Coin Rarities & Related Topics: News and Analysis regarding scarce coins, markets, and coin collecting #383
An Ongoing Column by Greg Reynolds …..
Three Cent Silvers are much different from Three Cent Nickels. U.S. Three Cent Silver coins were minted from 1851 to 1873, while Three Cent Nickels were minted from 1865 to 1889. Before discussing the practicality of collecting Three Cent Silvers without spending as much as $500 on any one coin, historical circumstances are covered.
Type 1 Three Cent Silvers in particular have far greater historical significance than most collectors realize. Importantly, a pleasing PCGS- or NGC-certified set of Type 1 Three Cent Silvers may be completed without spending as much as $225 on any one coin.
There are three design types of Three Cent Silvers. All have a star on the obverse and the Roman Numeral three (III) surrounded by the letter ‘C’ on the reverse. On the Type 2 pieces (1854-58), the design of the large obverse star is slightly different. Also, leaves and arrows were added to the reverse design.
Although there are subtle artistic differences, the changes in 1859 mostly related to engineering and mechanics. For Type 3 Three Cent Silvers, a motive was to improve striking quality and make production more efficient. For example, letters became crisper and narrower. The outside lines on the obverse star were transformed and became more consistent on struck coins. Moreover, the borders are curiously different. While the changes in the design from Type 2 to Type 3 are not blatant, Type 3 coins are sharper and more impressive. Generally, Three Cent Silvers were intended to serve a practical purpose and aesthetics were not much of a consideration.
United States Capitol in the 1840s.
During the early 1850s, all U.S. silver coins except for Three Cent Silvers were subject to extensive hoarding, export and melting. Later, during the U.S. Civil War (1861-65), there was hoarding of U.S. silver coins for different reasons; citizens were scared.
People are far more likely to hoard coins with precious metal content, silver or gold, than coins that contain copper and/or nickel. When Three Cent Silvers were introduced in 1851, the metal nickel had yet to be utilized in U.S. coinage.
Half cents and large cents were produced from 1793 until 1857. These are copper.
If a Three Cent Copper had been introduced in 1851, it would have been expected to be much larger than a large cent, really much larger than a quarter, and thus would have been cumbersome. But more importantly, throughout most of the history of human civilization people have preferred coins with silver or gold content, two metals that have been traditionally thought of as suitable for both media of exchange and “stores of value”.
The California Gold Rush began in 1848. Within a matter of months, vast quantities of gold were mined and shipped to the East Coast. Gold discoveries and shipments continued for many years. The government-set ratio of gold to silver, however, remained the same for decades.
The U.S. dollar remained pegged by law at 371.25 grains of silver (.7734 Troy ounce) and at 23.22 grains of gold (0.048375 Troy ounce). There are 480 grains in one Troy ounce. Before 1853, except in regard to Three Cent Silvers, a dollar’s worth of silver coins weighed 412.5 grains of a 90% silver alloy and a One Dollar Gold piece was specified to weigh 25.8 grains of a 90% gold alloy.
The supply of gold greatly increased, while the supply of silver increased just a little. So, one dollar’s worth of silver coins came to be worth more than a One Dollar Gold piece in the marketplace.
In another words, from around 1850 to 1853 the value of the silver bullion in 10 dollars face value of U.S. silver coins was significantly more than the value of the gold bullion in 10 dollars face value of U.S. gold coins. Consequently, U.S. citizens hoarded silver coins or shipped them outside the U.S. Essentially, 10 dimes, four quarters, or two halves were worth more than one dollar in gold.
My hypothesis here is that this increase in the relative value of silver was the leading factor in the introduction of Three Cent Silvers, though politicians at the time tended not to acknowledge this reason.
An increase in the quantity of gold resulted in an increase in the relative value of silver. Even if the demand for gold remained the same, a significant increase in supply will have a downward effect on price – in this case, the price of gold. As 23.22 grains of gold equaled one U.S. dollar, the value of a U.S. dollar decreased, too, and silver rose in value. Incumbent elected officials did not wish to reveal that the value of a U.S. dollar went down because of a vast increase in the supply of gold.
