Article Written by Dan Duncan – Pinnacle Rarities
CoinWeek Content Partner

World War I was called “The War to End All Wars.” The sad irony is that it was arguably the war to begin all wars – at least for the modern era. A couple generations (or more) removed, it’s hard for us to get inside the average man’s head from 1921. But the horrors of that war included the use of nerve gas and mass genocide for the achievement of military goals. The resulting carnage statistics are estimated at over fifteen million civilian and military deaths. With that in mind, it’s easier to understand the sentiment for peace was overwhelming, and from this passion the Peace dollar was born.

Peace

This story begins with Allied forces pushing back against German occupation. By 1918, the German forces were defeated, and the negotiations of the Allied powers on how best to “punish” Germany began in Paris. These talks originally included seventy delegates from 27 different nations. This soon proved too complex to find any common ground and the actual treaty was drafted by just the three largest nations – The United States, France and Great Britain. Even with just three nations represented, decisions and agreements to key components were tough. Each nation’s goals conflicted with the others.

Ultimately an “unhappy compromise” was reached. It was called the Treaty of Versailles, and it officially ended the war in Europe. But stateside, the battle for a declaration of peace had just begun. Congress initially bucked Woodrow Wilson’s plan and even after the Harding administration took over, Congress on several occasions rejected the League of Nations and the ratification of the Treaty of Versailles. It wasn’t until the summer of 1921 that we passed the Knox-Porter Act, and peace was officially declared between the United States and Germany.

Dollars

The cost of the war was paid in silver from melted silver dollars. As our currency at the time was backed by silver dollars in the treasury vaults, the result of this debt was a recall on circulating silver certificates. Dollar production had been on hiatus since 1904, but the Pittman Act of 1918 ordered over 270,000,000 silver dollars to be coined to relieve this debt and replenish the Treasury’s coffers. The U.S. was going through a recessionary cycle and the Pittman Act went a long way to helping the economy recover. While authorization of the coinage of silver dollars passed in 1918, it wasn’t until three years later that the Peace dollar design was implemented.

Peace Dollars

The idea behind the new dollar design was a commemorative example to serve as a reminder of the atrocities from the war and the value of peace. The path to the enactment of the design was as turbulent as the road to peace itself. The Pittman act had paved the way for new dollars. But, the design ordered was the standard dollar or today’s Morgan type. At the time, monetized commemoratives coins had begun to make waves in numismatic circles and a number of different examples and denominations had been produced since 1892. Up to 1921, all commemoratives had been sold at premiums over face value and only a few ever inadvertently went into circulation. In 1918, as the war was ending, The Numismatist ran an article suggesting a commemorative that would circulate at face value.

This idea was batted around and in 1920 Farran Zerbe submitted a workable framework to the commemorative idea. Over the following fifteen or so months, the American Numismatic Association enlisted the help of Congressmen William Ashbrook and Albert H. Vestal. Their work along with the blessing of Mint Director Raymond Baker and the Commission on Fine Arts secured a “victory” coin’s place in circulating coinage as the silver dollar. The nation had yet to officially declare peace, but the proponents of the new dollar forged on. Short on time, they held a closed competition amongst the better known medalists and Anthony de Francisci won. His works included the recently released Maine Centennial Coin of 1918. His rushed Peace design met with equal amounts of scorn as delight. And after it underwent some cosmetic alterations, it was pushed through the necessary committees and approved.

1921 Morgans were in production for most of the year and were being struck at amazing speed. Upon approval, Baker ceased Morgan production but the Peace designs weren’t struck until the last week in the year. With little preparation time, the dies had not undergone much testing. The bold devices caused the dies to break prematurely and the design elements suffered from lack of sufficient pressure. Initial strikings of the high relief 1921 were not met favorably. The devices weren’t clearly struck up, the lettering wasn’t sharp and the coins were rumored to stack improperly. With die life and production speed compromised by the stylish design, the elements were flattened creating the lowered relief examples used for the duration of the series.

Mintages continued from 1922 to 1927 in large quantities tying up the mint production and causing low mintages of the other denominations of the period. In 1928 mintage numbers decreased, and once the Mint had satisfied the requirements of the Pittman Act, coinage of the Peace dollar was halted. It wasn’t until after the recall of gold coinage that new silver dollars were authorized. The Peace design was reborn with coins struck during 1934 and 1935 to fulfill the requirements of the Silver Purchase Act of 1934.

The design makes a brief encore appearance with the authorization of several million examples in 1964. And, in 1965, Denver coined some 317,000 1964 dated examples. Shortly thereafter, the Coinage Act of 1965 prohibited the production of silver dollars. The idea of a Peace dollar was scuttled with all coins destined for the melting pots. Examples of the 1964-D Peace dollar are rumored to exist, but with recent 1933 $20 legislation, the likelihood of anything ever surfacing is virtually nil.

Today, the Peace dollar is one of numismatics most popular series. The design is rich in history, one that begins as a commemorative coin and ends up an instrument of economic recovery. The story highlights the U.S. involvement in WWI, and its efforts to fund the conflict. The dollar was later used to stabilize the economy during the Great Depression. And now, the series is popular amongst collectors because of its relative affordability, the lack of any true stoppers and mostly for its lasting beauty. The historic past is one that spans three generations and the collectible nature means the Peace dollar will be enjoyed for many more to come.

By Patrick A. Heller – Liberty Coin Service
Commentary on Precious Metals Prepared for CoinWeek.com

Even though gold and silver prices are up significantly since the beginning of 2012, that doesn’t necessarily mean that this trend will continue. Buyers and sellers modify their decisions as prices change.

When you look at who is and who isn’t actively buying or selling gold and silver right now, that can give you significant clues as to where prices head in the near term.

Ever since the price of gold surpassed $1,000 for the first time in 2008, there has been significant liquidation and recycling of “scrap” gold such as jewelry and industrial products. In many instances, people who lost jobs or experienced other financial setbacks have sold assets to generate cash flow. Investment demand in the past three years has been so strong that prices continued to rise despite the increase in recycling supplies. From now into the future, however, the amount of scrap gold that could be liquidated will be smaller than it would have been because of all the gold already recycled.

The story is similar for silver. During the 1979-1980 precious metals boom, many companies acquired equipment to recycle metals. Even though prices later fell so low that it was no longer economical to acquire such equipment, it was still profitable to continue to use existing machines since the acquisition costs had already been paid. As a result, silver recycling continued at a steady pace even when prices were far lower during the past few decades.

Therefore, there is less silver available for recycling today and in the future than there would have been. Another factor to consider is that the use of silver in photography (including x-rays) has fallen sharply in the past decade or so. This is significant because a high percentage of silver used in photography is recycled. As the amount of silver used in photography has fallen, so has the amount of silver that could be recycled.

With higher prices, there would be a strong incentive for mining companies to expand production. However, it’s not quite that simple. From discovery of a mine site until full production used to take an average of about three years. With increasing environmental and other regulations, it now takes an average of about ten years to go into full scale operation.

Increasing regulations have also impacted the ability of existing mines to operate. In January, the government shut down operations at the Lucky Friday mine in Idaho, producer of about 0.5% of the world’s newly mined silver supply. Even though the mine had passed twice-a-year federal safety inspections, it was closed because of alleged problems with its state of the art mine shaft supports. The owner of the mine stated that it will take a full year to fix the alleged safety issues before the mine can resume operation.

