By David Thomason Alexander for CoinWeek …..
In Part One, I discussed the beginnings of popular coin collecting in America in the late 1850s. I also discussed the birth of the coin dealing market and the origins of several coin clubs and organizations in the latter half of the 19th century. And of course, I mentioned the development of an objective numismatic literature to provide guidance to the collector.
In Part Two, I take us into the 1950s and the Golden Age of the hobby as we have known it in America…
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6.) Expositions and Commemoratives: 1892-1954
The World’s Columbian Exposition in Chicago was the launch site for the nation’s first commemorative coins: a half dollar and quarter honoring Christopher Columbus and his royal patroness Queen Isabella of Spain, respectively. For the first coin, U.S. Mint Chief Engraver Charles Barber appropriated a fictitious bust of the discoverer from Olin Warner’s exposition directors’ medal and adapted his squashed ship from Warner’s participants’ medal for the reverse. The queen’s bust was adapted from her gold coinage to grace the quarter.
Neither design was especially elegant but the public controversy about the coins actually centered on their issue price of $1 each, which seemed forthrightly dishonest to the fiscal conservatives of the time. A satirical rhyme captured their indignation: “The Half of ’92, the coin that had to do, the disc that stopped the wheels of Congress for a while! Will you see it at the Fair? Will it buy a dollar there?!?”
Chicago had to learn a great lesson: world’s fairs never make money! As it turned out, tens of thousands of Columbian halves held by Chicago banks were dumped on the public at face value as the fair limped to its end, generating impotent fury among those who had paid issue price.
Subsequent expositions hailed Lewis and Clark, the Louisiana Purchase and above all the Panama Pacific Expositions. The last marked completion of the Panama Canal and was made memorable by its array of gold commemoratives ranging from one dollar to two massive $50 gold pieces that were beyond the reach of most coin collectors and which sold poorly among those who could afford them.
The public was now aware of commemoratives and dozens of new issues appeared from 1920 through 1954, nearly all as silver half dollars. Some marked significant anniversaries; many more were devoted to local themes that seemed trivial to most collectors. Issue prices generated anger and reports of manipulation and profiteering roused collector opposition. Issues such as the Boone, Arkansas and Texas half dollars continued to be struck year after year, bearing varying dates and mintmarks to generate further controversy.
The boom in commemoratives was not accessible to all collectors, even before the collapse of the U.S. Economy in 1929. Fifty cents was 50 cents, a significant sum, especially after “Brother, can you spare a Dime” became a wry but realistic commentary on unemployment and bread lines across the nation.
World War II stifled further issues, and postwar coins honoring black Americans Booker T. Washington and George Washington Carver sputtered along in 1946-1954. Exasperated by years of colorful shenanigans involving commems, few collectors mourned the seeming death of commemorative coinage in 1954.
7.) Coin Boards and the Great Depression
The dramatic expansion of popular-level coin collecting in the depths of the Great Depression might seem puzzling to some readers, but the economic downturn actually brought vast numbers of new collectors from the lower ranks of American society. This dramatic shift was the result of the sudden fad for coin boards that held the most common of coins, the Lincoln cent then in circulation.
Coin albums had been invented decades earlier and had been marketed first by Martin Luther Beistle of Shippensburg, Pennsylvania, until he sold the product to Wayte Raymond, who marketed them as the National Albums. Such albums were costly, as were many of the coins to fill them. The true revolution was caused by the vastly cheaper “Penny Boards” that snobs described as “both inexpensive AND cheap!”
The boards were the invention of Joseph Kent Post of Neenah, WI, an engineer and coin collector. They were made of cardboard with colorful face imprints and die-cut holes to hold each date and mintmark struck from 1909 to 1935. Virtually anyone could scrounge up a few “pennies” to fill the holes or keep searching until they did.
The boards were open-faced, the colorful fronts bearing data about each date sought. Cents were pushed into the tight-fitting openings until all were filled. A veteran of that era, the late Art Kagin of Des Moines, Iowa, told this writer how the system worked. A customer bought the board for about a quarter, then headed out to start filling the holes. When filled, the board was returned and bought back by the dealer for the numismatic value of the cents.
Likely as not, the customer would buy additional boards to fill and began the cycle again. Filling boards with higher denominations was more costly and with the return of prosperity after the war the penny board quietly faded away.
