By Harvey Stack – Co-Founder, Stack’s Bowers Galleries …..
Links to Part 1 | Part 2 | Part 3 | Part 4 | Part 5
Interest in Coins Starts to Grow Again
Numismatics started to grow all through the 1950s. Many of the servicemen who were stack’s collectors before World War Two returned home, settled down to their regular working jobs, started to raise families and dedicated themselves to re-starting their hobbies. It was a wonderful feeling to see them rejoining their fellow hobbyists, as we renewed our friendships from years gone by.
The advent of their reappearance in the market helped the growth once again of the fun and relaxation of coin collecting.
But besides the normal growth of interest that added some five to 10% each year to the value of many coins, there was a speculative fever that emerged during this period that added people to the hobby and wreaked havoc with the way one dealt in coins.
Rage to Own Quantity
Because of the war the United States Mint had stopped making special Proof Sets between 1942 and 1950. Some 21,000 Proof Sets were struck in ’42, and when they started again in ’50–with the beginning of revived interest in numismatic collector sets–51,000 were struck, which indicated that the demand for these sets had more than doubled. Collectors loved to buy the Proof Sets direct from the Mint, where $2.10 bought them a cent, a nickel, a dime, a quarter and a half dollar (the last three made in silver, of course) for a bit over double face value direct from the Mint. Dealers also paid the same price, and we kept them in stock as an accommodation for our customers. Our price at the time was usually about $3.00 per set to cover cost of purchase, stocking and shipping. It was a wonderful reintroduction to collecting.
But speculation hit the market by 1955, when some 700,000 sets were struck and sold by the Mint. Many, many more than there were collectors for them!
Nevertheless, at $2.10 per set it became a major speculative item.
Collectors AND speculators bought the sets in quantity, in lots of five, 10, 50 and 100, straight from the Mint. About half of the sets were packed in boxes like the earlier dates, while the other half were pack in a flat pack envelope. Yet at $2.10 per set (91 cents face) and a bright finish, how could you go wrong?
But the trading of bulk groups of Proof Sets was for the initial time just another idea for the speculators. I remember that the supply was so great that some “investors” sold theirs below original cost, for the supply seemed unlimited.
In addition, by 1955 clients started to buy ROLLS of current and near-current dates. These were soon traded, and even BAGS were being offered as an investment. S. Feinberg in California and Max Hirchhorn in New York hoarded rolls and bags, and tried to create a market for a profit. So blind were the investors who were promoted into rolls and bags–and bulk lots of Proof Sets–that no one seemed to consider that the numbers struck far outnumbered the collectors interested in buying them from the Speculators.
It got so grossly over promoted that even a dealer named Sol Kaplan of Ohio set up a “tote board” at the 1955 ANA like a numismatic ‘bookmaker” and recorded bids and asks. He created such a furor at the show that the ANA made him stop, after some two or three days. It was like mass hysteria!
At the show in 1955, investors and collectors did participate in buying and selling, as bags, rolls and Proof Sets were traded until there were NO buyers but only SELLERS.
The market dropped liked a stone, and I remember that a roll of 1950-D nickels, because none seemed to be in the market place, jumped in the early 1950s from $10 a roll of $2.00 face to over $100 a roll. Shortly after the 1955 ANA show was over, a Detroit bank that received a huge quantity of the 1950-D distributed them to their clients and suddenly the over-supply became a drain on the demand, and by the end of 1955 a roll could readily be acquired very close to the $2 face.
Other New Issues Negatively Affected
The same speculative drive hit the Commemorative half dollar issues from 1946 on. The Iowa, the Booker T. Washington issues, and the Washington Carver issues, suffered from the same speculation: up in the beginning and back down to almost face value within a few years after their issue.
All of these promotions virtually killed the market for late issue coins! It was a horror to witness but I learned that you cannot make something rare or desirable just because it is promoted. And you can’t make it happen just because you say a coin is “rare” or “scarce” and will rise in value.
Coin Galleries Established
Part of the move from 46th Street to 57th Street in New York was due to needing more space for our library and foreign coin business. We also set up, about a half a block away on 57th Street from our store, a second floor to house a division called “Coin Galleries”, and we were fortunate to be able to get Dr. and Mrs. Vladimir and Elvira Clain-Stefanelli to run it for us. They were scholarly, had a good following for foreign and ancient coins, and developed a MAIL BID entity for those clients. They were able to move in above our shop on the second floor of the building we occupied and so they were close by when we needed them. “Coin Galleries” mainly provided us with an operation dedicated to those who collected foreign and ancient coins. We added James C. Risk, George Weyr, Hans Holzer and John Burnham to our staff, each one being a great numismatist.
A world-class staff for sure!
Stack’s “Coin Galleries” grew tremendously in popularity, and we were proud of our staff. However, all good things can sometimes come to a friendly but hard-to-take turn of events. Dr. and Mrs. V. Stefanelli were offered the job of curators of the National Numismatic Collection at the Smithsonian in Washington D.C. To scholars such as them the honor of the position outweighed the salary we could pay. They left us in 1956 on good terms, and we were honored that they were once part of the Stack’s family. Our relationships continued for decades after they left, until they passed away.
