A Weekly CoinWeek Column by Greg Reynolds
News and Analysis regarding scarce coins, coin markets, and the coin collecting community #137 …..
Collectors and dealers often refer to their pursuits of “rare coins” without really reflecting upon the meaning of the term ‘rare.’ Indeed, sellers of common coins often represent them as being ‘rare,’ or subtly imply that some common coins are scarce. I am concerned about situations where collectors pay substantial sums for common coins, without realizing such coins are common. Moreover, there are no widely accepted definitions of “scarce” and “common” as these terms relate to 20th century coins. It is difficult for a collector to know if a coin of his (or hers) is common if there is no appropriate definition of the term ‘common.’
In the past, I demonstrated that modern coins tend to be much more common than corresponding classic U.S. coins. A theme of this discussion is that, while most all modern U.S. coins are common, many classic U.S. coins are common, too. I aim here to contribute towards understanding the commonality of many, early 20th century U.S. coins and to take a first step towards developing definitions of the terms ‘scarce’ and ‘common’ to be meaningfully applied to classic U.S. coins, especially those of the early 20th century.
I. What are Classic U.S coins?
Of course, there are many modern U.S. coins that are as common as the most common classic coins. I have addressed modern coins in a other discussions, and, not long ago, I wrote about certified MS-67 grade modern quarters selling for more than $10,000 each. (Clickable links are in blue.) It is apparent that almost all modern coins are common. A primary point here is that most coin buyers do not realize that many classic U.S. coins are common, too.
In a two part series that I wrote in 2010, I explain that 1933/34 is the dividing line between classic U.S. coins and modern U.S. coins. The notion that pre-1934 issues tend to me much more scarce (or at least much less common) than corresponding post-1934 U.S. coin issues is a FACT, not an opinion. Others who argue that there is a different dividing line defend their respective views with opinions, not facts, mostly regarding the past timing of changes in the designs or alloys of coins.
Yes, the last business strike dimes, quarters and half dollars that are 90% silver are dated 1964. This is not a reason to regard 1964/65 as the dividing line between classic U.S. coins and modern U.S. coins. Like the clad (copper-nickel sandwich alloy) issues of the mid 1960s, the silver issues of the early 1960s were minted in enormous quantities. Other than the introduction of the Kennedy Half Dollar in 1964, U.S. coins had the same designs in 1963 as they did in 1966.
Besides, Lincoln Cents and Jefferson nickels of 1963 are the same in terms of design AND alloy as those dated 1966, respectively. Lincoln Cents and Jefferson Nickels of 1963, 1964, 1965 and 1966 are all extremely common. There is no dividing line here.
Indeed, U.S. coins issues of 1963, 1964, 1965 and 1966 are all very common. Other than for collectors seeking the finest known representatives or very obscure varieties, there is no challenge in acquiring U.S. coins from the mid-1960s. They all fall into the same general category of modern coins In contrast, with a very small number of exceptions, U.S. coins minted after 1934 are dramatically more common than corresponding U.S. coins minted before 1933.
While I admit that many pre-1934 coins are common, too, and these are the topic of this discussion, pre-1934 common coins tend not be nearly as common as corresponding post-1934 coins. Moreover, I am not here referring to generic U.S. gold coins, though these are very common. I am referring to many classic U.S. coins that collectors do not usually think of as being common, yet are common in the sense that more than 10,000 exist now: ALMOST all issues in the following series: Buffalo Nickels, Mercury Dimes, Standing Liberty Quarters, Walking Liberty Half Dollars, Peace Dollars, Indian Head Quarter Eagles, and Indian Head Half Eagles.
II. Marketing of Coins
It is not a secret that generic U.S. gold coins, common-date Morgan Silver Dollars, Peace Dollars, common-date Walking Liberty Half Dollars, common-date Mercury Dimes, and many other non-rare coins are extensively marketed, by telephone, by direct mail, on websites, through television infomercials and shopping channels, through financial advisors, and by other means. Many of these same coins are sold by mainstream coin dealers as well. In addition to millions of outsiders who are targeted, most people in the coin collecting community are exposed to the marketing of common coins.