8.) Market Fads of the 1950s
By the 1950s, postwar prosperity had the U.S. coin market beginning to boil. Coin buyers without much experience but with money to spend were swept up in two major fads that illustrated how overheated markets can go. In 1950-55 there were only two monthly numismatic periodicals that mattered, the ANA’s Numismatist and Numismatic Scrapbook, published by Lee F. Hewitt in Chicago.
There were no electronic networks, no weekly newspapers to speed up fermentation. Not long after they were issued, word got out that 1950 Jefferson nickels struck at the Denver Mint had the lowest mintage of the series up to that point at 2,360,000 pieces. Few had entered circulation, since well-connected dealers swallowed up many mint-sewn bags of these nickels.
Famed numismatic researcher Walter Breen published the information that one Milwaukee, Wisconsin dealer had squirreled away 8,000 rolls of these coins – 160,000 pieces in all. Two facts emerge from this statistic: the coins were by no means rare, though of comparatively low mintage as modern coins go; and most coins in existence were Uncirculated. Indeed, circulated 1950-D nickels were scarcer that brilliant Mint State examples!
1950-Ds peaked at $30 to $36 each (or $1,200 to 1,400 per roll) until they crashed in 1956. A leading professional numismatist, the late William Fox Steinberg of Miami, Florida, contributed a letter to Numismatic Scrapbook’s popular annual “Crystal Ball” suggesting to collectors who had just lost substantial amounts, “Next year stop worrying how many nickels the Mint is going to produce! Just enjoy your coins and good health!”
Vastly greater amounts were lost in the 1957 collapse of the Proof set madness that drove prices for 1936-1942 Proof sets to dizzying heights and attracted hordes of newcomers to the postwar sets that were being produced in increasing numbers each year.
Although the U.S. has long boasted of its capitalist economy, the U.S. Mint has frequently deplored coin collectors making–gasp!–PROFITS! By 1957, older Proof set values had risen skyward, inducing Prudential Life Insurance to purchase more than 100,000 sets out of the 1,247,952 sets produced with an eye to making money for its clients. By issuing more than a million 1957 sets, the Mint broke the Proof set boom.
9.) Auction Adventures: The 1954 King Farouk Sale
Auction sales have been foundation stones of the U.S. numismatic world since the 1850s, and whole books have been devoted to them. However, one particular sale of major American interest stands out for its exotic locale, ownership and setting. This was the event entitled The Palace Collections of Egypt, sold in Cairo, on February 24, 1954 by A.H. Baldwin & Co. with catalog by Sotheby and Co.
This was the coin collection amassed by King Farouk (reigned 1936-1952) who had begun his reign as Egypt’s second monarch amid fervent acclaim as a refreshing contrast to his tyrannical father King Fu’ad. Then a dynamic, physically robust young man, Farouk, whose name translates “He who knows right from wrong”, was seriously proposed as candidate for the vacant post of Caliph of Sunni Islam.
Egyptian political life was complicated by an overwhelming British influence, which included an army in the Suez Canal Zone and a de facto British viceroy keeping an eye on the king. Farouk’s policy was to continue extending his country’s de facto independence without triggering a military backlash.
World War II brought disaster as most Egyptians fervently wished for an Axis victory and backed the German Afrika Corps under Field Marshal Erwin Rommel as it prepared to invade Egypt. Only by surrounding Abdin Palace with British armor did Ambassador Sir Miles Lampson forestall Farouk from going over to the Germans.
Reduced to a helpless puppet and suffering physical deterioration after a jeep accident, Farouk drifted from failed marriage to failed marriage, seemingly helpless to steer his ship of state away from the waiting rocks. Military disaster in Palestine in 1948 further weakened the throne and not even the birth of a son could stave off ruin.
Collecting provided relief and the king bought coins with enthusiasm, largely under the direction of New York-based dealer Hans M.F. Schulman. Scion of a famous Amsterdam numismatic dynasty, Schulman steered the king into American coins, buying heavily in gold and silver, nickel and copper regular coins, Proofs, and above all, patterns.
There is no evidence that the king ever viewed his coins as more than glittering baubles, learning little about them and publishing nothing. All purchases were brutally scrubbed by his court staff, and put away with the same solicitude as the carefully ironed condiment and champagne labels he also preserved.