While several researchers have maintained that Three Cent Silvers were introduced so that members of the general public could buy postage stamps, this was mostly a smokescreen rather than one of the primary reasons. It is true that legislation requiring a reduction in the the price of mailing a letter from five cents to three cents was considered at the same as legislation authorizing Three Cent Silver coins. Politicians are often clever.
The United States Postal Service did not serve the same purpose then that it served a century later. When leading researcher Don Taxay and others were writing about coins during the 1950s and ’60s, most adults received large quantities of mail every week, perhaps almost every day, all year around. The U.S. Postal Service was a very important part of many business activities and of the personal lives of people. A century earlier, people did not receive nearly as much mail, and postal services was not nearly as extensive. Furthermore, the literacy rate was not as high. Many U.S. citizens in 1850 did not receive any mail, not one letter during their entire lives. Life was dramatically different in 1850.
A majority of adults could then use three large cents to buy a postage stamp during the infrequent instances that a single stamp was really needed. Businesses and wealthy people could then obtain postage stamps in bulk, rather than walk to a post office for the purpose of buying one stamp.
Three Cent Silvers were introduced to provide silver coins that immediately circulated without changing the official gold/silver ratio or changing the government-mandated ‘value’ of a U.S. dollar in silver bullion. Three Cent Silvers were introduced without an acknowledgment that the policy of bimetallism was faltering. Some Congressmen just said that Three Cent Silvers were needed for sales of postage stamps.
In my article on an 1853 silver dollar, I explain bimetallism. Besides, an attempt to reduce the silver content of many denominations in 1851 would have required more of an explanation to members of the U.S. Congress than did the introduction of a new and seemingly inconsequential denomination.
When the law was passed authorizing the introduction of Three Cent Silvers, most legislators probably did not understand the significance of the legislation or did not consciously think about the implications of this act. While the official value of silver in U.S. silver coinage was 371.25 grains per dollar, with one cent thus being worth 3.7125 grains of silver, each Type 1 Three Cent Silver was specified to contain 9.28125 grains of silver, 3.09375 silver grains per cent. Therefore, a Type 1 Three Cent Silver contained much less than three cents worth of silver, 9.2812 grains versus 11.1374 grains.
For the first time in the history of the United States, a silver coin was deliberately made such that the silver-bullion value was much less than the face value of the coin, the first subsidiary coinage or fiat coin!
Additionally, Type 1 Three Cent Silvers were specified to be 75% silver and 25% copper, rather than 90% silver and 10% copper, which was the standard alloy for U.S. silver coins from 1837 to 1964. From 1794 to 1837, the composition of U.S. silver coins was not all that much different, though it was non-decimal, 1485/1664 silver, about 89.24%.
So, Type 1 Three Cent Silvers (1851-53) are the only classic U.S. silver coins that were not specified to be 90% silver or 89.24% silver. Type 2 and Type 3 Three Cent Silvers are 90% silver. During 1851 and 1852, though, Three Cent Silvers were the only U.S. silver coins that widely circulated. The legally mandated silver-to-gold ratio was no longer consistent with market realities.
The partly-cloaked introduction of subsidiary or fiat coinage was not the only reason in 1851 for introducing Three Cent Silvers. A major reason was to facilitate the retiring of well-worn silver coins of the Spanish Empire that were then present in the U.S.
Although a Quarter-Real (cuartilla) was 1/32 of a dollar (3.125 cents), many of these had worn considerably while circulating in the United States and contained significantly less silver than they did when they were struck. It was thought that a brand new Three Cent Silver would be preferred to a well worn Quarter-Real of the Spanish Empire or Mexico.
A Half-Real coin likewise was worth 6.25 cents (1/16 dollar) and One Real was worth 12.5 cents (1/8 dollar). Legislators figured, logically, that most consumers would be happy to receive Three Cent Silvers in change when they spent coins of the Spanish Empire in the U.S. Three Cent Silvers could also be traded for such coins in banks or other settings.