Yes, if a collector fully understands the commonality of a coin and markets for such a coin, then he can make a sound decision, given his own values, regarding whether he wishes to acquire such a coin. A collector who is receiving honest and extensive advice from an expert, too, should be able to make sound buying decisions and have some understanding of the rarity or commonality of specific coins. The reality, though, is that many coin buyers respond to marketing campaigns, sales pitches, or disjointed recommendations.
I am aware of cases where medical doctors, lawyers, accountants, and other formally ‘educated’ people are misled. Here, I am not referring to scams, however, as scams and blatant fraud are topics that are beside my present points. I am concerned that the buyers of common coins at fair market prices are often not aware that such coins are common.
I hope that all coin collectors will reflect upon the commonality of many classic U.S. coins and think about how valuable these coins ‘should be,’ from a logical perspective. It is relevant some mainstream dealers ‘push’ the coins that they have in inventory or the coins that they can easily acquire from wholesalers. On the whole, there are numerous sellers who have a financial motive to sell common coins while giving the impression that such common coins are scarce.
It is also important to identify different degrees of commonality. Generally, Morgan Dollars are much more common than Standing Liberty Quarters.
III. What Causes a Coin to be Valuable?
I am not suggesting that the rarity or scarcity of a coin is the only factor that does or should determine its value. Of course, I realize that there are and should be other factors.
The rarity, scarcity or commonality of a coin relates to its supply, though also affects demand. There are collectors who enjoy owning certain coins just because they are rare. Alternately, as John Brush pointed out in a recent column of mine, there are collectors who enjoy collecting Morgan Silver Dollars because these are so common and thus readily available. For most Morgans, there is not a need to spend much time waiting or searching.
The demand for a coin is determined by its popularity or the overall popularity of its design type, its scarcity (or rarity or commonality), its overall quality, its quality or eye appeal in relation to its already assigned grade, its historical significance, and its role in the history of coin collecting.
Although the unique 1873-CC ‘No Arrows’ dime is far rarer than any 1804 silver dollar, each 1804 dollar is a legend in the history of coin collecting, as is each 1913 Liberty Nickel, and thus most 1804 dollars and all 1913 Liberty Nickels are each worth more than the unique 1873-CC ‘No Arrows’ dime. (It may be true that the two lowest quality 1804 dollars each have less value than the $1.84 million amount that the unique 1873-CC ‘No Arrows’ dime realized in the Stack’s-Bowers auction of the Battle Born Collection on Aug. 9, 2012.)
Lincoln Cents of the 1909-S VDB issue and 1916-D Mercury Dimes are extremely famous and will always be far more valuable, in the same grades, than other classic U.S. coins that are equally common. Indeed, John Albanese declares that “there are more 1909-S VDB pennies than 1912-S nickels, but more people want S-VDB pennies than ’12-S nickels because collecting pennies is more popular and S-VDB pennies are the most popular.”
Most 20th century coins are common. Few 20th century coins that are rarities. Some 20th century U.S. Mint errors are rarities, though these are in a specialized and complicated category.
I immediately recollect five dates in the series of Indian Head Eagles ($10 gold coins) that are rarities, including the 1907 ‘Rolled Edge,’ the 1907 ‘Wire Edge’ (if this is a regular issue), the 1920-S, the 1930-S and the 1933. Others in this series are scarce.
There are several Saint Gaudens Double Eagles ($20 gold coins) that are truly rare. Among Indian Head Quarter Eagles ($2½ gold coins), the 1911-D may be scarce; all the other business strikes are common. Among Buffalo Nickels, 1916/1916 Doubled Die coins are very scarce, possibly rare.
I am not suggesting that common coins be avoided. I just wish for collectors to be aware of the commonality, and other characteristics, of the coins that they are buying. Indeed, the commonality of most early 20th century coins is a topic that coin enthusiasts, myself included, should learn more about.
IV. What does ‘Common’ mean?
The terms “rare coins,” scarce and ‘common’ are often employed in a casual manner. A coin is rare, in absolute terms, if five hundred or fewer representatives of the respective coin issue currently exist, in all grades, and of all die varieties. If fewer than two hundred and fifty exist in the present, a coin is very rare.
