A Weekly CoinWeek Column by Greg Reynolds
News and Analysis regarding scarce coins, coin markets, and the coin collecting community #166 …..
For the first time, an auction of coins, patterns, medals and paper money contained seven items that each sold for more than one million dollars! From April 24 to 28, Heritage conducted the official auction of the Central States (CSNS) Convention in Schaumburg, Illinois. Of these seven, three coins and a million dollar pattern were sold on April 25 and the three paper money pieces (‘notes’) were auctioned on April 26. In my last column, I analyzed the results for the three coins and a pattern: the Walton 1913 Liberty Nickel, the Newman Collection 1852 $10 pioneer gold coin, the finest known 1796 silver dollar and a pattern 1783 Quint. Here, the importance of the sales of million dollar items is emphasized and a history of past sales of million dollar items is detailed. A central question is why are million dollar items important, anyway?
An auction of a million dollar coin positively affects emotions and draws people to coins. Plus, sales of million dollar items generate more enthusiasm among many of those who are already interested. Sales of million dollar items energize the coin collecting community.
I. Why Discuss Million Dollar Items?
Certainly, the prices of coins and the enthusiasm that collectors have for coins are affected by auction events and communications among coin buyers. Furthermore, the extent to which people who are not currently buying coins may be spurred to do so is partly a function of how interesting, exciting and rewarding coin collecting is perceived to be. Although the value of one million U.S. dollars has diminished over the last half century, the psychological and emotional aspects of something selling for one million dollars remain largely the same.
I have now been analyzing auction results for more than twenty years. When it is reported that something sells for a million dollars, the eyes of people light up and their bodies shift. Non-collectors are often annoyed, shocked, or repulsed by such news. Collectors and potential collectors, though, are likely to think that sales of individual items for more than one million dollars each are exciting, cool, interesting, neat, curious, wonderful, or otherwise appealing. Indeed, when something sells for more than one million dollars, and similar items do not routinely sell for more than one million dollars, collectors are more likely to be interested in that ‘something’ than they otherwise would be, regardless of the nature of that ‘something’!
When a comic book first sold for more than one million dollars, I immediately started reading about rare comic books and I then read far more material about comic books than I had before or have since. I was characterized by a similar burst of excitement after a baseball card first sold for more than one million dollars. I realized that I would never develop the level of enthusiasm for comic books or baseball cards that I have for coins. Even so, I was, for a time, pulled toward these areas by million dollar auction results.
In Nov. 2007, I was present when one of the brighter survivors of the ‘Inverted Jenny’ 24¢ stamp errors of 1918 was sold at auction. (I covered that event in an article on CoinLink.) Before that auction, there was a good chance that this, especially appealing ‘Inverted Jenny’ (upside down plane) airmail stamp would become the first individual stamp to publicly sell for more than one million dollars. An auction record was, in fact, established. The $977,500 auction result, however, was disappointing and anti-climactic, as the psychological barrier of one million dollars was not overcome. The event was just not nearly as exciting as it would have been if the price had been $25,000 higher.
While the wealthy people who buy million dollar items are often reclusive, relatively poor collectors are influenced by million dollar coins. At a typical meeting of a coin club, no one present can afford to spend one million dollars on a single coin, yet sales of million dollar coins at auction are often topics of dynamic discussions at coin clubs. The people who cannot afford them wish to talk about them with fellow collectors, friends, colleagues and neighbors.
Reports of some classic U.S. coins selling for more than $1 million each gives the impression that most classic U.S. coins are great values in comparison. People become overjoyed at the opportunities to acquire terrific, classic U.S. coins for less than $250, or even less than $100. After all, a collector can buy a nice 1912 Liberty Nickel for three dollars, rather than a 1913 Liberty Nickel for more than three million!
I am referring here to historical items and other collectibles, not to art, as art is often considered to be a category apart from collectibles. This is an analytical distinction, as many people collect art.
The one million dollar threshold for a painting was reached so long ago and so many thousands of objects of art have surpassed it in innumerable sales that one million dollars is no longer a magic number in the realm of valuable art. For an object of art, $25 million is the cultural equivalent of $1 million for a coin
Indeed, in art auctions in the late 1980s, many pieces sold for more than $1 million each. Several paintings then sold for more than $40 million each. Coin enthusiasts were then frustrated because a coin had yet to be auctioned for more than $1 million.
II. The path to $1 Million Dollar coins
In July 1989, Rarcoa auctioned the Dexter-Dunham-Bareford 1804 dollar for $990,000. As the price was disappointing and a fund (rather than a collector) was the buyer, this near-miss was quickly forgotten by most market participants.
In Oct. 1993, Stack’s (New York) auctioned the Olsen-Hawn 1913 Liberty Nickel for $962,500. Coin markets had fallen since the volatile, boom period of 1988 to early 1990. Many market participants did not expect this nickel to sell for more than $750,000. So, the $962,500 was emotionally uplifting, much more so than the sale of an 1804 dollar for $990,000 in 1989. I remember an aura of joy and optimism in the auction room. A $1 million result, however, would have brought about much more publicity.