Overall, silver mine output has been rising over the years even as global gold mine output mostly declined. Still, silver supply is just not increasing enough to match the rise in demand.

For decades, the central banks were net sellers of gold every year. That changed a couple of years ago to central banks now being net buyers of gold. The swing from being a net supplier to a net buyer has affected the supply/demand equation by about 40 million ounces a year. This is a huge impact when you consider that worldwide annual mine output may be only 70 million ounces.

Above ground inventories of physical gold and silver have dwindled over the past few decades, with supplies of both metals becoming tighter every year. Last year I received several reports of would-be buyers of multi-million dollar amounts of physical gold or silver who wanted to take immediate delivery but were unable to find sellers willing to accept their orders.

While the supply side of gold and silver is constrained, I think the largest impact on the prices of both will come from a surge in buying demand. Even though there has been an increase in demand for the two metals for industrial and investment purposes, the market has not yet experienced a sustained rush to buy physical gold and silver.

For instance, when gold and silver prices fell sharply in late 2008, there were significant delays in purchasing almost every form of bullion-priced physical gold and silver. At the most extreme, new orders for 1 ounce size silver rounds and ingots were taking three months for delivery after the buyers had paid for them. Today, in the US almost every bullion coin and bar is available for live or short term delivery. Premiums are close to as low as they have been over the past couple of years.

The recent weekly Commitment of Traders Report issued by the COMEX show that speculators have not jumped into the market. This means that the price increases have occurred without this source of demand.

China and India are the world’s two largest nations for consumption of gold and silver. What happens in those countries has a major impact on prices.

The Chinese government has been very aggressive at purchasing physical gold and silver for itself and also encouraging its citizens to accumulate precious metals. It is expanding the venues which would make it convenient for people to acquire gold and silver. There are regular stories of Chinese citizens who are unable to purchase physical precious metals because the stores are out of stock or have lines so long that it takes (literally) several hours to get service.

Demand in India is very sensitive to price. When prices fall, demand soars. When prices rise, demand tapers off until there is a sense that the market has established a base from which prices will resume climbing. Right now, buyers in India are mostly sitting on the sidelines since the price of gold broke above $1,700. So, prices rose in the second half of January without extra demand from this nation.

In Europe and the Middle East, there is strong demand for physical gold and, to a lesser extent, silver as safe havens from deteriorating currency values. Demand was especially strong in North America in March and April 2011, but is now lackluster.

Although there have been some investment funds taking positions in gold or silver, this activity has been on a minor scale.

Perhaps the most significant indicator that the rush to buy gold and silver has not started in earnest is the relatively minor importance that the two metals have in world finances. There were times in the first half of the 20^th century where the value of gold and silver mining shares and all the circulating gold and silver coins made up more than 20% of global wealth. Today that proportion of worldwide wealth is about 0.5%.

By the way, perhaps a significant indicator of where prices are headed in the near future is a decision by Endeavor Silver to inventory part of its newly mined silver output rather than sell it at current prices. I have heard that other mining companies are discussing this option, where they might only sell enough metal to fund continuing operations. It is highly unusual for mines to choose to defer cash flow in anticipation of much higher prices in the coming months.

The real rush to buy gold and silver will not be underway until there is strong demand from China and India, elsewhere in the Far East, the Middle East, Europe, and across North America. You will also see central banks and investment funds purchasing greater quantities of physical gold and perhaps silver. When fabricators and wholesalers are unable to meet demand for physical metal, prices could skyrocket. We are a long way from this position today. But it is coming and will be here surprisingly soon.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (http://www.numismaster.com under “News & Articles). His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.

by Louis Golino for CoinWeek

For the first time since the early 1980′s gold and a possible return to the gold standard have emerged as issues in American politics.

One GOP presidential candidate, Ron Paul, has made it a centerpiece of his campaign; another, Newt Gingrich is interested in exploring the idea; a third, Mitt Romney, opposes the idea as inflationary; and Rick Santorum also supports returning to the gold standard.

1981 gold commission

During the presidency of Ronald Reagan, a gold commission was created in 1981 that included Lewis Lehrman, a longtime advocate of returning to the gold standard.

The 1981 commission was marked by strong disagreement among its members on the idea of once again linking our currency to gold. The idea basically went nowhere, and in the view of many gold proponents it was just a sop to the gold bugs.

Mr. Lehrman was one of only two members of the seventeen-member commission who actually backed the idea of a new gold standard. He helped write the minority report of the commission, The Case for Gold, that was published in 1982. He frequently makes the case for a gold standard in interviews and articles.

Last year he published a book called The True Gold Standard that explains how to go about implementing it. He also has a web site, www.thegoldstandardnow.org, which is a project of the Lehrman Institute.

The gold standard started in 1853, became official in 1900, and ended in 1971, when another Republican president, Richard Nixon, ended the convertibility of the dollar into gold.

The gold standard was replaced with a system of floating, paper-based, or fiat, currencies that many conservative economists have argued over the years is at the root of inflationary pressures.

Price inflation was almost non-existent when the U.S. was on the gold standard, but the amount of gold that was pegged to the dollar has changed numerous times in U.S. history. For example, as Alan Herbert explained recently in Numismatic News, in 1792 a dollar was worth 1.604 grams of gold, but by 1971 it was only half that amount (0.8016 grams).

2012 GOP race

Of the candidates still in the 2012 GOP primary race, four have raised or been asked about the gold issue, and several of those who dropped out earlier also support the gold standard. Only Mitt Romney opposes the idea.

Rep. Ron Paul (TX) strongly endorses the idea of returning to a gold standard. Congressman Paul is widely known a gold bug and a supporter of backing the dollar with gold because it is the only sound form of money in his view.

He is also a former coin dealer, and his personal portfolio, as revealed last year in Barron’s, includes major investments in gold company stocks.

Last year he held a hearing on this issue in his position as chairman of the monetary policy subcommittee of the House Financial Services Committee.

Rep. Paul was also a member of Reagan’s 1981 gold commission, and he was the other commission member besides Mr. Lehrman who supported a new gold standard. He also favors abolishing the Federal Reserve.

Newt Gingrich, the former House speaker from GA, has expressed an interest in exploring the idea and has also backed a proposal to form a new gold commission that would evaluate the feasibility of returning to a gold-backed dollar.

During a January policy forum, Mr. Gingrich called for a return to hard money and said “Part of our approach ought to be to reestablish something Ronald Reagan did in 1981 and that is to have a Commission on Gold to look at the concept of how to get back to hard money.”

He also said he thinks the Federal Reserve’s mandate should be limited to maintaining the stability of the dollar.

Mitt Romney, former governor of MA, was asked about the idea in a recent interview with CNBC’s Larry Kudlow, who is a proponent of a strong dollar that he calls King Dollar. Mr. Kudlow often comes across as a sceptic about gold’s bull run in his CNBC appearances. He served in the Reagan administration.

Gov. Romney, whose front runner status in the GOP primary race is under siege by Speaker Gingrich, gave the following response to Mr. Kudlow when asked on January 25 about Gingrich’s proposal: “I know that in the past when we had a gold standard, the idea that somehow it was detached from or free from any interference by Congress was simply wrong because even with the gold standard someone has to decide what is the conversion rate between the gold and the dollar.”

He added that “And Congress can inflate the dollar simply by changing the exchange rate, as was done in the past. So I don’t think there’s any, if you will, magic bullet substitute for economic restraint, for not spending more money than you take in, for having the nation that’s the most productive in the entire world.”

