Coin Rarities & Related Topics: News and Analysis regarding scarce coins, coin markets, and the coin collecting community #332
A Weekly CoinWeek Column by Greg Reynolds …..
The fourth in a series of auctions of the Pogue Family Coin Collection will be conducted on Tuesday, May 24, by Stack’s Bowers in association with Sotheby’s. The sale will be held in the same gallery in New York where Sotheby’s has auctioned many paintings for more than US$10 million each. As so much has already been published regarding the highlights of the sale, three largely undiscussed topics merit attention before Pogue IV occurs.
First, it is a good idea to reflect upon why this sale is important to many people who cannot afford the coins being offered. Second, it is important to consider the importance of the offerings of Draped Bust silver dollars and Capped Bust half eagles ($5 coins), as many collectors are unaware of the epic nature of the currently offered groups of these, respectively. A third topic is the implications of the results of this sale. Many coin collectors mis-interpret auction results or believe that auctions reveal more than is really revealed about underlying market conditions.
Why All Collectors of Classic U.S. Coins Should Care?
Without collectors, rare coins would not be worth much, certainly nowhere near their current values. The market values of coins in the present, and the reasons why some rare coins are more highly demanded than other classic U.S. coins stem in large part from the culture and history of coin collecting in the U.S.
The reasons why people like 1909-S VDB and 1955/1955 Doubled die cents relate to a culture of coin collecting. They are not obviously valuable to people outside of the culture.
The assembling and definitions of sets, premiums for physical rarity, values of condition rarities, famous coins, largely ignored coins, exciting coins, wholesome circulated coins, naturally toned coins, epic collections, among other aspects of the culture, are all inter-related and are parts of the history and present realities. Various parts are integrated and intertwined.
In coin publications, reference books, private conversations among collectors, public discussions at coin clubs, much of the culture of coin collecting is known to the participants already and is not consciously discussed. To some extent, people involved share a common system of beliefs. Of course, this culture evolves and new traditions emerge.
Not long ago, business strikes and Proofs were typically mixed in sets of coins that grade above 60. Proof-only issues were considered necessary for completion of sets that included largely business strikes. Gradually, a new tradition of segregating Proofs and business strikes was started, and now there are competing belief systems within the culture of coin collecting regarding the mixing of Proofs and business strikes in the same sets.
Did the Pogues mix them or were they collecting two sets of each type, Proofs and business strikes, as Gene Gardner did? This is not clear.
When I was a kid, every collector of Liberty Head nickels desired a 1913 and every collector of Barber dimes sought an 1894-S. Among collectors who I knew, Proof Three Cent nickels were then considered to be superior to business strikes of the same respective dates.
Now, most PCGS and NGC registry categories prohibit the mixing of Proofs and business strikes in the same sets. Some prominent collectors, like Dr. Duckor, prefer business strikes and tend to avoid Proofs.
Did the Pogues follow the earlier, long-standing tradition and the leads of Eliasberg and the Norwebs, among others? There are Proofs and business strikes, apparently in the same sets, in the Pogue Collection.
Was an 1838-O half, though not a business strike, sought by the Pogues to be part of a set of ‘Reeded Edge’ (Gobrecht Capped Bust) half dollars, or was it just a complement? In Pogue I, a Proof 1827/3 quarter seemed to be part of a set that consisted mostly of business strikes.
Is an 1804 dollar needed to complete a set of business strike Draped Bust silver dollars from 1795 onwards? To form a meaningful opinion either way, there would be a need to have at least a little understanding of 1804 dollars and the culture of coin collecting.
In the context of coin collecting, to understand business strikes, there is a need to have some understanding of Proofs and non-Proof Specimens. To learn about rarity, sets, and the reasons why some coins cost so much more than others, education is essential. The cultural values and prevailing price ratios in the coin community are not easy to learn. To understand the scarce, classic U.S. coins that a collector can afford, he or she must attain some understanding the coins that are regarded as unaffordable.
