A Weekly CoinWeek Column by Greg Reynolds
News and Analysis regarding scarce coins, coin markets, and the coin collecting community, #103
While I am focusing upon early Quarter Eagles ($2½ gold coins) in a recent auction, I am covering more than just these coins. In my discussions here, I aim to contribute to the knowledge of the rarity, quality, pedigrees and market prices of Bust Right Quarter Eagles. These are very rare coins that are much less expensive than many coins that are much less rare.
Auction reviews typically emphasize coins that realized strong prices. It is important, however, to discuss coins that realize weak prices or do not sell at all. Indeed, it is often educational to analyze the reasons why a particular coin did not sell.
Usually, it is not the fault of the auction firm. It is a standard practice in the coin auction business for consignors, especially dealer-consignors, to have the option of establishing reserves of their choosing.
Essentially, this is my fourth column relating to the Stack's-Bowers Rarities Night event of March, 22, 2012. Last week, I wrote about dimes and copper items. The week before, I covered half dollars in this Rarities Night event. (Clickable links are in blue.)
Yes, I know that many collectors cannot afford to buy gold coins, let alone Bust Quarter Eagles. Even so, I find that collectors of copper, nickel or silver coins enjoy reading about gold coins. These are central to the history of U.S. coins and played a role in the economic history of this nation. Moreover, to understand the culture and overall values of the coin collecting community, there is a need to learn about coins that most collectors regard as not affordable. It is traditional and logical for each collector to learn about classic U.S. coins in general, all types minted from 1793 to 1934.
Since I was a kid, I have enjoyed learning about 1913 Liberty Nickels, 1894-S dimes, and 1873-CC 'No Arrows' Quarters, among a wide variety of coins that I cannot afford. IF I was writing here about art auctions or art history, would each reader wish to read only about paintings that he or she can afford?
I. 1796 'No Stars'
Quarter Eagles are $2½ gold coins. These were minted during most years from 1796 to 1929. There are two types of 1796 Quarter Eagles, those that lack stars ('No Stars') on the front of the coin (obverse) and those that have stars in the outer fields of the obverse, 'With Stars.'
The 1796 'No Stars' issue, however, is a one-year type coin. The lack of stars on the obverse is so readily apparent that it is a distinct design type. Quarter Eagles of the 'With Stars' Bust Right type were minted from 1796 to 1807.
In 2007, before PCGS CoinFacts was published, I estimated that seventy to ninety, perhaps eighty, 1796 'No Stars' Quarter Eagles exist. (Please click to read.) At this point, I do not perceive a reason to revise my estimate.
The 1796 'No Stars' Quarter Eagle issue is the rarest of all U.S. type coins, unless the 1907 'Rolled Edge' Eagle ($10 coin) is considered to be a distinct type and a definite regular issue. While archival researchers have concluded that only forty-two left the Philadelphia Mint, it seems that there are substantially more in the possessions of collectors. Could there currently exist as many as seventy 1907 'Rolled Edge' Eagles? That question will be addressed at another time.
In the March 22nd Rarities Night event, a 1796 'No Stars' Quarter Eagle is NGC graded MS-62 and it sold for $258,750. This exact same coin was auctioned by Heritage in Jan. 2007 for $253,000. Steve Contursi was then the successful bidder. Furthermore, it was then NGC graded MS-61. I am sure that Contursi was not the only leading bidder to determine that it might upgrade. In 2007, bidding started at less than $150,000.
In 2012, I graded it as 61.7, and, in 2007, I had quickly and tentatively graded it as MS-62. Although it is debatable as to whether it is strictly uncirculated, I contend that it is so. Even if it does have a little friction, it has less friction than many bust gold coins that are graded as MS-62 by the PCGS or the NGC. Such friction, if present, came about during storage, perhaps in a coin cabinet.