Former Sen. Rick Santorum of PA also supports the idea. Last June he participated, along with some of the candidates who are no longer in the race, in a tea-party bus tour that was focused on support for returning to the gold standard.

A new gold standard?

It has been estimated that based on current U.S. gold reserves a price of $10,000 per ounce would be required to return to a gold-backed dollar. Others have put the figure as high as $45,000.

Many mainstream economists say such a system would be totally unfeasible because there simply is not enough gold in the world to make it workable. That may well be true, but it goes back to the idea of the amount of gold that would be linked to a dollar, which would not be permanently fixed.

But if that were the case, a new gold-backed currency might face many of the same problems the current dollar faces, especially devaluation, or reflation, through increases in the money supply.

A more widely accepted idea is the notion that the U.S. dollar, which is currently the world’s global reserve currency, will before long be replaced by a new system that would include a number of different currencies as well as gold.

Finally, any discussion of a new gold standard raises the issue of possible confiscation of privately owned gold.

I personally do not believe it is likely that we will see another U.S. government effort at confiscation in part because the wealthiest Americans are believed to store a lot of their gold offshore in locations like the Perth Mint of Western Australia and other locations that provide secure storage.

It would be very difficult for this and other reasons to achieve anywhere near the compliance level that was achieved when President Franklin Roosevelt declared it illegal for Americans to own all but a limited amount of gold in 1933. He did so to expand the money supply during the Great Depression.

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

News and Analysis on scarce coins, markets, and the collecting community #93

A Weekly CoinWeek Column by Greg Reynolds

It has been a while since I have written about Liberty Seated Half Dollars. Indeed, I have not done so since August 2011, when I discussed several Liberty Seated halves that had then just been auctioned, as members of the Dick Osburn Collection. The topic here is Liberty Seated Half Dollars that were offered in the FUN Convention auction, during the Platinum Night session on Jan. 4, 2012. I have already covered many other coins that were auctioned in this same event, including bust halves last week and earlier the Eliasberg-Atwater-Jung Chain Cent that realized $1.38 million. (Clickable links are in blue.)

Liberty Seated Half Dollars are scarce and attractive coins, which are undervalued from a logical perspective. While the uncirculated and Proof coins that I discuss here are too expensive for most collectors to obtain, Liberty Seated Half Dollars are not very costly in circulated grades, and may be good values in comparison to bust halves or Walking Liberty Half Dollars. Also, 63 grade halves tend to be much less expensive than the even higher grade coins that I discuss herein.

Besides, I wish to repeat my belief that, for collectors to understand the classic coins that they own or see, there is a need to learn about coins that are not affordable. Art enthusiasts often determine that it is beneficial to learn about paintings that they cannot afford.

It is not practical to cover all of the Liberty Seated Half Dollars in this auction session. I am focusing upon ‘No Motto’ Liberty Seated Half Dollars. The motto, ‘In God We Trust,’ was added to half dollars in 1866. Liberty Seated Half Dollars were minted from 1839 to 1891.

The so called ‘No Motto’ type was minted from 1839 to 1866, and this auction featured an impressive assortment of these. Moreover, this auction contained two gem quality, 1853 ‘Arrows & Rays’ Half Dollars, a business strike and a certified Proof. These are representatives of an important one-year type.

I. 1842 ‘Small Date – Large Letters’

The run of Liberty Seated Half Dollars in this Platinum Night session began with an 1842 half that is PCGS graded MS-64. It is of the “Small Date, Large Letters” variety.

There was another 1842 ‘Small Date – Large Letters’ half sold by Heritage in a different session of this same auction extravaganza. Surprisingly, it was also PCGS graded MS-64 and it realized the exact same price, $8050! I did not see the second one.

As high grade representatives of this issue trade so infrequently, it is hard to interpret this dual $8050 result. It could be that the PCGS price guide value of $17,500 is incorrect and should be lowered.

There was also a ‘Proof’ 1842 ‘Small Date – Large Letters’ half in this auction session. All known Proof 1842 half dollars are of the ‘Small Date – Large Letters’ variety.

This one is PCGS certified ‘Proof-64.’ The Heritage cataloguer suggests that seven are known. I am not thrilled about this particular coin. The $43,125 result is strong, a full retail price.

The Proof 1845 half in this sale is PCGS certified ‘Proof-64 Cameo.’ It sold for $57,500, another strong price.

II. Background: Small Dates and Larger Dates

The ‘Small Date’ term refers to the size of the numerals on the obverse (front of the coin). The ‘Large Letters’ term refers to the size of the letters on the reverse (back of the coin). Liberty Seated Half Dollars minted from 1839 to 1841 feature letters that are smaller than the letters on halves that were minted after 1842.

There are 1842 dated halves with both reverses. The ‘Small Letters’ reverse is sometimes called the ‘Reverse of 1839,’ and the ‘Large Letters’ reverse likewise is sometimes called the ‘Reverse of 1842.’

There are three major varieties of 1842 halves: Small Date – Small Letters, Small Date – Large Letters, and Medium Date – Large Letters. The ‘Small Date – Small Letters’ coins are much rarer than the other two varieties, though the ‘Small Date – Large Letters’ is worth a considerable premium over the ‘Medium Date’ 1842 halves.

In the history of coin collecting, obverse varieties tend to be much more significant than reverse varieties, especially those varieties that relate to numerals. A readily apparent obverse variety that is characterized by differences in one or more numerals, such as notably smaller numerals, is more likely, than other varieties, to have the status of a distinct ‘date.’

Randy Wiley and Bill Bugert have analyzed varieties of Liberty Seated Half Dollars and incorporated their findings into a book, which was published in 1993. This Wiley-Bugert (WB) book is available online at the DLRC website. They measured the height of the numerals on Liberty Seated Half Dollars.

In relation to coins, the term ‘date’ has more than one meaning. In the context of Small Date, Medium Date and Large Date designations, the date refers to the physical numerals of the respective year that appears on each coin.

According to Wiley and Bugert, Liberty Seated Halves of 1839 to 1841, plus some 1842s, have a ‘Small Date,’ which measures from 0.056 to 0.064 inch in height. As I already noted, other 1842s have a ‘Medium Date.’ The numerals in ‘Medium Dates’ vary from 0.076 to 0.086 inch. All half dollars of the following years are said by Wiley and Bugert to each have a ‘Medium Date’: 1843-45, 1859-74, 1876-85, and 1888-91.

In contrast, a ‘Large Date,’ which is sometimes termed a ‘Tall Date,’ measures from 0.086 to 0.096 inch in height. Wiley and Bugert report that Liberty Seated Half Dollars dating from 1847 to 1857, and also those of 1875, each have a ‘Large Date.’ It is curious that the 1875 is the lone year from a different era to have a ‘Large Date.’ Halves of 1858, 1886 and 1887 are said to each have an ‘Extremely Large Date,’ which is approximately 0.1 inch in height, give or take 0.02 inch.

The 1842 ‘Medium Date’ coins are often wrongly cited as having a ‘Large Date.’ Among Liberty Seated Half Dollars, 1846 seems to be the only year for which both ‘Medium Date’ and ‘Large Date’ coins are known. ‘Large Date’ and ‘Tall Date’ 1846 halves are the same coins.