During the 1840s, coins of the Spanish Empire and of independent Latin American societies continued to circulate in the U.S. to a large extent, though not nearly as much they did 20 years earlier. The old monetary system of the Spanish Empire had faded. This empire itself began to crumble around 1810, partly as a consequence of the Napoleonic invasion of the Iberian peninsula where Spain and Portugal are located.
Many societies in Latin America initiated independence movements between 1808 and 1822. Newly independent Spanish-speaking societies tended to issue coins that were similar to or roughly consistent with the denominations of the Spanish Empire. Later, they shifted to other monetary orders or at least changed their respective coinage denominations.
The coins of the Spanish Empire and their descendants were the standard monetary units of the Western Hemisphere for centuries. The era of Reales and Escudos faded gradually. The U.S. dollar and several other standard monetary units around the world were based upon the Eight Reales silver coins of the Spanish Empire, ‘pieces of eight’!
The fact that Three Cent Silvers were somewhat consistent with the well-worn Quarter-Real, Half-Real and Real coins was a logical reason for this denomination. Certainly someone who held a very worn coin that has a face value of 3.125 cents (1/32 dollar) would often have been willing to equate it with a brand new U.S. Three Cent Silver. Someone who had a well-worn 6.25 cent coin (Half-Real) would have been likely to equate it, more or less, to two Three Cent Silvers.
Before the 20th century, trading and making change ‘in person’ were typically imprecise. People were willing to negotiate and compromise to effect transactions.
Despite the fact that the government was sneaking subsidiary or sub-par coinage on the public, Type 1 Three Cent Silvers served an important and valuable purpose. Without them, ‘making change’ during 1851 and 1852 would have been horrible for merchants and consumers. Type 1 Three Cent Silvers were very beneficial for the economy.
Collecting Three Cent Silvers
Except for the 1851-O issue, all Three Cent Silvers were struck in Philadelphia and do not bear mintmarks. The 1851-O Three Cent Silvers were struck at a branch mint in New Orleans and feature an ‘O’ mintmark on the reverse (back) of the coin. This mintmark is fairly large and commands attention.
By 1863, Three Cent Silvers were not serving the purpose in commerce that they were supposed to serve, use on a daily basis by tens of thousands of consumers. Those Three Cent Silvers minted from 1863 to 1873 are scarcer and more expensive now than Three Cent Silvers that were minted earlier.
“Three Cent Silvers stopped circulating in large quantities in the latter part of 1862, though some may have continued to circulate significantly in early 1863,” finds R. W. Julian. Bob is an eminent historian of U.S. coinage of the 19th century.
Three Cent Nickels were introduced in 1865, and contained no silver. From 1865 to 1873, the Philadelphia Mint struck both Three Cent Silvers and Three Cent Nickels. Julian points out, though, that “they did not co-exist” in commerce on a regular basis. Three Cent Silvers circulated to a minimal extent from 1863 to 1873. Production of paper money during this time period is pertinent. Collectors can easily acquire Three Cent Silvers that truly circulated.
Collectors with a $500-per-coin limitation can complete sets of Type 1 and Type 2 Three Cent Silvers, and then maybe add three or four Type 3 dates. It is perhaps neater to complete sets of the first two types and ignore Type 3 Three Cent Silvers. Coin collectors like to finish sets.
Of Type 1 Three Cent Silvers, there are just four dates: 1851, 1851-O, 1852 and 1853. There are minor anomalies that are ignored by collectors except by specialists in the die varieties of Three Cent Silvers.
A PCGS- or NGC-graded MS-64 1851 Three Cent Silver could be acquired for less than $500. Heritage just sold one in July 2017 for $352.50.
It is easy enough to just buy a PCGS- or NGC-graded AU-55 to -58 piece for less than $190. The 1851-O is a different matter. The lone branch mint Three Cent Silver is especially popular.
In August 2016, Stack’s-Bowers sold a PCGS-graded AU-55 1851-O for $470. In March 2017, this same firm sold a PCGS graded AU-58 1851-O for $376. There is a need to see the coins in actuality to interpret prices realized, and to not take certified grades too seriously.
