CoinWeek Podcast #138: Rare Coin Battle: The 1822 $5 Gold Coin vs. the 1870-S $3 Gold Coin

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It’s a battle of epic proportions today on the CoinWeek Podcast, as noted gold coin expert and author Doug Winter and I pit two multi-million dollar coins head to head to find out which great American rarity comes out on top.

Our competitors are the 1822 half eagle and the 1870-S three-dollar gold coin.

Which of these coins will come out on top? You’re about to find out next, on the CoinWeek Podcast.

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The CoinWeek Podcast is brought to you by PCGS.

This episode of the CoinWeek Podcast is brought to you by PCGS.

PCGS is proud to announce the upcoming dates of its next PCGS Members Only Show, which will be held from Tuesday to Friday, August 4-7, 2020 at the Bellagio Hotel and Casino in Las Vegas, Nevada.

The PCGS Members Only Show is a great event with many of your favorite PCGS dealers represented. Also on site are PCGS’ world-class graders, who will be there to grade your coins on-site!

Of course, you will want to take all necessary COVID-19 precautions and the organizers will be following enhanced health and safety measures. To learn more about this important event, go to www.pcgs.com to learn more.

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The following is a transcript of Charles’ conversation with Doug:
 

Charles Morgan: This episode of the CoinWeek Podcast is brought to you by PCGS. PCGS is proud to announce the upcoming dates of its next PCGS members-only show, which will be held from Tuesday to Friday, August 4 through August 7, 2020, at the Bellagio Hotel and Casino in Las Vegas. I personally attended the PCGS members-only shows in the past, and it’s a great exclusive event with many of your favorite PCGS dealers present. And, of course, PCGS’s world-class graders will be on hand to grade your coins.

Of course, you will want to take all necessary COVID-19 precautions and the staff and dealers present will be following enhanced health and safety measures. To learn more about this important event, go to www.pcgs.com.

It’s a battle of epic proportions today. On the CoinWeek Podcast, noted gold coin expert and author, Doug Winter, and I will put two multimillion-dollar coins head to head to find out which great American rarity comes out on top. Our competitors today are the 1822 Half Eagle and the 1870-S $3 gold coin. Which of these coins will come out on top? You’re about to find out next on the CoinWeek Podcast.

Charles: Hi, Doug. Thanks for joining me on the CoinWeek Podcast.

Doug Winter: Thanks for having me. Appreciate it.

Charles: I figured today we’d have a lively conversation, comparing two great gold coin rarities, the 1822 $5 gold coin and the 1870-S $3 gold proof and discuss which is the better gold rarity.

Doug: Well, I’m going to pretend to ruminate for three seconds, but the answer is the 1822 Half Eagle. Boom, mic drop, end of podcast.

Charles: [laughs] In all seriousness, when we talk about these coins, I think it’s very interesting to compare them. It’s fascinating to think about who has owned these coins. How much these coins have brought at past auctions. And the ways for the 1822 $5, availability of the coin has dramatically declined in recent years. And for the 1870-S, there’s still some mystery behind how the coin came to be available to the public.

To familiarize our listeners, by the way of background, here’s my rundown of each of these coins, and I’m sure, Doug, you will add immensely to my coin narratives.

The 1822 $5 gold coin features that classic portrait of Liberty. It’s a beautiful design from the early days of the US Mint. The finest example known is in private hands and was graded AU50 by PCGS. The coin has appeared in auctions in the past and it was the highlight of the Eliasberg collection, and one of only two coins from the Pogue sale that the family did not let go of. And this was due to very high reserves placed on the 1822 $5 and the child specimen 1804 $1 proof. The bidding at the Stack’s Bowers/Sotheby’s sale in 2016 for the 1822 $5 reached $6.4 million, and I think that’s without the dues before failing to meet the reserves. I’m not sure that anybody outside of the Pogue family or Stack’s Bowers/Sotheby’s knew exactly what the reserve level was. I know it wasn’t announced for the sale. Many of the dealers I talked to told me that they were not privy to that number.