III. 1846 Halves

The 1846 ‘Large Date’ (also known as “Tall Date”) is rarer in ‘mint state’ grades than the 1846 ‘Medium Date’ issue. Indeed, the 1846 ‘Large Date’ is probably rare in all grades.

The 1846 ‘Large Date’ in this auction is NGC graded MS-66. I just glanced at it quickly. I tentatively agreed with the 66 grade.

Matt Kleinsteuber carefully inspected it. He is very enthusiastic about this ‘Large Date’ 1846. It has “beautiful russets and blues,” Matt exclaims, “a true Superb Gem, wonderful.” Kleinsteuber is the lead trader and grader for NFC coins.

This 1846 ‘Large Date’ realized $25,300. If it was an 1846 ‘Medium Date,’ it would not have sold for as much. In this case, the premium for the ‘Large Date’ is perhaps $8000.

There were two Proof 1846 ‘Medium Date’ halves in this auction. The values of these Proof 1846 halves should not be directly compared to the values of 1846 business strikes, as Proofs are much rarer and are more expensive.

Each certified Proof 1846 in this sale is PCGS graded ‘64’ and is CAC approved. The first, at $35,937.50, brought slightly more than the second, which went for $34,500. Both prices are fair, though I feel more comfortable about the first coin than about the second. While the second Proof 1846 is more sharply detailed, the toning, surface quality and overall ‘look’ of the first are better.

Importantly, this session contained six Liberty Seated Half Dollars from the 1840s that are certified as Proofs by the PCGS or the NGC. All Proof issues from the 1840s are very rare.

IV. Eliasberg 1847

The Proof 1847 half from the Eliasberg Collection was in this sale. It is NGC certified Proof-64.

Louis Eliasberg formed the all-time greatest collection of U.S. coins and he had an excellent collection of world coins. This half dollar was auctioned by B&M of New Hampshire during April 1997, in New York.

On Jan. 4, 2012, the Eliasberg Proof 1847 half did not sell. I was present when the lot was offered. My impression is that a commitment of at least $24,750 would have been required to compete for it. The reserve was too high.

Consider the Pittman-Kaufman 1847, which is also NGC certified ‘Proof-64.’ It sold for $27,600 on July 31, 2008 when coin markets were peaking, for $16,100 in April 2009, when coin markets were bottoming, and for $16,675 in August 2011, at which time it was part of the Dick Osburn Collection.

It did not make sense for the consignor to require that bidding start at nearly $25,000 for the Eliasberg 1847. Even a collector or dealer willing to pay $25,000 may have wished to ‘see’ someone else bid before committing. There is a good chance, though, no bidder was willing to pay more than $21,500 for this coin on Jan. 4, 2012.

I like the Eliasberg 1847. Proof silver coins from the 1840s tend to be somewhat dark. This is often, though not always, an important sign of originality. Furthermore, natural medium to deep toning, of expected colors, should be celebrated, not penalized as one grading service seems to do. (Please see my three part series on appreciating naturally toned coins.) In my view, this Eliasberg 1847 half is certainly a Proof, is more than attractive, has naturally toned, and merits a grade in the middle of the 64 range.

V. 1853 Arrows & Rays

The quarters and halves of 1853, with ‘Arrows & Rays,’ are among the most famous and curious of type coins. Only in 1853, quarters and half dollars featured arrows on the obverse (front) and rays on the reverse (back). These are generally determined to be one-year type coins, or at least need to be regarded as a one-year subtype of Liberty Seated Quarters and Half Dollars, respectively.

Arrows & Rays Half Dollars are thus highly demanded by collectors who are assembling type sets. This auction featured both a business strike and a Proof 1853 with Arrows & Rays!

The business strike is PCGS graded MS-66 and has a CAC sticker. It has been moderately dipped and has naturally retoned to some extent. Further, it is mildly lustrous and has very few contact marks. In my view, its grade is around the border between MS-65 and MS-66. I am less favorably inclined, though, towards very apparently dipped coins than are the graders at the PCGS, the NGC, and the CAC.

This business strike sold for $69,000, which John Albanese finds to be “a strong price.” Indeed, I did not expect this coin to realize even $57,500. It did, though, realize this exact same $69,000 price at the Jan. 2008 FUN auction, four years ago. So, it is not quite fresh. Also, market levels for rare U.S. coins in general were higher in Jan. 2008 than in Jan. 2012.

For this issue, the PCGS has graded thirteen as MS-65, four as MS-66 and two as MS-67. This total of nineteen ‘gems’ undoubtedly includes multiple counts of some of the same individual coins. The NGC reports sixteen in MS-66 and zero higher. I doubt that these sixteen are all different coins, maybe nine of them are different. I have seen other gem business strikes of this ‘Arrows & Rays’ Half Dollar issue that I prefer to the one in this auction.

Any “Proof” 1853 Arrows & Rays half is extremely important. According to Heritage cataloguers, just five or six exist. At the moment, I recollect seeing just one other of this issue.

The one in this auction is PCGS certified ‘Proof-65’ and has a CAC sticker. Bruce Morelan reveals “that this is the Nevada collection coin.” (Please click to read my article on The Spectacular Nevada Accumulation and the Morelan Collection of Type Coins. )

Bruce Morelan had included this half in his type set. For reasons apart from the present or future market prices of coins, Bruce decided to sell his half dollars and he consigned this ‘Proof’ 1853 to this auction.

The finish on the 1853 ‘Arrows & Rays’ halves that are certified as ‘Proofs’ is substantially different from the finishes on certified Proof Liberty Seated Half Dollars of most other dates from the 1840s to the 1860s. Plus, there are other significant differences. These 1853s are very interesting coins.

While these special 1853 Arrows & Rays halves (and corresponding quarters) are not business strikes, I have never felt certain that “Proof” is an appropriate term for them, though I have come to accept it. When I reflect upon many of the silver coins from the 1850s that the PCGS or the NGC has certified as ‘Proofs,’ especially those with some or most design elements (devices) that are not even close to Proof ideals, this coin and probably a few similar ‘Arrows & Rays’ Half Dollars qualify as Proofs, in accordance with the criteria employed by the PCGS and the NGC, respectively. Certainly, these are close to being Proofs, special strikings of some kind.

The Nevada-Morelan ‘Proof’ 1853 was dipped, maybe more than twenty-five years ago. It has been naturally retoning to an extent. Further, this coin has minor hairlines and contact marks, mostly on the obverse (front). In my view, this coin’s grade is in the ‘low end’ to middle part of the 65 range, somewhere between 65.25 and 65.4.

This Nevada-Morelan 1853 realized $184,000, a price that John Albanese says “is about right”! Although the PCGS price guide value is “$200,000,” I regard this $184,000 result as a strong price, well within the retail range.

In 2007, Heritage auctioned the Kaufman 1853 Arrows & Rays half for $149,500. It is NGC certified “Proof-66.”

VI. Proof 1857

The Proof 1857 half in this auction is PCGS graded Proof-65 and has a CAC sticker. “It is beautiful,” John Albanese exclaims. John reveals that he bid, or was planning to bid up to, $34,500 for this coin. It sold for $35,937.50.

This exact same coin was auctioned by Heritage on July 31, 2008, when coin markets were literally peaking. It then realized $28,750. The Numismedia.com retail guide value for this coin is “$15,310,” as of Jan. 30, 2012. Proof 1857 halves, however, are rare in all grades and are distinct condition rarities in 65 grade. Guide prices may not be even close to actual market prices as Proof-65 1857 halves do not trade very often.

