News and Analysis on scarce coins, markets, and the coin collecting community #54
A Weekly Column by Greg Reynolds
Two-Cent Pieces are interesting and fun to collect. Last week, I wrote about Three Cent Nickels. Those who never heard of Three Cent Nickels have probably never heard of Two-Cent Pieces either. Unlike Three Cent Nickels, Two-Cent Pieces do not contain any nickel. These are 95% copper. Two-Cent Pieces are wider than Three Cent Nickels and five cent nickels. Since their birth in 1866, five cent nickels have had a diameter of five-sixths of an inch, more or less.
The diameter of a Two-Cent Piece is nine tenths of an inch, while the diameter of a Three Cent Nickel is seven tenth of an inch. Like Three-Cent Nickels, Two-Cent Pieces do not receive much publicity. For collectors who are looking for a series of U.S. coins to collect, are Two-Cent Pieces an appealing choice?
Two-Cent Pieces were minted from 1864 to 1873. Three Cent Nickels were minted from 1865 to 1889, though Three Cent Silvers were first struck for circulation in 1851.
John Albanese and Matt Kleinsteuber both maintain that it is important that Two-Cent Pieces were struck while the U.S. Civil War was still being fought. Two Cent Pieces are thus a Civil War era type. During the war, people hoarded silver coins, including dimes, half dimes and Three Cent Silvers. More coins for small change were needed.
“Two-cent Pieces were one of my favorites when I was a kid,” Albanese remembers. “Most Americans are not even aware that they ever existed.” Albanese was the sole founder of the NGC in 1987 and he started the CAC in 2007.
Matt Kleinsteuber started collecting coins when he “was eight years old. By nine or ten, I was collecting Two-Cent pieces.” Matt is lead trader and grader for NFC coins. Also, Kleinsteuber has been an instructor in grading at ANA Seminars.
Kleinsteuber continues to collect two-cent Pieces. “I own a lot of two-cent Pieces,” Matt reveals. He sold his complete set on a whim a few years ago. “I still collect the keys,” Matt says. Moreover, Kleinsteuber collects patterns of Two-Cent coins. “I think some pattern two-cent pieces are extraordinarily good values. Some are very under-rated,” Kleinsteuber emphasizes.
Matt “got into two-cent Patterns to expand the series. I would recommend people putting patterns into any 19th century set.” Patterns are “great additions” to collections of regular issues, Kleinsteuber declares. Plus, “patterns are fun!”
As for regular issues, which are the topic here, Albanese asserts that Two-Cent Pieces can easily be collected in most grades. “The set is short and not hard to complete,” John states. “I am in favor of any Two-Cent Piece that is high end for its [certified] grade,” Albanese maintains.
Kleinsteuber declares, likewise, that the series is “short, challenging, unrespected and completable” in most any grade from Good-04 to “gem mint state. A set of Proofs is completable, too.”
I. The Set
It makes sense to discuss circulated Two-Cent Pieces first, as most coin collectors can afford to buy a few of these. Business strike Two-Cent Pieces date from 1864 to 1872. According to U.S. Mint records, only Proofs, not business strike Two-Cent Pieces, were minted in 1873. All U.S. Two-Cent Pieces were struck in Philadelphia and do not have mintmarks.
A set of business strikes need include just ten coins: 1864 ‘Small Motto,’ 1864 with the ‘large’ or ‘regular’ motto, 1865, 1866, 1867, 1868, 1869, 1870, 1871 and 1872. The ‘Small Motto’ of 1864 is noticeably different from the ‘large’ or ‘regular’ motto that appears boldly on the obverse (front) of the design of all other issues of Two-Cent Pieces.
“The mainstream varieties are the 1864 Small Motto and the 1867 Doubled Die,” in Kleinsteuber’s view. Matt “would recommend these two varieties for a set of Two-Cent pieces.”
John Albanese has a different perspective. “A Doubled Die has to be prominent. The1955 Doubled Die Lincoln Cent is prominent. As for the 1972 Doubled Die cent, you can barely see it. I think the grading services label too many cons as Doubled Dies. It leads to price inflation for coins that are not that important. The 1867 Doubled Die Two-Cent Piece is really minor,” John asserts.
