A Weekly CoinWeek Column by Greg Reynolds
News and Analysis regarding scarce coins, coin markets, and the coin collecting community #108
As this is the second in a three part series, in the next two paragraphs, I provide an introduction for those who have not read part 1 or do not clearly remember it. The point here in part 2 is to demonstrate that there are compelling logical reasons for Philadelphia Mint officials to have planned to strike twenty-five or more Proof 1841 Quarter Eagles, even though fewer than six Proofs were probably struck of each of all other Proof U.S. gold coin issues during the 1840s.
Quarter Eagles (U.S. $2½ gold coins) were minted from 1796 to 1929, and in every year from 1829 to 1915. They are about the size of dimes and are 90% gold or nearly so. For decades, there was nearly unanimous agreement that all 1841 Quarter Eagles were struck in Proof format. There were no business strikes. There is now an ongoing debate, which is of tremendous importance, even to collectors who cannot afford 1841 Quarter Eagles. The debate relates to the definition of a Proof and whether experts can agree on the Proof status of a large number of 19th century coins, including many that are not particularly expensive.
In Feb. 2012, the Professional Coin Grading Service (PCGS) announced that most known 1841 Quarter Eagles are really business strikes, not Proofs. The PCGS published a thirty seven-page report, The 1841 Quarter Eagle Revisited: A New Approach to a Classic Rarity. Moreover, PCGS mastermind David Hall determined that all but four 1841 Quarter Eagles are business strikes, “regular strikings.” David Akers agrees. Hall acknowledges, however, that experts are deeply divided over this issue.
David Hall and David Akers argue that a production run of business strikes, on the order of 100 to 250 pieces, must have occurred. A central part of their theory is that there were not twenty to twenty-five collectors coming to the Philadelphia Mint in 1841 to demand Proof 1841 Quarter Eagles. Indeed, David Akers asserts that “there is no logical explanation for the number [16 to 20] of surviving specimens of this date other than the fact that regular, non-proofs must have been struck” (PCGS, Feb. 2012, page 7). David Hall and Anthony Terranova put forth similar remarks. Essentially, they are asserting that twenty or more Proofs would not have been planned or even considered, let alone struck.
One strong logical reason is sufficient to show that there is a good chance that there was such a plan and coin press run, as there is no evidence of any 1841 business strikes being planned or having been formally released into circulation. While it was customary in the 1840s for Proof strikings to be unrecorded, business strikes, in contrast, were subject to different rules and were formally documented. Akers and Hall contend that 1841 Quarter Eagles were exceptions to the rules that governed the production of business strikes.
As to whether all surviving 1841 Quarter Eagles are all Proofs, I discussed that issue to an extent in part 1, where I analyzed the importance of the debate, and I will address the matter further in part 3, where I will discuss the physical characteristics of some 1841 Quarter Eagles. Herein, I build a case as to why twenty or more Proofs were planned or intended at some point. Indeed, I address an issue that no one else is addressing, why was there such demand for Proof 1841 Quarter Eagles, as it is widely believed that no more than five Quarter Eagles of any other date in the 1840s were struck?
VI. Undiscovered Circulated Proofs of Other Dates?
Before addressing the main topic, I feel compelled to put forth another logical point. Could there really have been many more Proof U.S. gold coins of other dates in the 1840s than those that are now known? If some Proof 1840 or Proof 1842 Quarter Eagles circulated, they may have been eventually melted or are lying unrecognized in collections in the present. Because 1841 Quarter Eagles are so rare and because there was near-unanimous agreement that all 1841 Quarter Eagles are Proofs, expert dealers and collectors have honed in on them for more than a century.
How often would collectors or dealers have bothered to determine if a 40 grade 1842 Quarter Eagle was struck as a Proof? Would such a possibility even have occurred to many experts? The die varieties of circulated, Philadelphia Mint Liberty Head Quarter Eagles are rarely analyzed.
