By Harvey Stack – Co-Founder, Stack’s Bowers Galleries ……
A Dip in the Market
1981 became a very difficult and costly year to deal with.
Basic silver dropped on the world markets from over $50 per ounce to under $10 an ounce. Traders, speculators, and coin collectors felt the “sting” of this market downturn in a short few months, as speculators were forced to sell their “futures” and the raw material they bought on margin.
Collectors who tried to “strike it rich” on the value of silver were caught “short” and had to cover their losses with the actual sale of their collections or numismatic holdings. Many a bankruptcy occurred, and people lost confidence in the coin market. Actually, if one looks at the gold prices of the period they did go down, but relatively little.
But since most collectors had numismatic and silver coins in their collections, that was where the real hurt was happening.
The famous Hunt Family of Texas, who started the speculation some years before, were caught so short that each member of the Hunt Family, including their relatives, had to file for bankruptcy.
However, it is more important to talk about the numismatic collector, who, as the market declined, either held on to what he had or was able to add to his collection at lower prices than he could a few years earlier. Many a collection grew in size and quality. Nevertheless, it was a very upsetting environment in which to be a dealer. We had to watch the fluctuations in the metal markets while always asking ourselves: Can we resell these numismatic coins without also taking a loss?
We also had another problem. Many of our clients had open accounts with us, and in a good number of cases we had reason to worry that they could “go bad” and we’d sustain a loss. The drop in value was ruthless, and many a dealer and trader lost so much that they, too, were forced to declare bankruptcy, their shops and offices permanently closed for business.
Grading Cert Fraud Adds to Collector Concern
As far back as the early 1970s, an epidemic in misuse of grading information forced the American Numismatic Association (ANA) to convene a meeting in 1973 of about 50 professional dealers to examine the misgrading of coins that were sold by mail order houses, small dealer shops, and at small coin shows. At this meeting in Colorado Springs, the ANA created a forum that eventually resulted in a “third party” grading service called “ANACS”. Housed in the ANA’s Colorado headquarters, a professional numismatist would, for a small fee, accept coins for grading and return the coin to the owner, along with a certificate that presented the grade and a photograph of the coin.
The problem was that it was not possible to fix the photo to the coin. An unscrupulous vendor could then send the original “graded coin” back to ANACS and get it graded again. Then they would sell an inferior or “doctored” coin to an unsuspecting victim by using the original photo and certificate and many, many collectors were taken in by the scam. At one point a dealer boasted that he had over 14,000 photos and certificates (from multiple submissions of exchanged coins), and ANACS offered him $1.00 for each unused photo.
It became a well-known con, and the value of the photos and certificates began to depreciate – though not because the ANA did bad grading. Some of the perpetrators were caught and made to return the money to their buyers, but many simply flourished while they caused great uncertainty in the grade of ANACS coins being sold and many a client, especially those that were new to the field, were taken advantage of.
There did, however, exist a large number of professional collectors who were capable of deciding from their own experience whether the coin they were looking at was graded correctly or not, and they continued to sustain some sales in the market. But doubts existed, and many collectors preferred to chase coins that came from old-time collections, even at lower prices than earlier years.
It wasn’t until a few years after all this “scamming” became so prevalent that a group of prominent and well-informed collectors formed a new grading service called PCGS (Professional Coin Grading Service). It took a few years for PCGS to become acceptable to the mainstream of the hobby, but the encapsulation of coins in plastic holders (with the grade enclosed within the plastic, also) caused buyers started to return to the market with the much-improved assurance that they were getting correctly graded coins.
Public Auction Sales Maintained Some Levity
I list below the dates and general content of each Stack’s public auction sale from January to December of 1981. And since you will see that the value and extent of each sale lead to them getting better, this will give you a good indicator as to how the numismatic market regrouped and tried to recover the earlier price structure of a few years ago.
JANUARY 1981: We started the year with a comprehensive collection of United States gold, silver, and copper, consisting of 986 lots with many popular early dates and Proof items found in general collections. The attendance was great, some times standing-room-only, as collectors vied for bargains as each lot was sold.
MARCH: A larger group of consignments than in January, the March auction featured a comprehensive offering of United States gold, silver, and copper coins–some 1,395 lots–including a nice collection of U.S. paper money. Bid sheets did flow in quantity, and the saleroom had many buyers who also wanted to see how well this diversified sale would do. Many were surprised that the market for Proof and choice Mint State coins was very active, and the early date coins also attracted reasonable bids. It seems that the collector, though he could buy at prices below those of a year or two prior, had full confidence in bidding for and acquiring nice coins for their growing collections.
MAY: This was the special date for the Metropolitan New York Numismatic Convention in New York City, sponsored by nine local coin clubs from New York, New Jersey, and Connecticut. It was considered the most important spring coin convention held in the Northeast, and Stack’s was able to assemble some 1,358 lots for this important show.