In my view now, this coin has too many imperfections to merit a 62 grade. I understand, however, how others may honestly determine that a 62 grade is accurate. Additionally, while I do not usually find Mint caused imperfections to be bothersome, this coin has substantial Mint caused imperfections, especially in relation to the dentils, rims and edge. This coin, however, was struck with more detail than many 1796 'No Stars' Quarter Eagles.
Why did this 1796 'No Stars' bring just $5750 more while NGC graded MS-62 than it did when it was NGC graded MS-61? Five logical reasons come to mind:
- Some leading bidders in 2007 graded it as MS-62 and adjusted their respective bids accordingly.
- Prices for 'Mint State' grade 'No Stars' Quarter Eagles are not as high now as prices were before rare coin markets in general peaked in early August 2008.
- On average (not nearly always and not for all types), PCGS certified coins are worth more than NGC certified coins of the same type, date and certified grade.
The disparity has become greater over the last two years. Further, the premiums for PCGS certified coins, or discounts for NGC certified coins, are greater for 1796 'No Stars' Quarter Eagles than for other coins, such as Liberty Head Quarter Eagles. A PCGS graded MS-62 1796 'No Stars' Quarter Eagle, if one was auctioned in 2012, would be expected to realize more than $300,000, maybe as much as $400,000.
In July 2008, Stack's auctioned a PCGS graded MS-62 1796 'No Stars' for $488,750. That coin was earlier part of the Oliver Jung Collection and ANR auctioned it in July 2004 for $345,000. The Jung 1796, though, is one of three that are certified by the PCGS as “MS-62.” In 2004, it was the only one so certified. I wonder if the total of three PCGS graded MS-62 coins of this type refers to only two different coins. Moreover, the Jung 1796 scores higher in the category of originality than the presently discussed NGC graded MS-62 coin. The Jung 1796 is a better coin overall.
Importantly, the PCGS has graded just one 1796 'No Stars' Quarter Eagle at a level higher than MS-62. It has been PCGS graded MS-65 since the mid 1990s. The finest known, MS-65 grade Lelan Rogers coin was auctioned in Jan. 2008 for $1,725,000.
- The presently discussed NGC graded MS-62 coin is not fresh. As I have emphasized, for a coin to be 'fresh,' it must not have been openly offered, in the mainstream of the coin business, for at least five years. This same coin was in a Goldbergs auction in May 2008, in which it did not sell. Also, it may be the NGC graded MS-62 coin that Stack's offered at auction in March 2010. I do not have immediate access to the Stack's March 2010 catalogue.
- As I have been pointing out for more than two years, there has been a growing trend for bidders, especially agents for collectors, to 'look past' the certified grade and figure bids on the basis of an evaluation of the coin, with the grade on the holder being relatively less important that it was prior to 2008. I could not be the only expert who figures that this coin may really just grade 61.
For a coin that is extremely rare in grades above AU-58, there may be a substantial difference in value between a 'low end' and a 'mid range' MS-62, and especially between a 61.7 grade and a 62.1 grade. If this coin's grade really is at least in the middle of the MS-62 range, in the views of pertinent experts, it probably would have realized much more than $258,750 in this auction.
Almost all expert leading bidders, and expert potential bidders, probably graded this coin as 61 'mid range,' 61 'high end,' or 62 'low end.' There are also bidders who 'buy the holders' regardless of the true quality of the coin inside. If 'holder-buyers' were leading the charge for this coin, my point that experts did not grade it as 'a mid range 62' would be further substantiated.
Supposing that this 1796 'No Stars' Quarter Eagle truly grades 61.7 or so, the $258,750 result is not strong. At this price, it would be a good value for a collector.
Although Jim McGuigan regards this coin as being overgraded, he is impressed by the details of the strike and the overall appearance of this coin. Most surviving 1796 'No Stars' Quarter Eagles have more issues and/or more serious issues than this coin. “If I was doing a type set, I would be happy with it,” McGuigan admits. Indeed, it would be difficult to find a better one.