A coin is scarce if five thousand or fewer exist. Fewer than five thousand 1901-S, 1913-S and 1918/7-S quarters exist, respectively. At the moment, I cannot think of another business strike, U.S. silver coin from the 20th century for which fewer than five thousand survive in all grades, including those that are not gradable.
In the past, I defined a coin as being common if more than ten thousand exist, in all grades. If this ‘10,000’ rule is taken literally, however, then almost all 20th century coins are common. All Buffalo Nickels, except the 1918/7-D and the 1916 ‘Doubled Die,’ are thus common, as more than 10,000 exist of each of the other issues. Except perhaps the 1916-D, all Mercury Dimes are common, according to this definition, as are most all Standing Liberty Quarters and maybe all Walking Liberty Half Dollars. For all 20th century regular, business strike Indian Cents and Lincoln Cents, more than 10,000 of each survive.
For a particular coin issue, there is a huge difference between 11,000 coins being in existence and eleven million, or even just one million. It is thus misleading to refer to a 1916-D dime and 1929 dime as both being common, as fewer than 20,000 1916-D dimes exist and maybe more than two million 1929 dimes exist.
A coin is defined as scarce if fewer than five thousand exist or maybe fewer than ten thousand, depending upon which definition is accepted. The terms common, very common and super common have not really been defined and there is no accepted usage. In contrast, I contend that my definitions of rare (less than 500), very rare (<250), extremely rare (<100), and a Great Rarity (<25) are consistent with the traditions and established rules of coin collecting in the U.S. There is no such tradition in relation to identifying common coins.
Clearly, there is a need for clarity and additional definitions. Without definitions, collectors will not know what is meant by scarce, very scarce, common and very common. Moreover, I believe that it is harmful to use the term ‘rare’ to refer to coins that are scarce or common. Since the 1970s, many buyers have specialized in collecting 20th century coins in gem grades (65 or higher) and the notion of a ‘condition rarity’ became more narrowly defined.
A coin may be very common in grades below 64 and yet very rare in grades of 65 or higher. The usefulness of this concept of a ‘condition rarity’ is limited and it can be misleading. First, the line could be drawn at 64 or 66. Is 65 a magic number? Second, it does not make sense to exclude, to ignore, or to downplay the people who collect coins that grade less than 65. Third, it is unlikely that the concept of ‘MS-65’ is clear to most coin buyers. The use of MS-65 as a dividing line leads to problems and mis-understandings.
It is not unusual for a coin that is graded ‘65’ by the NGC to be graded MS-64 by the PCGS. Furthermore, a coin that is graded ‘65’ or even ‘65+’ by experts at both the NGC and the PCGS may fail to be approved by experts at the CAC. In addition, a coin that was fairly PCGS graded MS-64 fifteen years ago may have a good chance of being fairly PCGS graded MS-65 in the present. Grade-inflation occurred. Furthermore, even regarding coins that have been graded 64 not long ago, it is not that unusual for a coin that is graded 64 to be upgraded to 65 by the same service that earlier graded it as 64. Also, coin doctors may add putty to a coin that was PCGS graded MS-63 and deceive PCGS and NGC graders into thinking that it now grades MS-65.
For several reasons, referring to some coins as being “rare” in MS-65 or higher grades and as common in grades below MS-65 does not lead to a solution to the problem of defining the terms rare, scarce, and common. Other definitions of ‘rarity’ and ‘commonality’ in regard to 20th century coins are needed.
Certainly, definitions should be fair and helpful to the people who collect coins that grade less than MS-65. In my view, it does not make sense to lump coins that grade Good-04 and MS-63 into one category.
My main purposes in this discussion are to outline the problem and to shed light on the commonality of 20th century coins. I am postponing my attempt at a solution. Furthermore, it may make sense for the proposing of such definitions to be a group project. I will be asking several experts.
For now, I suggest distinguishing the number surviving of coins that grade Very Fine-20 or higher from those that grade below VF-20 or do not merit numerical grades because of serious problems. A VF-20 dividing line is not arbitrary.
