period one coin. These coins were primarily used as a money substitute.

fractional

Figure 1 - 1854 $1 California Fractional Gold Coin. Weight 1.01 grams, Diameter 12.2 mm. Breen-Gillio catalog number: BG-508.

Coins from period two, 1859 to 1882, are typically underweight and the design varieties vary significantly from that of the US coins. In 1854 the US Mint in San Francisco was opened and began production of large quantities of silver coins. This effectively ended the need for the fractional gold coins as a money substitute. During period two, the utility of the California Fractional gold moved from a money substitute to that of a novelty.
Manufacture of California gold coins was not limited to California. In 1871, an established jewelry firm in Leavenworth, Kansas named Hershfield & Mitchell began production of “California Gold”. This was short lived, by the fall of 1871 the two principles in the firm had been arrested in violation of the Act of 1864 which out-lawed production of private coinage. The case never came to trial and both men escaped prosecution, however, the legal fees were quiet expensive and production of California gold in Kansas came to an abrupt end. It is estimated that there are approximately 400 Hershfield & Mitchell California Fractional gold coins known to exist.

Period three covers coins struck post 1882. By this time the US Secret Service was actively pursuing prosecution and closure of manufactures of the Cal Fractionals. As a result of the illegal nature of these coins, the number of types and quantities available had declined. Many of the coins minted during this period were given earlier dates to obscure their actual date of manufacture.

All of the California Fractional gold coins are rare when compared to modern coinage standards. The Breen-Gillio catalog lists a rarity scale with R1 being the most common, this is for coins with over 1250 known to exist. Compare this with the 1877 Indian Head Cent. The original mintage of this coin was 852,000, but, only 5,500 are estimated to have survived. So what this tells us is that the most common California Fractional Gold coin is rarer that the key date 1877 Indian Head Cent.

There are over 450 varieties known of the fractional gold coins and they range in diameter from approximately 9 mm to 13 mm. These are all small coins. They can be round or octagonal, and typically weigh around one gram. The earlier Period one coins have a much higher gold content than the later Period three coins.

Due to the rarity of any authentic California Fractional gold coins, the price starts at around $200 for a circulated common example and go up from there. It is best to purchase the Cal Fractionals that have been professionally graded and encapsulated by one of the services, such as, ANACS, NGC, PCGS, or ICG. This ensures that your coin is authentic and is reasonably accurately graded. Having a professionally graded coin also makes the coin much easier to sell.

 

Tips for Selling Your Coins on eBay

Is it time to sell all or part of your coin collection? Eventually we all reach that point. So if that day has arrived and it is time to depart with some of your prized coins or maybe just thin out the duplicates, on alternative to selling your coins is eBay. eBay is one of the largest on-going coin markets in the world and it is right in your computer. For example, on a typical day on eBay there are of 100,000 US coin auctions that are active. With a little knowledge and good business sense it can be a great place to buy and sell all types of numismatic related materials, for example, US coins and currency, world coins and currency, precious metals, nearly any type of exonumia (tokens & medals), and the list goes on and on. In this article I want to give you some basic tips that will help you sell your coins and other numismatic articles on eBay. For the purpose of this article I’ll focus on the auction style of listing your coins.

Tip 1: Build up feed back on your account.

eBay has a system in place that lets the Buyer rate the Seller at the end of each transaction. Sellers with high numbers of positive feedback attract more buyers. It is just human nature; we all like to deal with people that have a proven track record. A way to increase your positive feedback count quickly is to make a few small purchases or start some low cost auctions at 99 cents and don’t worry too much about the final selling price. The idea of this exercise is to build positive feedback for bigger sales later. Once you have a track record of positive feedback established, say, 20 or more, and then it is time to get a little more serious.

Tip 2: Take good pictures of what you are selling.

One sure way to ensure  poor performing auctions is to have poor quality images of your coins. Images of your coins can be obtained with a flat bed scanner or a digital camera. Unless you have a more expensive scanner, starting at $250, you will only be able to image coins and currency. Items, such as slabbed coins or boxed sets will image poorly in a lower cost scanner due to it’s limited depth of field capability. A digital camera is the most versatile method to take images of your item. You don’t need a top of the line digital camera to take very nice pictures of your coins. We (my wife and I) use a Cannon Sureshot SX100 camera that costs around $300 for our images. You can see the quality of images this provides by looking at our items on eBay. Our eBay ID is dwest61506. This will give you an idea of what can be done with an inexpensive digital camera. Getting good pictures of your coins is probably the most challenging part of selling on eBay. If can become reasonably proficient with the camera then you can sell just about anything on eBay.

Tip 3: Write an accurate description of your item.

Potential buyers won’t give your item a second look if they feel your description is vague or deceptive. Tell the buyer exactly what they are going to get in this auction. No one likes to guess what they are bidding on. May sure you at least tell the basics, such as, quantity, date, mint mark, approximate grade, condition (cleaned, damaged, torn, …), shipping costs, and return privilege.  Keep your description accurate and straight forward. A well worded description will also save you the time of answering a bunch of questions from potential bidders.

Tip 4: Duration of Auction.

eBay allows auctions to run from one to ten days. For most coin related material a seven day auction is probably the best. Auctions with duration shorter than seven days should be avoided. Use a ten day auction for items with a smaller collector base, such as, tokens and medals.

Tip 5: Starting price.

Unless you become a high volume seller on eBay it is best to start your auctions with a minimum starting bid that is your absolute bottom dollar. What I mean by this is that you want the starting bid on the coin to be as low as possible to generate some interest and bidders. If you want a specific price for a coin then use the Buy-It-Now method to sell the coin rather than an auction. When you are determining the lowest price you can start your auction at don’t forget how the eBay fees figure into your starting price. I’ll discuss eBay fees in more detail in the next Tip.

Tip 6: Understand the eBay fee structure.

eBay is a business and they make their money off the fees they charge the Sellers. There is a small listing fee for an auction and a much larger fee when the auction ends and the item is sold. Currently, eBay charges a flat nine percent fee of the total selling price as there Final Value Fee for each auction with a maximum charge of $100. Since nearly all transactions on eBay are paid for with Paypal you need to take this into account also. Currently, Paypal charges the Seller 30 cents plus 2.9 percent for each transaction. Since the fee structure of eBay always seems to be changing, check for any changes in fees on the eBay website.

It is time to put it all together and start your first eBay auction. Using the Tips above and some common sense you should be able to have some successful auctions. A last bit of advice is to start small, that is, do a few auctions on low cost items and don’t worry too much about making a high profit. The idea here is to gain some experience with all the details of running an eBay auction. Like anything else in life, it takes time and practice to get proficient with eBay.

 


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Introduction to the U.S Two Cent Piece

By Doug West, Ph.D.

 

This article is a brief introduction to the U.S. Two Cent Piece dating from 1864 to 1873.The purpose of this article is to give the collector some basic information to help get them started collecting this series of U.S. coins.  

As a result of the Civil War, the general population was hoarding coins and there was a shortage of coins needed to complete day-to-day financial transactions. In a desire to provide additional coins for circulation, in 1863, it was agreed upon by the Director of the Mint and the Secretary of Treasury that a two cent coin was necessary. The two cent piece does have the distinction of being the first U.S. coin with the motto “In God We Trust”. Inclusion of the motto “In God We Trust” has been credited to Reverend M.R. Watkins who suggested a similar wording to Secretary of the Treasury Salmon Chase in 1861. Several pattern two cent pieces were produced in 1861 and 1863. By an act of Congress on April 22, 1864 authorization for the minting of two cent piece was approved and this new coin was born. See the figure for an example of a two cent piece.

 Two Cent Coin

Figure – 1867 Two Cent Piece in EF Condition

The fist year of minting of the series, 1864, saw the largest mintages of 19,847,500. By the end of production of the series in 1872, the mintage was only 65,000 coins. With the end of the Civil War in 1865, the hoarding of coins had virtually ended and the need for small coins had return to pre-war levels. In 1873 a few hundred proof two cent pieces were struck for collectors. Many of the two cent pieces were removed from circulation and melted by an Act of Congress in 1871.

This short run series of coins has its share of die varieties. The most obvious die variety occurred during the first year of minting. In 1864 the motto on the obverse “IN GOD WE TRUST” has both a small and large size. The large motto variety is much more common and it is estimated that only a few thousand of the small motto coins were minted (Breen, full reference below). The 1867 two cent has a rare die variety of a double die obverse. A full discussion of the die varieties of the two cent piece are thoroughly covered in a book by Myron M. Kliman (full reference below).

A bit of caution must be exercised when purchasing uncirculated two cent pieces. It is common to see AU coins that have been cleaned or re-colored to give a bright orange or red color and then passed as uncirculated coins at a large premium. Unless you are very familiar with the series and early copper coins in general, it is wise to spend your money on coins that have been professionally graded (PCGS, NGC, ANACS, or ICG) and encapsulated. To learn how to grade this series of coins, the best source of detailed information on grading is the American Numismatic Association Grading Guide (full reference below).

Common date examples of an 1864 or 1865 two cent grading Good can be purchased for less than $15.00. A nice XF goes for around $40.00. A common date brown uncirculated coin sells for $110 to $125 and a top end MS65 red two cent sells for $1500 to $2000. As mentioned above, it is to your advantage to buy uncirculated examples that have been professionally graded and encapsulated.

Since it is easy to tie up several hundred or thousand dollars into a collection of two cent pieces it is helpful to know how your collection might fair as an investment. To get an idea of the potential these coins have for price appreciation, we take the price of an 1866 uncirculated (MS60) two cent piece and compare the price in 1947 to today’s price. In 1947, the retail price of a 1866 uncirculated two cent piece was $6.00. This price comes from the 1947 edition of the Red Book. Compare this to the current price of $100.00 in the 2012 Red Book. This is quite a price change. This increase in price is equivalent to putting $6.00 into a bank account in 1947 which bears 4.49% interest and pulling out a $100 in 2011.

Specifications - Designer: James Barfton Longacre; weight: 6.22 grams; composition: 0.95 copper, 0.05 tin and zinc; diameter: 23 mm.

References

Bressett, Kenneth (editor), The Official Numismatic Association Grading

Standards for the United States Coins, 6th Edition, Whitman Publishing LLC.Yeoman, R.S. and Bressett, Kenneth (editor),

A Guide Book of United States Coins, Whitman Publishing LLC. This book is commonly called the "Red Book".