Less than a month ago, Stack’s-Bowers sold a PCGS-graded MS-63 1852 for $240. In June, Stack’s-Bowers sold a PCGS-graded MS-64 1852, with a CAC sticker, for $446.50. A collector with a tighter budget may like to know that GreatCollections sold a PCGS-graded AU-55 1852 for $117.70, on June 18, 2017.
PCGS- or NGC-graded MS-64 1853 and 1854 coins could be purchased for less than $500 each. In March 2017, GreatCollections sold a PCGS-graded AU-53 1854 for $170.50.
In most cases, in the under $500 price range, Type 2 Three Cent Silvers are significantly more expensive than Philadelphia Mint Type 1 Three Cent Silvers of approximately the same quality. While ‘mint state’ Type 2 coins may be obtained for less than $500 each, pleasing AU-55 to -58 grade coins of the same respective dates are often better values. Coins that grade MS-60 or MS-61 tend to have problems, a large number of noticeable contact marks or annoying scratches.
In December 2016, Heritage sold a PCGS-graded AU-50 1854 for $188. In March 2017, Stack’s-Bowers sold a PCGS-graded AU-53 1855 for $446.50. In August, Heritage sold a PCGS-graded AU-58 1856, with a CAC sticker, for $352.50. In September 2016, Stack’s-Bowers sold a PCGS-graded AU-58 1857 for $199.75.
The 1858 is the last of the Type 2 Three Cent Silvers. In August 2014, Stack’s-Bowers auctioned an NGC-graded EF-40 1858, with a CAC sticker, for $110.45. This might have been an excellent value. It seems to be a wholesome coin with a few hairlines and minor contact marks, for just $110.45. If the toning is natural and pleasing, and it probably is so, this could be a really neat and very appealing coin, which is scarce and curious. Also, an AU-grade 1858 could certainly be acquired for less than $250, perhaps much less.
On July 9, 2017, GreatCollections sold a PCGS-graded AU-50 1858 with a CAC sticker, for $223.30. Earlier, on May 28, this same firm sold a PCGS-graded AU-58 1858 for $199.35.
Collectors seeking Extremely Fine to AU or higher grade Three Cent Silvers cannot build a set of Type 3 pieces, without spending more than $500 on any one coin. A short set of 1859 to 1862, however, is a very realistic possibility, as these tend to sell for the prices of Type 2 Three Cent Silvers, or less.
For coins in the $100 to $500 range, the 1859 is less expensive than any of the Type 2 Three Cent Silvers of equivalent quality. In May 2017, GreatCollections sold a PCGS-graded MS-62 1859 for $183.70.
AU-grade 1860, 1861 and 1862 Three Cent Silvers are sometimes excellent values. Back in July 2016, a PCGS-graded AU-58 1860, with a CAC sticker, brought $254.10. Within the last 10 months, GreatCollections sold a PCGS-graded AU-58 1861 for $138.60 and a PCGS-graded AU-58 1862 for $192.50.
Individual coins are not being recommended here. Auction and Internet-sale results provide ideas and ranges regarding market values. Even among two coins of the same date and type that have received the same grade from the same grading service, there can be tremendous differences. Collectors are advised to ask questions of experts, to carefully study coins on their own and to proceed slowly.
For prices ranging from $100 to $400 per coin, a neat run of Three Cent Silvers from 1851 to 1862 can be obtained, including complete sets of Type 1 and Type 2 coins. The historical issues relating to Type 1 Three Cent Silvers are fascinating and important. Historical aspects add to the experiences of collecting coins.
© 2017 Greg Reynolds
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Recent Articles in the Series on Classic U.S. Coins for Less Than $500 Each:
Barber Quarters | Set of Liberty Seated Types | Capped Bust Half Dimes | Capped Bust Quarters | Liberty Head Nickels | Barber Dimes | Proof Shield Nickels | Braided Hair Half Cents | Matron Head Large Cents | Classic Head Half Cents | Draped Bust Half Cents | Classic Head Large Cents | Gem Early Lincoln Cents | Indian Head Half Eagles | Two Cent Pieces | Three Cent Nickels | Indian Head Quarter Eagles | Copper-Nickel Indian Cents | Standing Liberty Quarters | Walking Liberty Half Dollars | Bust Half Dollars
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