News and Analysis regarding scarce coins and coin markets #26
A Weekly Column by Greg Reynolds
The current topic is the W. L. Carson collection, which features Proof U.S. coins. It was auctioned by Stack's in Baltimore last week. B&M also conducted a major auction in Baltimore, which included the Malibu Collection. Next week, I will discuss the Malibu Collection. This 'Malibu' collector formed one of the all-time best collections of Standing Liberty Quarters. He also had an excellent run of Liberty Seated Halves, as well as some important Liberty Seated silver dollars.
Some may wonder why I am focusing on collections rather than on the most expensive coins in these two auctions. I write about a wide variety of coins, not just expensive ones. For discussions of modestly priced coins, please see some of my recent columns: Advice for Beginning Collectors, The 1933/34 dividing line and Collecting Modern Coins.
Importantly, the most expensive coins in an auction are sometimes consigned by dealers or non-collecting speculators. In the grand scheme of the history of coin collecting, consignments from collectors (or the beneficiaries of deceased collectors) have much more significance than dealer-consignments. Moreover, collector-consignments tend to realize higher prices at auction, especially in instances where the coins consigned have been 'off the market' for seven years or more, and thus constitute 'fresh material.' Bidders become more enthusiastic about coins in very good collections than about coins that are consigned by dealers or entirely unknown parties. Noteworthy collections are central to the culture of coin collecting.
I. W. L. Carson Collection
Most (or all) of the coins in the W. L Carson collection have been 'off the market' for decades. This collection contained more than six hundred coins, including, but not limited to, early copper, circulated key-date Lincolns, and choice vintage commemoratives. The core of the collection, however, is Carson's Proof sets dating from 1856 to 1915.
As best as I can tell, all of the pre-1916 Proofs in the Carson collection are PCGS certified. Most are PCGS graded and a large number have stickers of approval from the CAC, which approves or rejects coins that have already been graded by the PCGS or the NGC.
I hypothesize that Carson aimed to assemble Proof sets, from 1856 onwards, in copper, nickel and silver. Three of his sets included gold, 1888, 1906 and 1913.
Unfortunately, Carson's level of knowledge was not great, at least not when he started buying Proof coins, and he bought some problematic coins, including non-Proofs that were probably represented to him as Proofs. I further hypothesize that he learned a good deal, received advice from an expert advisor and/or purchased many coins from honest, knowledgeable dealers, as he did obtain a large number of choice or gem Proof coins dating from the 1860s to 1915. Though Carson also had Proof sets dating from 1936 to 1942, and from 1950 to 1964, these are beside my discussion of the core of his collection. At the center of the core is a complete 1888 Proof Set.
II. 1888 Proof Set
Yes, W. L. Carson had a complete 1888 Proof Set, with copper, nickel, silver and gold coins. The Indian Cent is in a PCGS Genuine Holder. Carson probably did not know that it had problems when he acquired it. After all, other coins in the set are choice. (Coins that grade 63 or higher are termed 'Choice.' Coins that grade 65 or higher are gems.)
“As a whole,” Matt Kleinsteuber declares, the Carson 1888 Proof set “was incredible, especially the gold. The coins were filmy and original, just like they were supposed to be. The coins were conservatively graded, in [Matt's] opinion. The gold all had the same matched, creamy surfaces, never dipped or enhanced, virgin surfaces that were amazing. [Kleinsteuber] loved the set.” Matt is the lead grader and a trader for NFC coins, and he is an instructor at ANA grading seminars.
The ungradable 1888 Indian Cent sold for $276, which is obviously a strong price. A gradable Proof-60 1888 cent is worth less than $100. Even a Proof-64 1888 would sell for less than $276, unless it has a great deal of original Mint Red color.
The Carson 1888 Three Cent Nickel is PCGS certified Proof-64 and has a CAC sticker of approval. This Three Cent Nickel went for $322, which is not a weak price, yet it is not one of the stronger prices in the auction. It may be a good deal for the buyer.