Albanese would not recommend that collectors pay much of a premium for an 1867 Doubled Die Two-Cent Piece. John maintains that it is not needed for a complete set of Two-Cent Pieces.
The Numismedia.com website lists considerable premiums for an “1869 Recut Date” Two-Cent Piece. “The 1869 Recut date means nothing to me,” Albanese exclaims.
I agree with Albanese. Except for advanced specialists in varieties, I would not suggest that a collector include either an 1867 Doubled Die or an 1869 “Recut Date” in a set of Two-Cent Pieces. The funds that a collector would have spent on these two varieties could be more sensibly employed, perhaps to start a set of another series.
Yes, there are many minor die varieties of Two-Cent Pieces. These, though, are of interest to advanced specialists in varieties who have been carefully studying such items in detail for many years. Most coin collectors focus on building sets in a reasonable amount of time and like to start new projects. For a large number of collectors, a set of all the dates in the Two-Cent Piece series would be a very realistic objective.
II. Circulated Coins
Business Strikes that grade less than sixty, especially those that grade less than fifty, are generally regarded as being ‘circulated,’ as are some Proofs that exhibit wear. Other than the 1864 ‘Small Motto’ and the 1872, circulated Two-Cent Pieces are not extremely expensive.
Raw (not certified) Two-Cent Pieces in Good-04 grade generally retail from $14 to $20 each. A sizeable, established coin firm recently advertised an 1865 Two-Cent piece for $4.95. While I have never seen this particular coin, I find the advertised grade of ‘Poor-01’ to be very believable.
For most dates, Very Fine-20 grade Two-Cent Pieces sell for from $20 to $30 each, and EF-40 grade coins for $40 to $50 each. As Fine-12 grade Two-Cent Pieces are only a few dollars more costly than Good or Very Good grade coins, Albanese strongly suggests Fine grade Two-Cent Pieces “over Good or Very Good ones. If you can afford a VG, you might as well buy a Fine,” John says.
For several dates, Fine-12 grade Two-Cent Pieces are probably available for around $20. An 1871, a better date, may be worth $30 in Fine-12 grade and perhaps $100 more, $130, in EF-40 grade.
Generally, Albanese holds that Very Fine and Extremely Fine grade Two-Cent Pieces are “the best values” among circulated Two-Cent Pieces. Numismedia.com values a set in VF-20 at about $1650, a set in EF-40 grade at around $2400, and a set in AU-50 grade at slightly above $2800. I, this writer, suggest that Two Cent Pieces in EF-40 to AU-50 grades are excellent values.
Raw (not certified) Good to Extremely Fine grade Two-Cent Pieces can be easily and fairly acquired from a large number of acceptable dealers. Collectors, though, should be careful and selective in regards to acquiring an 1864 ‘Small Motto’ and an 1872. “I have always liked the 1872 in circ grades. It is very tough to get a nice chocolate brown one in a circulated grade,” notes Albanese.
Collectors should consider 1864 ‘Small Motto’ and 1872 Two-Cent Pieces that are PCGS or NGC certified. There are idiots who tamper with these. Also, in a comprehensive encyclopedia that was published in 1988, Walter Breen stated that “dangerous counterfeits” are known of 1872 Two-Cent Pieces.
It would not surprise me if some entity in China produced forgeries of the 1864 ‘Small Motto’ issue. These have retail values of around $300 in Fine-12 grade and of around $500 in Very Fine-20 grade. It would not cost a lot of money to manufacture fakes and then artificially circulate them, along with some clothing and dirt, in machines modified for such a purpose. Numerous, artificially circulated forgeries of Morgans and Trade Dollars have surfaced.
To build a set, a collector should start by spending a small percentage of his or her budget for Two-Cent Pieces. It is best to proceed slowly.