If there are heavily circulated Proof Quarter Eagles of other dates from the 1840s around, these may have been graded as if they were business strikes. John Albanese contends that, if a coin grades below 55, it is often not possible to tell if it is a Proof or a business strike. He is quoted in part 1. In any event, I continue here, under the widely held assumption that fewer than six Proofs were struck of all other U.S. gold coins issues in the 1840s.
The central part of my hypothesis is that, when it became apparent that no business strikes would be planned in 1841, U.S. Mint officials planned to make more Proofs than usual, certainly more than twenty, to accommodate collectors and tourists who came to the Philadelphia Mint each year and requested new Quarter Eagles. These collectors would not have been expecting Proofs and almost all of them would not have been knowledgeable about Proofs. If only Proofs were made, these collectors ‘ended-up’ with one because there were no business strikes. My impression is that the Philadelphia Mint traded coins with collectors and tourists for face value, though it is possible that premiums were sometimes charged.
I put forth here an additional realistic possibility, which would be an added factor, not an alternative to my hypothesis that collectors acquired Quarter Eagles each year, for face value, from the Philadelphia Mint. A dealer, or two, may have realized or found out that business strike Quarter Eagles were not to be regularly minted in 1841 and thus decided to inventory any 1841 Quarter Eagles that he could obtain from the U.S. Mint. He may or may not have known that 1841 Quarter Eagles obtained from the Mint would be Proofs or Special Strikings.
Such a dealer was probably not much of a rare coin dealer. There were no full-time rare coin dealers in the 1840s. Indeed, if such a dealer did inventory Proof 1841 Quarter Eagles, he may not have even been a coin expert, and may not have understood that he was inventorying Proofs.
Speculating in 1841 Quarter Eagles may very well have been done by a metals dealer, a jeweler, or an antiques shop owner, in Philadelphia. He may have been a coin collector himself, may have had a friend who was employed by the Philadelphia Mint, or may have just heard about the lack of 1841 Quarter Eagles from others. In such a scenario, a merchant could have ordered or requested 1841 Quarter Eagles. He may or may not have paid a small premium over face value.
If so, Philadelphia Mint officials were probably delighted that a local merchant was showing enough interest in current coinage to inventory some for resale. If Proofs were traded in such a matter, the dealer may not have known that he was acquiring Proofs, though U.S. Mint officials would have known. As researcher R. W. Julian suggests, Proof coins were excellent public relations devices for the U.S. Mint.
A sign in a shop of a jeweler, metals trader, or antiques dealer, could have indicated that 1841 Quarter Eagles were extremely rare and none could be found in change. If such a sign was displayed, it would have been very truthful advertising. Indeed, some people who came into such a shop for other reasons would have figured out that this selling 'pitch' was, in fact, true. Such coins could not be found at banks or 'in change' in 1841 in Philadelphia.
If these were offered by a shop-owner in a major business area in Philadelphia, it seems likely that at least a few people would have bought 1841 Quarter Eagles for $2.75 to $3.25 each. (There are now hundreds of thousands of people who pay tremendous premiums over face value, from the U.S. Mint, for coins dated 2012.)
In 1841, someone who could have afforded to acquire high-end jewelry, choice antiques, or sizeable holdings in bullion, could also have spent $3.25 or so for a Proof (or Special Striking) 1841 Quarter Eagle. It would be unsurprising that ten to twenty could have been sold in this manner over a period of many months.
In 1841, an 1841 Quarter Eagle would have been a neat conversation piece in the greater Philadelphia area. Some such casual buyers may have carried these around to show to friends or colleagues. “You probably have not seen a new Quarter Eagle of this year. There are no regular ones and I have one of the few special ones,” such a buyer may have honestly said to his friends.
If such a venture was successful for a store-owner, casual buyers or their heirs would have eventually spent most or all of these 1841 Quarter Eagles. If such a venture in dealing in 1841 Quarter Eagles was a failure, the shop-owner could have 'broken even' or incurred a modest loss by spending most or all of his 1841 Quarter Eagles himself.