The monarchy was overthrown in July 1952 by conspirators calling themselves the Free Officers, headed by General Muhammad Naguib and Colonels Abdel Gamal Nasser, Abdul Hakim Amer, and Anwar Sadat. Farouk sailed into exile while the colonels began holding political trials and plundered the royal collections.
Despite the official anti-British mania of the new regime, the sale of the coins was entrusted to the British firm of A.H. Baldwin & Co., who delegated cataloging to veteran numismatist Fred Baldwin of Sotheby & Co. The cataloger brought no books to his task, though American dealer John J. Ford Jr. expressed some titles, notably the Adams and Woodin work on U.S. Patterns.
A very few Americans were permitted to enter Egypt as bidders, including Abe Kosoff, Sol Kaplan, Robert Schermerhorn, James P. Randall and a youthful John Jay Pittman of Rochester, New York, who took out a second mortgage on his home to finance the trip.
Baldwin divided up the vast collection into 2,798 lots covering 310 printed pages with 72 black-and-white photo plates. Creating group lots on a grand scale, Baldwin reduced the U.S. coins to 560 lots, jamming fantastic rarities into a sea of common coins. Photography was generally hideous, reducing all coins to blobs of what appeared to be cloudy Jell-O.
Not photographed were two classics: Lot 185 included 19 gold double eagles ($20 pieces) beginning with 1924 and ending with “1933. Mostly Extremely Fine.” This grade in English terms meant Brilliant Uncirculated. As exciting was lot 1695, ”Five Cents nickel (116), dates 1866-1938 D, as detailed in the National Coin Albums, also added to the collection are 1913 Liberty head, extra fine and extremely rare…”
Sale date was set at February 24, 1954 at Koubbeh Palace in Cairo. The colonels had expected to realize $200 million, but ignorance and paranoia interfered with lot viewing and bidding, bringing the total realization to only $2 million. Foreign bidders were scrutinized if they were admitted to Egypt at all and trigger-happy soldiers intimidated the lot viewers at every turn during three days of bidding.
The 1933 gold double eagle was withdrawn and supposedly turned up decades later in England. After much cloak and dagger work it was permitted to be cataloged in New York by Stack’s for Sotheby’s where it realized $7.4 million.
10.) Silver Dominates the Headlines
In 1965 the U.S. Treasury announced the effective removal of silver from U.S. circulating coinage. The precious metal had been showing volatility for several years, beginning energetic runs on the seemingly inexhaustible store of silver dollars that had reposed in treasury vaults since the 1890s and later. Redemption of paper dollars (silver certificates) was succeeded by redemption of the notes in silver granules before all such redemption was simply cancelled.
Coin collectors were loudly blamed by Mint Director Eva Adams. Mintmarks were abolished and dates frozen – though the real cause of the “coin shortage” was actually the immobilizing of cubic volumes of coins in vending machines.
After endless studies, the Mint announced adoption of a complex “sandwich” alloy of copper-nickel clad copper for the dime, quarter and ultimately half dollar (remember half dollars?). Spokespeople blithely assured the public that hundreds of millions of .900 silver coins would remain in circulation. The new clad coinage signalized the greatest sea change of U.S. coinage in history and logically closes out this historical review.
Morgan Silver Dollars Currently Available on eBay
“Remember half dollars”? Definitely! In retrospect the MInt committed two huge blunders that doomed the denomination.
First, the coin’s composition should have been immediately changed to clad cupronickel like the dime and quarter. By adhering to the fiction that silver coins would co-circulate and insisting that the half should retain the metal (albeit at reduced levels) as a “prestige” coin ensured that huge numbers would vanish into melting pots. Additionally, the half’s continued production in silver for half a decade cemented the myth that even post-1970 coins were valuable, leading to continued hoarding.
Second – and I realize how politically and emotionally difficult this step would have been – the 1964 issues should have been declared to be a one-year memorial program, with the Franklin design returning with the 1965-dated coins.
Perhaps, IF Congress ever develops enough spine to stand up to the special-interest lobbies and discontinue both the cent and $1 bill, a new, smaller-size 50¢ piece could eventually rejoin our coinage system and shrink the oceans of quarters we often have to carry. But I dream …