Myron M. Kliman, The Two Cent Piece and Varieties, Published by Sanford J. Durst. This book gives an extensive date by date analysis of each die variety for the two cent piece.

Breen, Walter,  Complete Encyclopedia of U.S. and Colonial Coins, Published by New York: Doubleday, 1988.

 

 


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Introduction to Classic Head U.S. Half Cent 1809 to 1836

By Doug West

This article is an introduction to the U.S. Half Cent dating from 1809 to 1836. The purpose is to give the collector or investor some basic information to get started collecting this series of U.S. half cents. The term "Classic Head" refers to design of Miss Liberty on the obverse (front) of the coin. A design similar to this was used on other denominations of coins during this time period. Mintage for this series began in 1809 and ended in 1836. In 1831 the dies were modified slightly and the resulting coins had a raised rim. In 1831 began the production of proof half cents.

Coins from the first three years of production (1809 to 1811) of the Classic Head typically have areas of light or incomplete striking. It is common to see areas on higher grade examples, EF or better, to have areas where the design in missing or faint and the rest of the coin is be sharp and full of detail. These inconsistencies must be taken into account during the grading of this coin series. By 1825 the minting process had improved to the point where the coins produced were of higher quality than the earlier coins in the series. After 1825 you shouldn't expect to see many of the coins with faint areas resulting from a poor strike. The best source of detailed information on grading this series of coins is the American Numismatic Association Grading Guide (see Reference section below).

Half Cent Coin

Figure – 1835 Classic Head Half Cent in Almost Uncirculated (AU) Condition

The quantities of these coins produced (minted) are extremely small compared to modern coins. The 1809 half cent had the highest mintage of the series with only 1,154,572 produced. It is estimated that only one in ten of these original coins survive today. The 1831 and 1836 half cents are the rarities of the series with less that 100 of each know to have survived the centuries. Examples of both these coins will set you back more $1000. Restrikes of the 1831 exist and are still expensive.

This short run series of coins has it's share of die varieties. Three dates have easily recognized die varieties, these are: 1809 has three minor variations to the date, 1811 has a wide and narrow date variety, and the 1828 comes with both 12 and 13 stars on the obverse. None of these varieties, in itself, is rare and don't command a significant premium over the more common varieties.

Common date examples of the Classic Head half cent can be purchased for less that $50.00 in good condition. With any coin, you want to be careful with cleaned coins. Typically, these coins are rarely seen with natural bright red mint luster. Copper tarnishes over the years and any early half cent that is bright copper color has probably been re-colored by a chemical process. Avoid these coins. For coins that are uncirculated (MS60 or higher) it is wise to buy coins that have been professionally graded and encapsulated by either: PCGS, NGC, ANACS, or ICG. Consult the current edition of the Red Book (see the reference below) for current retail pricing information. In general, half cents are not common coins and if the price seems too be good to be true, be very cautious. There are few bargains for properly graded and problem free half cents.

Since it is easy to tie up several hundred or thousand dollars into a collection of half cents it is helpful to know how your collection might fair as an investment. To get an idea of the potential these coins have for price appreciation, we take the price of an 1810 Good half cent in 1947, which was $2.75, from the 1947 edition of the Red Book and compare it to the current price of $55.00 in the 2012 Red Book. This is quite a price change. It is equivalent to putting $2.75 into a bank account in 1947 which bears 4.8% interest and pulling it out in 2011.

Specifications – Designer John Reich, weight: 5.44 grams, composition: copper, diameter: 23.5 mm.

References

Bressett, Kenneth (editor), The Official Numismatic Association Grading Standards for United States Coins, 6th edition, Whitman Publishing LLC

Yeoman, R.S. and Bressett, Kenneth (editor), A Guide Book of United States Coins, Whitman Publishing LLC. This book is commonly called the "Red Book".

 


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Introduction to the Flying Eagle Cent 1856 to 1858

By Doug West

  This article is an introduction to the U.S. Flying Eagle cent dating from 1856 to 1858. The information in this article will help you get started collecting this short, but interesting, series of U.S. Flying Eagle cents.

  By the 1850’s the production costs of the large cent and half cent had risen to the point where the U.S. Mint could no longer produce these coins economically. Also, the large cents and half cents had become unpopular and did not circulate widely. It was time for a change to the penny. In 1856 the Flying Eagle cent pattern coin was introduced and a couple thousand proof coins were also struck. Legislation in 1857 made the change to the new smaller size copper-nickel cent official. This legislation also mandated that circulating foreign money in the U.S. be redeemed for mint issued coins, such as, the flying eagle cent and larger denomination silver coins. The series ended abruptly in 1858 and was replaced by the Indian Head cent in 1859.

The Flying Eagle cent was heavily used in everyday circulation until the 1870’s. Most of the coins on the market currently are of lower grade (AG to VG) and many of these will have some light damage or will be darkly toned. Due to hoarding of the new coin in 1857, uncirculated examples of the Flying Eagle cent are more common that would be expected for a coin of this age. The best source of detailed information on grading this series of coins is the American Numismatic Association Grading Guide (see Reference section below).

  Flying Eagle Cent

Figure – 1857 Flying Eagle Cent in EF Condition

  The first year of issue for the Flying Eagle cent was 1856. These initial coins started out as pattern coins which were evaluated by the mint officials and certain Congressmen. There were approximately 800 struck and these quickly made it into circulation and coin collections. Later that year, approximately 1500 proof Flying Eagle cents were struck. With both very low mintages of the business and proof strikes, any Flying Eagle cent from 1856 is rare and expensive. Beware that some 1858-dated cents have been altered to read 1856. These altered coins can be identified by the difference between the “5” on a genuine 1856 and an 1858. A low grade circulated example of the 1856 starts at around $6000.00. In 1857 the mint began full production of the coin and 17,450,000 were struck. 1858 was the last year of production with a total of 24,600,000 coins struck.

 

With such a short lived series as the Flying Eagle cent there aren’t many notable varieties in the series. The most common die variety is the 1858 cent which has both small letters and large letters in the obverse legend. The simple way to tell the difference between these two varieties is the small letter variety is the A and M in AMERICA has a small space between the bases of the letters. On the large letters variety, the bases of the A and M letters merge.

  Common date examples of the Flying Eagle cent can be purchased for around $25.00 in Good condition. For coins that are uncirculated (MS60 or higher) it is wise to buy coins that have been professionally graded and encapsulated by either: PCGS, NGC, ANACS, or ICG. Truly uncirculated coins start at around $350 and go up from there depending on the date and grade. Proof examples of the Flying Eagle cent will set you back at least $4000.00. Due to the low mintage of the proof coins, the price is quite high and out of reach for many collectors. Consult the current edition of the Red Book (see the reference below) for retail pricing information.

  Since it is easy to tie up several hundred or thousand dollars in a collection of Flying Eagle cents it is helpful to know how your collection might fair as an investment. To get an idea of any price appreciation over the years, take as a test case an uncirculated 1857 Flying Eagle cent and compare the price in 1947 to the price in 2011. We will use the prices from the 1947 and 2012 Red Books in this comparison. In 1947, the uncirculated 1857 Flying Eagle cent sold for $5.00. In 2011, the same coin sells for $350. The price appreciation is equivalent to a bank account which bears 6.68% interest over the years from 1947 to 2011. Most would consider this a decent rate of return on your money.

  Specifications – Designer James B. Longacre, weight: 4.67 grams, composition: 0.880 copper and 0.120 nickel, diameter: 19 mm.

References



Bressett, Kenneth (editor), The Official Numismatic Association Grading Standards for United States Coins, 6th edition,

Whitman Publishing LLC

Y eoman, R.S. and Bressett, Kenneth (editor), A Guide Book of United States Coins, Whitman Publishing LLC. This book is commonly called the “Red Book”.

S now, Richard, A Guide Book of Flying Eagle and Indian Head Cents, Whitman Publishing LLC


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Coin Market Update

By Brad Welles
www.CoinsWorthSaving.com

 

Market Update:

Obscured by volatility in bullion prices, the overall coin market has moved steadily higher by about 4% this year.  Rare coins and those that are nice for the assigned grade have been very difficult to locate, with most locked up in collections for years to come.  Overgraded coins and those with poor eye appeal are everywhere.  Choose carefully.

What’s Hot: Walking Liberty half dollars, nicer Morgan and Peace dollars, early silver dollars, Type 1 $20 gold and Carson City gold, and, until 2 weeks ago, gold and silver bullion.

What’s Not: Indian and Lincoln cents, 2 and 3 Cent coins, Buffalo and Liberty nickels, small denomination gold coins ($1, $2.50, $3), and many key dates in popular series.

The Bullion Roller Coaster:

In the last few months, wild swings in gold and silver bullion prices have attracted a lot of attention.  Gold started the year around $1420/oz., dropped to 1320/oz., powered its way near $1575, then fell to $1480 at the time of this writing.  Gold is virtually unchanged for the past 30 days, up 11.5% in the last 6 months, and up over 21% in the past year.  Silver, not to be outdone, is down 21% in the past 30 days, up 34% in the last 6 months, and up 81% over the past year.  It’s been quite a ride – both up and down.

In contrast, numismatic or rare coins have been downright boring.  Various reports show numismatic coins up about 4% in 2011, and 7-8% over the past year.  What about the long run?  Since January 1970, silver is up an amazing 1876%; gold an even more amazing 4242%.  In the same period, those boring numismatic coins are up 6677% (based on the PCGS 3000 Index).

There’s no denying that straight bullion has outperformed numismatic coins over the past decade.  We sell quite a few bullion coins, and believe there are legitimate reasons to own them: fear of inflation, financial turmoil, dollar devaluation, etc.  That said, more than a century and a half of history make a compelling case for numismatic coins.  It is rare indeed for bullion to appreciate more quickly than numismatic coins over extended periods.  Is the bullion run over?  Good question; we are neither financial advisors nor prognosticators.   Nevertheless, we believe there is a strong case to be made for numismatic coins over bullion going forward.

Feel free to contact us any time for more information on coin-related topics.