The Carson 1888 Liberty (Five Cent) Nickel is certified Proof-64+ and also has a CAC sticker. The CAC approves (or rejects) coins that are already graded by the PCGS or the NGC. A coin is approved if CAC experts find that its grade is in the middle or high end of the range pertaining to the grade that the coin has already received from the PCGS or the NGC. (Please see a past article, The Widening Gap, for discussions of the terms low end, mid range and high end. )
This 1888 nickel sold for $402.50. This price is in the retail range. When an auction price surpasses the wholesale range and enters the retail range, it is usually considered to be a very successful auction result. Of course, there are exceptions to this rule, and there are coin issues for which wholesale and retail price ranges are relatively more ambiguous.
The Carson 1888 dime is PCGS certified as Proof-66 with a Cameo designation (“CAM”). It also has a CAC sticker.
In regard to Proof coins, a cameo involves the contrast between design elements that are frosted (upon striking) and the mirrored fields. Frosted design elements tend to be whitish in appearance. Frosted devices may tone a variety of colors though the original whitish frosting will still be evident. Though I never agreed that a Proof with a cameo contrast should always (or even usually) be worth more than a Proof without any cameo features, my opinion is in the minority on this issue. In coin markets, cameo Proofs are worth more, and “Deep Cameo” or “Ultra Cameo” Proofs are worth even more than Proofs with just moderate Cameo contrasts, regarding Proofs of the same type of equivalent rarity with the same numerical grades.
The Carson 1888 dime sold for $4312.50. The PCGS price guide values this piece at $2750. “The 1888 dime was really, really special,” Kleinsteuber asserts. Matt “was not surprised by the price realized. [This dime has] beautiful fresh color, watery fields, and nearly no imperfections to be found.”
The Carson 1888 Quarter, Proof-63 with CAC, sold for $776.25. This result is closer to a wholesale price than to a retail price, and may have been a good value. It is important to remember that each coin is different, and it is often not a good idea to draw firm conclusions from auction results without actually examining the coins in question. Even so, this price seems reasonable to me.
The Carson 1888 half, Pr-64 CAM with CAC, garnered $3,737.50. Indisputably, this is a very strong price. It is well above prevailing retail levels for Proof-64 CAM halves of 1884 or equivalent dates. In auctions over the past five years, several 1888 halves with this same PCGS Pr-64 CAM certification brought between $2000 and $3000.
The Morgan silver dollar in Carson's 1888 Proof set, Pr-64+ CAM with CAC, went for $8625. Without actually seeing this coin, I am not prepared to explain this price, which is apparently very high. It is worth noting that the PCGS has probably only designated twenty or so different 1888 Morgans as having a 'cameo' contrast. There are hundreds of collectors of Proof Morgans. Perhaps some of them are just not satisfied with a Proof 1888 that does not have a Cameo contrast, though I would be. Another possibility is that at least two bidders were almost certain that this coin was undergraded and really deserves a higher grade. Many Internet bidders probably expected this coin to sell for between $4750 and $5600.
The Carson 1888 Gold Dollar, Pr-64 CAM with CAC, brought $9200. I am certain that this is a very strong price. My guess is that most of those Internet bidders who are familiar with coin markets, were probably expecting a price around $6000. Surely, though, experts who viewed the coin may have had different expectations. I wish that I had seen it.
The Carson 1888 Quarter Eagle ($2½ gold coin), Pr-65+ CAM with CAC approval, was purchased for $27,600. This is certainly a retail price and a fairly strong auction result, though not extremely high.
Note that the CAC does not approve (or reject) plus grades, just whole numerical grades. So, in the case of this 65+ grade Quarter Eagle, CAC experts determined that this coin's grade is in the middle OR high end of the 65 range, while PCGS experts determined that, in their view, it is in the high end of the 65 range.
The Carson 1888 Three Dollar Gold piece is in a 'Genuine' holder and thus has been judged not gradable. It was certainly salable for the sum of $9775! This sum could be used to buy a certified Pr-62 or Pr-63 1888 Three Dollar Gold piece.
The Carson 1888 Half Eagle ($5 gold), Pr-64 CAM with CAC, brought $19,550, which is a moderately strong auction result. It is above or in the far upper reach of the wholesale price range for this coin issue.
The Carson 1888 Eagle ($10), Pr-65 CAM with CAC, brought an impressive $54,625. Matt Kleinsteuber emphasizes that this is an “original” and “amazing” coin, and he was “not surprised” by the price realized. Legend Numismatics was the buyer, for a collector. The Carson 1888 Double Eagle ($10), Pr-64 Cam with CAC, was auctioned for $69,000.