For the foreign and ancient collector of gold and silver, we amassed some 639 lots and attracted many collectors who specialized in these series. For the United States collector, Stack’s offered full sets of Shield and Liberty nickels, plus many duplicates in Proof and Mint State and a superset of Two Cent pieces – not to mention a selection of coins from the Colonial period to the mid-20th century in all grades and completeness. The auction also featured a wonderful selection of U.S. gold, including some four different $50 Slugs. This portion of the sale had some 700 desirable lots and the participation by both attendees and mail bidders showed that interest in numismatics had continued, albeit at somewhat lower levels than before. In fact, we had to move the room for the U.S. Section sale as the regular ballroom was unable to accommodate so many collectors and viewers. I remember being the auctioneer at this sale and felt that I had to stay very alert and work hard to keep up with all the activity.
The convention dinner that night was oversold and a joyful event.
JUNE: For this late spring sale, Stack’s was able to assemble some 921 lots of U.S. gold, silver, and copper, highlighted by nice selections of Colonial coinage and early U.S. gold (from 1795 in both $5 and $10), plus a goodly number of scarcer dates.
JULY: After having two successful years with the Apostrophe sales–a joint auction alliance with RARCOA, Paramount, Superior, and ourselves–the foursome got together to have another offering in the Summer of 1981.
Each company was limited to offer 500 lots, a total sale to be a total of 2,000 lots. Each company did its best to get outstanding, rare and high-quality material and we were successful in doing so. Stack’s was lucky in getting more lots that, if sold individually, would exceed the limit of 500 per dealer. We decided, along with the consignors, that if we took some of the outstanding sets and SOLD THEM AS SETS the way the collector consigned them to us, then we could fit the consignments into the sale (for the record, during the 1970s and ’80s the price of individual Proof and Mint State coins was relatively low, so many a collector, in order to get a choice set and not have to search out the coins individually, bought many of what were considered “minor sets”). We offered the following as “sets”: ‘Two Cents, Three Cent Silver, Shield nickels, Liberty Head nickels, Buffalo nickels, Mercury dimes, 20 Cent pieces, and Peace dollars‘. Listed individually in single lots was an extensive group of Type coins, from the Half cent to the silver dollar, including an almost complete series of Proof silver dollars, 1855 TO 1921; Trade dollars in Proof from 1873-1883; and some complete year Proof sets as early as 1962 (with most up to 1915).
In addition, in the U.S. gold series, was a complete set of gold dollars in Mint State or Proof, plus a run of Charlotte gold. There was also a super offering of early $5 and $10 gold and an extensive offering of dates and mints for double eagles.
All in all, our section of “AUCTION ’81” was outstanding, complemented by rare and scarce offerings and quality coins of all United States series. It became a landmark sale as the prices were very strong. Each company received a massive amount of bid sheets, which helped the market regain interest in building and adding to collections. It indicated that the buyers were there, especially those who ignored the silver market and stuck to numismatics.
It was gratifying to us. To all of us.
SEPTEMBER: A valued collector whom we served for decades, whose offices were within a few streets from Stack’s, decided to sell his collection. It was assembled by Raymond J. Wayman, whose collection–which became a model for many to imitate–consisted mainly of U.S. gold $10 and $20 gold with an outstanding selection of U.S. Pioneer and Territorial coins. Ray Wayman had his office a few blocks from Stack’s and whenever he had spare time he would wander over to our shop to see if something new had arrived. He loved Mint State and Proof coins, but after trying to do only those grades, he came to realize that sometimes Extremely Fine or About Uncirculated were the best he could find. But he only wanted coins that appealed to his “own eyes” and would study coins from our auctions or stock carefully before adding them to his growing collection.
When Ray decided to retire, he decided to sell his coins as no one else in his family fully understood what he wanted.
His collection started with early eagles: 1797, 1799, 1800, 1801, 1802, 1803, and 1804. He continued on to the Liberty Head series from 1838 and assembled the best he could find. Ray then moved on to the Indian Head design, and though not complete, he had an outstanding 1907 wire edge with periods, a 1920-S, and a 1930-S.
In double eagles he was more complete, starting in 1850 and running through 1907 with many Mint State and rare mint marks, plus some Proofs to flesh it out. In the St. Gaudens series, he boasted owning an outstanding Roman numeral wire edge struck in Roman Proof, and several rare dates: 1925-D, 1926-D, 1926-S, 1927-S, 1930-S, 1931, and 1931-D, all in lovely Mint State.
Ray loved the history of our early Pioneer and Territorial coinage and finance. He amassed examples from the Bechtler Family, NGN, Mormons, Baldwin, Conway, Humbert, Oregon, Moffat, Parsons, Miner’s Bank, and other assayers of our early monetary issues. He read books, studied catalogs, and enjoyed owning specimens of historical importance. All this took time, but Ray found it relaxing and gratifying to own these gold coins.
Though the collection had just 446 pieces, the importance of the sale became an event, for few had been able to acquire what Ray Wayman had assembled. Specialists all made efforts to attend the sale and add a piece of history to their own collections.
