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Growing up in a Numismatic Family: The Early Days of Stack’s – 1966

In the Early Days of Stack's 1966 - Harvey Stack
In the Early Days of Stack’s 1966 – Harvey Stack

By Harvey StackCo-Founder, Stack’s Bowers Galleries ……
Links to earlier parts: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13

1966 – The Year I Can’t Forget

Following 1965, business continued to be active at Stack’s. We attended many shows and conventions; we had a series of important auctions; sales were busy over the counter and via mail order; and we continued to build the J.K. Lilly Collection. From ancient times to the pre-1933 series in United States gold coins, no collection in existence could compare with the size and scope of this endeavor by a single collector over a period of some 16 years.

Stack’s also dedicated itself to learning more about the restrictions on gold coins that had to be licensed to be imported.

By 1966, because more collectors were entering the field, visiting coin shops, and attending coin shows and conventions, the market grew and prices did rise. The cessation of proof and mint state silver coin production in 1964 further got people interested in pursuing coins as a hobby.

A Parade of Public Auctions

The increase in the price of coins was recognized by those who had collections of their own or as part of their family’s inheritance, and the noted value of coins did stimulate many to consider offering these collections for sale.

Dr. Conway Bolt 1966 Stack's
Dr. Conway A. Bolt – Auction Catalog and Coins

To start 1966 we offered the Dr. Conroy Bolt collection (built years back by George Walton and Stack’s), which offered an array of gold coins issued by our southern states. It started with the Bechtler series and included compete runs of gold coins from the Dahlonega Mint and the Charlotte Mint (as well as New Orleans). Dr. Bolt also had an extensive collection of U.S. silver and copper issues.

Following the Bolt offerings, we auctioned the Lee S. Miller collection of copper coins, followed by the Andrew Watson and Maurice Bauman collections. Hence, with all these titled and renowned collections Stack’s had quite a full plate. I must mention that my cousin Norman and I helped Maurice Bauman, who had attended many of our sales over the years, to build his showcase half dollar collection. So we built them, and later were able to sell them!

Adding to the Lilly Collection

For some 16 years we were dedicated to building the World Class Gold Coin Collection for Mr. Josiah K. Lilly of Eli Lilly & Co. It started off with his initial purchase of 12 different Spanish Colonial gold coins (doubloons), which did circulate in America before and shortly after we became the United States. Mr. Lilly had a passion for the early history of America, and wanted examples of gold coins (which filled the American literature he studied profoundly) that could have been or were used as money in the early colonies. From that beginning through the next decade and a half, we found over 6,100 coins for his collection, as he went from Spanish Colonial to early French and English gold coins, which were contemporaneous to the doubloon. He then expanded to the more modern coins of the Western Hemisphere, and then on to the gold coins of all centuries from Europe, Asia and Africa that were used as trade coins used here in America. He eventually backed into the coins of the Ancient World in gold and then added the early gold coins of the Middle Ages, so that his collection would have the most examples used throughout the centuries as part of the monetary history that governed various economies.

Josiah K. Lilly, Jr.
Josiah K. Lilly, Jr.

Mr. Lilly would visit Stack’s in New York, usually in the fall as he traveled from Indianapolis to Florida by train on his way to Palm Beach for the winter, and again in the spring on his way back home. Both Mr. and Mrs. Lilly disliked air travel, so that’s why they used the train.

We would dedicate our time for Mr. Lilly as follows:

He would advise us how he wished to proceed, then we would endeavor to find the coins he desired. We got them together to have on hand for his visit to New York in the fall of each year starting in 1951. He would review what we had acquired (usually buying everything we showed him) and then we would hold the coins for him. In the spring of each year on his way home he would review what we had already showed him and examine any new additions we were able to locate and acquire. He would ask his normal questions as to how he wanted to continue and then leave for home.