“The Market” and An Auction
I have been asked hundreds of times about the Pogue sales reflecting ‘The Market.’ The Pogue Collection consists mostly of highly certified, pre-1840 U.S. coins and is distinct from the classic U.S. coins that trade often. Indeed, many of the rarities in the Pogue Collection trade very infrequently
More importantly, no one auction demonstrates much about overall markets for U.S. coins. There are thousands of dealers and more than 100,000 people who collect classic U.S. coins.
Changes in market levels are among many variables that affect participation in coin auctions. As many collectors wish to see coins before they buy them, they would be more likely to buy coins privately than at auction, anyway. Other collectors dislike making split-second decisions and find auctions to be stressful. When a collector receives a coin from his favorite dealer in the mail, it is not unusual to spend hours or days thinking about whether to buy it. At an auction, a decision may be made in an instant.
Also, fewer than five people can drive prices up in any one auction, sometimes just two. A coin for which dealers would pay $30,000 to $45,000 could bring $150,000 at auction if two collectors are eager to own it or are misled about it. I have written often about coins that bring extremely strong prices at auction, sometimes multiples of wholesale levels. For definitions of auction terms, please see my article on ‘What Are Auction Prices.’
Very strong to extremely strong prices usually do not reflect changes in underlying market levels; they reflect bidding activity by energized collectors, which may occur in ‘down markets.’ If most all the Capped Head half eagles or silver dollars in an auction bring far more than wholesale levels, then that would be evidence that the wholesale values have themselves risen. Nonetheless, more research would be required to draw a conclusion in such a case. It would help to examine prices of similar coins over a series of auctions, not just one event.
At some auctions, there is minimal collector participation for unknown reasons and most coins are purchased by dealers for inventory. At such auctions, many coins bring weak to moderate prices, even if underlying price levels are largely unchanged.
An immediate point is that, even if market levels for rare U.S. coins continue to trend downward, the Pogue IV sale could be characterized by strong prices. Market prices were falling in September and October, yet the Pogue II sale on September 30 was characterized by many very strong prices. An auction result for a coin may be very strong, even if the market level for that coin is staying the same or falling. The success of an auction is usually not a function of underlying markets or demand by dealers; it is a function of collector and/or other retail participation.
In October 1990, Stack’s (NY) auctioned the “L.A.’ type set” of classic U.S. coins. Although market prices for high quality type coins were then dropping and continued to fall, on average, for the next two years, auction results for coins in the L.A. type set were strong to very strong. There was very positive energy in the room while the auction was in progress.
The ‘L.A. type set’ 1795 Draped Bust silver dollar is now in the Pogue Collection. The Pogue 1796 quarter, which brought $1,527,500 last year, was also formerly in the ‘L. A. type set.’
The auction of the “L.A. type set” had a self-propelled energy drive. This was true of the Eliasberg ’96 sale, the Newman sale of November 2013, and the Pogue II sale, among others. In many cases, an auction has a ‘life of its own,’ which is distinct from underlying market levels.
Therefore, it does not make sense for observers now to assume that the Pogue IV sale will not be a success because coin markets are currently lethargic. Many of the coins in Pogue IV may bring retail or even super-retail prices, as many coins did in Pogue II in September.
The results are impossible to predict, and predictions may be harmful as they may dampen energy at the auction. The emotions of collectors are involved and other intangibles like brewing group enthusiasm cannot be defined, let alone predicted.
Clues About Markets From This Auction
Certainly, the results of this auction will provide clues about the demand for Great Rarities. Other than Q. David Bowers, I have written, in published forms, more about Great Rarities than any living person.
In the realm of classic U.S. coins, a Great Rarity (which should be capitalized) is a coin issue for which there are fewer than 25 representatives now known of the same date and type, including Proofs and business strikes, and all die varieties of the same ‘date,’ which incorporates the concepts of design type and mint location. An 1807 Draped Bust half and an 1807 Reich Capped Bust half dollar are two different dates.