In general, Proof 1857s are rarer than Proof Liberty Seated Half Dollars of the 1860 to 1865 time period, which are of the same ‘No Motto’ type. The current PCGS price guide value is $35,000 for this coin, though I did not check this guide value prior to the auction.

The PCGS has certified just two 1857 halves as ‘Proof-65’ and none have been PCGS certified at a higher level. The NGC has certified three as ‘Proof-65’ and just two higher. This is the only certified ‘Proof-65’1857 half that is CAC approved, and the CAC has not stickered one of a higher grade.

The point of citing such data here is to further demonstrate that it is very difficult to gauge the market value of and analyze the auction result for this specific coin. Overall rarity, condition rarity, individual attractiveness, place of this coin’s grade in the 65 range, number of people collecting Proof Liberty Seated Half Dollars ‘by date,’ and other factors may have contributed to the auction result.

VII. 1859 Business Strike

Business Strike 1859 halves are scarce in all grades. Further, these are extremely rare in MS-65 and higher grades. The one in this sale is NGC graded MS-66 and has a CAC sticker. While 66 is a fair grade, its grade is not even near the high end of the 66 range, in my view. The $19,550 result is very strong. I was expecting a price in the $12,500 to $15,500 range.

This 1859 business strike is one of the finest known representatives of this issue. Only two have been PCGS graded MS-66 and none have received a grade higher than MS-66 from the PCGS. Three have been graded MS-66 by the NGC and one has been graded MS-67. Not all the NGC graded MS-66 1859 halves, though, would be graded MS-66 by the PCGS.

The originality of this coin probably was a factor in its strong realization. The deep brownish-russet tones, and blue hues in some areas, are soothing. Furthermore, it has very few contact marks. This 1859 is a pleasing coin overall.

VIII. Proof 1860

The 1860 half in this auction is PCGS certified ‘Proof-67+ Cameo.’ It sold for $43,125. The PCGS price guide value is $43,500. This coin glistens.

Matt Kleinsteuber reveals that he “was the consignor” and was excited about this coin. “It is very pretty. It is devoid of hairlines. I made it,” meaning that Matt was the submitter when it was graded ‘67+.’ “It is one of the best ‘No Motto’ Proof Seated Half dollars that I have ever seen. I thought it would bring more money,” Kleinsteuber declares.

I did not expect it to realize a higher price. In my view, the $43,125 result is strong.

High quality, Proof Liberty Seated Half Dollars, in general, tend to be very attractive. I am surprised that more people do not collect them.

Collecting Proofs of the post-1866 types and/or business strikes of the pre-1866 types would be enjoyable, in my view. Furthermore, I am surprised that more people do not assemble type sets of Liberty Seated Half Dollars and/or coins of other Liberty Seated series.

Each collector may choose a grade range that matches his or her budget and tastes. Most circulated Liberty Seated type coins are not expensive. Even a type set of uncirculated Liberty Seated Half Dollars is not costly relative to prices in general for uncirculated 19th century U.S. silver coins.

©2012 Greg Reynolds

Many clients are inquiring about their self directed New Direction IRA account buying metals. If you’ve taken an interest in purchasing real precious metals with your retirement account, it’s important to know what types of metals are allowable and the qualifications that must be followed to satisfy the IRS’ guidelines. This article sheds light of many of the different options available to precious metal investors and covers some of the more specific information regarding specific types of coins and bullion products for IRA investments.

First, let’s cover the basics. Your self directed IRA can only invest in Gold, Silver, Platinum and Palladium. The keyword here is “invest”. Your IRA cannot buy collectibles – your IRA is only investing in the metal itself, not rare or attractive coins. The metal must be in a certain form (usually coins or bars) and/or of certain purity. The purity or fineness of the metal is how the quality of the metal will be measured for your IRA.

When most of us hear about gold investment we picture the 400 ounce gold bars we have seen in movies. Extraordinarily heavy (about 25 pounds), those bars are also quite the expensive items, particularly with the recent price increases in gold. IRAs are often priced out of the gold bar market, but, fortunately, other options exist. One other option is smaller units of bullion, provided they meet the fineness, or purity level, requirement. Another option is coins.

Initially, the IRS deemed all coins to be collectable and disallowed IRA investments in coins.

In the mid-1990s, after realizing that a 400 ounce gold bullion bar would be prohibitively expensive for most IRAs, Congress revised the rules and allowed IRAs to own certain coins in addition to bullion.

Generally these IRA allowable coins fall into two categories:

Category #1: Coins specifically listed in the Internal Revenue Code, and defined as NOT being collectable. These include only the American Eagle coins minted by the US Mint. Specific coins include:

• American Gold Eagles – Proof and Non-Proof

These coins are issued by the US Mint in both Proof and Uncirculated (non-proof) form. Because the coins are specifically listed as NOT being collectables, they are allowed in your IRA. Prices for Proof and Non-Proof Gold Eagle coins vary due to a number of factors including the availability, original production, and date.

Interestingly, these US minted coins are not of sufficient purity to classify them as bullion. They are only approximately 91% pure gold. The other material in the coin off sets the softness of the gold and makes the coin more durable. Gold Eagles arrive in one of 4 forms: 1/10, ¼, ½ and 1 full ounce coins.

• American Silver Eagles. – Proof and Non-Proof

These coins are issued by the US Mint in both Proof and Uncirculated form. Because the coins are specifically listed as NOT being collectables, they are allowed in your IRA in proof and non-proof form. Prices for Proof and Non-Proof Silver Eagle coins vary due to a number of factors including the availability, original production, and date. Silver Eagles land in only one form: 1 full ounce coin. They are of bullion fineness, but are only .999 (three nines) due to the addition of a touch of copper for added durability.

• American Platinum Eagles. Proof and Non-Proof.

These coins are issued by the US Mint in both Proof and Uncirculated form. Because the coins are specifically listed as NOT being collectables, they are allowed in your IRA in proof and non-proof form. Prices for Proof and Non-Proof Platinum Eagle coins vary due to a number of factors including the availability, original production, and date. The rarest of birds, the Platinum Eagles are minted in 4 forms: 1/10, ¼, ½ and 1 ounce coins. These are of .9995 fineness.

Any of the above coins which have been graded for condition by certification organizations and placed in tamper-proof plastic containers called “slabs”, will generally fall into the collectible category and thus are not allowed for IRAs. Recently a national certification service has initiated an authentication service for bullion coins. Authentication provides a guarantee as to the purity of the metal and the weight of the coin. While the authentication process does place the coin in a tamperproof container and give it a unique serial number, it is intended for verification only and does not move the bullion into the collectable category.

If you’re not sure about this, ask your self directed IRA provider or metals dealer. All US minted coins have nominal face values, but the true value is based on the value of the metal in the coin.

Category #2: Some coins meet the minimum fineness requirements but are not rare enough to receive collector attention.

• American Gold Buffalo coins. Non-Proof Only

First minted in 2006, they are of bullion fineness, .9999 fine (known as four nines). Note that the specially processed proof version of this coin is NOT acceptable, due to the treatment raising the value of the coin beyond the value of the metal.

• Gold Coins – .995+ note that gold is a soft metal (although heavy) and thus most typical minting includes other alloys to harden the coin. Therefore most minted gold coins intended for use as currency do not meet the fineness requirement.