Mr. Lilly always desired personal delivery of his coins, so after he went home I was given the job of delivering the coins to him. I would fly to Indianapolis in the evening before our meeting and stay the night at the Indianapolis Club. A driver would come around and pick me up at 8:30 in the morning to take me to Lilly’s personal retreat of some 5,000 acres on the outskirts of Indianapolis. Mr. Lilly would greet me at the door of his house and library, where I saw other things that he collected in what he considered his hobby house.

Not only was he developing a coin collection, but he also had at that location his stamp collection, which was extensive and very complete. There was also his collection of revolutionary rifles replete with many rare and unusual types; his collection of some 5,000 lead soldiers that he helped design and had made by a renowned artist in Philadelphia; and his collection of classical paintings of mostly seascapes, as Mr . Lilly was fond of the oceans around America.

Attached to his hobby house was another large building: his rare book library. He collected American Literature, mainly first editions, and English literature going back to Shakespeare – which had many early first editions. It was an amazing thing to see and when given some of the rare books he had, each of which was housed in a special library box, I virtually trembled at being so close to history.

We got a call in September of 1965 from Mr. Lilly’s secretary that Mr. Lilly had become ill and would not go to Palm Beach that year. His secretary asked if we could hold the coins for delivery sometime later. Of course, we said, being very concerned what his ailment was. Lilly’s secretary called every few weeks, or we would call her, whereupon we learned that his condition had not changed much.

Sometime in April 1966 Mr. Lilly had her call and asked if I could visit him within the next two weeks, as I had done for some 15 years before. So I set a date and went to Indianapolis with the coins he wished to add to his collection. Before I left, I was instructed that while he wanted to have me visit, the visit itself would not be of any great length of time, perhaps a half hour or so.

Naturally, whatever he wanted, I would do.

I arrived, stayed at the room reserved for me and at 8:30 promptly was picked up and taken to him. We did not go the way I was accustomed to going. The driver told me that I would be going to Lilly’s home in town, called “Oldsfield”. It was a beautiful estate near the cultural center of town, having about 40 acres of magnificent gardens, mostly roses in full bloom, and in that setting was this beautiful house made from large granite natural rock.

I was welcomed at the door by the houseman, who told me that Mr. Lilly was upstairs in his study next to his bedroom. As I looked about the first floor before going upstairs I saw a group of masterpieces on the walls, fine tapestry also on display, beautiful antiques that were very classical, and I proceeded up stairs.

Josiah K. Lilly Collection at the National Numismatic Collection
Josiah K. Lilly Collection at the National Numismatic Collection

There I found Mr. Lilly, sitting at his desk in the center of the room. He got up to greet me and asked me to sit down. Remembering the instructions I received I showed him the box of coins I had brought. Mr. Lilly looked at them, and with a twinkle in his eye said, “What wonderful things you have assembled for me, I am delighted and thank you for finding these items for me. With these added to my collection I will surely have a great collection to pass on to the family.” He insisted in making out a check, even with his shaking hands and giving it to me.

“Young man,” he said “you and your family did an outstanding job for me, which I do appreciate, and hope you will be able to expand this collection in the future.”

I was embarrassed by his warm remarks and we both shook hands. The time to go arrived quickly and I bid him good health and said goodbye.

Two weeks to the day I received a call from Mr. Lilly’s office that he had passed away the night before. I asked about the services, for I wanted to attend; after all, I was considered a friend who worked with him for 16 years. The family decided to have a private ceremony and therefore I should not travel to be with them.

This was one of the closest numismatic contacts I had, especially since I was present when he began and was with him when he acquired his last coins. Because he wanted privacy we never revealed his name to anyone, and only to our immediate staff did we ever mention we were serving one collector as we did with Mr. Lilly. Everyone thought we had maybe five different clients who specialized in gold coins from one or two areas, but no one ever suspected it was all for one special collector.

Once the family agreed that we could talk about the collection and the work we did with Mr. Lilly we took out an ad.

It said:




The Lawsuit

In 1966, after trying to get information from the Office of Gold and Silver Operations (OGSO) about their lack of response to our application to import an extensive collection of gold coins from the Netherlands, Stack’s initiated a lawsuit against the OGSO.

