The Coins In-Between – Special Mint Sets

By David Schwager for CoinWeek …..
“A very disappointing product” David Lange, A Guide Book of Modern United States Proof Coin Sets (2010)

“Predictably a failure” Walter Breen, Walter Breen’s Complete Encyclopedia of U.S. and Colonial Coins (1988)

These quotes from well-known authors describe the Special Mint Set (SMS) coins of 1965 through 1967. Are they really, however, so inferior?

“In between” is the best way to describe almost everything about SMS coins that bridged gaps during a transitional time in the history of US coinage.

The Silver Crisis and the End of the Silver Proof Coin Era

Entire books have been written on the silver crisis, of which the SMS was a small part. Put briefly, the United States Mint found itself unable to keep up with demand for silver coinage. The rise in silver prices posed a significant cost issue for the federal government were it to continue to produce circulating coins in silver, but an equally large component of the coinage crisis was an explosion in the use of vending machine technology.

By the mid-1960s, federal stockpiles of silver dollar coins, long stored in Treasury vaults, were exhausted by speculators. Similar pressure on silver coinage was felt globally as well.

In 1965, Congress authorized a switch from silver to copper-nickel and the Mint needed to produce coins at a furious rate to replace the missing silver. To save effort and move resources towards making coins for commerce, the mint made no proof sets or mint sets in 1965, 1966, and 1967.

In those three years, however, the Mint did not completely ignore the coin collector. As replacement for proof sets and mint sets, they made an in-between product known as a Special Mint Set (SMS). A mint set (for most years) contains coins made with ordinary circulation methods – struck once with unpolished dies on unpolished planchets and allowed to fall into a hopper with other coins. A proof set contains coins made with slow and careful methods – struck multiple times with polished dies on polished planchets and individually handled so they do not touch other coins.

A Special Mint Set falls in between circulation and Proof coins. They were struck once with polished dies on unpolished planchets and allowed to rub against other coins, although not to the same extent as circulation strikes. The resulting pieces were better than ordinary coins in mint sets but not up to the level of proofs. Grading services call these in-between coins specimen strikes and give them grades such as Specimen-67, abbreviated to SP-67.

The 1965 set came in the same packaging as 1955 – 1964 Proof sets. A flexible clear plastic holder kept each coin in a separate pocket, with this inside a brown paper envelope. Earlier proof sets were only $2.10, a price low enough that many collectors ordered multiples to resell at a profit. The SMS jumped to $4, a price more in line with the value of proof sets on the secondary market. Lower quality coins at a higher price drove the mintage down from the 3,950,762 of the last 1964 proof set to 2,360,000 for the first 1965 Special Mint Set.

Seeking to give collectors something more for the extra money, the Mint invested in more attractive and durable hard plastic holders for the 1966 and 1967 sets, each in a cardboard sleeve. These resembled the aftermarket Capitol Plastics holders used by collectors both then and today to store proof sets. The price stayed at $4 and mintages continued to drop, with 2,261,583 sold in 1966 and 1,863,344 in 1967. The decline was partly due to the content of the sets and partly due to the coin market coming off its 1964 peak, in one of the endless series of market ups and downs.

With the coin crisis solved, the Mint no longer needed emergency measures and resumed making proof sets in 1968. Selling for $5, the 1968 set used an even better hard plastic holder and cardboard box. Mintage did not return to 1964 levels, but jumped to 3,041,506, or more than any Special Mint Set.

Special Mint Sets illustrate how the way the Mint served collectors changed during the coinage crisis of the 1960s. Previously, the US Mint made coin sets as a public service at a minimal charge below their market value. The Special Mint Sets, with their price increase, were a step towards a more entrepreneurial spirit. Although it is still a government agency and not run for profit, the Mint began the phase that continues today, in which it sells premium products to collectors at market prices, helping to fund other Treasury operations.

These premium products, in the case of the SMS, also began to include premium packaging. The rigid plastic cases of 1966 and 1967 sets led to the hard plastic holders known as “lenses” used in proof sets to the present day. Early proof sets, mint sets, and classic commemoratives came in functional but drab boxes and envelopes. The small nod towards aesthetics in SMS holders, however, was the first step towards ever more elaborate packaging, leading up to the richly designed boxes used for today’s gold coins.

How do collectors see Special Mint Sets today? Plenty of collectors assemble runs of US proof sets and most include 1965 – 1967 Special Mint Sets in their collections rather than leaving gaps for those years. That is, collectors see SMS coins as substitutes for the missing proofs.

A collector who wants one SMS of each year can easily pick them up for around $40 for all three in original packaging. It is possible, however, to get much deeper into the subject.

For example, early 1965 sets had a satin finish while later sets had a shiny appearance usually known as brilliant. Nothing in the packaging points to the difference. Instead, it takes skill and experience, gained through viewing large numbers of sets, to separate the two finishes. The true student of modern proofs will want to look for examples from all three years with cameo contrast.

Cameo coins, in which the devices (foreground) have a frosty white appearance against a mirrored field (background), became common around 1971. They are scarce, however, for most 1950s and 1960s proof and SMS coins, and the market rewards the few that appear. For the 1965 SMS nickel, for example, PCGS Coin Facts shows 344 certified in SP-67 (PCGS price guide $30), 103 certified in SP-67 Cameo (price guide $140), and only 13 known in SP-67 Deep Cameo (one auctioned in 2017 for $3,525).

The even more advanced collector of modern coins can pursue the mysterious 1964 Special Mint Set. Unknown for decades after their production, the 1964 sets first came to light in a 1993 Stack’s Bowers auction. The coins have a satin finish like early 1965 sets and heavy polish lines in the fields, indicating that the dies were enhanced before striking. They may have been prototypes for the 1965 sets sold to the public or presentation sets made for important people. Some writers speculated that they came from the estate of Eva Adams, mint director from 1961 to 1969, but the real answer is that no-one knows why or how they were made. Based on the number that have come to market in the last 25 years, mostly as single coins, about 50 sets exist. These attract intense interest when sold. For example, in 2016 Heritage Auctions sold a 1964 SMS half dollar for $47,000 and a 1964 SMS nickel for $17,625.

Only a few of us, of course, collect at this lofty level. For all collectors, especially those specializing in proof set or mint set coins, the SMS is a necessary and intriguing “in between.”