Market Analysis by CoinWeek …..
Hi folks. Today we wanted to draw your attention to the popular U.S. Peace dollar series and some collecting strategies for those who would like to buy uncirculated coins but stay within a reasonable price range.
To help, we’ve split the series into two periods and have created a graph that illustrates the relationship between the market price of coins in MS63 and the mintages reported for each issue in the series.
Why MS63
MS63 is traditionally referred to as CHOICE UNCIRCULATED. This is an uncirculated grade wherein a coin does not show wear from circulation but will have issues like bag marks or hits from when the coin came into contact with other coins.
MS63 coins can be attractive or ugly, but collector appreciation for the grade typically suffers when there is plentiful availability of coins in higher grades. We chose to focus on MS63 because it is the highest grade that allows for the construction of a matched set for all dates and mintmarks, with only one coin being what one might describe as a “stopper” or a “key”.
So let’s look at the series, broken down into early dates (1921-1926) and late dates (1927-1935) and discuss collecting opportunities for those of you looking to “pick” the series for a handful of interesting dates and for those of you looking to build a complete set.
Historic Background
On May 9, 1921, the same day that the Morgan dollar reentered production after a 16-year hiatus, Republican Congressman Albert Henry Vestal (IN8) introduced legislation proposing a silver dollar coin redesign.
The kernel of the idea to update the dollar coin design to commemorate peace came from coin promoter Farran Zerbe, who, in October 1920, had written a column for The Numismatist entitled “Commemorate the Peace with a Coin for Circulation”. Zerbe was piggybacking off of the idea of another hobbyist, Frank Duffield, who had called for the production of a circulating coin commemorating peace in the November 1918 issue of the same magazine. Zerbe’s plan was, however, more specific, and given Zerbe’s penchant for promotion and government connections, his lobbying held more sway.
Vestal was never able to carry the bill to passage, but his position as chairman of the House Committee on Coinage gave him the latitude to move forward with a plan to change out the design of the silver dollar with a new one promoting peace. Treasury Secretary Andrew Mellon and Mint Director Raymond Baker endorsed the idea and a design competition was held for three weeks starting on November 23.
A virtual who’s who of American sculptors submitted designs for the Peace dollar. Anthony di Francisci, a New York-based sculptor who had designed the Maine commemorative half dollar a year before, beat out Robert Aitken, Chester Beach, Victor David Brenner, John Flanagan, Robert Tait McKenzie, and Adolph Weinman. President Warren G. Harding chose Francisci’s design over the other finalists on December 19. Dies were prepared by the 24th, with coin production beginning on December 26 and running through the end of the year. In total, 1,006,473 Peace dollars were struck in 1921 and on January 3, 1922, the new design was released into circulation, with President Harding receiving the first coin.
After the initial rush to produce coins based on the new design had passed, United States Mint Chief Engraver George T. Morgan made a series of adjustments to the design to improve the life of the dies. A small number of High Relief 1922 Peace dollars were produced, but the majority of the coins issued in the series’ first full year of production were struck with modified lower-relief hubs. This design change, coupled with the 1921 issue’s low mintage, rightly draws enthusiasm from collectors and is considered a TYPE coin. The lower-relief issues of 1922-1935 represent the second TYPE of the series.
Collecting at MS63
At the MS63 level, the Peace dollar series begins in a fairly straightforward fashion.
We have already mentioned the hurried and limited production of Peace dollars in the closing days of 1921. Our chart reflects a mintage of just over one million coins and a market price of $425. This price is reinforced by the fact that the 1921 issue comes in high relief, whereas the vast majority of 1922 issues feature the revised, lower-relief hubs. This makes the 1921 High Relief dollar a Type Coin and the version of the coin that comes closest to Francisci’s design.
Obviously, a complete set of Peace dollars would include an example, but one is also needed to complete a Type Set. Even if a collector wanted only two or three Peace dollar coins in their holdings, we’d recommend the purchase of a 1921.
Silver dollar mintages from 1922 to 1925, including all branch mint issues except the 1924-S, were produced at sufficiently high levels that there is little upside for dramatic price appreciation. These are the issues that a collector will most likely come into contact with in the Peace dollar series and are also the issues most heavily promoted to the general public.
Do these issues have any financial upside?
In some cases, yes. Popular varieties can be cherry-picked and nicely toned examples (read: shimmering rainbows, not mottled or drab examples with mere hints of color) always generate interest. But outside of these two categories, the upside of the aforementioned issues is limited.
A dealer can generate revenue by selling them in volume, but the individual collector buying coins like this at retail is entirely at the mercy of the precious metals market and will need to make up the difference between the cost of acquisition and spot before being in any kind of position to reap material gains from his or her investment.
To break it down, consider a hypothetical. Let’s say a customer a certified MS63 1922 Peace dollar is being advertised on a late-night cable coin show for $89. With today’s spot price of $17.32, it would take a significant increase in the cost of silver to make up the spread between the coin’s high markup and its intrinsic value.
That same coin might sell on a popular online market like eBay for $30-$40. Or it might sell for $70 or $80. The market can be a whimsical place; good luck navigating the irrational.
The back half of the Peace dollar series is where things really get interesting.
Outside of the 1921, which we think is necessary, the remainder of the issues through 1926 can more or less be ignored by those looking pick the series for opportunities.
In the issues struck from 1927 to 1935, there are a number of interesting issues where scarcity and price are fairly aligned.
For the Philadelphia Mint issues, the 1928 is the “key”, with MS63 examples commanding $650. Stretching to MS64 may be a good call here, as the cost increase is only $100 and it gets you that much closer to a gem. Gem 1928 Peace dollars are scarce and the price escalation from MS64 to MS66 is dramatic.
The 1928-S is a sleeper issue that has a higher mintage than most issues in the back half but is conditionally scarce in Mint State. Here an MS63 is a good buy. But as is the case with the 1928 plain, the MS64 is even better. For $900 you get a coin that is a few ticks away from costing $16,000. Q. David Bowers calls the grade before the jump grade the Optimal Collecting Grade.
At this point, we have recommended three issues: the 1921, the 1928, and the 1928-S. The final issue we would like to focus on is the 1934-S. In the MS63 through MS65 grade bands, this is a great coin. Very seldom encountered in Mint State, the 1934-S is the key to the entire series.
Coveted by most fans of the series (and out of reach for many), the 1934-S climbs in price in consistent increments from MS63 to MS65 and jumps to $28,500 in MS66. It is a coin with upside in all Mint State grades MS63 and above.
It would be the first coin that one should locate the “right” example of when building a set, as the appearance on the market of choice uncirculated examples with great eye appeal is not an everyday occurance.
If we could have only one Peace dollar in our collection, we would still pick up the 1921 due the issue’s fidelity to Francisci’s original design. But if we were making a play on the one coin in the series that we believed would appreciate in value after 10 or 20 years, we’d be foolish to ignore the 1934-S.