In May 1996, it finally happened. Jay Parrino bought the Eliasberg 1913 Liberty Nickel for $1,485,000. Louis Eliasberg formed the all-time best collection of U.S. coins. His U.S. gold coins were sold in Oct. 1982. With the exceptions of a few pieces that were sold later, the rest of the Eliasberg Collection was auctioned in May 1996, Oct. 1997 and April 2005. In Oct. 1982, the Eliasberg 1815 Half Eagle and the 1870-S Three Dollar Gold piece each sold for the then record price of $682,500.
The Eliasberg 1913 Liberty Nickel is the finest of five known. The third or fourth finest, the Walton 1913 Liberty Nickel just sold on April 25 for $3,172,500, as I discussed in part 1.
In April 1997, Eliasberg’s 1804 silver dollar sold for $1,815,000, a new record was thus set. The Eliasberg auction of 1996 and 1997, the auctions of John Pittman’s U.S. coins in 1997 and 1998, along with the State Quarter program, were key factors in the boom in coin collecting that started in 1998 and became ever vibrant until dampened by the worldwide economic downfall that took hold towards the end of the summer of 2008.
III. Impact of Million Dollar Items
Indisputably, the sales of million dollar coins, and other coin auction records, played a role in generating excitement for rare U.S.coins in the late 1990s and early 2000s. Markets for rare U.S. coins were generally very slow from 1991 to 1996. There was then a renaissance of coin collecting that continues, with force, now. Auctions of million dollar coins have been factors propelling the boom and later sustaining the increased interest.
On Aug. 30, 1999, the Childs 1804 silver dollar sold for $4.14 million, at a Bowers & Merena auction in New York. This result was startling. The notion of a coin selling for more than $1 million was supplanted with the concept that individual coins might sell for multiple millions. For many years afterward, however, sales of individual coins for as much as just one million were rare.
When Sotheby’s, in partnership with Stack’s, auctioned the ‘Dallas Bank – Jeff Browning’ collection in Oct. 2001, Great Rarities and other famous rarities were included. Not one sold for a price near one million dollars. The absence of a sale of $1 million contributed to the somewhat subdued mood in the auction room.
In May 2003, Stack’s sold the L.K. Rudolph Collection of silver dollars and trade dollars. The JAS-Rudolph 1870-S silver dollar then sold for $1,092,500, more than twice the price it brought in March 1995. In 2003, the auction room was overflowing with excitement. Conversations in the hallway were very animated. During that auction and over the next several years, Liberty Seated Silver Dollars received more attention than they had ever received before.
Again, I was preset, in Baltimore in Nov. 2004, when DLRC auctioned the Richmond-Norweb 1885 Trade Dollar for slightly more than $1 million. I covered that auction for Numismatic News and the editor was stunned by the price. In 2004, sales of individual coins for more than $1 million each were still viewed by some coin enthusiasts as special cases, or anomalies, rather than normal market events.
The sale of the Fenton 1933 Double Eagle ($20 gold coin) for $7,590,020 in July 2002 was an anomaly. Almost all interested coin experts regard the circumstances surrounding that legal case as unfair to owners of 1933 Double Eagles and relevant actions by the Treasury Department as being misguided. The buyer and at least one of the other leading bidders were Sotheby’s clients who were not really interested in coins.
The auction of the Fenton 1933 was largely driven by the peculiar controversy, and the event occurred apart from normal events in the coin business. It did, though, contribute to increased interest in coins. In many social settings, I have come across people who know little else about coins, yet have heard of that 1933 Double Eagle selling for more than $7.5 million.
IV. Multiple Million Dollar Items in Single Events
A wonderful watershed in the culture of coin collecting occurred during Heritage’s Jan. 2005 FUN auction. Just two days earlier, on Jan 10th, ANR had sold an 1866 ‘No Motto’ Silver Dollar, one of two known, for $1,207,500. I covered that event for Numismatic News and wrote extensively about that piece, the auction of it, and the atmosphere in the auction room. Internet and outsider participation in coin auctions remained minimal. The sale of that dollar electrified the room.
By Jan. 12, market participants were cheerful and were looking forward to the mammoth Heritage auction. One of the all-time best type sets of gold coins, awkwardly called the “Gold Rush Gallery Collection,” had been consigned. As this collection arrived at Heritage two weeks after the pertinent consignment deadline, there was not time for the usual promotion of an epic collection. So, the contents were largely a surprise to coin enthusiasts who descended upon Fort Lauderdale, in droves, for the annual winter FUN Convention.
Before the auction, it was known that a stunning collection of Barber coins, that of the late John Hugon, had been consigned. It was also known that Hugon had a vast quantity of superb gem Barber coins, yet his collection lacked an 1894-S dime. Those in attendance were pleased to find out that, from an unnamed consignor, a gem quality 1894-S had been included in a session later the same evening.
As it turns out, the Gold Rush Gallery Collection contained two Brasher Doubloons, rare and extremely famous pre-federal American gold items. Two of the seven known were thus in one auction, including the only one that has the ‘EB’ punch on the eagle’s chest.