Collectors who are only minimally concerned about the design details and/or who are focused on completing sets will often acquire coins that grade Good or Very Good. Furthermore, many collectors find coins that grade less than VF-20 to better values than coins that grade higher. For some reason, a large percentage of the survivors of circulating coin issues grade in the Good-04 to Fine-12 range. Coins that grade below Good-04 were more likely to be melted. On a Good-04 grade coin, the main design elements are discernible, at least in outline.
For 20th century coins, it may make sense to define an issue as being “very common” if more than ten thousand exist in grades above Fine-15, meaning VF-20 and higher, and as “scarce” if fewer than five thousand grade above Fine-15. After all, for a large percentage of 20th century copper, nickel or silver business strike U.S. coin issues, more than five thousand of each exist in all grades, including coins that are not gradable because of serious problems.
V. Examples: 1929 Dimes and Quarters
To attain an understanding of the commonality of most 20th century classic coins, I cite 1929 dimes and 1929 quarters as examples. Indeed, Philadelphia Mint 1929 Mercury Dimes are perhaps excellent examples of pre-1934 Mercury Dimes that are common, yet not as common as many post-1934 Mercury Dimes. Please remember that 1933/34 is the dividing line between classic and modern U.S. coins.
I realize that 1929 Mercury Dimes and Standing Liberty Quarters are not mass marketed in the ways that Morgan Dollars, Peace Dollars, 1901-S Eagles ($10 gold coins), 1926 Eagles, and 1924 Double Eagles ($20 coins) are marketed. These are not generics.
Nearly twenty-six million 1929 dimes were minted in Philadelphia. Yes, most of these have since been melted. I suggest, though, that at least ten percent survive. Throughout the 1930s, 1940s, 1950s, and early 1960s, there were a large number of people collecting Mercury Dimes at face value, usually from change. Furthermore, collectors and dealers did set aside rolls. Among collectors, Mercs have been extremely popular for more than seventy-five years.
So, it is likely that there are two million, five hundred thousand 1929 dimes around. Even if I am mistaken about the number of surviving 1929 Mercs, there could not be fewer than five hundred thousand extant, still a large number, though less than one percent of the reported mintage.
At least one 1929 dime has sold at auction for more than $8000! MS-65 grade 1929 Mercs retail for $60 to $75, or so. Two PCGS certified MS-65 grade 1929 Mercs with ‘full bands’ apparent on the reverse (back) recently sold at auction for $141 and $188, respectively. The PCGS CoinFacts site states that there are “1,500” or so 1929 Mercury Dimes that grade MS-65 or higher, with ‘Full Bands.’ So, even this sub-category of 1929 dimes is not rare.
Besides, a weakly struck MS-63 grade 1929 Merc is worth around $30. Is this a lot of money for a very common coin?
Philadelphia Mint 1929 Standing Liberty Quarters are not as common as 1929 dimes. These are, though, very common, More than eleven million were minted. There must be more than three hundred thousand in existence in the present. In MS-63 to to MS-66 grades, PCGS certified 1929 quarters have recently sold at auction from around $170 to nearly $700.
PCGS certified 1929 quarters, with ‘Full Head’ designations, in MS-63 to -66 grades, have recently sold at auction for prices ranging from $282 to $1610. Certainly, more than two thousand 1929 quarter have received or would receive ‘Full Head’ designations from the PCGS or the NGC. Besides, it is often debatable as to whether a quarter really has a ‘Full Head.’
There are many U.S. coin issues dating from 1900 to 1932, 20th century classics, that are common, in terms of all plausible definitions of the term ‘common,’ as applied to coins. Admittedly, more than a few of these that I previously categorized as ‘common’ could be, with a new set of definitions, re-classified as scarce. Even if a new set of definitions is adopted, however, most Lincoln Cents, Buffalo Nickels and Mercury Dimes, among other early 20th century issues, will remain classified as common.
Would using the terms scarce, scarce, and very scarce in regard to just the respective coins, of each issue, which grade above Fine-15, be educational and productive? A coin could thus be a key date in grades above Very Fine and not be a key date in grades below VF-20.
©2012 Greg Reynolds