Grading circulated Two-Cent Pieces is not very difficult, though it is a good idea to ask questions of experts. Collectors should not be afraid to ask questions and should not assume that most sellers will tell the whole truth about coins being offered.
III. Almost and Truly Uncirculated
As with Three Cent Nickels, many collectors of Two-Cent Pieces contend that coins in the 55 to 64 range are good values. These are considerably less expensive than coins that grade 65 or higher.
Unlike nickels, high grade copper coins are segregated into three categories, brown (BN), red and brown (RB) and full mint red (RD). Those that are designated ‘RB’ are said to exhibit a mix of original mint red and naturally toned brown color, sometimes with orange or green shades.
Business strike Two-Cent Pieces “don’t get very colorful,” Kleinsteuber finds. Even so, “they are great coins. The red-brown and the brown ones are usually attractive,” Matt says.
A set of PCGS or NGC certified MS-63 to MS-64 ‘Brown’ Two-Cent Pieces would probably cost somewhere between $5000 and $10,000, depending upon the quality and aesthetics of the individual coins. “A brown coin with booming luster can be hard to turn away,” Albanese remarks.
In AU-55 grade, a set would cost between $3000 and $4500, depending in large part upon the prices for the 1864 ‘Small Motto’ and the 1872. If outlays are spread over four years, a collector could thus complete a set of Almost Uncirculated Two-Cent Pieces for $650 to $1250 per year. For a set of an entire series, and of an entire denomination, such expenditures seem reasonable, from a logical perspective. It is not unusual for 19th century U.S. coins to sell for thousands of dollars each.
IV. Gem Uncs
By tradition, coins that grade 65 or higher are termed gems, such as ‘Gem BU’ and ‘Gem Proof’! Gem copper enthusiasts are advised by both Albanese and Kleinsteuber to be cautious about obtaining ‘full red’ (“RD”) Two-Cent Pieces.
Evidently, ‘RD’ copper coins that are stored in the East Coast, near the Atlantic Ocean, are much more likely to substantially tone and will tone faster than red copper coin stored in other regions. “If you are going to collect red coins, make sure you know how to take care of them. Use Intercept Shield storage containers and put your coins in safe” climate controlled environments, Albanese strongly maintains.
“Red copper is volatile,” Kleinsteuber declares. Though “I like full red copper, because I live in Florida, I personally collect red and brown. The [atmospheric] conditions in Florida are not good for red copper,” Matt insists. This is not only true of Florida. “There are [other] states where I would not collect red copper,” Kleinsteuber adds.
The premiums for PCGS or NGC graded MS-65 Two-Cent Pieces with a ‘RD’ designation over those of the same respective dates with ‘RB’ designations are substantial. Indeed, these premiums often range from 100% to 300%.
According to the PCGS price guide, a PCGS certified “MS-65 RD” 1868 Two-Cent Piece is worth “$6000,” while a PCGS certified “MS-65 RB” 1868 is worth considerably less, just “$1200.” In another words, the 1868 that is designated full red (“RD”) is valued 400% higher! In my opinion, this premium is not logical.
The fact that red copper tends to tone brown is not the only reason why ‘RB’ designated Two-Cent Pieces are often better values than ‘RD’ designated Two-Cent Pieces of the same respective dates. Those with ‘red and brown’ colors are typically attractive, sometimes more so than certified ‘RD’ coins.
Also, “a Full Red Two Cent Piece is more likely to have been doctored than a red-brown Two-Cent piece,” Albanese points out. A combination of incentives and doctoring techniques prompt coin doctors to transform Two-Cent Pieces that are not original mint red such that they look as if they exhibit original mint red. On occasion, graders at the PCGS or the NGC are deceived by artificially enhanced, ‘red’ copper coins.
In my view, collecting certified ‘RB’ copper coins involves less risk than collecting certified full ‘RD’ copper coins. Consider atmospheric issues relating to copper, the possibility of obtaining doctored coins, and the 50% to 500% premiums that ‘Choice’ or ‘Gem’ quality, certified ‘RD’ Two-Cent Pieces tend to command in coin markets.