One Brasher sold for $2,415,000 and the other, with the EB punch on the eagle’s chest, for $2.99 million. These results then became the third and fourth highest prices ever paid for individual rare coins at auction. Later in the same evening of Jan. 12, 2005, an 1894-S dime sold for $1,035,000. It is not of the same quality as the JAS-Richmond 1894-S that DLRC auctioned for $1,322,500 two months later.
A central point here is that, on Jan. 12, 1005, Heritage sold three different million dollar coins in one night. Million dollar auction prices could then no longer be thought of as anomalies or freakish events.
On June 30, 2005, in New York, ANR auctioned two coins for more than a million each, on the same day. A 1794 silver dollar realized $1,150,000 and the Rogers 1796 ‘No Stars’ Quarter Eagle rose to $1,380,000.
In Oct. 2005, the firm of Lyn Knight auctioned a $1000 “Grand Watermelon Note,” a very famous $1000 bill of 1890, for $1,092,500, the first time that a paper money item had surpassed the one million dollar level at auction. There are three privately owned Grand Watermelons, the note that Knight sold in 2005 and the two from the Greensboro Collection that Heritage auctioned last week.
On April 26, the brown seal note went for $1,527,500 and the unique red seal Grand Watermelon brought $2,585,000. Also, an 1863 $100 Gold Certificate brought $2,115,000.
Three paper money items bringing more than $1.5 million each in one auction is an unprecedented event. Have even two notes ever before sold for more than $1 million each in a single auction?
On Nov. 3, 2005, two coins and a pattern, all from the same collection, sold for more than $1 million each. So, the record of three numismatic items selling for more than $1 million each that was set on Jan. 12, 2005 was tied less than nine months later, when Heritage auctioned the Philip Morse Collection of Saint Gaudens Double Eagles ($20 gold coins).
The Trompeter-Morse Ultra High Relief $20 gold pattern sold for a reported $2,990,000, the same price that the punch-on-chest Brasher Doubloon realized earlier that year. The Godard-Morse 1921 Double Eagle brought $1,092,500 and the Parrino-Morse 1927-D Saint sold for $1,897,500.
From 2006 to 2012, there were many coin auctions that included the sale of a single coin for more than $1 million. At the Heritage FUN auction of January 2007, a coin and a pattern each sold for more than $1.5 million, the Eliasberg 1839 Proof Eagle brought $1,610,000 and the Simpson Ultra High Relief Saint went for $1,840,000.
One year later, in the FUN auction of Jan. 2008, two 1796 Quarter Eagles ($2½ gold coins) each brought more than $1 million, including the already mentioned Rogers coin, which soared to $1,725,000.
V. Last Three Years
In the FUN auction of Jan. 2010 in Orlando, it happened again that three coins or patterns sold for more than $1 million each. The Olsen-Hawn 1913 Liberty Nickel brought $3,737,500.The Connecticut-Muller 1927-D Saint realized $1,495,000 and a Bickford $10 gold pattern of 1874 sold for $1,265,000, which is the most surprising of these three results.
By 2012, quite a few ancient or European coins had sold for more than $1 million each and U.S. coins no longer seemed all that far ahead of the rest of the world. In Jan. 2012, again at the official auction of the winter FUN Convention, two coins sold for $1.38 million each, the Eliasberg ‘With Periods’ variety Chain Cent and the Garrett 1829 Half Eagle. (Clickable links are in blue.)
On Jan. 24, 2013, Stack’s-Bowers auctioned the Cardinal Chain Cent for $998,750, the Knoxville-Cardinal 1792 Half Disme for $1,145,625, and the Carter-Cardinal 1794 silver dollar for $10,016,875, by far the auction record for a coin or other numismatic item of any kind. (Please remember that clickable links are in blue.) Still, though, the Cardinal Chain Cent would have received much more attention if it had sold for more than $1 million.
VI. Depth of Participation
In any event, the sale of seven million dollar items at this year’s CSNS Convention is incredible. I am almost certain that the buyer of the highest certified 1796 silver dollar did not buy any of the other million dollar items.
I doubt that the successful bidder for the Walton 1913 Liberty Nickel even bid on any of the other million dollar items in this auction. There were thus at least three different buyers of million dollar items in this auction, perhaps six different!
Todd Imhof reports that “there were five bidders at $800,000 or higher on that 1796 dollar, and at least three at $900,000 or higher.” Imhof is the executive vice president of Heritage and he executed some of the bids. “ On the Quint, I recall it was just Kagin and myself from $850,000 on but think there were at least four other bidders with paddles in the air between $625,000 to $850,000. I was representing a collector, who was not the same person I represented on the Walton Nickel, or the 1796 dollar, or the Humbert. His maximum was $950,000,” Imhof reveals.
My research indicates that there are more than thirty different people who have bought numismatic items for more than $1 million each during the last ten years. Moreover, sales of coins for more than $1 million each attract the attention of hundreds of thousand of people, who tend to then take coins more seriously or at least become curious. Perhaps the most important aspect of the sales of million dollar numismatic items is the generation of energy in markets for rare coins and in the coin collecting community. People very much enjoy talking about and learning about million dollar coins, patterns, medals and paper money.
©2013 Greg Reynolds