Indeed, it is very plausible that some jeweler, antiques dealer, or metals trader allocated $40 to $55 for such speculation, really an entrepreneurial endeavor. While $40 was a much greater amount in 1841 then it would be to people in Philadelphia in 2012, it was not then a large amount of money. Undoubtedly, in 1841, there were merchants and other entrepreneurs who risked far larger amounts on ventures that were more far fetched or far riskier.
VIII. Collectors Travel to Philadelphia
The most likely explanation for a plan to strike twenty or more Proof and/or 'Special Striking' 1841 Quarter Eagles is that U.S. Mint officials knew it was likely that at least twenty collectors would come to the Philadelphia Mint seeking 1841 Quarter Eagles. I am not referring to sophisticated collectors who are now famous figures in the history of coin collecting. Admittedly, there were few sophisticated collectors in 1841 who would have desired an 1841 Quarter Eagle.
It is logically compelling to conclude that some people then casually collected gold coins in the 1840s, and acquired them at face value. As even Hall and Akers suggest that there were no business strike 1841 Quarter Eagles struck in 1841, many of those collectors who would have acquired business strikes had to acquire Proofs or Special Strikings if they were to obtain 1841 Quarter Eagles in 1841 for their respective collections.
Yes, there were business strike 1841 Quarter Eagles struck in Charlotte, North Carolina, with 'C' mintmarks, and in Dahlonega, Georgia, with 'D' mintmarks. These were generally absorbed in the economies in the South. In the year 1841, it is unlikely that more than a few of them found their way to Philadelphia. Furthermore, these tend to be struck with less detail than Philadelphia Mint gold coins. To a novice or unknowledgeable collector, an uncirculated 1841-C or 1841-D Quarter Eagle may look like it has circulated. Also, while Charlotte and Dahlonega Mint coins are now regarded as being of great historical or cultural significance by many collectors, in the 19th century, very few collectors wanted them.
In the 19th century, collectors of gold coins tended to demand Philadelphia Mint issues. These were and are much better looking, on average, than Branch Mint coins. Casual collectors of contemporary business strike Quarter Eagles were probably seeking coins that experts now would grade 63 or higher, choice coins.
The Middle Atlantic States were then much wealthier than Southern States, where few people could afford to collect Quarter Eagles. Plus, the limited mintages at Charlotte and Dahlonega were probably needed for business transactions in the South.
Besides, the Philadelphia Mint had more of a reputation for providing choice coins to collectors and tourists. Like people who buy coins from the U.S. Mint in the present, casual collectors of contemporary coins tend to desire choice or gem pieces. In 1841, they would not have wanted coins that have been 'banged up' while traveling to Philadelphia from North Carolina or Georgia.
Of course, I do not expect to ever be able to fully prove my hypothesis that more than twenty people, who resided in Pennsylvania, Maryland, Delaware, New Jersey and/or New York, each obtained one Philadelphia Mint Quarter Eagle, typically a business strike, during every year in the 1840s. Nevertheless, I find this hypothesis to be very logical and extremely realistic.
Is the Akers-Hall theory logical and realistic? They suggest that there was some mysterious, urgent order for 100 to 250 Quarter Eagles in early 1842, which was fulfilled, 'off the books,' with the use of Proof 1841 dies, including the reverse die that was used to strike Proof Quarter Eagles for the remainder of the decade. (Please read part 1.)
Collectors must have lived in, worked in, or traveled to Philadelphia in 1841. A very large percentage of the U.S. population lived in the Middle Atlantic States and New England. The Middle Atlantic States are Maryland, Delaware, Pennsylvania, New Jersey and New York. Many people in these states would travel to or pass through Philadelphia, especially when en route to Baltimore or Washington. Plus, many relatively wealthy people in New England traveled to Philadelphia for business or pleasure.