 

Coin Market Update

 

As we enter the early part of 2011, it’s worth looking back at some of the major trends that shaped 2010:

  • Gold, silver, platinum, and palladium prices soared, along with the corresponding bullion coins.
  • The high end of the rare coin market was strong.  Examples include a 1794 silver dollar setting a new all-time highest price for any coin, and a record price for a 1943 copper cent, among others.  Proof gold also powered higher.
  • Outside gold, silver, and rarities, there wasn’t a great deal of price appreciation across the rare coin market.  Morgan and peace dollars did show some strength.
  • The price difference between premium quality coins and ho-hum coins of the same grade continued to expand.  Problem coins were very difficult to sell.
  • PCGS and NGC introduced + grading in an attempt to compete with CAC.
  • The largest coin seller in the world (the US Mint) continued to flood the market with modern products, offering 106 different 2010-dated coins with a total cost of over $18,000.

We are neither financial advisors nor prognosticators.  There are, however, a few things we expect to see in 2011:

  • The rare coin market is off to a strong start.  A recovering economy should lend further upside support.  While the market paused in 2009 and early 2010, rare coins have a long history of appreciation.
  • Generic gold coins (common date $5, $10, and $20 pre-1933 gold) are trading for barely over gold bullion, and currently represent a better value than gold bullion coins.
  • For those who look for severe economic conditions, bulk 90% silver (pre-1965 dimes, quarters, and halves) and 1/10 oz. gold bullion coins are still reasonable options.
  • Our favorites in the rare coin market remain early US gold and silver coins (pre-1834), classic gold and silver commemoratives, type 1 $20 gold (1850-1866), Carson City coins, and key dates in popular collector series.

Our wish for you in 2011 is the same as every year:

  • Walk humbly with God
  • Love and appreciate your family and country
  • And by all means, add a few really special coins to your collection

Feel free to contact us any time for more information on coin-related topics.

Brad Welles
Solid Rock Rarities, LLC
316-250-7287

http://www.coinsworthsaving.com/

 


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Grand Canyon National Park Quarter

By Doug  West, Ph.D.

You may have noticed a new quarter in your pocket lately. If you look carefully it could be the new Grand Canyon National Park quarter issued by the US Mint in September. They are just now getting into wide circulation. See the figure below for an example of the new quarter.

The coin's reverse (tails side) design, by United States Mint Sculptor-Engraver Phebe Hemphill, features a view of the granaries above the Nankoweap Delta in Marble Canyon near the Colorado River.  Marble Canyon is the northernmost section of the Grand Canyon.  The design featured on the coin's obverse (heads side) is the 1932 portrait of George Washington by John Flanagan, restored to bring out subtle details and the beauty of the original model. 

The Grand Canyon National Park quarter is the fourth coin released through the United States Mint America the Beautiful Quarters Program, which is a multi-year initiative to honor 56 national parks and other sites in each state, the District of Columbia and the five U.S. territories. This program is scheduled to run through the year 2021.

2010 Grand Canyon Uncirculated Quarter

Figure 1 – The Grand Canyon National Park Quarter (photo courtesy US Mint)

 


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Coin Market Update

By Brad Welles

Overview:

The big story in the past three months has been soaring gold and silver prices.  It would be an exaggeration to say that the rest of the market is on hold, but not a huge exaggeration.

What’s Hot:  Gold and silver bullion coins, 90% silver coins, lower grade Morgan and Peace dollars, lower grade $10 and $20 gold coins, seated liberty and walking liberty half dollars

What’s Not:  High grade modern coins, most copper coins including Lincoln and Indian head cents, most nickel coins, some higher grade gold coins

Are There Still Bargains in the Coin Market?:

It’s a reasonable question after several years of a strong coin market.  The answer is a resounding yes.  Like any market, not everything goes up at the same time.  Here are a few places where prices have not moved yet, or have even decreased:

  • Lower Denomination Numismatic Gold – Three dollar gold coins in all grades are trading for less than two years ago; even though all are scarce.  Better grade (MS-63 or higher) $1, $2.50, and $5 gold coins have come down in price as buyers have stampeded into the lower grade $10 and $20 gold coins and bullion.  A $5 Indian in MS63 now costs 40% less than two years ago.
  • Popular Collector Coins – Would you believe that the 1909-S VDB Lincoln cent, 1877 Indian head cent, 1937-D three-legged buffalo nickel, and many of the all-time collector favorites are down compared to a year ago?  In blind pursuit of gold and silver bullion, many have temporarily abandoned these and other timeless classics.
  • Gold and Silver Classic Commemoratives – We’ve been accumulating and recommending these for several years.  All are rare.  Although prices have started to move higher recently, they remain well below the levels of a few years ago.
  • Better Date and Higher Grade Silver Dollars – The lower grade coins have moved up sharply due to their silver content.  Only now are the better dates and higher grades starting to join the party, though still at a level well off previous highs.
  • Generic Gold $5, $10, $20 Coins – As outlined in our 8/13/10 coin market update, the premiums on these coins over their bullion value are at all time lows.  Does it really make sense to buy a gold bullion coin at 4-6% over bullion value instead of a $20 Liberty or St. Gaudens for 7-8% over bullion value?  If gold goes higher, the $20’s should go up just like the bullion coins.  But if gold prices go down, the $20’s may go down less assuming their premiums return to normal levels.
  • Currency – U.S. currency prices were hit harder than coin prices in 2009, and some beautiful historic notes remain below prior levels.

Bottom Line:  If you wish to accumulate silver or gold bullion, we can certainly help with that.  However, it may be worth looking at generic gold and silver or other numismatic coins that have fallen out of favor in the last year or two.  It may also make sense for some to trade gold bullion coins for generic gold coins to take advantage of the historically low premiums in the latter.

 


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Price Comparison for US Coins from 1947 to 2010

By Doug West, Ph.D.

Collectable coins have always been touted as a good investment for your money. Is that really true? To test this assumption I used a reprint of the first Red Book issued in 1947 and compared the prices to the current 2011 Red  Book (“A Guide Book of United States Coin” by R.S. Yeoman). I was amazed at how cheap coins were back in 1947. As a couple of points of comparison, I compared the Dow Jones Industrial Average (DJIA) in 1947 to a recent value of the DJIA and the average price of a new home in 1947 to the present value.

Table 1 presents the details of my investigation. The last column in the table is titled “Percent ROR” which is the effective rate of return for the price change. This is equivalent to the interest rate you would have received if you put the money in a savings account at the bank in 1947 and withdrew it in 2010. I used the change in the DJIA as a comparison since the stock market is a common investment for many people. However, the DJIA isn’t really as good as comparison as I would have liked because the stocks that made up the DJIA in 1947 are not the same stocks that make up this index in 2010. For example, General Motors was a big part of the DJIA index in 1947 and today it has been removed from the index due to the stock price dropping to nearly zero. Also, the dividend yields of the individual stocks have not been taken into account. Okay, it isn’t a perfect comparison between coins and stocks, but it is a point of comparison. I also used the change in the price of the average home from 1947 to 2010. In the strict sense of the word “investment” your primary residence isn’t an investment, that is, you don’t sell just because the price has increased or buy two more if the price of the average home drops by ten percent. Just as the comparison between stocks and coins have some issues, so does the comparison between the average price of a home and a collection of coins.

For the basket of coins used in the analysis I chose common coins that a typical collector would have in their collection. A brief description of the coins are in Table 1. The Red Book in 1947 uses the term “Fine” for circulated grades. This “Fine” is not the same Fine you see in the current Red Book. The 70 point Sheldon grading system was not invented until 1949. However, to make the comparison from 1947 to 2010, I used the “Fine” grade in the current Red Book to compare to the “Fine” grade in the 1947 Red Book. For “Unc.” Coins from 1947 I used BU or MS60 prices in the 2011 Red Book.

Table 1 – Results Comparing an Investment in Rare Coins, Stocks, and a New Home.

       
 

Red Book

Red Book

Percent

Item

1947

2011

ROR

DJIA

176.39

10739.31

6.66

Average New Home price

$6,600.00

$203,000.00

5.52

       

1829 Fine Large Cent

$1.50

$30.00

4.81

1838 Large Cent Unc.

$6.00

$300.00

6.33

1909S Unc. Lincoln Cent

$3.75

$325.00

7.25

1941 Proof Lincoln Cent

$1.25

$40.00

5.58

1832 Fine Bust Quarter

$2.50

$125.00

6.33

1847 Unc. Seated Liberty Quarter

$6.50

$575.00

7.28

1829 Unc. Bust Half Dollar

$4.25

$1,050.00

9.03

1878CC Unc. Morgan Dollar

$5.50

$250.00

6.17

1901 Proof Morgan Dollar

$9.00

$3,100.00

9.60

1884 Fine $2.5 Quarter Eagle

$12.50

$375.00

5.48

1913 Unc. $2.5 Quarter Eagle

$10.00

$375.00

5.85

1845 Fine $10 Eagle

$35.00

$900.00

5.22

1906 Unc. $10 Eagle

$37.50

$850.00

5.01

1920 Unc. Pilgrim Ter. Commemorative  Half

$2.50

$115.00

6.19

1921 Unc. Alabama Cent. Commemorative Half

$7.50

$230.00

5.51

       
   

Average Coins

%6.38

     
       

Comparing the three categories of investment vehicles (see Figure 1) we see that coins with a rate of return of 6.38 percent fit in between the DJIA (6.66 percent) and the increase in average price of a home (5.52 percent). The ROR on coins could have easily been inflated by using key dates and using the prices for MS65 coins in 2010. The actual rate of return for each of these investments would be slight lower since transaction costs have not been taken into account. In the case of a new home, the transaction costs are the realtor fees and the cost of obtaining the loan. For coins, the transaction costs are the fees (or mark up) the coin dealer changes to cover the cost of buying and selling coins.

From the results of this study we see that coins really are a good as investment. They compare favorable with an investment in the Stock Market or a typical new home.

Figure 1 – Rate of Return for Coins, Stocks, and a New Home from 1947 to 2010

Reference Books on Coin Investment:

“Heads you Win, Tails You Win: The Inside Secrets to Rare Coin Investing” by Jeffrey J. Pritchard. Reston Publishing Company, Inc., 1983.

“The Investor’s Guide to United States Coins” Second Edition, By Neil S. Berman, Silvano DiGenova, and Dr. Jason Perry. The Coin & Currency Institute, Inc. 2007

“The Expert’s Guide to Collecting & Investing in Rare Coins” by Q. David Bowers, Published by Whitman Publishing, LLC.