OCTOBER: As I wrote in my article about 1978, Harold L. Bareford was a collector of premium and rare coins. He was always considered the Dean of Rare and Choice Numismatics and was willing to wait until the proper example, to his eye and personal evaluation, came to market. During the decades Bareford collected, he looked for the finest coins and competed heavily to add special pieces to his collection. He owned many coins with lengthy pedigrees, for he felt that those who collected before him, who cherished beautiful and rare coins as he did, set a goal for him as to getting superior examples. Bareford was successful in this approach, as shown in his December ’78 sale, and even more so in his 1981 Sale. His greatest rarity was his Class 1 Dexter-Bareford 1804 dollar, considered the finest known and always labeled the “King of American Silver Coinage”.
The offering of US Coins in 1981 was so spectacular that it attracted buyers from all parts of the country. There were but 626 coins in this part of his collection, and the competition was keen.
The United States Collection offered a small but high-quality group of 25 lots of Colonial coins, and was followed by a prize-winning set of US half dimes. Starting in 1794, his run of half dimes was almost complete in Gem Mint State and Brilliant Proof, with most of the coins originally acquired from the William Neil Collection, a landmark in and of itself.
The selection of dimes started in 1796 and was quite complete to 1916. The quality and beauty of this offering inspired many collectors. The dime collection boasted Gems and rarities from the following pedigree collections: Col. Green, Atwater, Neil, and Allenberger. The sale included a super offering of pattern dimes, over 50 different types, many not seen or offered for decades.
Following the dimes was an offering of 20 Cent pieces, a selection of early and Liberty Seated quarters, and half dollars. All being outstanding examples of their respective series.
The feature coins were then offered for sale. Harold Bareford loved the beauty and strike of the early dollars from 1795 to 1804, and tried to assemble as many different dates and varieties of these Early American issues. Though small in number compared with the known dates and varieties, there were some 21 early dates that the buyers fought for, one after another.
The highlight of the collection was the Dexter-Bareford 1804 dollar. Originally purchased by Bareford in 1950 at a private sale, in 1981 it realized $280,000 USD – a record price for a single coin sold at public auction.
After the audience applauded the sale of the coin, the room calmed down and a group of exceptional Liberty Seated dollars, including three Carson City issues, concluded the sale of US Coins.
The balance of the auction was dedicated to an outstanding collection of coins of Great Britain, commencing in 700 BCE and running to the early 1800s (after the revolution here in America). Harold Bareford was part of the United States Navy during World War II, and he had the opportunity to visit dealers and museums when he was off duty. The English series attracted him, and he started to assemble some examples while overseas and continued when he returned to America. Bareford assembled coins in silver and gold, representing most of the kings and queens of England, and though he had acquired only some 200 different specimens, his impeccable taste and purchases drew to New York a large assemblage of English dealers who represented major foreign collectors. The action for this collection was such that the 200-plus coins took almost three hours to sell. Many a record price was established.
As one of the founders of the Metropolitan New York Numismatic Convention (MNYC), he served as president for a number of years, as well as the annual toastmaster at their concluding banquet. He encouraged new collectors old and young with special exhibits and displays, not to mention lectures. Bareford attained the title of “Dean of Metropolitan New York Collectors”, an honor and title he deserved immensely.
DECEMBER: The strength of the coin market was re-established by the fall of 1981, fortified by our Auction ’81, the Raymond Wayman sale, and the Bareford sales. And for December, Stack’s assembled a two-catalog sale, one covering a selection of US gold. silver, and copper coins of nearly 1,100 Lots, and the second covering the Western Collection of United States gold coins (an additional 205 lots).
The early catalog of US gold, silver, and copper coins was a comprehensive offering of United States coins in all metals, which had series of dates and mints in all denominations. It was really tailored to the smaller but interested buyers who wanted to acquire some of the “missing links” to enhance or make their own collections more complete. The offering contained coins in various grades and therefore attracted a good audience and bid sheet response.
The second catalog of high-quality US gold in both Proof and Mint State condition was assembled over several decades of careful collecting. Featured within this special auction catalog was a complete collection of $3.00 gold in Mint State and Brilliant Proof, a set of Stella $4.00 gold consisting of examples of both the Flowing Hair (1879 and 1880) and the Coiled Hair Stella (1879 and 1880), which were sold separately. Following that spectacular offering was a range of $5.00 gold from 1795 TO 1834, which was followed by an almost complete offering of early eagles.
This spectacular group then led to the offering of early double eagles, plus a virtual complete offering of the St. Gaudens design, 1907 TO 1932, with superb examples including 1920-S, 1924-D, 1924-S, 1925-D, 1925-S, 1926-D, 1926-S, 1927-S, the excessively rare 1927-D, 1929, 1930-S, 1931-D, and 1932.
The sale concluded with the offering of a complete set of Proofs of 1895 in both silver and gold, and a complete set of Proofs 1903 in silver and gold (we were told that 1903 was his birth year). Each of the Brilliant Proofs in these two sets was sold individually.
Though the year began with the scare that the “silver Market” would endanger coin collecting, it finished off with a “bang” as collectors who were not silver speculators and who avoided the promotions on a daily basis knew that a coin collection, formed with care and dedication, would surpass whatever they might achieve dealing with the hectic uncertainties of gambling in the silver market.
We at Stack’s were great observers of the speculation and did what we could to preserve our capital and protect our clients from being tempted to give up coins. The year of 1982 would be a test of this.
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Links to Earlier Parts:
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