As the Philadelphia Mint was known to welcome visitors, especially coin collectors, it is extremely likely that several hundred people, maybe more than a thousand, came by every year to gather coins that were just made. Yes, a few sophisticated and/or very social collectors dropped their names and are known in the present. They became part of the recorded history of coin collecting. Then and now, however, most coin collectors are not that sophisticated or not that dedicated, and are relatively anonymous.
IX. Unrecorded Collectors in 1841
Throughout the course of my life, I have met a large number of people, including neighbors, who routinely buy Proof sets or uncirculated coin sets from the U.S. Mint every year. In most cases, these buyers know little about coins, and, despite my best efforts to teach them, do not really wish to learn. They just like to collect. People have been collecting coins for centuries. Indeed, in human civilization, especially in affluent capitalist societies, collecting coins is a common, natural activity.
For thousands of years, people have been collecting things of some sort. It is indisputable that people have been collecting art and manuscripts since ancient times.
Aristotle was fascinated by the constitutions of many Ancient Greek City-States and he used to collect the constitutions themselves. Ancient Greeks who were not as academically sophisticated as Aristotle, undoubtedly, collected pottery, plates, weapons, sculptures, amphoras, etc.
There is not a need to provide specific examples to know that collecting has occurred for more than two thousand years. Consider the collections of Kings and Queens, and those of religious institutions, plus all the collections that have been donated to museums over the centuries.
King Louis XIV of France (born 1638, died 1715) and Italian King Victor Emmanuel III (1869-1947) were dedicated to the study of rare coins. While in exile, Emmanuel joined famous coin collector King Farouk in Egypt in the 1940s.
According to the Wikipedia, “Some notable [coin] collectors were Pope Boniface VIII, [Holy Roman] Emperor Maximilian I, Ferdinand I, …, Henry IV of France and Elector Joachim II of Brandenburg, who started the Berlin Coin Cabinet.”
In the 1300s, the very famous scholar and poet Francesco Petrarch was an extremely enthusiastic coin collector. He gave numerous rare coins to Holy Roman Emperor Charles IV in 1354. According to Petrarch himself, collectors in Rome frequently brought their rare coins to him so that he could identify them.
It is well known that many people in Europe collected coins during the Renaissance. The Medici family in Florence and the Este family in Milan formed extensive coin collections. A summary of a recent book, by Laurie Fusco and Gino Corti, on the collecting activities of Lorenzo de Medici, in the 1400s, states that de Medici “acquired sculpture to embellish his palace, but his real predilection was for small objects: coins, hardstone vases, and gems” (Lorenzo de'Medici: Collector of Antiquities, 2006).
In 1841, a substantial percentage of U.S. citizens were of British, Dutch or German descent. It was not a secret that people had been collecting coins and medals in England, the Netherlands and German speaking societies for centuries. Indeed, many relatively high grade, centuries old, English, Dutch and German silver coins survive. Unlike gold coins, silver coins do not usually fare well in the ground, or at sea, and it is evident that many of these European silver coins were properly stored, literally for centuries, by people who cared about them.
In 1841, many U.S citizens must have had friends, relatives, or ancestors who collected coins. People who collected coins 'out of change' or by going to banks were usually not members of scholarly organizations or sophisticated clubs. They were often businessmen, lawyers, architects, craftsmen, blacksmiths, silversmiths, or people who inherited land. People who collected Quarter Eagles were probably, on average, more affluent than people who collected half cents or large cents.
Researchers Saul Teichman and David Stone wonder why most “great collectors” of the 19th century did not own an 1841 Quarter Eagle or had a coin of this date that would now be graded less than 61. In my view, in 1841, sophisticated collectors did not regard 1841 Quarter Eagles as being of tremendous importance, as most (not all) sophisticated collectors now do not regard current U.S. Mint products to be particularly important.
Later, some 19th century collectors may have wished that they had each acquired an 1841 Quarter Eagle in 1841. There are U.S. Mint products that I wish that I had acquired at the time of issue, long ago, though not many.