Disclaimer: this article is intended solely for information purposes. The opinions are those of the author only. Please conduct additional research and consult your financial advisor before making any investment or trading decisions. No responsibility can be accepted for losses that my result of trading on the basis of this analysis.


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How to Successfully Buy Coins on eBay

By Doug West, Ph.D.

eBay is probably the largest coin market on the planet. There are many thousands of wonderful coins and numismatic items for sale on eBay at any given moment. The vast majority of the sellers on eBay are honest people, however, it is that small percentage of less than honest sellers that you have to learn how to avoid. In this article I present some basic advice on making your eBay coin buying experience more fun and profitable.

Buy from an experienced seller of coins

Not all those that sell coins on eBay are equal. What I mean by this is that there are many people selling coins on eBay that don’t know much about coins. This puts you, the buyer, at greater risk. Buy from someone who has a proven track record. This is easy to find out. Clicking on the number next to the seller’s name will give the history of the seller and their customer’s feedback. A couple of years ago I bought an XF Seated Liberty dollar off eBay for a very attractive price. I was quite pleased with myself. The down side came when the coin arrived. I knew at first glance there was something wrong with coin, it just didn’t look right. I weighted it and the weight was off too. I contacted the seller and told them I thought the coin was counterfeit and wanted my money back. I returned the coin and they gave me a full refund. The seller was very apologetic and I found out they ran an antique shop and didn’t know much about coins. The moral of the story is to buy from an experienced seller.

Buy at Off-Prime Times

Most of the auction activity with coins occurs in the late afternoon and evening hours. This is when most of the bidders are looking to buy. By bidding on coins that don’t go off (end of auction) during this prime time there will be fewer bidders in competition for coins. The last 30 minutes of an auction can have a flurry of activity. Place your bids for coins that go off in the wee hours of the morning and when you get up in the morning see what you have won. Also, Sunday is typically the slowest day of the week for auctions which makes it a good day to buy coins on eBay.

Don’t get auction fever

Sellers love when bidders get excited about a coin and get into a bidding competition with another bidder(s). Set a limit you are willing to pay and stick to it. Unless it is a great rarity, there will be another one for sale.

Make sure there is a return policy

Choose sellers that have a liberal return policy. Some sellers don’t accept returns and others have a “no questions asked” return policy. Go with the sellers that will allow you to return the coin if you are unhappy. Many sellers have a restocking fee for returns. Make sure this isn’t a large percent of the cost. A liberal return policy puts the burden on the seller to accurately describe and image the coins – this is to the buyer’s advantage.

If it too good to be true, it probably is

eBay has several auctions that feature a pile of coins and unless you read the fine print you think you are bidding on all of these coins. Be careful! You may end up paying too much money for a few common coins. The bottom line here is to read the ad carefully. If it ambiguous about what you are bidding on then stay away. It may be just poor wording on the seller’s part but it may be a cleverly disguised ad to take your money.

Another common problem is over graded coins. Sellers will list coins in Gem BU+ condition that really aren’t. If you want to buy coins in the top condition, like MS-65 or better, then you should probably be buying coins that have been professionally graded and encapsulated by ANACS, PCGS, ICG, or NGC. Unless you have a lot of experience grading high end uncirculated coins, I would recommend staying with coins professionally graded.

Buy the Book before the Coin

There is an old saying in the coin collecting world “Buy the book before the coin”. I couldn’t agree more! Knowledge is king in the world of coins. There are dozens of good coin related books out there to help you gain the knowledge to be a successful coin collector or investor. The References section of this article lists several good books to help you fill in the missing gaps in your numismatic knowledge.

Video on the buying coins on eBay

http://www.youtube.com/watch?v=6CEsxTJg0Go

References

The Official Red Book - A Guide Book of United States Coins, edited by Kenneth Bressett

Official ANA Grading Standards for United States Coins

2010 Standard Catalog of World Coins 1901-2000, by Colin R Bruce II, Thomas Michael

Standard Catalog of World Paper Money, Modern Issues, by George S. Cuhaj, Editor

Ancient Coin Collecting, by Wayne G. Sayles

Standard Catalog of United States Tokens 1700-1900, by Russell Rulau

Standard Catalog of United States Paper Money, by George S. Cuhaj & William Brandimore

Standard Catalog of Modern World Gold Coins, 1801-Present by Colin R. Bruce II and Thomas Michael

Standard Guide to Small-Size U.S. Paper Money 1928 to Date, by John Schwartz and Scott Lindquist

 

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Glossary of Gold and Silver Related Terms

 

By Doug West, Ph.D.

www.investmentmetalsandcoins.com

 

ALLOY

 

To alloy a precious metal is to introduce a quantity of another metal into it. Gold may be alloyed with base metal or with silver. As an example, White Gold is an alloy of gold and nickel or palladium.

 

ANNEAL, ANNEALING

 

To heat metal until it becomes soft enough to work into desired shapes, or to receive stamped designs (such as in coin striking). The degree of annealing varies depending upon the metal's use, as some uses call for greater softness or hardness than others. Gold, being naturally soft, requires less annealing that other metals.

 

ASSAY

 

The official determination, by a licensed assayer, of the bullion content in an object (usually a gold or silver bar). The assaying of metal requires testing that includes a measurement of its weight by specific gravity. See figure 1 for an example of an Assayer’s report associated with a Palladium bar.

1 Ounce Palladium bar

Figure 1 – 1 Ounce Palladium bar and the associated Assayer’s report as to material, fineness, and weight.

 

AQUA REGIA

 

A chemical widely used in the jewelry industry, especially for testing the fineness of gold. Aqua Regia is made of three parts hydrochloric acid and one part nitric acid.

 

BALANCE SCALE

 

A scale operating solely by the balance principal, rather than by springs or the use of a sliding weight. It consists of two pans suspended on hangers, connected at the top to a horizontal bar containing a pivot at the center. When empty, the pans are at precisely equal distance from the ground. For weighing, the object(s) to be weighed are placed in one pan, and counterweights of established weight in the other. The object(s) weight is determined by the weight of counterweights needed to precisely balance it.

 

BASE METAL

 

Catch-all term used to refer to all non-precious metals, such as copper, zinc, nickel, copper, lead, etc. These are the metals used in industrial applications and  in alloying gold, silver and platinum.

 

BRICK

 

A gold brick, also known as bullion bar, weighs 1,000 troy ounces, or approximately 68.5 pounds.

 

BRITANNIA SILVER

 

A high grade of silver, consisting of 95.84% pure silver and 4.16% alloy. Its use is chiefly for tableware and decorative articles. The hallmark is a likeness of Britannia, which is the symbol of the British Commonwealth .

 

CLIPPING

 

A once-prevalent method of criminally acquiring bullion by trimming small portions from coin edges and then passing the coins at their face value. This occurred in the days of hammered coins, whose edges were not perfectly symmetrical. The edges of coins are now reeded to make any removal of metal from the edge more obvious.

 

COIN SILVER

 

A grade of sliver whose content is .90 fine, or 90% pure silver and 10% alloy (usually copper). The term arose because the majority of U.S. silver coins have about this composition. However, many foreign silver coins vary in composition. It should not be presumed, as it sometimes mistakenly is, that coin silver is made from melted coins. It could be, but it can just as well be manufactured from other silver and alloy.  

 

CORROSION

 

The discoloration or patina to which old, neglected (not regularly pol­ished) sliver can fall prey results from acids or oxides acting upon chemical properties in the metal. It can generally be removed or at least diminished, by treatment with common solvent (silver cleaner). However, in the case of collectors' items hundreds of years old, such as coins or religious objects, experts generally advise against its removal.

 

DICHROMATE

 

A chemical solution used for testing the composition of metal article. Dichromate is composed of potassium dichromate and nitric acid.

 

ELECTRUM

 

A natural mixture of gold and silver, from which the earliest true coins were made (those of the Lydians of Eastern Asia, in the 7th or 8th cen­tury B.C.).

 

FILE MARK

 

A recessed mark left upon an object as the result of filing, to test its metallic content. File marks are occasionally found on gold coins, tested for the possibility of being counterfeit. They also appear on items that proved to be of low bullion or non-bullion content, as the majority of tested objects found to be of solid gold or sliver are sent for melting.

 

FINENESS

 

The degree of purity in an object of precious metal, usually expressed by hundredths in decimal form (such as .995, which means 99.5 parts pure and 0.05 part of alloy). It may also be written in terms of a percentage, in the case of the example given, the percentage equivalent would be 99.5%. The highest degree of obtainable fineness in gold or sliver is expressed as .9999 or 9999, rather than 1.0000, because of the impossibility of guaranteeing that all minor traces of incidental metallic substances have been removed. See figure 2 for an example of fineness markings on a Canadian silver bullion coin.

 

2009 Canadian silver Maple Leaf

 

Figure 2 – The reverse of a 2009 Canadian silver Maple Leaf coin has 9999 Fine Silver marked on the coin. Most coins that trade as bullion coins have similar fineness markings.

 

GERMAN SILVER

 

Low quality silver, containing a high proportion of nickel alloy.

 

GOLD FILLED

 

Gold filled articles are similar to plated. They have an exterior of gold and a core of base metal, usually copper. The difference is in the method of application. Plated objects are shaped and then bullion coated by electro­plating, in which the soft gold takes the object's form.  

 

G.P.

 

When found on an article that appears made of gold, these letters indi­cate that the gold is merely surface plating (G.P. = gold plated).

 

HALLMARK

 

A decorative marking sometimes (but not invariably) found on foreign made sliver articles, indicating that the metal is of sterling quality or higher. The origin of the word hallmark dates to the later Middle Ages in England , when silversmiths were members of the Guildhall.

 

JUNK SILVER

 

This normally refers to the U.S. 90 percent silver coins. See COIN SILVER. See figure 3 for an example of coins commonly traded for their melt value.

 

US coins dating before 1964

 

Figure 3 – Examples of common US coins dating before 1964 that trade for their silver melt value rather than carry a numismatic premium. Higher grades or rarer dates of coins within these series of coins carry a substantial premium above the bullion or melt value of the coins.