• Silver Coins – .999+

• Platinum – .9995+

• Palladium – .9995+

Non-coin forms of metal, such as smaller gold bars, must be manufactured to meet specific weight specifications for the amounts of metal included and meet the above fineness requirements.

In addition to these American options, there are some coins issued by mints of other nations that do meet the fineness requirements:

• Australian Nugget (Kangaroo) Gold coins .9999 fine

• Australian Kangaroo and Kookaburra Silver coins .999

• Australian Koala Platinum coin .9995 fine

• Austrian Philharmonic Gold coins .9999 fine

• Austrian Philharmonic Silver coins .999 fine

• Canadian Maple Leaf Gold coins .9999 fine

• Canadian Maple Leaf Silver coins .9999 fine

• Canadian Maple Leaf Platinum coins .9995 fine

• Canadian Maple Leaf Palladium coins .9995 fine

• Mexican Libertad Silver Coins .999 fine

• Isle of Man Noble Platinum coins .9995 fine

Some examples of coins that don’t meet the fineness requirements are: Austrian Corona and Ducat, Belgian Franc, British Sovereign and Britannia, Chilean Peso, Columbian Peso, Dutch Guilder, French Franc, German Mark, Hungarian Korona, Italian Lira, Mexican Peso and Ounza, South African Krugerrand, Swiss Franc, and any coin that falls into the “Rare”, and thus collectible, category.

Again, if you’re not sure about the fineness, ask your metals dealer to verify it.

Next time, we will talk about the process of getting metals into your IRA or other tax sheltered account. Note that Health Savings Accounts, another plan that can be self directed, is also eligible to be self directed and purchase metals.

by Louis Golino for CoinWeek

Dr. Michael Bugeja was appointed last year to serve on the Citizens Coinage Advisory Committee, which advises the U.S. Secretary of the Treasury on U.S. coin and medal designs and themes.

He is also a columnist for Coin World magazine, where he writes the “Home Hobbyist” column, and writes the “Coin Capsule” feature for Coin Update News that deals mainly with graded coins. He is very active in the numismatic arena, and has served as president of the Ames Iowa Coin Club, helped organized Coin-A-Rama,” a large Midwestern coin show, writes a blog about the auction platform Proxbid, and buys and sells coins at a local shop in Iowa.

In addition, Dr. Bugeja is Director of the Greenlee School of Journalism and Communication at Iowa State University and a former journalist and editor for United Press International. He is the author of numerous books and articles on issues such as ethics and poetry, among many others.

The CCAC was established though a 2003 law to advise the Secretary of the Treasury on the themes and designs that appear on all U.S. coins and medals, including circulating coins, bullion, commemoratives, and Congressional Gold Medals and other medals. It also advises on what people, events, or places should be honored with commemorative coins and makes recommendations on mintage levels.

The Treasury secretary makes the final decision on coin designs, but the recommendations of the CCAC play a critical role in informing those decisions.

After each of the committee’s meetings, it sends a letter to the Secretary with the minutes of the meeting. According to its web site (http://www.ccac.gov), “The CCAC serves as an informed, experienced, and impartial resource to the Secretary of the Treasury and represents the interests of American citizens and collectors.”

In my view, the CCAC is a critical link between the numismatic community and the U.S. Mint.

Dr. Bugeja serves in a position on the committee that is reserved for someone specially qualified in numismatics. The CCAC also has members who are numismatic historians and researchers, sculptors, experts on medallic arts, and so forth.

By serving on the CCAC, Dr. Bugeja plays an important role in promoting the hobby we all love so much and representing the views and interests of coin collectors.

I recently interviewed Dr. Bugeja about his work with the CCAC and his views on modern commemorative coins, circulating coins, coin design and artistry, the state of the U.S. coin market, and his interest in coins.

LG: 1.) Last year you were appointed to serve on the CCAC. Please briefly describe your work with the committee.

MB: I was chosen for knowledge of numismatics, after responding to an open call for applications. Because of my work for Coin Update News and Coin World, in addition to my love of the hobby, I was chosen in a very informative application process. I was asked pertinent questions, and I addressed them in part by recalling U.S. Mint history, especially as it related to coin design. The research and interview process prepared me well for the design critiques that we routinely do in our public sessions. I remember that I also am there to promote the hobby. As a collector, that always helps in the critiquing of designs for US coinage. We have a very good group of experts and a proactive, engaged and committed chair in Gary Marks. He prepares an agenda, the Mint sends designs in advance of the meeting–often with pertinent background information on legislation or commemorative occasions–and we analyze at home and then share in committee. Often, you’ll see preconceived ideas change during discussion. That’s the exciting part about being on the committee.

LG: 2.) Do you agree that the maximum authorized mintage levels for many recent U.S. commemorative coins have been far too high, which has depressed secondary values for many issues? It almost seems as if the Congress and the Mint have forgotten that these coins no longer have anywhere near the level of demand they did in the 1980′s, when they sold in very large numbers.

MB: As you know, often mintage is legislated and the Mint does what it can to fulfill obligations. But yes, I think mintage levels have been too high on some modern commemorative coins. I recently did a column for Coin World on privy marks and how Canada, for instance, uses them rather than mint coins commemorating one occasion in different coin denominations.

LG: 3.) I thought the Mint was working with the Congress to set lower mintage levels, but I noticed that the authorized level for many releases in the next couple years is still much too high, such as for the Marshall Service commemorative half dollar at 750,000. The most recent commemorative halves, the 2011 Army coins, only sold a total of about 108,000 pieces. Is the committee making an effort to suggest to the Treasury Secretary that these levels be set more realistically?

MB: In the meetings that I attended, that topic had not been debated or discussed at length with respect to commemorative coins. We have discussed mintage levels with presidential [$1] coins because of the recent news stories about the backlog of coins in storage. Personally, I think hobbyists want presidential coins to continue, but at lower levels, perhaps just in mint and proof sets, as we did with the Kennedy half dollar.

LG: 3.) Do you agree with the view some people have expressed that there have been too many military-themed commemorative issues in recent years (Army and Medal of Honor coins last year, infantry soldiers this year, five-star generals next year, etc.)?

MB: I really don’t have a personal position on that. I have great respect for those who serve our country in the armed forces. Also, since ancient times, military symbols and icons traditionally appear on coins. I believe we need more women on our coins. And I would like iconic women, such as Lady Liberty, to look like real women of different ethnic backgrounds, rather than media images of female beauty.

LG: The second part of this interview will appear next week. In it Dr. Bugeja discusses coin artistry, the use of classic images of liberty on our coinage, and other issues.

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

News and Analysis on scarce coins, markets, and the collecting community #92

A Weekly Column by Greg Reynolds

Regarding the FUN Convention auction in Orlando earlier this month, I discussed quarters last week, the Garrett-Jacobson 1829 ‘Large Date’ Half Eagle the week before, the Eliasberg-Atwater-Jung 1793 Chain Cent right after the sale, and Dr. Duckor’s Saints before the auction. (Clickable links are in blue.) The topic now is bust half dollars that sold during the first Platinum Night session, on Jan. 4, 2012.

In this auction session, the selection of half dollars had more depth than the offering of quarters. It is not practical to cover all or even most of these halves here. So, I have chosen bust halves for the present discussion. Next week, I will focus upon Liberty Seated Half Dollars. Eventually, I will write about rarities of other denominations in the FUN auction, perhaps including a specially struck 1927 nickel, an 1802 half dime, a 1799 dollar, and some more gold coins.