Interestingly, that coin was reportedly purchased by the Pogues for $687,500 in 1982. That’s when it was sold in the Eliasberg sale. And that was quite a lot of money for a coin back then.

The other two known examples of the 1822 $5 gold coin, which comes from a mintage of 17,796, or coins that were owned by Josiah K. Lilly, whose estate donated his collection to the National Numismatic Collection after his passing, and the coin that was held in the US Mint cabinet, which was cared for for a long time by Adam Eckfeldt. This one is also impounded in the National Numismatic Collection. So the only available 1822 $5 gold coin, the only one a collector can own is the Eliasberg Pogue example in AU50.

As for the 1870-S, this is a coin with a mintage of one, possibly two, but probably one. This coin is very unusual, in the fact that it was supposedly struck to be placed in the cornerstone of the then-new San Francisco Mint building. But if that story was true, and that was the case, then how does this example end up in private hands? The coin has been pedigreed back to the 19th century. Eliasberg was offered this coin twice, he had to have it for a set, and he bought it from Stack’s in 1946.

Eliasberg’s 1870-S, the only one known, sold for the same amount in 1982 at his auction that the 18.25 did, $687,500. The coin was purchased by Harry Bass who also was a major collector and enthusiast of gold coins. Both of these coins are considered comparable in terms of the price realized and their importance in 1982 when collectors were offered them. So, why then, Doug, is the 1822 the Gold Coin Rarity for you today?

Doug: Well, it’s a coin that’s got no controversy. It’s what is referred to as the Fat Head Fives of that era and that design, are melt rarities. Melt rarities, meaning that virtually every coin was either unreleased or was just in circulation for a short period of time, and then recalled and melted in around 1834, 1835. So, the published mintage figure in 1822 Half Eagles is probably incorrect. It’s probably lower than 17,000. I believe that some coins struck in 1822 or either dated 1821 or dated 1823, and the 1823 is a rare but obtainable coin, the 1821 is a very rare but sort of obtainable coin.

The 1822 is a coin that it has no controversy associated with it. It’s a legitimate coin. It’s a coin that was made for circulation. It’s a coin that no rumors have come around for generations of a coin becoming available. It’s just the classic American rarity. Just also not to stick a knife in your argument but the 1870-S, if it were sent in for grading would be a no grade, because it’s essentially a jewelry piece. Whereas the 1822 in the Pogue sale is really a very attractive coin.

Charles: Well, you’re absolutely right. It’s an attractive coin. There’s no disputing that. On the other hand, there are very few, if any, good photographs of the 1870-S $3 gold coin available online. The coin does have, if you’ve seen it in person, a pebble appearance and it has what appears to be damage from a jewelry mount. On the reverse, the coin has been defaced with graffiti.

Doug: The coin is actually– it’s on exhibit at the American Numismatic Association Museum in Colorado Springs. So, I’ve seen it at the museum and obviously it’s a very important significant coin, but it’s really not an especially attractive coin. Given the fact that the 22 is a really attractive coin, I believe that would make most people– if they had a chance to obtain one or the other, that most people, I believe, would probably take the 1822 based on its appearance.

Charles: One of the things I find most interesting about the 1870-S is that there is no clear-cut documentation for why it was struck in the first place. There’s innuendo and the mintmark, which is found on the reverse of the coin is unusual. It’s unlike any other S mintmark found on coins of the period.

Doug: It appears to be hand engraved. So that’s something that’s always been interesting to me, the fact that– sort of like the 1854-O Huge O quarter, which is a mintmark that was clearly added by hand in New Orleans. This appears to be struck from Philadelphia dies with the S mintmark probably added at the mint in San Francisco for whatever reason.

Charles: I’m going to put forward a potentially controversial opinion. I don’t know if you’ll agree with me, but you might, as a rare gold coin dealer. I think in the astronomically unlikely event that another 1822-5 or another 1870 $3 gold coin, especially ones that are attractive and mint state and gradable [chuckles] that the discovery of either one of these coins would be a bigger deal than the potential discovery of an as-of-yet unknown 1804 $1. Do you agree with that?