Albanese suggests that current prices for PCGS or NGC certified MS-63BN, MS-64BN and MS-64RB Two-Cent Pieces “seem awfully cheap.” John draws attention to the fact that a “MS-64 Brown Two-Cent Piece is around the same price as a MS-65 1881-S silver dollar, which is a very common coin.” When I last checked, wholesale bids for a MS-64 Two-Cent Piece, of a typical date, and for a MS-65 1881-S Morgan were both around $190.
Kleinsteuber agrees that prices for Two-Cent Pieces are relatively low, when compared to prices for some other U.S. coin types. These are “the only neglected copper series in [American] numismatics,” Matt says. “Two-Cent Pieces are lower priced than other copper coins of the same rarity.”
Proof Two-Cent Pieces are a bit pricier than business strikes in grades of 61 and higher. There are exceptions. For a few choice or gem quality Two-Cent Pieces, with RD designations, business strikes are more expensive. A MS-65 RD or -66 RD 1868, for example, is worth more than a corresponding Proof-65 RD or Proof-66 RD 1868 Two-Cent Piece. Furthermore, in all grades above 60, business strike 1872 Two-Cent Piece are worth more than corresponding Proofs of the same respective, certified numerical grade and color designation.
The main reason why most interested collectors do not attempt to complete sets of Proof Two-Cent Pieces is the cost of a Proof 1864 ‘Small Motto’. Even a terribly hairlined Proof 1864 ‘Small Motto’ may cost more than $20,000. A PCGS or NGC certified Proof-65 coin could cost anywhere from $30,000 to $75,000, depending upon the color designation and other factors.
For most dates, a certified Proof-61 Two-Cent Piece would cost between $300 and $600. Except for the 1864 Small Motto and the 1873s, certified Proof-65 BN Two-Cent Pieces tend to have retail values from $700 to $1500. Again, with exceptions, prices for PCGS or NGC certified Proof-65 RB (red & brown) Two-Cent Pieces tend to be in the $1100 to $1750 range. A certified Proof-65 RB 1864 regular motto may be priced between $2000 and $2750.
The 1873s are a separate matter. According to U.S. Mint records, no business strike Two-Cent Pieces were dated 1873. As with 1873 dated coins of many other denominations, there are two widely recognized varieties, which are distinguished by the shape of the numeral 3, ‘Open 3’ and ‘Close 3.’
“It is okay to have just one Proof 1873 Two-Cent Piece in a set,” John Albanese relates. The PCGS Registry defines a “Basic” set of Proof Two-Cent Pieces as omitting the 1864 ‘Small Motto’ and including only one 1873. The corresponding PCGS Registry set with “major varieties” includes both 1873s and the 1864 ‘Small Motto.’
If a collector could afford a 63 or higher grade Proof 1864 ‘Small Motto,’ he or she could also afford both 1873s. Roughly, Proof-63 RB and Proof-64 BN 1873s tend to retail for prices ranging from $3000 to $3500 or so. A really high end Proof-64 BN of the ‘Open 3’ variety may cost closer to $4000. A Proof-64 RB ‘Open 3’ would be likely to cost more than $4000, while one of the ‘Close 3’ variety may be priced around $3500. Proof-61 to Proof-62 pieces of both varieties would probably be priced between $2000 and $3000, usually closer to $2000.
For all Proofs and choice to gem business strikes, I am referring to coins that have been certified by the PCGS or the NGC. Buying an uncertified Proof Two-Cent Piece would be a mistake.
Undoubtedly, there are collectors who very much like Proof Two-Cent Pieces and do not wish to spend more than $4000 on any one Two-Cent Piece. They may wish to save more than $20,000 by omitting the 1873 ‘Open 3’ and by substituting a business strike 1864 Small Motto for a Proof.
I emphasized last week in my column on Three Cent Nickels that mixing Proofs and business strikes in the same high grade sets was the rule for more than a century. (Clickable links are in blue.) For several series, collectors could save a lot of money and aggravation by assembling such mixed sets. Will this tradition make a comeback?
©2011 Greg Reynolds