 

KARAT

 

The method by which fineness of gold is expressed. Pure unalloyed gold is 24 karat. As alloy metal is added (usually copper, for strength or to reduce the price), the karat value declines: 22K, 20K, 18K and so on. The lowest grade of gold to carry a karat marking is 10K, or, in Great Britain , 9K. Most gold coins are 20K or 21K. Jewelry is commonly made of 12K to 18K. The word "karat" derives from the carob bean, used as a measure of weight in the ancient world. When spelled "carat" it refers to the weight of a precious gem and is not associated with fineness.

 

MELT VALUE

 

The bullion value of any object containing precious metal. When sold for melting, the full price of an item's bullion content is not received but only a percentage of it. Some articles, such as gold or silver coins of key dates or mintmarks, have a higher retail or "numismatic" value than melt value and obvi­ously should not be melted.

 

PANNING

 

The technique of recovery of gold particles from streams or river beds, practiced widely by prospectors in the rush of 1849 and to a lesser extent in South Africa In the 1870's. Gravel and small rocks are scooped into a pan along with water. After shaking, the upper layers are poured away. Gold, being heavier than common rock or other minerals will settle on the pan bottom.

 

PLATING

 

The covering of base metal articles with a layer of gold or sliver, which may be of various thicknesses and grades. Presence of plating may be discovered by filing and using nitric acid, or subjecting the item to specific gravity testing. See the related term GOLD FILLED.

 

PRECIOUS METAL

 

The four primary precious metals that are commonly traded in coin form and used in the jewelry industry are: gold, sliver, palladium, and platinum. All others (except derivatives of these four) are known technically as "base metal." Of course, the preciousness of precious metals varies, as does the baseness of base metals.

 

PURITY

 

The proportion of precious metal in an object vs. base metal. A purity of .900 would mean a content of 90% precious metal and 10% base metal alloy, or a ratio of 9-to-1. See the related term FINENESS.

 

REEDING

 

The faint impressed lines, running vertically from reverse to obverse, found on the edges of many coins struck by machinery. The original purpose of these lines was to discourage clipping, or removing minute portions of metal from the edges and then passing the coin at face value. See the related term CLIPPING.

 

SCRAP

 

Material made of or containing precious metal, which has no value beyond that of its bullion content and is suitable only for melting. Old spec­tacle frames, jewelry containing gold, and gold dental crowns are examples of typical scrap.

 

SPECIFIC GRAVITY

 

A method of testing the composition of metallic objects, which measures their displacement of water in relation to their bulk. Each metal element has an established specific gravity (or density). Specific gravity of 0.999 fine silver is 10.50. For Sterling silver (0.925 fine) the Specific Gravity is 10.31. The Specific gravity of 0.999 fine (24K) gold is 19.32.

 

SPOT PRICE

 

"Spot Price" is the price at which precious metal is being traded at any given time. Spot prices are always calculated on the basis of one full troy ounce and must be multiplied or divided to arrive at prices for larger or smaller quantities. The spot price is achieved in day to day trading in gold and other precious metals markets, just as are prices for stocks and other commodities. Generally, the London spot is used as the world barometer, after conversion from pounds to dollars.

 

TOLERANCE

 

The amount of difference permitted by law between the karat marking on a gold article and the actual fineness of gold it contains. Tolerances up to one full karat are allowable, depending on circumstances (such as whether solder has been used in manufacture.) Tolerances are permitted only on craft or other manufactured items, not on bars or Ingots. The term Fineness is used for coins made of precious metals.

 

TOUCHSTONE

 

A stone, of basalt or slate, used in testing gold to determine its karat. Touchstones are used in combination with testing needles and Aqua Regia.

 

WHITE GOLD

 

An alloy of gold that contains at least one white metal, such as, nickel or palladium.

 

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Introduction to Collecting Sales Tax Tokens

By Doug West, Ph.D.

Collecting Sales Tax Tokens has been a part of numismatics for years and can be a lot of fun. This brief article gives the collector an introduction to the origins, identification, and current prices of common tax tokens.

Background of the Tax Token

Currently there are no known tax tokens in circulation. They were mainly products of the depression of the 1930's along with wooden nickels, depression scrip, and other kinds of emergency money. They were meant to assist in the collection of consumer's sales taxes when the amount due was only a fraction of a cent. During the Great Depression people did not like the idea of paying a whole penny tax on a small purchase, say, 25 cents. The tokens served as a useful device to make the new tax laws more palatable to the buying public. Establishing the use of these tokens by states normally involved a vigorous public debate. They were even opposed by the federal government on the grounds that they were “money” and thus competed with its constitutional coinage responsibilities. However, this latter opposition did not seriously materialize. Mintage estimates for many tax token run into the millions, this is high when compared to merchant tokens which typically have mintages below 1000.

Prior to state issue, there were locally issued tokens by private individuals and groups. These were mostly made of paper or cardboard, with some made of metal and wood. The earliest known non-state issued tokens were the tokens made in Illinois communities during the spring of 1933. They were short-lived and as unpopular as the forth coming state issues. Privately produced tokens from Washington State were issued in wood and cardboard and only were in service from May to August, 1935. They were soon replaced by state issued cardboard and metal tokens. In Ohio the state used punch cards instead of tokens and also issued a complex series of whole-cent receipts.

The first widely distributed state issued tokens were distributed by Washington State in May 1935. By the end of World War II tokens had been virtually discontinued. Missouri was the last to use tax tokens which lasted until 1961. Ohio discontinued use of the paper receipts in 1962.

Characteristics of Tax Tokens

Tokens came in denominations of Mills. A Mill is equal to 1/10th of a cent. They were also issued in fractions of a cent, such as, 5 Mills. Washington State issued tokens that were at values greater than the standard Mill.

The state tax tokens are found in many materials: aluminum, copper, brass, zinc, cardboard, fiber, and plastic. The tokens made of fibers, cardboard, and plastic come in a wide variety of shades. The design for all of the state issued plastic tokens is the same except for the name of the issuing state.  Metal tokens were issued from about 1935 to 1940, fibers from 1941 to 1943, and plastics from 1943 and on.

Most of state-issued tax tokens are 22-23 mm in diameter or 16 mm in diameter. Most came with some
form of center punched round, square, triangular, or cross shaped hole. The size of the punch varied in width or diameter from one or four millimeters. See figure 1 for examples of common tax tokens. There are many varieties in the letterings of the legends and the designs on the tokens. Several tokens exist without a center punch which they normally should have had. Others have off-center punches and double punches. These are a result of mis­takes during the manufacture of the tokens.


Figure 1 – Colorado (aluminum), Oklahoma (fiber), Alabama (zinc), and Missouri (plastic) tax tokens.

Current Values

Most state issues are still plentiful and are available in uncirculated con­dition. The state series makes a simple and compact collection, and one can still get most of them at a cost varying from 50 cents to a few dollars each in uncirculated condition. Coin Dealers, eBay, and Antique Malls are good sources of the tokens.

Good reference books on the subject:

U.S. State-Issued Sales Tax Tokens by Jerry F. Schimmel, 2nd Edition Revised, 1980.

United States Sales Tax Tokens and Stamps: A History and Catalog, by Merlin K. Malehorn and Tim Davenport. 1993.

 

 

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H.R. 4248 – Repeal of Sales Tax for Coins and Precious Metals and More…

By Doug West, Ph.D.

www.investmentmetalsandcoins.com

On December 9, 2009 Representative Ron Paul introduced H.R. 4248 the Free Competition in Currency Act of 2009. The following is a brief summary of the bill: (Sec. 2) Repeals the federal law establishing U.S. coins, currency, and reserve notes as legal tender for all debts, public charges, taxes, and dues. (Sec. 3) Prohibits any tax on any coin, medal, token, or gold, silver, platinum, palladium, or rhodium bullion issued by a state, the United States, a foreign government, or any other person. Prohibits states from assessing any tax or fee on any currency or other monetary instrument that is used in interstate or foreign commerce and that has legal tender status under the Constitution. (Sec. 4) Repeals provisions of the federal criminal code relating to uttering coins of gold, silver, or other metal for use as current money and making or possessing likenesses of such coins. Abates any current prosecution under such provisions and nullifies any previous convictions. A complete copy of the bill can be downloaded from http://www.gpo.gov/fdsys/pkg/BILLS-111hr4248IH/pdf/BILLS-111hr4248IH.pdf.

Since I am not a Lawyer or Federal Economist, I will not venture a guess on the impact Section 2 would have on the economy. That is, what happens to our “green backs” once we can no longer use them to pay for day-to-day business transactions. When we go to lunch at McDonald’s, what form of currency would we pay with? In Section 3, the removal of taxes on coins and precious metals would be very helpful for coin dealers and would put dealers in all states on a level playing field. Some states, such as Kansas, do require sales tax on coins and precious metal purchases. Other states, such as Missouri, don’t require a sales tax on coins and precious metals.  If I am reading Section 4 correctly, individuals could start minting their own coins for use in day-to-day transactions. How would that work?

Currently this bill is in the Subcommittee on Commercial and Administrative Law. This Subcommittee is lead by the Democratic Representative Steve Cohen from Tennessee and the Republican Trent Franks from Arizona. You may want to contact these two individuals to let them know you would like to see the elimination of taxes on coins and precious metals (or any other parts of the Bill you like). Contact information for these two Representatives can be found at http://directory.usayfoundation.org/.

 

 

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Glossary of Coin Grading Terms and Abbreviations
By Doug West, Ph.D.
www.investmentmetalsandcoins.com

In the world of collecting coins there are a wide variety of terms and abbreviations used to represent the grade or condition of a coin. Some are very helpful and others nearly meaningless. In this guide I will present some of the more commonly used useful terms and explain them.

About Good (AG-3) – Heavy wear with portions of the lettering, legends, and date worn smooth.

About (or Almost) Uncirculated (AU-50) – Traces of light wear on many of the high points. At least half the original mint luster is still present.

ANACS – Professional coin grading service. This is the oldest coin grading service and originally started with the American Numismatic Association (ANA).

BR – Brown. This is a designator that can follow the grade of a copper coin. It indicates the color of the coin is brown. Brown copper coins normally sell for less than red copper coins.

Cameo – This refers to the devices (portrait, legends, eagle, etc.) of the coin will be a duller texture than the fields of the coin. This is normally only seen in proof coins. See figure 1 for an example.

Coin Grading

Figure 1 – Example of a Cameo coin.