There were not many Proof gold coins in the Carson collection. He had 'all metal' Proof sets of 1906 and 1913 as well. In regard to these 1913 Matte Proof gold coins, originality is an extremely important factor. A conservation service has been changing the color of numerous Matte Proof gold coins and many of these 'conserved' Proofs receive grades of 64 to 68 from a leading grading service. In other cases, the color of Matte Proof gold coins has been changed by past cleanings or dippings.
Greg Cohen, who is a staff numismatist at Stack's, notes that “there were many beautiful coins in the Carson collection, but the most interesting pieces in [Cohen's] opinion were the 1913 Matte Proof gold coins.” Cohen may not be experienced enough to have seen a large number of Matte Proof gold coins with original surfaces. These are an endangered species.
My (this writer's) understanding is that the Carson 1913 Matte Proofs possess completely original color and texture. It is thus not surprising to me that these realized prices that were higher than the auction prices of corresponding Matte Proof gold coins in the recent past.
Laura Sperber reports that her firm bought the Carson 1913 Eagle for $80,500 and the Double Eagle for $103,500, and thus “saved them from the coin doctors”! Unfortunately, 'coin doctors' modify coins in ways that are even more harmful than light cleanings or dippings. (Please see my three part series on collecting naturally toned coins, Part 1, Part 2 and Part 3; and my September column regarding allegations of coin doctoring.)
The Carson 1913 Half Eagle and Quarter Eagle are each PCGS certified Pr-65+ with a CAC sticker. The Quarter Eagle realized $34,500 and the Half Eagle, $43,125.
It is curious that a collection with so many choice or gem Proofs would also contain a substantial number of coins, from the same time periods, in PCGS “Genuine” holders. Curiously, some of these were 'doctored,' decades ago.
III. Ungradable Coins
The Carson 1856 Flying Eagle cent has serious problems and resides in a PCGS Genuine holder. It brought $10,350.
I find it to be interesting that, given the emphasis upon quality in the current marketplace, that non-expert collectors are willing to pay substantial sums for coins that are judged by the PCGS to be not gradable. Of course, I realize that, sometimes, coin doctors buy these for the purpose of modifying them such that graders at the PCGS or the NGC can eventually be deceived into believing that the modified coins never had the problems that used to be readily apparent. In most instances, however, coins in 'genuine' holders are purchased by collectors who just like the particular coins or are unwilling to pay the sums demanded for choice, premium representatives of the same respective types and dates.
The PCGS price guide values a Proof-60 1856 Flying Eagle cent at “$15,000” and perhaps a collector wished to save a few thousand by acquiring this one for $10,350. Besides, Proof-60 coins are often not attractive at all. This non-gradable coin may have been aesthetically appealing to two or more bidders, perhaps more so than a gradable Proof-60 1856 Flying Eagle cent would be.
The Stack's cataloguer suggested that the Carson 1837 dime has been doctored. It is in a PCGS genuine holder and it realized $402.50.
The Carson 1865 Three Cent Nickel is also in a PCGS Genuine holder. The cataloguer said that the “surfaces have been chemically etched and toned back with bright yellow and gold hues, but the devices and fields show roughness today. The process resulted in false luster appearing in the fields.” It sold for $80.50.
Matt Kleinsteuber was also curious about the contrast between the choice original Proofs in the Carson collection and the coins that had serious problems. “All the coins in the Carson collection were not nice,” Matt relates. “Some were pretty screwed up. The ones that were nice were really nice for their grades, appealing surfaces, not screwed with, often never dipped.”
IV. 1864 Two Cent Piece
Kleinsteuber was particularly enamored with the Carson 1864 'Small Motto' Two Cent piece. This is certainly one of the rarest Proofs in the Carson collection, perhaps the rarest. The 1864 issue with a relatively small motto, “In God We Trust,” is much rarer than the 1864 large motto issue.
The Carson 1864 'Small Motto' is PCGS certified Proof-64 with a designation of 'RB' meaning that it exhibits a significant amount of original Mint red color. Further, it has a sticker of approval from the CAC. I regard the $63,250 result as being very strong.
The Carson 1864 'Large Motto' Two Cent piece has the exact same certification as the Carson 'Small Motto' piece, Pr-64RB with a CAC sticker. It realized $3220.