The OGSO had decided, without explaination, to deny the license. By bringing a suit against the unknown regulations, we felt we could at least know what the reason was for denial, and perhaps learn why certain coins were restricted.

In late 1965 and early ’66 we spent hours preparing new inventories and marking which coins were highly rare numismatic items. The papers we helped our attorney prepare were virtually what our catalog would have included.

I represented Stack’s at the intiail hearing, having personally handled each coin in the collection. I could attest that they were all genuine and not counterfeits.

After reviewing the listing, especially with full information about the 175 that were originally described, I again asked the hearing judge to help us get those items as well as the rest of the collection admitted to the United States so we could offer them for public auction.

To further our presentation, several specialists confirmed my explanations as to why all the coins in the collection were scarce or rare numismatic items and should be licensed for import to America. These witnesses included both Vladimir and Elvira Clain-Stefanelli, the husband and wife curators of the National Numismatic Collection at the Smithsonian, plus Henry Grunthal, Curator of Numismatics at the American Numismatic Society (ANS) – as well as some collectors familiar with the contents of the collection.

The attorney for the OGSO was at a loss to refute.

Then the OGSO made its case. The Mint representatives sounded like neophytes as to the great numismatic value of the coins we wished to import. Their excuses were vague and factless, and those who understood numismatics often laughed at their explanations.

During cross-examination by our attorney, we finally began to get at the main question: the criteria that were used by the Office to determine what would or would not be imported. The OGSO stated that they had a committee to determine the rarity of any gold coins to be licensed for import, and did not feel they had to explain each denial they made.

The initial hearing then concluded with no rulings, as the Hearing Judge instructed the OGSO to bring a much clearer and understandable explanation to the next hearing (which was to occur about a month going forward).

Between hearings there was much correspondence and many filings submitted to the Judge so that the next court session could be expedited.

I assume that the Office felt that if they just said they had a formula that it would satisfy the Hearing Judge. To our benefit, it did not. The judge would not stand the secretive rules that the OGSO made in refusing to license some of the coins in the collection.

This response somewhat shook the attorneys for the OGSO. They confered among themselves and relented.

Here is how it was explained.

Gold Coins of the World - Robert Friedberg, Second Edition
Gold Coins of the World – Robert Friedberg, Second Edition

The first piece of evidence they presented was the Robert Friedberg book, Gold Coins of the World, published for the first time in 1958. It is a wonderful reference and tool for information and pricing of gold coins. Numismatists from around the world contributed information and photographs to this much-needed resource. So we were happy to see that the OGSO didn’t just guess at what they were ruling on.

They also made particular issue of the fact that Norman, Benjamin and I were listed as contributors.

They further explained that they had a formula to determine when a coin was rare enough to be licensed. Since gold was valued at $35.00 per ounce in 1934, and had remained at that value till at least the 1960s, the value was determined by multiplying the gold value of the coin at the time ($35.00 per ounce) times a factor of four. And if the coin met the criterion of four times or more in listed value it was considered licenseable.

The government’s argument continued to explain that the rulings on import were set up to discourage counterfeits from coming into the U.S., as much gold jewelry, even fabricated, was priced below the 4 X factor and therefore the high price created by the 4 X factor would make in unsaleable in the U.S. and prohibitive to order and ship.

Well, we finally had an answer, though it made little sense. It would’ve made better sense if, for example, the Friedberg book had complete listings of all dates and mints for a series, which it does not. Gold Coins also lacked pricing information at different grades, listing an average price for the design instead.

The Government Shoots Themselves in the Foot

Once we heard the government’s explanation we were confident we would win our case againt their “arbitrary and capricious” decision-making process. According to our attorney, “laws can be made and enforced if they are fair and without being prejudices.”

Yes, the source of the information was current. Gold Coins of the World was a wonderful tool for all to learn about coins. But to the numismatist, it provided only basic information.