Cir. or Circulated – A coin that has some degree of wear. On the MS grading scale it could be from 1 to 59.

Choice About Uncirculated (AU-55) – There is only light wear at the high points of the coin. Most of the original mint luster is still present. AU-58 is a slightly higher grade than AU-55 and refers to coins that appear uncirculated at first glance but have a small trace of wear.

Choice Very Fine (VF-30) – Light, even wear on the surface and highest parts of the coin. All lettering and major features are clearly visible.

Choice Extremely Fine (EF-45 or XF-45) – Light overall wear on the highest points. All design features are very sharp. Some mint luster is still present.

Choice Uncirculated (MS-63) – An uncirculated coin with some distracting contact marks or blemishes in the prime focal areas (normally the obverse portrait). Mint luster may be dull or impaired.

Choice proof (PF-63) – Surfaces are reflective with only a few blemishes in the field of the coin. No major flaws or scratches.

DMPL – Deep Mirror Proof Like. These coins have surfaces that resemble the mirror like finish commonly found on proof coins. Morgan Silver dollars are the most common coins found with DMPL surfaces.

Extremely Fine (EF-40 or XF-40) – Light wear on the entire design. All features are sharp and well defined. Traces of mint luster may still be present.

FBL – Full Bell Lines. This refers to the horizontal lines across the bell on the reverse of the Franklin Half dollars. Choice or better uncirculated coins with Full Bells Lines command a premium price.

FSB – Full Split Bands. This refers to the horizontal bands on the reverse of a Mercury dime. Choice Uncirculated FSB Mercury dimes command a price premium.  

FH – Full Head. This refers to the head of lady Liberty on a Standing Liberty Quarter. Example with a strong strike will have a full head. Typically, the head of Liberty is not fully detailed. Choice Uncirculated FH quarters command a price premium.

Fine (F-12) – Moderate to considerable even wear. The entire design is bold and all major legends are visible.

Gem Proof (PF-65) – Surfaces are brilliant with only very minor blemishes or surface flaws (barely noticeable marks or hairlines).

Good (G-4) – Heavy wear with the design visible but faint in areas. Many details are flat. Date is readable.

ICG – Independent Coin Graders. A professional coin grading service.

Mint State – same as uncirculated. This term refers to coins showing no trace of wear. Coins very due to strike and the handling the coin has received at the mint and the banking systems. See MS-60, MS-63, MS-65, and MS-70 for further details of the grading terminology.

NGC – Numismatic Guaranty Corporation. A professional coin grading service. See figure 2 for an example.

PCGS – Professional Coin Grading Service. A professional coin grading service.

Perfect Uncirculated (MS-70) – Showing no trace of wear. No evidence of scratches, handling, or contact marks. Few coins issued for general circulation are ever found in this condition.

Proof  – A specially made coin that typically has very sharp detail, mirror-like surfaces, and is very lustrous. Proof refers to a method of manufacture and is commonly confused with the grade of the coin. See PF-60, PF-63, and PF-65 for further details of this grading terminology.  

Proof (PF-60) – Surfaces may have several blemishes or scratches or light rub spots. Luster may be dull or heavily toned.

PL or Proof-Like – A coin that has surfaces that resemble that of a proof coin. See figure 2 for an example.

Coin Values Grading

Figure 2 – Example of Proof-Like Surfaces and an NGC graded coin.

PR – same as PF, designates a Proof coin. See Proof.

RB – Red/Brown. Color of a copper coin.

RD – Red. Color of a copper coin. Full red copper coins command a price premium over brown or red/brown coins.

Sheldon Grading Scale – A system of grading which was originally introduced by the late Dr. William H. Sheldon. During the 1970’s this system was widely adopted and is in wide use today. The Sheldon Scale consists of assigning numerical grades to a  coin that range from 1 to 70. A grade of 1 is the lowest (Poor) and a grade of 70 is for a perfect coin. The designators are given below and a more complete explanation of each grade is presented in this article under the specific grade.
Poor -1
Fair – 2
Almost (About) Good – 4, 6
Very Good – 8, 10
Fine – 12, 15
Very Fine – 20, 25, 30, 35
Extremely Fine – 40, 45
Almost (About) Uncirculated – 50, 53, 55, 58
Mint State – 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70

Slider – A coin with possibly a trace of wear. It is hard to tell if the coin has actual circulation wear or if it has just been mishandled and appears to be slightly circulated.

Toned or Toning – a coin with surface oxidation. Most commonly seen in silver coins. The surface turns different shades of grey or black.

UC – Ultra Cameo. This refers to the devices (portrait, legends, eagle, etc.) of the coin will be a duller texture than the fields of the coin. This is normally only seen in proof coins. See figure 3 for an example.

Coin Grading Example

Figure 3 – Example of a PF 70 Ultra Cameo coin.

Uncirculated or Unc. – same as Mint State (MS).

Very Good (VG-8) – Well worn with main features clear with even wear. VG coins normally have a full rim.

Very Fine (VF-20) – Moderate wear on design high points. All major details are clear.

Whizzed – coin that has cleaned and/or rubbed with a fine wire brush to simulate an uncirculated coin. Use a 10X magnifier to look for very fine scratches on the surface of the coin to enhance its luster.

Reference Book on the Subject of Coin Grading:

A Guide Book of United States Coins by R.S. Yeoman

The Official American Numismatic Association Grading Standards for United States Coins, 6th edition. Edited by Kenneth Bressett.

 

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Price Analysis of 1956 to 2007 US Proof Sets

By Doug West, Ph.D.

The prices of US Proof sets can be analyzed to determine which set’s prices are high or low when compared to the group as a whole.  The buying and selling of Proof sets is like most other markets, that is, they are always moving toward a  price equilibrium. The problem is the term “price equilibrium” is a moving target. There is new information, buyers, and sellers constantly being introduced into the proof set market. As a result of these changes in the market place, some of the sets will appear to be too high relative to the group as a whole and some sets will appear to be too low. In this article, I analyze the group of proof sets from 1956 to 2007 and identify a few sets that may be over priced and a few sets that may be under priced based on mintage numbers.

The mintage figures used were from the 2010 Guide Book of United States Coins (“Red Book”) and the prices are Coin Dealer Newsletter bid prices from June 12, 2009. Only the regular clad and silver proof sets (including the Premier sets) were included in the data set. The proof quarter, Prestige, Presidential, and American Legacy sets were not included in the study. Figure 1 is a plot of the results of the analysis. The x axis is the mintage of the set in millions. The y axis is a logarithmic plot of the CDN price of the set. The price verse mintage was fitted with an exponential equation. The exponential fit gives a straight line on a logarithmic plot. Without getting bogged down in more mathematical jargon, the way to make useful sense of Figure 1 is to consider the sets that are above the line and assume they are more expensive relative to the sets that are below the line. Sets farthest from the line (upward) are more expensive based on their mintage than sets that are on or near the line. The same principle applies to sets that are the furthest below the line, except they are the least expensive sets based on their mintages.

The sets that are significantly above the line, which are considered over priced based purely on their mintage, include the 1999 silver, 2001 silver, 2001, 1976 three piece silver, and 1964 proof sets. I am going to throw out the 1964 set from this group of over priced sets. At a CDN bid of $11.75 this is approximately $3.00 over the silver melt value of the set and a significant portion of these sets have been broken up and the singles have been sold separately. The 1976 three piece silver set is a one year type set and there is justification for this higher price relative to the mintage of 3,998,621. The price of the 1999 silver, 2001 silver, and 2001 clad don’t seem to have a valid reason for this higher than expected set price.

There are seven sets that appear to be real bargains when compared to the group as a whole, these are: 1992 silver Premier, 1998 silver Premier, 1986, 1992, 1972, and 1982. These sets are further from the line on the down side. At only $11.00 wholesale and around $18.00 retail, the 1992 silver Premier set with a mintage of only 308,055 appears to be the bargain of the bunch. The 1998 silver Premier has similar statistics and also a good buy. The 1972, 1982, 1986, and 1992 sets have Red Book prices of $6.00, $6.00, $11.00, and $9.00, respectively. These four sets are just flat cheap, what else can I say?

Proof Set Price Graph

 

Figure 1 – Proof Set Price Plot

Considering the old adage “Buy low, sell high”, hopefully this article has helped identify what is currently low in price and what is high in price. As always, buy and sell with a reputable professional coin dealer to ensure you are getting what you pay for and you get a good price when it comes time to sell your proof sets.
Disclaimer: this article is intended solely for informational purposes. The opinions are those of the author only. Please conduct additional research before making any financial decisions. No responsibility can be accepted for losses that my result of trading on the basis of this analysis.

Coin Values in an Economic Recession

By Doug West, Ph.D

Last summer I published an article titled “Coin Values in an Economic Recession” see http://www.investmentmetalsandcoins.com/coinvalues.asp. At the time this last article was written we didn’t officially know a recession had already begun. It wasn’t until December 2008 that the National Bureau of Economic Research made the announcement that an economic recession has been going on since December 2007. The experts (if there is such a thing) tell us that it may well be into 2010 before we emerge from this economic quicksand. I thought it would be fun to see how the small basket of coins from the last article has faired through this long recession this far. Here is what I found:

To try to quantify the effects of a recession on coin values I compiled the prices of a group of coins in the Table 1 below. These prices are Coin Dealer Newsletter (CDN) bid values for the date in the first column. Due to a limited number of old CDN’s at my disposal I used the issues that most closely bracketed the recession period. These are the coins I would typically see in a coin collection. So hopefully this will give a decent representation of the average coin collection.

