Created Rarity: Coins That Have Become More Valuable Due to Melting
by Tony Davis – Atlanta Gold & Coin Buyers ……….
When it comes to collecting, rarity always drives up the value of an item; this is especially apparent in regard to numismatic coins. There are a few factors that can influence a coin’s rarity, starting with the most obvious: coins that have a limited mintage. Also, external factors, such as congressional legislation, can increase or decrease the mintage of coins for a period of time. Another factor that affects the rarity of coins comes from the amount of coins released into circulation. Some coins have high production numbers, yet there are very few uncirculated or proof examples, which can lead to a wide disparity in value between a circulated and brilliant uncirculated example.
Sometimes, however, coins are produced and then later melted down due to the desirability of the metals from which they are made. Generally, these are instances where the value of precious metals becomes extremely valuable, such as was the case when the Hunt brothers of Dallas tried to corner the silver market in the late 1970s. Before the market’s crash in 1980 (in what’s known as Silver Thursday), the price of silver reached $50 per troy ounce, a level that had not and has not since been matched. Adjusted for inflation, the 1980 value of silver is a staggering $150 per troy ounce today.
Other instances have seen the widespread melting of precious metals. The Panic of 1893 led to the melting of both silver and gold. Many silver mines in the western states were closed and the Carson City mint, created to handle the large amount of silver mined in Nevada, was placed on hiatus for four years (1885-1889). The mintages in the following years were significantly decreased and were compounded by the massive melting of silver on account of the Pittman Act of 1918. The Pittman Act authorized the melting of up to 350,000,000 silver dollars, with 270,000,000 actually melted. The act was intended to assist Great Britain after the German government was able to convince the residents of India that the British bank notes could not be redeemed for silver. Substantial redemption of the British banknotes would have tanked the currency.
Below are some notable examples where the melting of coins drove up the value of the remaining stock.
1873-CC Seated Liberty
This is the rarest of all the Carson City-minted coins. It is estimated that only 750-1,000 of these managed to survive melting, and that a maximum of 100 total 1873-CC Seated Liberty dollars exist today in total. This coin is a favorite among collectors, and can reach up to $100,000 in today’s market.
1883 Hawaiian Dollar
This coin is a prime example of one whose value rests solely on rarity due to melting. 500,000 of the 1883 Hawaiian dollars were minted, but over 450,000 of the coins were melted down. Because of this, high end examples of this coin can reach up to $25,000!
1933 Indian Head Gold Eagle
Like our next example, owners of the 1933 Indian Head gold eagle benefited significantly from the Great Depression. Trying to stabilize the country’s finances, President Franklin Delano Roosevelt ordered that all non-numismatic gold coins were to be redeemed in paper currency for the face value of the coins. Following this instance of gold confiscation, the price of gold was shortly thereafter reset at $35 an ounce. While almost all of the 312,500 1933 Indian Head gold coins were melted down, a few examples managed to escaped that fate. An estimated 40 of these coins exist today, primarily in higher quality examples. These coins have been known to reach prices of over $500,000 at auction. But none of the previously mentioned coins can quite compare to the next coin on our list.
1933 Double Eagle
The 1933 Double Eagle is one of the world’s most coveted coins. It was thought that the entirety of the 1933 Double Eagle’s mintage was melted down. However, it was later discovered that a cashier had snuck out with ten examples of it, and 9 were recovered by the Secret Service. Since they were technically stolen from the US government, they were illegal to possess. The King of Egypt at the time held the remaining coin, and was mistakenly granted the license to export it to Egypt, which meant he legally owned one of three examples present in the world (the US Mint had donated two samples to the Smithsonian).
After the King’s deposition in the 1950s, the coin was recovered in New York in the hands of British coin dealer Stephen Fenton. The coin was housed in the World Trade Center until a few months before September 11th, when it was moved to Fort Knox. It sold for a record-breaking $7,590,000 in 2002, with half of the sale going to Fenton, and the other to the US Treasury.
Three years after the auction, however, 10 more coins were discovered by the family of the dealer who sold the ten original 1933 Double Eagles. The owner of the Double Eagles sent the examples to the Mint to verify their authenticity, where they were subsequently seized. A high profile lawsuit ensued, which resulted in the jury finding in favor of the U.S. government. It remains to be seen if the coins will be auctioned off to the public.
Tony Davis is the owner of Atlanta Gold & Coin Buyers, a full service Atlanta based coin and bullion dealer specializing in buying, selling and appraising coins and coin collections of all types and sizes. Visit his website at www.atlantagoldandcoin.com for additional information on the products, services and educational resources offered by his company. Tony can be reached at firstname.lastname@example.org or at 404-236-9744.