The Stack family was recognized afterwards as major donors to the Smithsonian Collection, and I was honored to be able to call upon them for numismatic help and guidance.
Our Auctions Continue…
During the course of the year, Stack’s auctions were aimed at trying to help a growing clientele that was interested in expanding their collections or just starting out, and in the early part of 1955 we featured many choice and scarce coins of the United States (along with some important editions of foreign and ancient coins) as part of our offerings to attract more new collectors with limited budgets who still had the desire to collect. We held several smaller auctions that were well attended by a developing following. By the Spring we then offered some important name collections including the C.R. Smith Collection and the famous Frank Limpert Collection. In the Fall we were the auctioneers for the New England Numismatic Convention sale, conducted in Connecticut. We ended the year by offering the Farish Baldenhofer Collection of choice and very rare coins from the United States in gold, silver and copper. It was the highlight auction of the year and was attended by collectors from all over the country who bid for rarities and established new records for the period.
In 1956 we continued our auctions, serving both the Metropolitan Numismatic as well as the New England Numismatic conventions. Several major collections also were sold, namely the Lenox Lohr Collection of U.S. Coins featuring all the Proof cents through the dollar from the 1850s to the modern issues, and many earlier type coins.
We also sold the B. Frank Collection, which was highlighted by an 1876-CC Twenty Cent piece – the first to be available for years. An interesting thing happened at the end of the sale. John J . Ford, Jr. came up to me and said, “You guys had a number of bidders on the 1876-CC 20 Cent, could you place one or two more?”
We said we would try. John then proceeded to take five more examples right out of his pocket! Each of the Stack’s took one, and we offered them to underbidders still in the room. We were able to place ALL FIVE during the post-sale period! This is but ONE of the experiences I had knowing and dealing with John J. for the many decades we worked together as friendly competitors.
Also in 1956 we offered a public auction of the Farish Baldenhofer Collection, which was one of the early collections I helped build. Many of his coins are proudly referred to today as classic examples of U.S. series.
Stack’s Retail Business Expands
During the years 1955 and 1956, Stack’s retail business expanded, and I learned more from clients and collectors who visited us in our New York Store. They were enthusiastic and also wanted to learn more about Numismatics, and we exchanged much information on virtually a daily basis. To develop and nurture new collectors was our single most important goal.
Stack’s used to host a group of young collectors from the Pingry School in New Jersey who made a field trip to New York to acquire a few coins for their collection every month or so, and it was a pleasure to watch them select their new additions and talk about coins with us behind the counters. Some who had but a small amount to spend did a few chores for us, like sorting coins and putting them into 2 x 2 envelopes so we could add them to our stock. It was fun and exciting to see this generation learn and grow into being good numismatists. To this day we serve some of the graduates of that school, and they are our current advanced collectors. Dealing with the youth was a great learning experience that I will always remember.
Major Additions to the J.K. Lilly Collection
During the years of 1955 and 1956 we were also successful in obtaining addition rare and unusual gold coins to further enhance the Josiah K. Lilly Collection. We acquired more doubloons, coins of England and France, early dates of Spain and the German States, a goodly number of coins of Scandinavia and the Far East, and the Ancient World.
We also pursued the $20 gold collection of Robert Schermerhorn of Dallas, Texas–which we were promised when he was ready to sell, and in the Spring of 1956 Bob called and said he was ready to sell, privately if possible.
We negotiated a price and then J.K. Lilly bought it!
Though not absolutely complete, it was an outstanding array of coins, mostly Mint State and Proof, with but a dozen or so still missing. Mr. Lilly was pleased, and told us to go out and “fill the missing holes”, which of course we did. With this acquisition Lilly had one of the most complete collections of gold double eagles and wished Stack’s to continue completing the date and mint gold coin collection of the United States.
Whenever I delivered his new purchases to him in Indianapolis he always discussed his collection and the desire to enhance it. It was at one of these meetings we discussed United States Pioneer and Territorial Gold coins, one series I was very fond of and had researched extensively. It was then that he decided to assemble this rare and very historical series, from the $l Gold Bechtlers to the $50 California “slugs”. This was my chance to find and supply the very series that I myself would like to collect, as the monetary history of the growth of the United States was so closely tied to these coins.
As you can see, being able to work directly on a major numismatic collection and continue my own research and learning moved me up in stature from a basic dealer to an advanced numismatist. I helped build a new collection, worked with developing collectors, had direct contact with the specialists in most series, and at the same time was expanding my abilities to grow up further in the hobby. I must add, that even with these contacts, the retail store and auctions that my family developed over the years provided me with direct experiences that were not available anywhere else.
I was brought up in a learning environment, which is today rare to find in the entire numismatic world. I was very lucky to be brought up in a place that offered me so much. Today I enjoy passing on what I learned and hope my development will encourage others to dedicated themselves to Numismatics, as I was lucky to have been given to me.