Table 1 – Coin Price Changes

Date

1956

Proof Set

Large Cent

VG

1840-57

Indian

Cent

roll Good

Liberty

Nickel

PR-60

Bust 10  Cent

reduced

VG

L.S. Dime

w/ legend

BU-60

L.S. 25 Cent

w/ motto

VG

Morgan

1891CC

AU

Dollar

1934-S

XF

Dollar

$10  Gold

Indian

AU-50

Recession #1 - July 1990 - March 1991

1/5/1990

$34.00

$7.50

$25.00

$150.00

$9.00

$110.00

$8.25

$59.00

$110.00

$408.00

1/3/1992

$24.00

$9.00

$30.00

$105.00

$10.00

$90.00

$9.00

$59.00

$120.00

$330.00

% change

-29.4%

20.0%

20.0%

-30.0%

11.1%

-18.2%

9.1%

0.0%

9.1%

-19.1%

 

Recession #2 - March 2001 - November 2001

1/5/2001

$28.00

$11.00

$38.00

$90.00

$17.25

$100.00

$14.00

$90.00

$100.00

$265.00

1/4/2002

$36.00

$14.00

$41.00

$90.00

$17.25

$100.00

$15.00

$90.00

$100.00

$280.00

% change

28.6%

27.3%

7.9%

0.0%

0.0%

0.0%

7.1%

0.0%

0.0%

5.7%

 

Current Recession – December 2007 - ?:

12/7/2008

$48.00

$18.50

$55.00

$105.00

$30.00

$100.00

$22.00

$170.00

$145.00

$550.00

6/12/2009

$50.00

$19.00

$52.00

$125.00

$35.00

$100.00

$23.00

$170.00

$145.00

$610.00

% change

4.2%

2.7%

-5.5%

19.0%

16.7%

0.0%

4.5%

0.0%

0.0%

10.9%

The first recession occurred between July 1990 and March 1991. The fourth row down labeled “% change” shows what the percent change was for each of the ten groups of coins. The 1956 proof set and the proof Liberty nickel took the biggest hit during the period January 1990 to January 1992, both down around 30% - not good. However, five of the coins showed an increase in price over this period and one, the 1891-CC AU Morgan dollar showed no change. In summary, four of the coins went down, one stayed the same, and five went up in value. Depending on how many of each coin type you owned, this recession could have been either positive or negative to the value of your collection.

The second recession ran from March 2001 to November 2001. It was a short one. During the period of January 2001 to January 2002 our small group of coins faired a little better this time. Five of the coins showed an increase and five showed no change in price. The 1956 proof set and the VG large cent both gained over 25 percent during this year. This is a very nice increase in price for these two items. This recession did not have a negative effect on this group of coins.

This current recession has been friendly to this small collection of typical coins. The average percent increase in price of this collection of coins has been 5.3% over the period from December 7, 2007 to June 12, 2009. For the sake of comparison, the Dow Jones Industrial Average (DJIA) closed at 13625.58 on December 7, 2007 and 8799.26 on June 12, 2009. This is a 35 percent decrease over the same period.

To sum it all up, I would have to say that the last two recessions have not been too bad on this small coin collection and this current recession doesn’t appear to be having a negative effect on coin prices either.

 

Important Information about your Coin Collection

COINS WORTH SAVING
By Brad Welles
www.coinsworthsaving.com

Every coin must be judged on its own merit, and the assistance of an experienced dealer is invaluable.  Generally speaking, however, we prefer to deal in coins that exhibit the following characteristics:

  1. Great eye appeal – Within every grade level, some coins are more attractive than others.  Choose the most attractive overall, noting strike, luster, marks, toning, and other visual characteristics.  There can be marked differences in value within the same coin grade.

  2. Rarity – Overall rarity exists when few examples of a particular coin are available in all grades.  Condition rarity means rarity only in higher grades.  Either will generally enhance value.  Beware, however, of conditionally rare modern coins, where millions of other examples in high grade may be waiting to be discovered or certified.  Also be sure there is a collector base – some coins are rare, but no one wants them.

  3. Popularity – Greater collector and investor demand can lead to greater values.  Many series have time-proven appeal, including Morgan dollars, Indian and Lincoln cents, Mercury dimes, Buffalo nickels, and several series of gold US coins.  Key dates (the hardest to obtain) within these series have generally shown the greatest increase in value.

  4. Problem-Free – The coin should not be cleaned, altered, scratched, ex-jewelry, corroded, pitted, or otherwise damaged.  This does not include normal circulation, which will affect grade but not detract from value within the grade.  Some coins are so rare that any example is desirable, so there are numerous exceptions.   However, most coins that have been “improved” by humans are worth much less than their unimproved counterparts.  Original coin surfaces are rewarded by grading services and collectors alike.

  5. Certified – Third party grading is not critical for dealers or knowledgeable collectors/investors.  Nevertheless, it expands the universe of potential buyers when it’s time to sell.  It also increases the likelihood that less knowledgeable heirs will receive a fair sale value if the owner dies.  For higher value coins, it’s generally better to choose those that either have been or can be certified by PCGS or NGC.  Certification by other companies may be acceptable if their standards match those of PCGS and NGC, but they do not command the same respect in the marketplace.  Be cautious on coins certified in a grade with a big price jump over the next lower grade – make sure they are solid for the grade assigned.

  6. Numismatic Value vs. Bullion Value – Coins whose value is based solely on their metallic content (gold, silver, platinum) have historically proven to be poor long-term investments.  Coins with numismatic value, carefully chosen and held for extended periods of time, have generally rewarded their owners handsomely.  Bullion coins can be a perfectly legitimate hedge against inflation and financial panic, but numismatic coins are historically the better long-term bet.

Disclaimer: we do not offer any form of financial advice, nor do we speculate on the future prices of precious metals or any particular coin.  What we can offer is historical data on which coins have tended to appreciate in value, and the current trends in the industry.

 

 Example of items in the glossary

 

ALLOY

ANNEAL
NNEALING

ASSAY
AQUA REGIA  

BALANCE SCALE

BASE METAL  

BRICK
BRITANNIA SILVER

(See Other Terms)

Collecting Sales Tax Tokens has been a part of numismatics for years and can be a lot of fun. This brief article gives the collector an introduction to the origins, identification, and current prices of common tax tokens.

Background of the Tax Token

Currently there are no known tax tokens in circulation. They were mainly products of the depression of the 1930's along with wooden nickels, depression scrip, and other kinds of emergency money. They were meant to assist in the collection of consumer's sales taxes when the amount due was only a fraction of a cent. During the Great Depression people did not like the idea of paying a whole penny tax on a small purchase, say, 25 cents.

.....(Read More)

 

Glossary of Coin Grading Terms and Abbreviations
By Doug West, Ph.D.

In the world of collecting coins there are a wide variety of terms and abbreviations used to represent the grade or condition of a coin. Some are very helpful and others nearly meaningless. This guide presents some of the more commonly used useful terms and explain them. (Read More)

 

Price Analysis of 1956 to 2007 US Proof Sets

The prices of US Proof sets can be analyzed to determine which set’s prices are high or low when compared to the group as a whole.  The value of Proof sets is like other markets in that they are are always moving toward a  price equilibrium. The problem is that the “price equilibrium” is also a moving target. There is new information, (Read More)

 

Coin Values in an Economic Recession

Last summer we posted “Coin Values in an Economic Recession” At the time this article was written we didn’t officially know a recession had already begun. It wasn’t until December 2008 that it was announced that an economic recession has been going on since December 2007. Experts tell us...
(Read More)

 

COINS WORTH SAVING By Brad Welles
www.coinsworthsaving.com

Every coin must be judged on its own merit, and the assistance of an experienced dealer is invaluable. Generally speaking, however, we prefer to deal in coins that exhibit the following characteristics: (Read More)

Coin Values in an Economic Recession
6 April 2009

You can’t hardly turn on the TV or open a newspaper without some mention of the economic recession. So what does this recession mean for the coin collector and dealer? Will the value of our collections take a big hit? Obviously, we won’t know the effects until a recession actually occurs. However, we can look at the last two recessions and see what happened to a typical group of coins. The two most recent recessions occurred from July 1990 to March 1991 and March 2001 to November 2001. (Read More)

Which Coin Price Guide is Right?
7 April 2009

There doesn’t seem to be a shortage of coin price guides available to the collector and dealer. About a dozen come to mind immediately. To try to make sense of some of the information available to value coins I did a comparison for seven coins that are commonly bought and sold by collectors. What I wanted to discover was how do the price guides compare to actual prices of coins being sold. With only seven coins this isn’t an all inclusive statistical comparison of actual prices and the price guides, however, from this limited sample of coins you can get an idea of how well the price guides reflect the current price of coins. (Read More)

Who Will I Sell My Coins To When I Retire from Collecting?
8 April 2009

A collector friend of mine asked me the other day “Who would he sell his collection to once he was ready to retire from collecting”. I gave him a less than profound answer to his question, however, that got me thinking. Like most collectors and dealers it is easy to get a large sum of money tied up in your collection or inventory. So just who will we finally sell our coins to when we stop collecting? (Read More)

 


 

eBay Auction Results for Certified Dollars

 

In the last three decades the grading and encapsulation of collector coins has become big business. Many thousands (if not millions) of coins have been sent into such organizations as the Professional Coin Grading Service (PCGS), Numismatic Guaranty Corporation, and American Numismatics Association Certification Service (ANACS) to be graded by a professional grader and placed in a protective plastic holder. This practice has helped standardize the grading standards of uncirculated coins. The cost for this service currently runs around $20 to $40 per coin depending on the value of the coin and when you want the coin returned from the grading service. Is this extra $20 or more dollars spent to grade and encapsulate your coins really worth it? Does the grading service matter? In this article I want to answer these two questions based on actual auction results from eBay.

There are several good grading services that can provide this service to the collector and dealer. In this article I will focus on three of the largest and best know services: PCGS, NGC, and ANACS. All three have been around for years and have good reputations in the collector community. The four figures below show typical examples of dollars graded and encapsulated by these three services. The last figure is of a raw or un-certified dollar. This is the typical picture that would appear on an eBay auction for un-certified dollars.

Figure 1 – PCGS Graded and Encapsulated 1921 MS63 Morgan Dollar

Figure 2 – NGC Graded and Encapsulated 1885 MS64 Morgan Dollar

Figure 3 – ANACS Graded and Encapsulated 1884-0 MS64 Morgan Dollar

Figure 4 – Raw or Un-Certified 1884-O MS63 Morgan Dollar

To determine what value the certification of dollars has, I started collecting eBay auction results from four Morgan and Peace dollar auction types: raw dollars grading BU to Choice BU, ANACS dollars grading MS60 to MS64, NGC dollars grading MS60 to MS64, and PCGS dollars grading MS60 to MS64. The averages shown below in Table 1 are from at least 12 successful auctions on eBay in each category. In other words, the averages in Table 1 required results from over 48 successful auctions on eBay.  Many of the auctions were conducted by our coin business: C&D Coins and Currency http://stores.shop.ebay.com/C-D-Coins-and-Currency.  In Table 1 the first column lists the type of auction recorded. The second column is the average percent the final price of the auction plus shipping and handling divided by Coin Dealer Newsletter (CDN) bid price. The raw or un-certified coins brought an average of 95 percent of CDN, whereas, the average price for a PCGS graded Morgan or Peace Dollar brought 29 percent over current CDN bid prices. That is a significant difference.