Doug: 100%. I don’t even have to think about that.

Charles: What would you say the market value of such coins would be? Of course, the market made the determination of the value of the 1822-5 in 2016. It was what might turn out to be a once-in-a-lifetime opportunity to purchase that coin, and yet the Pogue family felt that the bid was not enough. I’d read presale estimates that the 1822-5 could have brought upwards to $10 million, a price only reached today by the Cardinal 1794 $1 which will be up for sale again soon. That coin at that point had sold a few years before. Every major player in the numismatic market had a shot at that 1822-5, and yet, no one were asked for whatever that number was that the Pogues want. Do you think that if the 1822-5 had been a mint state coin, that the story would have played out differently at the Pogue sale?

Doug: Hard to say. In theory, the grade of that coin shouldn’t really matter, although I guess it really does. But if it were a gem coin, if it were the quality of virtually all the other Pogue coins that almost every early five in the Pogue sale graded at least 64 and most coins graded 65 or even 66, I would think if the 1822 had just been a stone-cold gem coin, it would have had no trouble reaching the reserve.

There seems to be a feeling amongst people swimming in that deep end of the pool that if you’re going to spend $8, $9, $10 million on a coin that it needs to be a gem, I’m not sure that I agree with that. But I do think that that’s something that probably held that coin back. I think it’s something that would work against the 1870-S in a market that is so condition oriented as it is in 2020. I think that despite the fact that coin was an amazing rarity, I think its general ugliness would probably make itself for considerably less than the 1822.

Charles: Let’s put that hypothetical to the 1870-S. Assume a second coin is found, and the second one is a specimen strike with great fully struck surfaces and is a locked gem. Are we looking at a $6 or $8 million coin there?

Doug: I’ve got to say yes. The current batch coin– I think the best comparable to that is the 54-S $5 that turned up a couple years ago. That coin is obviously a little less rare, but it was not a no grade, but it wasn’t a really super attractive coin. And it brought, I think, around two and a half million. My guess would be that the 70-S would bring certainly more than that. But I would take the under, it’s probably 5 million.

Charles: How do we arrive at these types of numbers for rare coins? It seems to me that the fives are more popular than the $3 gold coins. But then, you get to the point where absolute rarity plays a very big role in the culture of collecting. And this is where I think psychologically, we begin to accept these values. So, does the fact that the 1870-S belongs to such an oddball denomination hurt its potential value?

Doug: I would tend to think yes. It’s sort of an oddball coin. It’s not an especially attractive coin. I think the thing that probably hurts that coin more than anything else is, for a coin to bring $5 to $10 million, you obviously need a few people bidding and you probably need somebody bidding outside of the typical realm of the numismatic buyer. The 1933 $20 that sold, the rumor has always been that that coin was sold to someone who’s never bought another coin. If the pool of bidders were expanded to include non-numismatic buyers, I think you would see crazy record prices. I think it would be very difficult to get somebody that knows nothing about coins excited about a no-grade 70-S $3.

On the other hand, I could possibly see somebody getting a little bit more excited about a nice, warm AU 1822 Half Eagle. The bottom line is, $5 million to $10 million is a lot of money to spend on a coin. And it’s especially a lot of money for a coin that’s esoteric and not particularly good looking. So, that’s what I think, probably holds back the 70-S more than anything.

Charles: What if neither of these coins ever came back to the market? This is always the risk, when a rarity is sold to a collector. You can’t control what somebody’s going to do with one of these rarities once they own it. If neither of these coins are ever made available again to collectors, do you think that hurts the rare coin market?

Doug: I really wouldn’t think so. This is at such a high end of the market that I don’t ultimately think it matters. I think people are still content to collect early $5s and $3 gold pieces knowing that they’ll never be able to buy a 70-S or an 1822. I don’t think that lessens the accomplishments of collectors that have put together world-class collections of those two series that they don’t have a 70-S or an 1822.