The Carson 1864 'Small Motto' Two Cent piece “was incredible. It bought all the money, Kleinsteuber declares. Matt “tried to buy it personally. It brought more than [Matt] expected. This Proof is a classic rarity. It has got a real mintage of twelve to fifteen; this is not a skewed [mintage estimate] like you see [reported] for some other 19th century Proofs. The Proof 1864 'Small Motto' Two Cent is a true rarity and [is] underrated,” Kleinsteuber maintains.
V. Selected Carson Proofs
An 1877 Twenty Cent piece is PCGS certified as 'Proof-63+ Cameo' and has a sticker of approval from the CAC. The PCGS price guide values this piece at $5150. It realized $6325 at the auction. Kleinsteuber identifies himself as “the underbidder” and Matt states out that this coin is “beautiful original, crispy, and has a nice cameo”!
The Carson Proof 1879 quarter is PCGS graded “63+” and also has a CAC sticker. It sold for $1092.50, which I regard as a strong auction result. This is certainly a retail price for a PR-63+ 1879 quarter, though Matt points out that it may be undergraded.
Likewise, the Carson 1882 quarter sold for a fair retail price, $2530, which is a strong auction price. In this case, the PCGS price guide value of $2850 is a little high and is in need of adjustment. The Carson 1882 quarter is PCGS certified Pr-64+ and is CAC approved.
Similarly, the $4600 result for the Carson 1879 Morgan, PCGS certified Pr-64+ and CAC approved, is a retail-level price. “That's a lot,” Kleinsteuber says. “That price was significantly higher than [Matt] expected. This sale brought very strong levels.”
As auction results are often at or slightly above wholesale levels, the auction of a coin is often considered successful if a retail price is realized. As bidders (or their agents) are able to carefully select coins that are particularly appealing, collectors and dealers benefit by participating in auctions. In a major coin auction, bidders may choose from large numbers of coins being offered. In my opinion, it is better to pay a strong price for an attractive mid range to high end coin than a slightly lower price for a low end coin. (See The Widening Gap.)
Another strong price is $4312 for the Carson 1883 half dollar, which is PCGS certified 'Proof-65 Cameo' and is CAC approved. Although this price is well above the listings in all leading price guides and above some recent auction records for similar coins, there is often a need to actually examine a coin before concluding that an auction result is 'too high'. Some coins have special or characteristics or exceptional features that cannot be fully comprehended from viewing pictures or reading descriptions.
I would like to have seen the Carson 1887 Morgan silver dollar that realized $7475. By any measure, this is a strong price for a PCGS certified Proof-65 Cameo 1887 Morgan with a CAC sticker. Auction records from the recent past suggest that PCGS Pr-65 1887 Morgans, with or without “CAM” designations, tend to sell for between $4000 and $6325. “Nice coin,” Matt asserts that these “Proof type coins are worth a lot of more when they have CAC stickers.” Kleinsteuber's hunch is that “this coin brought a lot more than it would if it didn't have a CAC sticker.”
VI. Success of the Auction
The fact that many of the coins had CAC stickers is one reason among several as to why the Carson collection brought very strong prices. (2) Carson's coins were 'fresh' in that these have been 'off the market' for more than seven years. (3) Carson formed a true collection that was recognized as such be collector-bidders. It was not a miscellaneous assortment. It was organized in a way that is consistent with the culture of coin collecting in the U.S. (4) Information about the collector and his collection was available. True named consignments tend to realize higher prices than anonymous consignments. (5) The auction house effectively promoted the sale.
(6) Matt and I are in agreement regarding the most important reason. “This sale proved that Proof type coins with original surfaces are bringing strong premiums. People are paying more for originality,” Kleinsteuber exclaims. Indeed, most advanced collectors, and many expert advisors to collectors, favor coins that have natural toning and mostly original surfaces. Moreover, coins that are entirely original are worth an additional premium over those that are mostly so. It is refreshing to see 19th century coins that have never been dipped, substantially cleaned, or doctored. If two coins of the same date and type are assigned the same grade by the PCGS, and one is mostly original with natural toning and the other is not so original, the mostly original coin will be much more strongly desired by sophisticated collectors and/or expert advisors to collectors.
©2010 Greg Reynolds