I. Flowing Hair Half Dollars

Flowing Hair Half Dollars were minted only in 1794 and 1795. A PCGS graded VF-30 1794 sold for $27,600, which may seem just slightly strong to an analyst who has not seen the coin. Jim McGuigan asserts that it has “questionable color.” In my view, it has significant issues relating to its ‘colors.’ The $27,600 price is very strong, given the characteristics of this particular 1794 half.

In Nov. 2011, Stack’s-Bowers (SBG) auctioned another 1794 that is also PCGS graded VF-30, for $25,875. It was naturally toned and much more desirable overall than this one.

The next lot was a 1795 (Two Leaves variety) half that is PCGS graded MS-61. It has been moderately dipped in the past and has naturally retoned to some extent. I just glanced at it briefly. I tentatively find it to have minimal abrasions. Furthermore, it has less friction than most certified ‘MS-61’ bust halves. Plus, this coin’s overall appearance is somewhat pleasing.

Even Jim McGuigan grudgingly accepts that the assigned 61 grade “may be okay.” Jim is known to be tough on coins that are certified as grading MS-61 or MS-62. For decades, McGuigan has been a specialist in pre-1840 U.S. coins. He attends almost all major auctions and leading coin conventions.

Although this exact same 1795 half sold for $54,625 in May 2007, I find the current $51,750 realization to be strong, well within the retail price range. The values of many coins have not returned to respective peak levels that were reached during 2007 or during the first eight months of 2008.

II. 1797 Half Dollar

Draped Bust Half Dollars of 1796 and 1797 are much rarer than Flowing Hair Half Dollars of 1794 and 1795, though each pair of dates constitute two-year types. Draped Bust, Small Eagle Half Dollars were minted only in 1796 and 1797. These are the rarest type coins of all series of silver U.S. coins.

The 1797 half in this auction is NGC graded ‘Extremely Fine-45.’ In terms of widely accepted price guides, the $86,250 price would seem to be very weak. Experts who have seen the coin, however, tend to be unsurprised by this auction result.

McGuigan regards this 1797 half as “VF-30, cleaned” and suggests that “maybe” the PCGS would grade it as “VF-35.” McGuigan and I each found this coin to have an awkward, washed appearance that is not rare for Draped Bust, Small Eagle Half Dollars.

In September, SBG auctioned this exact same 1797 half for $89,700. Further, it seems that, even earlier, Stack’s auctioned this same coin on March 23, 2007 in Baltimore. Although the online catalogue images are a little murky, I believe that it is the same coin. If so, it then realized $95,450.

As I have stated on numerous occasions, fresh coins tend, on average, to fare better at auction. For a coin to be fresh now, it must NOT have been publicly offered, such that many dealers and/or collectors know about it having been offered, for more than five years. This 1797 half is not fresh.

Additionally, circulated 1796 and 1797 halves now seem to constitute a category for which PCGS graded coins tend to be worth substantially more than NGC certified coins of the same respective grades. Price guides do not incorporate such wide gaps. Not too long ago, most collectors would have treated PCGS certifications equally, more or less, with NGC certifications, with respect to circulated bust halves. Market realities change over time, and such changes are often not reflected in price guides.

III. 1807 Draped Bust Half

In this sale, the first bust half that I became enthusiastic about is an 1807 Draped Bust, Heraldic Eagle coin that is PCGS graded MS-64 and has a CAC sticker. Draped Bust obverse, Heraldic Eagle reverse Half Dollars were minted from 1801 to 1807.

While this 1807 half is not exciting and maybe has the attractiveness of a 63+ or 64 minus grade coin, it is exemplary in a technical sense. There are minimal contact marks and this 1807 half does not exhibit any noticeable friction. Moreover, I do not remember any significant hairlines. The fields are impressive. Plus, for this issue, this coin is sharply struck. Also, it scores high in the category of originality. This 1807 half grades 64.4 or so, in my view. The price realized of $28,750 is strong, a full retail price.

IV. 1809 Half with Bars (|||) Edge

It is tricky to analyze the result for the 1809 Capped Bust Half in this auction, as it is of an unusual edge variety with irregular repeats of somewhat parallel bars among the words that are usually found on the edges of coins of this type. Capped Bust, Lettered Edge Half Dollars were minted from 1807 to 1836.

The 1809 ‘with bars’ ||| edge half in this auction is NGC graded MS-66 and sold for $43,125. John Albanese asserts that this “price is very strong.” I find it to be extremely strong and puzzling.

In 1809, other halves were minted with repeats of so termed “XXX” or “XXXX” devices between words on their respective edges. These seem to be sloppy, hand-engraved characters of some sort, which look more like graffiti than ‘X’ letters. Coins with such X devices on edges are even scarcer than those with the (|||) ‘bars’ edge. Most 1809 halves have normal edge devices, as the term ‘normal’ is defined in this context, typical letters for the type.

It has been argued that these extra edge devices are indicative of experiments. I doubt, however, that these 1809 halves relate to experiments. My guess is that some U.S. Mint employees were bored and added these devices in whimsical manners.

I was under the impression that collectors assembling sets of Capped Bust Half Dollars usually seek at least three 1809 edge varieties, normal edge, bars (|||) edge and XXX edge. Regarding this subject, I consulted Sheridan Downey, who is a specialist in varieties of Capped Bust Half Dollars.

“The ||| and XXX edge 1809 bust halves are anomalous” edge varieties that are listed in a widely read book covering all U.S. coins, according to Sheridan Downey. The Merriam-Webster online dictionary defines ‘anomalous’ as “inconsistent with or deviating from what is usual, normal, or expected,” and as “of uncertain nature or classification; marked by incongruity or contradiction.” “There are no other ‘edge varieties’ listed for the series” in the same guide book, Downey emphasizes.

I note that the famous researcher Breen addresses these varieties in his comprehensive encyclopedia that was published in 1988. Breen points out that there are a large number of edge varieties of Capped Bust Half Dollars and that it does not make sense for the (|||) bars and XXX varieties of 1809 halves to be specially itemized without mentions of many others.

Downey implies that these two ‘edge varieties’ should not be listed as separate entries in guides, except in very specialized volumes. I agree. While I am usually respectful of traditions, the significance of these edge varieties is grossly exaggerated. These seem to be barely noticeable, irregular varieties, perhaps due to thoughtless behavior of some U.S. Mint employees, rather than coins that should be treasured as distinct issues. In my view, these are not separate issues and should not command substantial premiums.

The PCGS price guide values an 1809 ‘with bars’ edge at $30,000 in MS-65 grade, as opposed to $17,500 for a PCGS graded MS-65 1809 half with a typical edge. The PCGS price guide does not value this issue in MS-66 grade, as there are no PCGS graded MS-66 coins of the ‘with bars’ variety.

“The XXX and ||| [bars] edge 1809s are sought by [guide book oriented] and Registry Set Collectors,” Sheridan Downey asserts. “Date and Overton-variety collectors don’t care about them.” Varieties of Capped Bust Half Dollars are typically identified and catalogued with a system that was originally developed by Al Overton.

Maybe the solution to the puzzle is that the buyer and/or the underbidder were thinking about including this 1809 in a PCGS or NGC registry set. There are popular categories in both the PCGS and the NGC registries for which three edge varieties of 1809 halves would be needed for a complete set of Capped Bust Half Dollars, an 1809 normal edge, an 1809 XXXX edge and an 1809 ‘with bars’ edge.

