By Harvey Stack – Founder, Stack’s Bowers….
Here I continue my thoughts on rarities, and the factors that affect this important aspect of numismatics.
As noted, true rarity cannot be caused by a collector through hoarding or manipulation, although sometimes temporary rarity can be achieved. During the early days of the U.S. Mint rarities came into being due to the absence of precious metals for striking, the desires of depositors who requested specific denominations, and the needs of commerce at a given time. Sometimes nearly the entire mintage would be used intensively in commercial channels while other times coins would be hoarded or exported.
With very few exceptions the Mint does not start out to make a rare or scarce coin; their mission is usually to meet the needs for commerce. In some years only a few of a given coin were struck and other times millions were made. These quantities affected what dates and mintmarks became scarce, also affected by the aforementioned commercial use. When the collecting community learned of scarce issues, demand might rise and eventually cause a coin to become truly rare.
The growth of numismatics and the popularity of a given series or denomination affects the demand side of the equation. For example, after World War II, collecting Morgan silver dollars became more widespread. There were certain dates that were extremely difficult to find. One such date was the 1895 Philadelphia Mint dollar with only 880 Proofs struck and with no circulation strikes ever located. By its very definition, a complete set of Morgan dollars required the purchase of one of these 880 Proofs. In earlier times there were not that many people seeking to acquire a full set of Morgan dollars, so 880 was not such a restrictive number. However, after the middle of the 20th century, when collecting Morgan dollars really took off, the increased demand caused this particular date to become much more of a rarity, despite the fact that there were pretty much the same number available as there had always been. Many Morgan dollar collectors had to limit their collections to circulation strike issues or be satisfied with a mintmarked 1895 coin to represent the date. Had the 1895 Morgan dollar been found in the Treasury releases of silver dollars as the 1903-O was, the rarity would have decreased as opposed to increasing.
This week I will tell of two instances where a change in supply made a coin that had been nearly impossible to find possible (and sometimes even easy) to locate — one involving Bust half dollars and one involving $20 gold double eagles — that I personally experienced during my early days as a professional numismatist.
In the early 1950s Stack’s was called upon to visit a bank in Bridgeton, New Jersey, a bank that had been established over a century before. My uncle Joseph and my cousin Norman drove out to see what was there. When they got there, they were shown sacks of silver Bust half dollars.
In the 1830s the price of silver was going up, and half dollars from the early 19th century would soon be worth more as a precious metal than face value. The president of the New Jersey bank felt he could profit by saving half dollars and decided not to place them back into circulation. He placed his entire inventory into his vaults, and over the decades they grew in value. Time passed and the bags remained in the vault until the early 1950s when the bank was to be sold–including this “silver asset”.
So Stack’s bought the coins for their numismatic value and sold half dollars from the hoard for several decades. We had a range of dates and die varieties and released them slowly to avoid flooding the market. Even so, 10,000 pieces was a lot of half dollars and in some cases rarity became scarcity and scarcity became available.
Another example occurred in 1933 and thereafter, when President Roosevelt wanted to raise the price of gold, so our Treasury could increase the value of its gold. First gold coins were called in, with penalties placed on those who did not comply. Fear of a 10-year prison term and fines as high as $10,000 scared much of the public. This was a tool the government used to get the country out of the Depression, and make us more liquid. Gold was valued at $20.67 an ounce for decades, and was now quoted at $35 an ounce.
There was an exception that exempted collectors who held gold coins as part of a collection from having to surrender them. Collectors in America, who could afford to save gold coins during the difficult Depression and World War II years, were able to take advantage of this loophole and build impressive collections. However, there were always gaps that they could not fill, and many rarities were just not available to those trying to complete collections.
In the years before, America had used gold to buy goods and services all over the world. Banks and central treasuries in other nations either melted the gold coins or stored them for safe keeping. In one instance, before and during World War II, Germany confiscated gold coins in mass to purchase arms and material to pursue their goal of trying to conquer the world. After the war some of these U.S. gold coins were returned to banks where they were held as assets. In America, no one knew what coins might be in vaults in that nation or in other parts of the globe.
In the 1950s, Americans building collections realized that some dates and mint marks of double eagles were scarce or rare. Prices for these particular issues started to rise. However, double eagles began to be found by dealers and traders in European banks and other locations, and scarce and rare dates were purchased at a substantial premium and brought back to America. Certain dates that had been considered scarce or rare suddenly were available and the value dropped. Over time, many such double eagles re-entered the United States and the market for some issues was changed forever.
Nevertheless, this didn’t happen overnight and in my next article I will reminisce about one particular rare double eagle and one particular well-known collector.