In my view, this coin is likely to be one of the half dozen finest known 1796 'No Stars' Quarter Eagles. At least four different kinds of type sets require one, a comprehensive type set of classic U.S. Coins (1793-1934), a type set just of classic U.S. gold coins, a type set of Quarter Eagles, and a type set of 18th century U.S. coins, which is popular among collectors. There are thousands of collectors who are assembling relevant type sets, or are planning to do so.
II. 1796 'With Stars'
The 1796 'With Stars' Quarter Eagle is even rarer than the 1796 'No Stars' Quarter Eagle. Decades ago, David Akers estimated that twenty to twenty-five exist. Now, most experts agree that between thirty-five and fifty-five exist. Forty-seven perhaps is a sound estimate.
The 1796 'With Stars' issue is not nearly as important as the 1796 'No Stars,' mostly because the 1796 'With Stars' is not a one-year type coin. Quarter Eagles of the same type were minted through 1807 and it is not difficult to find a high grade piece of this design type. Demand is greater, however, for a 1796 'WITH stars' than for an 1802/1 or an 1805.
Collectors tend to like coins dated 1796. Further, while the 'No Stars' issue is the first Quarter Eagle, the 'With Stars' issue is the first of its design type. Additionally, John Albanese finds that demand has recently been much greater for 18th century coins than for 19th century coins of the same respective design type. “Coins in the 1700s are hot,” Albanese declares. For example, “1799 tens sell like a hotcakes, ten times faster than 1800 or 1801” Eagles ($10 gold coins), John reveals.
I have been fortunate to examine the finest known 1796 'With Stars' Quarter Eagle more than once. It has been NGC graded MS-65 for a long time. ANR offered it in 2005. Heritage auctioned it in Jan. 2007 for $862,500 and, again one year later, for $1,006,250. In 2008, it was part of the “Madison” type set, which was incredible. Kevin Lipton was then the successful bidder.
At some point between the Jan. 2007 and Jan. 2008 Platinum Night events, it was CAC approved. This may have resulted in a significant increase in value, especially since it is widely believed that the PCGS will not grade this coin as MS-65. I would have to find my notes to discuss its quality. It is attractive.
In the first Stack's-Bowers Rarities Night event, on Aug. 18, 2011, an NGC graded MS-63 1796 'With Stars' Quarter Eagle sold for $287,500, a very strong price. That coin was formerly in the John Whitney Collection and is one of the finest known.
The 1796 'With Stars' Quarter Eagle in the March 22, 2012, Rarities Night is NGC graded AU-50. In my view, it does not merit a numerical grade. It has been buffed. Days after the auction ended, I called Jim McGuigan and he, without any prompting, said that it was “lightly polished,” which is very much consistent with my conclusion that it had been buffed. Unfortunately, it is not unusual for 18th century and 19th century gold coins to have been buffed or otherwise polished years after leaving the Philadelphia Mint.
Last year, in regards to an 1804 quarter, I was astonished when one of the most sophisticated coin dealers, who is also an advanced collector, stated, in response to my questions, that an early U.S. coin having been polished does not, in his view, preclude it from being gradable. He suggests that it is just another factor to take into consideration when determining a numerical grade, which involves a balancing of positive and negative factors anyway. I am reminded of an 1870-S silver dollar, which received a numerical grade from the NGC, even though it has been lightly polished.
My position is that a buffing or standard polishing (as opposed to a rubbing) prevents a coin from deserving a numerical grade. There was a time when experts at both the PCGS and the NGC rigidly adhered to such a position. Over the years, however, some extremely rare or otherwise important U.S. coins that have serious problems have received numerical grades from the PCGS or the NGC. I do not know whether the experts at the PCGS or the NGC factored the polishing or buffing into the grade of each such coin, or whether they just did not realize that such coins were polished.
When a coin has been extensively buffed or otherwise polished, it is readily apparent. When a coin has just been lightly buffed, experts sometimes do not see the harm done.
