By Harvey Stack – Co-Founder, Stack’s Bowers Galleries ……
1965 – A Demanding Year
The year of 1965 in Numismatics was a very demanding year for Stack’s, with several things starting to churn.
The United States Mint stopped making dimes and quarters out of silver and reduced the silver content of the half dollar down to a minimum of 40%. All the dimes, quarters and half dollars struck in 1964 or earlier were left in circulation, but no others were struck in a precious metal. Like all things that are deemed to be scarce, the public, collectors, and refiners started buying up silver coins. Shortly after the announcement of the termination of silver coins by the Mint, hoarding and gathering together the coins of 1964 and earlier began in earnest.
As soon as they could be found, pre-1965 coins were removed from circulation, and the public awaited the inevitable rise in price so they could sell them at a profit. In the beginning, the value of the silver was not sufficient to melt them. Besides, it was illegal, anyway.
But people felt that the value of these coins would become profitable, and when you considered that great quantities of them were still out there, silver quickly became a hot item. Newspapers and other media “shouted” that this could be a great investment, and the public responded with further hoarding.
So coin dealers, hock shops and assayers around the country were usually cluttered with people looking to see if they could profit from silver coins. It took sometime before the market for silver started to creep up, and the buyers of the metal were offered tens of millions of dollars worth of silver coins. And these buyers initially sat on these coins, waiting for the Treasury Department or Congress to let the melting commence. They didn’t have to wait long.
Gold Coin Imports Become Restrictive
The second task demanding my time in those days was the work we were doing with our attorneys in Washington, D.C. to prepare for our action against the Office of Gold and Silver Operation (OGSO) and its restrictions on the importing of gold coins into the United States. What we did will be discussed later in this report.
Stack’s basically had a somewhat lean year in 1964 as far as major public auction sales went. Collectors were starting to worry that the Treasury might try to activate and change the Gold Reserve Act of 1933-4, which restricted the ownership of gold coins (unless you were a collector), since silver was being withdrawn from circulation. It was unlikely, but once frightened by regulation or confiscation, it didn’t take much for the rumors to swirl.
Fortunately, rulings came down that the OGSO was interested ONLY in gold coins that might be sent by counterfeiters to the United States, which they were empowered to stop. Additionally, you had the Secret Service acting to seize counterfeits that were already in the United States.
So I spent days and weeks in Washington to try to find out “how they arrived at determining counterfeits” and trying to seize them. They were not interested in numismatic coins. They had a list, which they did not distribute, so their agents could more quickly determine what was to be allowed and what was to be banned! YET THE LIST WAS NOT MADE PUBLIC! The question was: What were the criteria for them to license imports? What references were used? Did the Custom House have experts who knew what was true and what was false? These question remained unanswered. And out of the Dutch collection of 900 different gold coins of the world we were interested in obtaining a license for, only about 725 pieces were approved for entry. Which means 175 were rejected, sight unseen!
So our attorneys as well as ourselves demanded to know what was the basis of denial. That was what our lawsuit asked.
Fortunately, Stack’s had developed a good relationship with the Netherlands collector over the years and he agreed to wait for the outcome of the case. He didn’t want to break up the collection, and he respected that we were willing to spend the time and money to get his collection into the States. So we proceeded and were forced to wait, and wait, and wait!
Despite everything that was going on, Stack’s was still able to offer great collections at public auction. We were all excited that we would be able to continue our public and mail bid auctions !!
We started the year off with the sale of the Dr. Moser Lyons Stadium Collection, which was a splendid collection of United States gold, silver and copper coins.
Following that sale we offered a collection of very choice and rare specimens, formed by one Eugene Gardner, the same Mr. Gardner who later built another, even more extensive collection of rare, high-quality coins, sold just a few years ago. Eugene had a wonderful eye for quality, and he concentrated on well-struck, lightly toned coins that even today are considered among the finest known. His wonderful eye for quality showed in 1965 just like it showed in the 21st century.
In the spring of 1965 we sold the Grant Pierce Collection of United States gold, silver and copper coins at the Metropolitan Numismatic Show. Many of the coins in that set were bought from various collections that B. Max Mehl had helped build in the 1940s and ’50s, including the Renz Collection and the Atwater Collection. The Pierce Collection covered date sets and rare mint marks, and the highlight of the collection was his set of $3.00 gold, which was mostly in glittering proof.
We didn’t offer his set of Indian head and St. Gaudens coins, of $2.50, $5, $10 and $20 gold, as he gave those sets to his grandson. And just for the record: Grant Pierce was the president of American Standard, one of the largest American plumbling supply companies. He was an avid fisherman and hunter, and was often photographed for sporting magazines. Pierce had a wonderful collection of sporting rifles that he bought from Purdue Arms as well as other gunsmiths. He shared his coin collection with his family, and was a close friend of my father Morton.