Table 1 – eBay Auction Results

Type of Dollar

Average Percent CDN Bid

Raw or un-certified

95%

ANACS Certification MS60 – MS64

101%

NGC Certification MS60 – MS64

106%

PCGS Certification MS60 – MS64

129%

The auction results in Table 1 tells the story, that is, certification does matter when it comes to the price you will receive for your coins when they are bought or sold. Based on the small number of auctions reviewed the difference between the ANACS and NGC results are not significant. However, there is a significant difference between the raw dollars and the certified dollars. You can expect to get at least an additional 10 percent for your certified dollars as opposed selling them raw. Starting with silver dollars that bid for around $200, the cost of certification is worth the money spent. PCGS certification clearly brings more money in auctions than either the ANACS or NGC certification.

Based on my own experience in dealing with hundreds of certified coins, I have found the three services discussed above to be very similar in their grading standards. The price difference between PCGS and NGC or ANACS must be due the perception of the buyers, that is, buyers of PCGS graded coins feel they are worth more money in that holder.

 

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Coin Market Update

 

Brad Welles
Solid Rock Rarities, LLC
316-250-7287

http://www.coinsworthsaving.com/

 

Overview:

Activity has slowed some in the early part of 2009, but most coin prices have held up well. In the first three months of 2009, approximately 35,000 US coins in the PCGS price guide moved up compared to about 8000 that lost value. A few coins priced over $15,000 have shown softness, as have coins with problems or poor eye appeal.  Gold coins continue to show strength, except a few priced above $25,000.  Less expensive “collector coins” have held their ground.  This is reflected in the major coin indices:

 

CCDN Coin Market Index (broad wholesale measure): Up about 0.3% year to date

CoinAge Magazine MS65 Index (high end): Down about 4% through March

CoinAge Magazine VF Index (lower end): Up about 0.4% through March

PCGS 3000 Index (broad measure):  Down 0.8% in the last 3 months

PCGS Generic Gold Coin Index (more common gold): Up 15% in the last 3 months

PCGS Mint State Rare Gold Coin Index (very high end):  Down about 6% in the last 3 months

 

What’s Hot: Early US coins minted before 1834; key date Indian and Lincoln cents; any but the most expensive gold coins; key date Morgan dollars

What’s Not: Specialty areas such as early gold commemoratives and Morgan VAMs; common date silver coins; high grade modern coins; some very high end (over $25,000) coins; most currency

 

What are the Best Gold Coins to Buy?:

The answer to this depends largely on your objectives.  Below are three general classes of gold coins and observations on each:

  1. Bullion Coins (US Eagle, Canadian Maple Leaf, South African Krugerrands, etc.) – These modern coins are minted and sold for their gold content.  There is little or no numismatic value.  They track gold prices closely.  Bullion coins tend to do very well in periods of financial uncertainty and inflation.  Values have risen steadily for the last 6 years.  However, precious metals prices are notoriously cyclical and bullion coins have proven a poor “investment” over longer periods of time.  Bullion was confiscated by the US government in 1933.
  2. Generic Gold Coins (common US gold coins minted pre-1933) – The value of these coins will be strongly influenced by precious metal prices, but also collector/investor demand.  They act as a sort of hybrid between bullion and numismatic coins.
  3. Numismatic Gold Coins (Rarer or higher grade US gold coins minted pre-1933) – These coins can be influenced by gold prices, but trade mainly on collector/investor demand.  There is a limited supply and obviously they are no longer being minted.  This market is completely different from that of bullion coins.  Over longer periods of time (5+) years, numismatic coins have typically rewarded their owners, independent of what spot gold prices are doing.  See for instance the article at http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=5356

Bottom line: Generally, we would prefer to sell numismatic (or at least generic) coins to customers who plan to hold them for some years.  However, if you judge that an economic crisis is at hand or simply want to own bullion, we can supply bullion coins at competitive prices.  If your needs or your assessment of the financial climate change, bullion coins are easy to sell or trade for numismatic coins.

 

 

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When I retire from collecting who should I sell my coins to?

A collector friend of mine asked me the other day “Who would he sell his collection to once he was ready to retire from collecting”. I gave him a less than profound answer to his question, however, that got me thinking. Like most collectors and dealers it is easy to get a large sum of money tied up in your collection or inventory. So just who will we finally sell our coins to when we stop collecting?

There are a couple of key factors that have a big influence on the answer. The first factor is general population growth. In the United States the population has doubled since 1950. That means the number of collectors has probably doubled too. That is a significant increase. In 1950 we had available from the mint a proof set, a mint set, and a few commemorative halves. Compare that to the number of numismatic products available from the US mint today. I didn’t count them all, but there are at least 20 different items you can purchase. Someone is buying all these items or the mint wouldn’t be producing them. This tells me there are a lot of collectors, beginners and advanced, picking up these coins.

Another important factor is the international market place. We sell quite a few coins each month over eBay and about ten percent of our sales are to addresses outside the US. I’m not trying to say that the international sales of C&D Coins are significant enough that it is upsetting the international flow of collectable coins. However, this tells me that most internet based dealers are also selling many coins overseas. Coins that are shipped to other countries probably aren’t coming back on the US coin market anytime soon. I see this international market coin market place spreading to more countries of the world with time. This will add many new collectors to the fold over the next decades. From what I have observed over the years, coin collecting is a fundamental human condition, not just a western society “thing”. More people with access to the coin market, via the internet, translates to more new collectors hungry for coins.

A factor that is working against the collector is that the supply of older coins is diminishing with time. This is due to damage and permanent loss, damage being the more common of the two. I personally know of more than one collection destroyed in home fires. This resulted in hundreds of coins being reduced to bullion value or blobs of metal. Another source of damage is cleaning. Many nice coins in the hands of the well meaning novice get harshly cleaned. This reduces their value and lowers the number of quality coins available. Once a coin has been cleaned, it is really hard to “unclean” a coin.

With the two factors of an increase in the number of collectors world wide and a decrease in the number of collectable older coins available, maybe the question isn’t “Who would he sell his collection to once he was ready to retire from collecting” but rather, “Can he find all the coins he wants for his collection before he retires”?

 

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Which coin price guide should I use to value my coin collection?

There doesn’t seem to be a shortage of coin price guides available to the collector and dealer. About a dozen come to mind immediately. To try to make sense of some of the information available to value coins I did a comparison for seven coins that are commonly bought and sold by collectors. What I wanted to discover was how do the price guides compare to actual prices of coins being sold. With only seven coins this isn’t an all inclusive statistical comparison of actual prices and the price guides, however, from this limited sample of coins you can get an idea of how well the price guides reflect the current price of coins.

The seven coins chosen are common coins most collectors would have in their collection. I purposefully didn’t include extremely rare, bullion related, or top end uncirculated coins. The price for these coins has a lot of variability due to market fluctuations and probably wouldn’t be reflective of what I am trying to uncover here.

Table 1 lists the coins used in this study. The column labeled “eBay Store” are actual selling prices realized during 2007 from our eBay store http://stores.ebay.com/C-D-Coins-and-Currency. The prices listed in the “Num. News Ad” come directly from display ads in Numismatic News or Coin World magazines. The last column labeled “Average” is just the numeric average of the eBay and magazine prices. All the prices include shipping and insurance. The average price should be very reflective of the current retail coin market for these seven coins.

Table 1 - Retail Prices


Coin

eBay Store

Num. News Ad

Average

1828 AU Half Cent 13 stars

$100.00

169.50

$134.75

1812 VG+ Large Cent

$82.00

$104.00

$93.00

1868 G Indian Head Cent

$32.00

$43.00

$37.50

1921-D G Walking Lib. Half

$257.00

$349.00

$303.00

1925 BU63 Stone Mountain Commemorative Half

$66.00

$83.50

$74.75

1872 VG Seated Dollar

$194.00

$244.00

$219.00

1924-S AU Peace Dollar

$59.00

$68.50

$63.75

Sum of column

$790.00

$1061.50

$925.75

Three commonly available price guides were chosen for the study. The first is the old reliable “Red Book”. Actually it is called “A Guide Book of United States Coins”. It has been published since 1947 and virtually all collectors are familiar with this guide. The second guide comes monthly in Numismatic News as an insert. Over the years, I have found it to be reasonably accurate on the retail prices of US coins. The last, but not least, is the Coin Dealer Newsletter (commonly called the “Grey Sheet”). The “Ask” prices are the suggested dealer’s retail prices. I used the most recent editions of each of the price guides. The last column is the average of the three price guides.

Table 2 - Price Guide Prices


Coin

2008 Red Book

Num. News Price Guide

CDN Ask

Average

1828 AU Half Cent 13 stars

$160.00

$135.00

$120.00

$138.33

1812 VG+ Large Cent

$85.00

$83.00

$72.00

$80.00

1868 G Indian Head Cent

$45.00

$37.50

$30.00

$37.50

1921-D G Walking Lib. Half

$300.00

$285.00

$280.00

$288.33

1925 BU-63 Stone Mountain Commemorative Half

$100.00

$85.00

$67.00

$84.00

1872 VG Seated Dollar

$220.00

$190.00

$230.00

$213.33

1924-S AU Peace Dollar

$70.00

$66.50

$55.00

$63.83

Sum of column

$980.00

$882.00

$854.00

$905.33

So what does all this tell us? The price guide from Numismatic News gives the closest average price ($882.00) to the actual selling price of the coins ($925.75) and the other two are a little over (Red Book) and a little under (CDN Ask). Does this mean we just should ignore the other two guides? Not really. Each price guide has its place for the collector and dealer. The Red Book is a classic and works well for retail prices of collector coins. The price guide in Numismatic News is free with the subscription and comes monthly. The editors of Numismatic News do a good job in keeping the price guide current. The CDN is the most expensive of the three but it comes weekly with current wholesale prices. So wherever you are at in the world of coin collectors, there is a guide that will help you spend your hard earned money wisely.