An objective relating to a registry set seems to be a plausible and logical explanation for the $43,125 result for this coin. After all, this 1809 is the highest certified representative of the ‘with bars’ edge variety. In April 2009, Heritage auctioned an NGC graded MS-66 1809, with a typical edge, for $14,950. The die variety, irrespective of edges, of that 1809 is rarer than the die pairing that was used to strike the $43,125 1809 ‘bars edge’ half being discussed here. Is it fair to suggest that the ‘with bars’ edge variety must have been the major factor factor contributing to the $43,125 result?

After all, the assigned 66 grade is debatable and very few high grade representatives of this edge variety have been documented. Downey “looked at but was not particularly impressed by the NGC [graded] 66” with bars (|||) edge half, this coin. I did not grade it as MS-66. I am not sure that the PCGS would even grade it as MS-65. The $43,125 price is one of the more interesting results in this auction.

Also, this NGC graded MS-66 1809 ‘with bars’ edge coin was previously in the collection of George Byers, which Stack’s auctioned in October 2006. If it then sold, this same realized $21,850, about half as much as the current result. I covered that auction for Numismatic News newspaper.

V. Run of Capped Bust Halves

There was a run of NGC certified Capped Bust Halves in this auction, several of which received grades that are sharply debatable. Very few are exemplary. The prices realized were moderate to strong for these overall, considering that several have characteristics that are causes for concern.

The following is a list of dates, with NGC grades in parentheses, and corresponding prices realized: 1810 (MS-65) $10,925, 1812 (MS-66) $14,950, 1814 (66) $15,625, 1815/2 (61) $19,550, 1817 (65) $10,925, 1817/3 (64) $17,250, 1819/8 (66), $16,100, first 1822 ($12,650, second 1822 (66) $10,925, 1828 (66) $12,650, 1830 (66) $9200, and 1834 (66) $11,500.

The 1815/2 is a scarce date and one of the keys to the series of Capped Bust Half Dollars. The one in this sale is NGC graded “MS-61.” Jim McGuigan suggests that this coin has “questionable toning.” Although I just glanced at this coin very quickly, I did not conclude that the toning was artificial. Even if the toning on this coin is not entirely natural, most collectors and dealers would probably accept this coin as being natural enough. It may have naturally retoned after a moderate to heavy cleaning. It is gradable, in my view.

Coins of the 1815/2 date that grade above MS-60 are subject to tremendous demand.Indeed, the PCGS CoinFacts site estimates that just a dozen 1815/2 halves grade MS-60 or higher. I suspect that there might be a few more than twelve. Nevertheless, the 1815/2 is scarce in all grades and is an important condition rarity in MS-60 and higher grades.

Even IF the 1815/2 in this auction merits a grade of MS-60 rather than MS-61, it would still be an extremely important coin. I reiterate that the MS-61 grade is probably fair, in accordance with widely accepted grading criteria. Even a MS-62 grade would not be ridiculous.

On July 31, 2008, when rare U.S. coin markets were peaking overall, Heritage auctioned a different NGC graded MS-61 1815/2 half for $18,400 and auctioned that exact same coin again in August 2010 for $12,650. This one brought more, $19,550. It may be true that this one is superior to the 1815/2 that was auctioned in 2008 and 2010. Generally, though, the $19,550 result for this specific 1815/2 is a fair to strong price.

The PCGS certified ‘Proof-64’ 1826 half in this auction did not sell, perhaps for three reasons. First, it has become stale by appearing in at least four auctions since 2005. Second, it exhibits a series of serious horizontal scratches near the numerals 1826, which cause some potential buyers to wonder about the assigned 64 grade. Third, even if its grade is held to be a solid 64, the reserve was just too high. A bid of more than $73,000 would have been needed to buy this 1826 half. Such an aggressive reserve discourages some bidders, possibly including people who might have been willing to pay $73,000 or more if the coin was unreserved.

This 1826 is very attractive and it is educational in the sense that it has powerful Proof characteristics. There are Capped Bust halves that are certified as Proofs yet might not be Proofs. This is not one of them. This half dollar is, indisputably, a Proof from the 1820s, and is very important as such.

VI. 1823 ‘Broken 3’ Half Dollar

The star of the Capped Bust Half Dollars in this sale is an 1823 half of the ‘Broken 3’ variety, which is distinct from the ‘Patched 3’ 1823 and from the ‘Ugly 3’! None of these should be confused with the 1823 issue that has normal numerals.

The unusual numeral ‘3’ varieties are all scarcer than the regular 1823 half with normal numerals. The ‘Broken 3’ coins, though, bring a higher premium than the ‘Patched 3’ or the ‘Ugly 3.’ The ‘Broken 3’ name refers to the fact that the top half of the 3 is mis-aligned with the bottom half and leans to the right. It seems to be disjointed.

The ‘Patched 3’ is characterized by additional metal where the top half and the bottom half meet and elsewhere. The ‘Ugly 3’ is mis-shaped, though not to a startling extent. On the die employed to strike 1823 ‘Ugly 3’ halves, in areas adjacent to the numeral 3,‘ die metal is missing and hot metal from the planchet (prepared blank) flowed into areas about the numeral ‘3’ while each coin was being struck. Improper punching of the numeral ‘3’ into the respective dies may have caused or contributed to all three of these unusual numeral ‘3’ varieties.

In my opinion, one 1823 is sufficient for a set of Capped Bust Half Dollars. Most collectors feel otherwise and find themselves compelled to include four 1823s in their respective sets. Coins with noticeable differences in numerals sometimes attain the status of ‘distinct dates.’ I just do not find the differences among the numeral threes in these cases to be especially important. I suggest that it makes sense for only collectors of die varieties to be concerned about them.

The one in this auction is certainly one of the finest known 1823 ‘Broken 3’ halves. Indeed, Downey says that the “1823 ‘Broken 3’ NGC MS 66 was more interesting” than the NGC graded MS-66 1809 that I already discussed. “It may be tied with the Overton Plate coin for finest known,” Sheridan declares. The “Overton Plate coin” is the 1823 ‘Broken 3’ coin that is pictured in the Overton reference book on die varieties of half dollars.

This 1823 ‘Broken 3’ is NGC certified “MS-66*,” including a star that is awarded by NGC graders to coins that they maintain have superior eye appeal. Furthermore, it is CAC approved. In my view, its grade is in the high end of the MS-66 range. Indeed, it is an especially appealing coin overall. John Albanese exclaims that it is “gorgeous.”

For some reason, the Numismedia retail guide value of $44,380 did not appear on the online listing for this coin on the Heritage website. Though it is strong, I did not find the price realized of $51,750 to be surprising. Albanese did. John states that this “price is very strong.”

If it is possible, then it may be very difficult to find another 1823 ‘Broken 3’ half that truly grades MS-65 or higher. In the minds of many collectors, this issue has the status of a distinct ‘date.’ After all, a numeral in the ‘date’ is different. While I am not convinced that it should have the status of a distinct ‘date,’ I find the ‘Broken 3’ variety to be much more important than the ‘with bars’ variety of 1809 halves that each include a few irregular bar devices on the edge in addition to the typical lettering.

I emphasize that it is not my intention here to cover all the pre-1840 halves in the Platinum Night session of Jan. 4. I selected some that are particularly newsworthy based upon consideration of their rarity, popularity, unusual characteristics, and/or strength of price realized.

©2012 Greg Reynolds