Those who were ruling on what could or could not be licensed for import did not possess or try to possess knowledge beyond the book they used. Gold Coins was really a book about what designs were struck and what denominations were issued, without considering the rare dates within each series or the grade of each coin. So rare dates and very high quality were not considered, for the OGSO examiner did not have the sources at hand that a numismatist would use when assembling his collection.

Let me give you an example, using just one denomination of United States gold coin, the Double Eagle ($20.00).

Gold in the 1960s was pegged at $35.00 and traded in that range worldwide. Say we take the St. Gaudens $20.00 gold, issued from 1908 to 1933. The gold content was, by carat and weight, slightly less than one ounce, but for exposition’s sake let’s say it was a full ounce.

United States Double Eagle
United States Double Eagle

Regardless of grade, as a precious metal coin it was valued at $35.00. Bunching all the dates and mints that struck these coins into the single category that the Friedberg book gave that design resulted in an average price of $75.00. So at slightly over two times 35, the common $20.00 gold would not be licensed for import. BUT, if among the dates we would like to import we had rarities such as 1921, 1925-S, 1926-S, 1926-D, 1927-S, 1927-D, 1929, 1931 or 1932, then the Custom House, the Treasury Department and the Mint would have considered each and every one of these VERY RARE COINS as if they were of the common type, for they were listed in Gold Coins at the low price of $75.00.

We saw as we presented our case that the agents responsible for making the determination were able to distinguish a genuine Double Eagle from a possible counterfeit (the whole reason for import restrictions in the first place) We claimed, however, that they had no idea what was “good” and what was “rare”, as they were only able to use a book that was of limited utility in those regards.

Therefore, citing one coin after the other, we were able to demonstrate that the officials were ARBITRARY AND CAPRICIOUS in their execution of the licensing.

Incidentally, the Mint was, by applying their formula, creating a “false rarity” for the common dates that was pushing prices up to and above the factor of four they required! When something is scarce or rare ir commands a price equal to its availability. So the rulings had their own effect on the market.

Of course, the Mint was embarrassed once shown that they were creating an unwarranted hardship, so they pleaded and got a stay of opinion in order to study what they had just learned. The judge extended them that privilege.

Sometime in November of 1966, we were advised by the Hearing Judge that we had given the proper information to the Treasury, and that they should proceed to review our explanation and testimony.

WE HAD WON OUR CASE and waited for the licenses to be issued.

Later in November, our attorney was advised that the Government had reviewed the Hearing Judge’s decision but then stated (typical from the Government) the following:

“We received and re-examined the ruling set forth by the Hearing Judge, BUT NOT ADHERING TO HIS RULING WE HEREBY STILL DENY THE LICENSE REQUESTED.”

Our attorney was flabbergasted, but he had witnessed such behavior from government agencies before. The remedy was for us to take the matter to a Higher Court and start over again.

After discussing this with the rest of the Stack family, we felt we were abused and taken advantage of, and requested our attorney to file the necessary appeal.

Morton Stack
Morton Stack

A Year of Despair

My father and uncle usually spent the holidays with their families for several months in Florida, starting after Thanksgiving.

A few days before Christmas my mother called me to tell me my father, Morton Stack, had a severe heart attack and was rushed to the hospital. I immediately packed and reserved my flight. But before I finished packing my mother called again. My father had just died, and I did not need not come to Florida since she was sending him to New York for burial in a family plot.

I just sat down and cried. The man, my father, my teacher, mentor and role model, was gone at the age of 66.

But my father’s passing was only the second tragedy I experienced in 1966, having been preceded by the death of Josiah K. Lilly.

And as I just explained that, after giving up so much time and effort to win a case against the government–a case which, if won, would benefit not only Stack’s but the entire numismatic community–we were forced to appeal a case that we had, in fact, already won.

As the pains settled in, we dedicating ourselves, in the many years that have followed, to helping our hobby grow and to serving the collector fraternity as we had learned in the past from those we had loved and lost.

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