Charles: Well, it certainly speaks to Eliasberg’s accomplishments if you ask me. Of course, he had the Clapp collection which is hand built and ready-made any purchase it in full. He had expert and professional help along the way, with a big impact played by the Stack family. It’s amazing to think that the entire Eliasberg collection was built for a reported sum of $450,000. Today, $450,000 will be like the downpayment on a handful of coins from that set, you couldn’t do it. You wouldn’t even come close to building the Eliasberg collection today on that sum of money.

Doug: Yeah. The advantage that Louis Eliasberg had was that coins were cheap in the 40s and 50s. When he was in his prime, there were very few coins priced at over $2,500. So, even when Harry Bass first started collecting, coins were a lot less expensive than they are now. Even somebody with virtually unlimited resources just runs into the ultimate fact that there’s a lot of six and seven-figure coins now which makes the collecting of an in-depth, multi-specialized collection all the more impressive in today’s economy.

Charles: So, we talked for the past 15 minutes about two of the great gold coin rarities in the US series. What is your quick hit of a nice $3 gold coin or a nice Fat Head $5 gold coin that the rest of us should be looking for to add to our collections?

Doug: Well, I really like the $3 gold series. It’s a series that I’ve bought and sold a ton of interesting coins. Right now, prices have dropped a lot on really nice coins, so you can buy a really pleasing MS64 common date, and the common date meaning an 1854, an 1874, an 1878, or an 1888 $3 gold piece and MS64 for around $4,000 which is a fraction of what these were worth before. And then, the MS64 $3 gold pieces are really, really attractive. You’re talking a coin that’s virtually gem quality and really nice.

I would say for most collectors, I’d spend a little bit more and maybe look for a slightly better date, something like an 1856 or an 1857, 1859, one of the low-mintage dates from the early 1880s, and say MS62 or MS63. It’s a $3,000 to $6,000 level. You can get a lot of bang for your buck in $3 gold pieces.

In Half Eagles, the Fat Head coins, the 1881-S $1 of that series is the 1813. By that, I mean that of all the Fat Head Fives that exist, at least 50% of them, maybe more, are dated 1813. It’s a fairly obtainable coin. A very nice AU coin can be purchased for around $9,000 to $12,000. If the collector is willing to go up into the mid to high teens, there’s a sequence of about five or six dates that include the 1814– actually it’s an overdate to 14/3. The 1818, 1820, or 1823, that the coins can be bought in choice AU to lower-end Mint State for around $15,000 to $20,000. And then just about any other date in that type is rare to extremely rare and gets very expensive very quickly.

Charles: The great thing about that series is that these are coins that were struck before the mint installed their steam presses and that gives these coins tons of characters as they are more artisanal.

Doug: Agreed. The pre-1834 US gold coins are essentially handmade versus post-1834 gold coins which are more machine-made and there are a lot of interesting varieties in the Fat Head Fives. 1820, I believe is the most prevalent year for die varieties. I think there’s eight or nine different die varieties and three major types. But it’s a very interesting series. If a collector has a budget of around $30,000 to $60,000 per coin, a lot of the dates are available. It’s a really fascinating series. Interestingly, when these coins come nice, and there are some beautiful gem coins from the 18 teens and 1820s and early 1830s, they come unbelievably well made with great color, great luster. A gem Fat Head Five in my opinion is one of the most beautiful early American coins.

Charles: Well, folks, that sums it up from us. If you want to put one of these great gold coin sets together, I’m sure Doug would love to talk to you. I’d like to thank you for joining us on the CoinWeek Podcast this week. I know this was a lively and robust debate. But at the end of it, Doug, I think I just have to agree with you, the 1822 $5 is the clear winner of this rare coin rivalry in my book.

Doug: Thank you, Charles. Always nice talking to you.

Charles: Thanks for joining us.


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