Later in 1965 we sold the George Sealy Ewalt Collection (which featured both foreign and American coins), the Charles Kenzie collection and the Henry Kingman collection, all of which are today considered major pedigree collections.
J. K. Lilly Keeps Active
During the same year, we were fortunate to find a goodly number of coins for the Josiah K. Lilly Collection within all fields of world gold coins. Mr. Lilly visited us, as was his custom, in the early spring, reviewed the new aditions we had acquired and again we were instructed to deliver the coins to his home in Indianapolis and to continue adding to his collection. The number of coins he had acquired from 1951 to 1965 was well over 6,000 different gold coins of the world! He enjoyed adding different dates and mints from all periods that gold coins were struck. In early April, I made my customary delivery to him, helped him place the coins in the special coin trays designed for his growing collection and he looked forward to seeing us in the fall when he was on his way back to Florida for the winter.
At the shop we were all busy with cataloging, buying and selling over the counter, and expanding Coin Galleries, our specialty Foreign and Ancient Department. Norman, as I mentioned earlier, was a dedicated cataloguer and researcher and wanted to do his work in the offices rather than travel about the country (or the world, when neccesary) to serve our clients with their hobby.
Ben and I traveled with my uncle Joe to many of the shows about the country, and my uncle, having made numerous friends during his earlier days “on the road”, would go out with one of us to visit a client and pick up a collection or two.
My father Morton worked in the office, cataloging collections for sale, visiting with clients who came to do business over the counter, and oversaw our daily operations. His health was failing, and to do other than come to the shop every day he could was difficult and trying. But he was there virtually every day we were open to the public. He too, developed many friends who were collectors, and he was a cordial host to our many visitors.
Silver Speculation Enters the Numismatic Market
The coin market became very hectic, as the country became more aware that the change in our pockets could be more valuable than the face value printed on it. So daily, without a break, we had numerous offers to buy silver at a “hyped-up price” created by a new promotional atmosphere.
Several prominent people created a new marketplace for coins. There was Dr. Jerekke, who owned Iron Mountain Depository and started buying up the silver coins for future enhancement. Then there were groups who pooled their wealth and speculated with their stock and precious metal friends. The demand that they created caused silver to begin to rise, but it wasn’t until a new regulation was passed that they were able to sell at a profit.
The leaders in this new speculation were, of course, the famous Hunt Brothers of Texas.
So coin dealers around the country were overcome with questions from customers and their daily work was always interrupted (though many made money by buying and speculating themselves). But it was a real distraction to the numismatic business.
I should mention another distraction that disrupted the daily work. Silver certificates, those notes that were issued with silver to back them, became another speculative item. The U.S. Assay Offices had to redeem these notes. Many billions were still in circulation, but in order to control demand the Assay Office would not redeem these notes for less than $10,000 face value. A small premium initially was paid for each note, and the buyer then had to patiently accumulate the $10,000. This redemption was more valuable than silver was trading on the precious metals market.
Stack’s Continues to Sue the U.S. Treasury (OGSO)
During 1965, the Office of Gold and Silver Operations was short of help, and was very slow in issuing import licenses for gold coins. Collectors and dealers sometimes had to wait months for a license. Complaints started to rise. If the OGSO denied a license, then the dealer had to try to resell the gold coins outside of the country, often at a price lower than what he had paid initially.
We were always looking to add to Josiah K. Lilly’s collection, and when we found something that would enhance or complete a part of it in some way, we were never sure if the OGSO would allow it into the country. This was how it was with all the gold coins we attempted to import. We, like every one else, did not have the criteria upon which a license could or would be issued, and with the Netherlands Collection spoken of earlier, an entire collection was being held up because some of the coins could not be decided upon for importation.
It was because of this depressing state of affairs that we, together with others, decided to take action.
Our Lawyers in Washington filed papers, suing the OGSO and the Treasury Department for actions without explanation. The procedure was not just taking the matter to court; you had to file papers with your complaint, and then wait for an answer. The OGSO had 60 days to respond, and then our attorney had a similar amount of time to respond. This was the typical runaround that one can encounter when contending with or against the government.
To the surprise of our attorneys the Department did not have a Judge or a Hearing Officer to hear our case. We therefore had to wait until one was found. One was finally found in the Commerce Department. We filed our complaint with him and then had to wait for the judge to set a date. It was finally set for the early part of 1966.
NOW, DEAR READERS, YOU ARE BEING MADE AWARE OF WHAT A DEMANDING YEAR 1965 WAS FOR STACK’S, THE FAMILY AND MYSELF. WE HAD TO DIVIDE OUR DAYS INTO MANY PARTS, BUT ALL WAS DONE WITH THE SPIRIT OF WORKING IN AND HELPING DEVELOP NUMISMATICS FOR ALL TO ENJOY.
The next segment of “GROWING UP” will discuss some events that affected me deeply.