“There was no 1841 quarter eagle offered in the Stickney catalogue when Henry Chapman sold the collection in 1907,” David Stone reports. Matthew “Stickney concentrated on the early Quarter Eagles and he had many of the rare dates from before 1834, but he only collected the later issues sporadically, with just a random date here and there.” So, Stickney was acquiring post-1834 Quarter Eagles in a whimsical manner, rather than methodically 'by date.'
Stone finds that Joseph Mickley did not have an 1841 Quarter Eagle in 1858, though may have acquired one later. The Stickney and Mickley “collections [each] had extensive early gold, i.e. pre-1840, not much in the post-1840 years,” Teichman states. Mickley and Stickney clearly did not view 1841 Quarter Eagles as being very important.
I conclude, from evidence that Dave and Saul provide, that several of the offerings of “1841” Quarter Eagles in 19th century auctions and price lists were really 1841-Charlotte or 1841-Dahlonega Mint Quarter Eagles. Some sellers omitted mintmarks from catalogue descriptions and others were not very careful, especially when cataloguing coins that were not worth much more than face value. In 2012, neither the management of Heritage nor of Stack's-Bowers would have their sharpest cataloguers spend much time on U.S. coins minted after 1964, except for a few landmark U.S. Mint Errors.
While the knowledge that Saul and Dave have of coin collecting in the 19th century is extraordinary, I do not find their points or logical arguments to be, in any way, in contradiction of the hypothesis that I am presenting here. The rarity of 1841 Quarter Eagles, and of quite a few other 19th century gold issues, was not discovered until the 20th century.
Sophisticated collectors, active after 1860, generally declined to purchase 1841 Quarter Eagles that were offered, for two reasons. They often desired coins that would now grade 64 or higher, or even 66 or higher, and they were under the impression that 1841 Quarter Eagles were not that rare. They incorrectly figured that choice or gem pieces could be eventually obtained, without too much difficulty.
Eventually, spent 1841 Quarter Eagles, probably Proofs or Special Strikings, were retrieved from circulation and offered to collectors. This was a gradual process, as experts of the era did not regard circulated 1841 Quarter Eagles as being prizes. By the time that more than a handful of sophisticated collectors were really interested in Philadelphia Mint 1841 Quarter Eagles, the casual collectors to whom I refer had already spent their coins, or their heirs did so.
An important point is that only a very small percentage of active collectors in 1841 would be identifiable through research now. Besides, when people acquired coins for face value, whether Quarter Eagles in the 1840s or Double Eagles in the early 1930s, collectors did not generally leave a paper trail.
When a worn Quarter Eagle was traded for a shiny new Quarter Eagle, then $2.50 was traded for $2.50. Logically, there would have been no pressing reason for a receipt to be issued, or for a record to be kept.
Recently, in 2012, I have been accumulating quarters from the 1960s that I find in change. Curiously, I find two or more each week. Certainly, all these quarters from the 1960s have not been circulating for more than forty years. Officials at the U.S. Mint currently estimate that coins last for twenty-five years in circulation before being scrapped or recycled as inputs in the production of new coins.
Literally millions of quarters from the 1960s were in the collections of casual collectors, people who never joined the ANA or the ANS. Further, these casual collectors may have never have joined the Heritage online community or bid in Stack's-Bowers auctions. There really is not a clear record of their existence. Yet, they were and some still are collecting quarters from change.
The number of people who have collected or are collecting state quarters is probably far greater than those who were interested in circulated coins from the 1960s. A coin expert, however, writing a weekly online column 150 years from now, would have no way of knowing how many people in the 1970s or in 2012 collected coins at face value. Besides, the coins available for face value in 1841 are much more attractive than the coins available for face value now.