An 1838 half dollar and an 1838-O half dollar are two different dates. The 1838-O in this sale is discussed later.
As there are known just fifteen 1804 dollars of all varieties, the 1804 dollar is a Great Rarity. For 1875 $10 gold coins , the total of business strikes and Proofs combined is less than twenty five, so the 1875 eagle is a Great Rarity, too.
The 1822 half eagle is obviously a Great Rarity, as the Eliasberg-Pogue coin is one of just three known. Many collectors are not aware, however, that there are more than a few additional Great Rarities in the series of Capped Head half eagles. Representatives of several of them are in this one auction!
From the 1870s to the 1920s, Capped Head half eagles were extremely popular and among the most talked about of all classic U.S. coins. In contrast, when I was a kid, my friends and I frequently talked about 1913 Liberty Head nickels, 1894-S dimes, and 1804 silver dollars. These were and maybe still are the most popular of Great Rarities.
At the moment, I am able to recollect only five substantial collections of Capped Head half eagles to have been auctioned since the late 1970s: Garrett (1979-80), Norweb (1987), Eliasberg (1982), and Jacobson (2012). I covered the Jacobson sale. The others were before my time. If all the Capped Head half eagles in the Superior Galleries sale of January 1996 were consigned by Michael Keston, then Keston’s set would have been rather amazing in terms of completeness.
Many of Harry Bass’s most important Capped Head half eagles were not included in the auctions of the Bass Collection and were retained by the private foundation that owns them. Also, individual offerings of Great Rarities in this series tend to be sparse. The Pogue set may be the greatest set of Capped Head half eagles ever formed!
Of all series of U.S coins that lasted for more than two years, Capped Head half eagles are the most difficult to 80% complete. A wonderful 1821, an 1828/7, an 1828 and two 1829s are clear Great Rarities in the Pogue IV sale that have not received much attention in the media. As a series, Capped Head half eagles represent the ultimate challenge in the realm of classic U.S. coins.
Draped Bust, Small Eagle (1795-98) Silver Dollars
Collecting circulated Draped Bust Silver Dollars ‘by date’ or by major variety is not especially difficult. I am surprised that more people do not do so. There are many available that grade from VG-10 to EF-40. Collecting the least rare dates or major varieties in choice to gem grades and the scarcer dates or major varieties in any ‘mint state’ grade is extraordinarily difficult.
The Pogue set of Draped Bust, Small Eagle silver dollars is impressive and provides opportunities for collectors to obtain highly certified pieces, the likes of which are offered very infrequently. In ‘mint state’ grades, 1796, 1797 and 1798 ‘Small Eagle’ silver dollars are extreme condition rarities. These do not draw as much attention as the incredible, three 1795 dollars in this sale.
Newcomer-JAS-Queller 1838-O Half Dollar
Discussion about the Pogue1804 dollars and the 1822 half eagle has deflected attention from the reality that there is another, very famous Great Rarity in this sale, an 1838-O Gobrecht ‘Reeded Edge’ half dollar.
The most famous half dollar is the 1838-O. The first official, U.S. silver coins to be produced outside of Philadelphia were struck at the newly-established New Orleans Mint in 1838. The Pogue 1838-O half is one of a dozen or less that are known. This issue is covered in some detail in a past discussion. (Words in blue may be clicked to access relevant past articles.)
The Eliasberg-Gardner 1838-O has the same PCGS “SP-64” certification as the Newcomer-Queller-Pogue coin. The Eliasberg-Gardner 1838-O realized $646,250 on May 12, 2015 in the Gardner III sale.
There was not an attempt here to summarize the offering of the sixty-three coins in Pogue IV. The purpose of this article was to help collectors and other interested people attain an understanding of the importance of the coins in the Pogue IV event and of coin auctions in general.
©2016 Greg Reynolds