In many instances, both services have accidentally graded coins that have been doctored or otherwise seriously harmed. Each of these two leading services grade hundreds of coins every day and perhaps tens of thousands of coins every month.
As for the 1796 'With Stars' in this auction, the reserve was such that a bid of more than $95,000 would have been required to buy it. Even if this coin merited a grade of “AU-50,” which it does not, this was a poorly reasoned reserve. In May 2010, when coin markets were similar to coin markets in the present, Stack's auctioned a PCGS graded AU-53 1796 'With Stars' for $80,500. Furthermore, the current Numismedia.com values are $91,880 retail and $73,500 wholesale. Although I do not always find Numismedia values to be valid, in this case, they seem to be very much accurate.
For this coin, the holder is worth at least $65,000. Given the rarity of this issue and the fact that many 1796 'With Stars' Quarter Eagles have problems, there is a good chance that collectors would have bid between $67,500 and $80,500 for this coin at this auction.
A fairly PCGS graded AU-50 coin of this issue probably would not have realized $95,000 in this auction. Indeed, in the Aug. 18, 2011, Rarities Night event, a PCGS graded AU-53 1796 'With Stars' did not sell and was reserved such that a bid of slightly more than $77,625 would have been successful. I am really puzzled that a consignor figured this generously NGC graded AU-50 1796 might sell for more than $95,000.
III. 1802/1 Quarter Eagle
The 1802/1 Quarter Eagle in this auction is PCGS graded MS-61. I found it to be a circulated coin that grades AU-58, at most. McGuigan agrees, as he grades it as “AU-55.” Furthermore, Jim remarks that it has been “dipped, is a light gold color and [lacks] eye appeal.” Though I agree that it has been dipped, I did not write any notes regarding its eye appeal, which I probably found to be average. A substantial percentage of 19th century gold coins that grade higher than EF-40 have been dipped.
While a very rare issue, the 1802/1 is not one of the rarest Bust Right Quarter Eagles. There could be as many as two hundred in existence. There are more than fifteen that merit 'Mint State' grades, though the piece in this auction is not one of them.
This coin did not sell. A bid of more than $38,000 would have been required to buy it. This is still another poorly reasoned reserve. Essentially, the consignor wished to start bidding at a retail level.
In Feb. 2009, the Goldbergs auctioned an NGC graded MS-63 1802/1 for $40,250. In March 2009, Stack's auctioned a different PCGS graded MS-61 1802/1 for $26,450. Yes, market prices for these are higher now than they were in Feb. or March 2009. Even so, I would have been startled if the presently discussed coin had sold for more than $38,000.
This same coin was offered in the first Stack's-Bowers Rarities Night event, on Aug. 18, 2011 in Illinois. It did not sell then either. In August, I noted that it had been dipped and that its assigned MS-61 grade is unsurprising.
When rare coin markets were booming in early 2008, Stack's auctioned a PCGS graded MS-61 1802/1 for $28,750. I believe that this is the presently discussed 1802/1, which was offered in Aug. 2011 and in March 2012. I am not completely certain that it is the same coin, as the catalogue images are not perfect matches. The photographic equipment or techniques employed for the Feb. 2008 Stack's auction catalogue may be very different from those employed for the Stack's-Bowers Rarities Night catalogues and/or this coin's appearance may have changed between 2008 and 2011. It is very likely to be the same coin. In any event, in March 2012, $23,500 would have been a reasonable reserve, not $38,000.
IV. 1805 Quarter Eagle
Like the 1802/1 overdate, the 1805 is more of a type coin rather than an extreme rarity. It is, though, much rarer than most 19th century type coins. Perhaps 150 survive.
The 1805 Quarter Eagle in this auction is PCGS graded Extremely Fine-45. It sold for $15,525.
It seems that McGuigan and I are in agreement regarding the underlying characteristics of this 1805 Quarter Eagle, yet I seem to like it more. I am reminded of the idiom that stems from the fact that the same glass containing a beverage can be accurately described as being half-empty or half-full. Even if the facts regarding an item are not in dispute, perceptions may be very positive or very negative.