A very basic knowledge of human nature and of the of history of human civilization, along with some knowledge of the history of collecting things, leads to the conclusion that there were thousands of people collecting coins 'at face value' in 1841. After all, there is little downside risk in collecting coins 'at face value.' It is difficult, certainly, to estimate the number of these people who were collecting Quarter Eagles in 1841.
X. Why collect Quarter Eagles in 1841?
As U.S. One Dollar gold coins were not minted until 1849, Quarter Eagles were in 1841 the lowest denomination of U.S. gold coins. So, if someone wanted to collect a new U.S. gold coin every year, Quarter Eagles were likely have been chosen, as these required the least amount of money and the least space for storage. A whole collection of Quarter Eagles could fit in a small jewelry box that was designed for rings or pendants.
Since ancient times, gold has had a special allure. Gold is a scarce metal. Furthermore, gold is relatively safe, stable, soft and attractive. Interestingly, gold was often used in fillings and crowns for teeth. It is unsurprising that, throughout history, gold was frequently used as a medium of exchange, used in jewelry and used in sculptures.
As the U.S. Mint did not formally offer Proof coins until the 1850s, most casual collectors probably did not know that Proof U.S. coins existed or did not know that they were available. Since the term 'Proof' was not often used and there multiple, often confusing names for Proof coins, it would have been difficult for a casual collector to request them anyway. It is very likely that the collectors who came to the Philadelphia Mint in search of 1841 Quarter Eagles had never thought about acquiring Proofs, and probably were unaware of Proofs, yet were 'sold' Proofs or other Special Strikings, probably for face value, or possibly for a few cents above face value.
As these non-expert collectors did not really understand the notion of a Proof, and there was not consistent terminology to explain or even define Proofs in 1841, they probably were content acquiring business strikes in subsequent years. Indeed, there were no widely available reference guides that clearly distinguished Proofs from business strikes. In the 1840s and 1850s, casual collectors and their respective family-members would have assumed that 1841 Quarter Eagles were worth face value or a premium that was so small that it was not worth pursuing.
Therefore, most 1841 Quarter Eagles were eventually spent. In a statistical sense, it is unlikely that those who traveled to the Philadelphia Mint in 1841 would drop dead the following year, soon become bankrupt, or abruptly decide to spend their collections of Quarter Eagles.
Some of these casual collectors may have died in the 1850s, 1860s, or 1870s. Even if a casual collector died in the 1850s, heirs may not have gotten around to spending his Quarter Eagles until the 1860s or later. People then were distrustful of banks and regarded gold as safe. Of the 1841 Quarter Eagles that now grade less than 60, most or all of these were probably spent between 1860 and 1910. By then, it is likely that all would survive and would be pulled from circulation, some by casual collectors in later eras who were assembling sets at face value, others by dealers. A eighty or ninety percent survival rate for 1841 Quarter Eagles would be understandable if these were acquired by casual collectors or tourists at the Philadelphia Mint in 1841 (or through an antiques dealer in the same year.)
In summary, if business strike Quarter Eagles were not available in 1841, then casual collectors or accumulators had no choice other than to acquire Proofs or coins that were intended to be Proofs. U. S. Mint officials knew that there was demand for new coins every year, as collectors walked into the Mint and asked for them. Plus, bankers and metals dealers requested them, sometimes for their clients.
If I was a working professional in Philadelphia in 1841, I would have, at some point, gone to the U.S. Mint during my lunch hour and asked for an 1841 Quarter Eagle. It is extremely likely that ten to thirty people did so. It is also plausible that a store-owner obtained a quantity of them with the intention of selling them for profit.
If there were no business strike 1841 Quarter Eagles, and none are mentioned in U.S. Mint records, this is itself a reason why there would have been ten times as much demand for Proof 1841 Quarter Eagles than for Proof 1840 or Proof 1842 Quarter Eagles. Each year, at least twenty people demanded a shiny, new, well struck Quarter Eagle and had little, if any, understanding of the meaning of a Proof.
©2012 Greg Reynolds