While McGuigan remarks that this 1805 has a “dead look, no reflectivity, and not much original surface,” I say that it has been moderately to heavily cleaned and is characterized by a nice, mellow green color. Furthermore, for a cleaned, extremely fine grade, 1805 Quarter Eagle, it is attractive. I did not really expect it to score high in the category of originality. It has, though, not been doctored. Many early 19th century gold coins have been doctored.
This 1805 is not bad. It is much more desirable than many other circulated Bust Right Quarter Eagles. Its wear is even. The strike is not weak. This coin does not have many contact marks and its hairlines are not particularly bothersome.
Any 1805 Quarter Eagle is a very rare coin. Further, there are probably not twenty-five 1805 Quarter Eagles that are of higher quality than this one. The $15,525 result was strong, though I was not surprised by it.
V. 1806/5 Quarter Eagle
The 1806/5 overdate is extremely rare. Both 1806 issues are overdates, the 1806/4 and the 1806/5. There are no 'normal date' Quarter Eagles of this year. Additionally, these two issues have different formations of stars on the obverses, a difference that is more noticeable than the overdates. The 1806/4 has eight stars to the left of the word 'LIBERTY' at the top of the obverse, and five stars on the right. The 1806/5, in contrast, has seven stars on the left and six on the right. For each, the total number of obverse stars is thirteen, in honor of the original thirteen States of the United States of America.
In the PCGS CoinFacts publication, it is estimated that just twenty-five 1806/5 Quarter Eagles exist. The Stack's-Bowers catalogue indicates that there are twenty-five to thirty. I tentatively suggest that there are between thirty and thirty-eight. Fewer than twenty-five are (or should be) gradable. In 2011, I concluded that the PCGS and the NGC together have probably graded eighteen different 1806/5 Quarter Eagles. There are a number of ungradable ones.
At the Heritage auction of Dr. Duckor's Saints on Jan. 5, a 1928 Double Eagle sold for $54,625. There are more than six hundred thousand 1928 Saint Gaudens Double Eagles in existence. Compare this total to the fact that there are less than forty 1806/5 Quarter Eagles being in existence, more than 600,000 versus less than forty!
Interestingly, the CAC has approved only one 1806/5, which is PCGS graded AU-55. In the Aug. 18, 2011, Rarities Night event, it sold for $69,000. I wrote about it in my column of Aug. 16. For the entire type, of Bust Right, with stars, Quarter Eagles, the CAC has approved only sixty-seven coins.
The 1806/5 in the March Rarities Night event is not gradable and is currently in a PCGS 'Genuine' holder. It has the design details of an AU to MS grade coin and features considerable natural toning.
This coin did not sell. A bid of more than $26,000 would have been necessary. This same coin was also in the Aug. 18th Rarities Night event. It was then in an NGC 'Details' holder, roughly the equivalent of a PCGS 'Genuine' holder, though each NGC 'Details' holder usually refer to a coin having the details of a particular grade. It was said by NGC graders that this 1806/5 has the details of an uncirculated grade. In 2012, the Stack's-Bowers cataloguer referred to it as having the details of an “AU” grade.
Presumably, the consignor was figuring that this coin would bring at least an amount equivalent to a wholesale price for an EF-40 grade 1806/4 or to a retail price of a VF-30 grade 1806/5 Quarter Eagle. It is difficult, though, to predict how collectors will interpret such a coin, as the various scratches will bother some collectors more than others. I am surprised that no bidder was willing to pay as much as $27,500 for it. It is certainly among the better non-gradable 1806/5 Quarter Eagles and it has much more detail than some of the gradable ones.
In an era where many people spend megabucks, often five and six figure amounts, for condition rarities of common 20th century coins, Bust Right Quarter Eagles seem undervalued. These are all very rare. The 1806/5 is an extreme rarity. Few collectors have ever seen one.
©2012 Greg Reynolds