Money: History in Your Hands

Transcription

1 Americans often find their appreciation of history rekindled by a monumental event or anniversary. The world s constant state of change stimulates an interest in where we ve been, where we are today, and where we may be going. Money: History in Your Hands

2 Arming collectors with Knowledge since 1955 Over the years, the PNG has been instrumental in creating services for the numismatic profession. In the 1960s, Abe Kosoff and several other dealers led the fundraising campaign to establish the headquarters of the American Numismatic Association (ANA) in Colorado Springs, Colorado. In the late 1970s, the PNG again rose to the aid of the ANA, providing funds for the American Numismatic Association Certification Service, the first thirdparty grading and authentication service. The PNG has hosted educational seminars, posted and paid reward funds for the conviction of those involved in coin robberies and burglaries, recognized outstanding book authors with the annual Robert Friedberg Award, and sponsored a college scholarship essay contest. Officers and directors also are available for speaking engagements. A recent effort of the PNG has been the Share the Knowledge seminars, which are conducted at most major coins shows in the United States. At each event, an expert in the field of numismatics shares his or her decades of experience with interested collectors. Some of the topics covered thus far include Pattern Coinage, Gold and Silver Bullion, Numismatic Literature, and Rare Coin Auctions. For more information on the Share the Knowledge seminars, please visit the PNG Web site at Founded in 1955, the Professional Numismatists Guild had its inception in 1950 with Abe Kosoff. At the time, Kosoff was in partnership with Abner Kreisberg in Numismatic Gallery, a firm that was well known for handling major collections and rarities. Kosoff and several other coin dealers believed that the hobby of coin collecting could be better served if a professional group was organized. After much effort, the Professional Numismatists Guild (PNG) was established. Its motto, Knowledge, Integrity, Responsibility, reflects its aims. For the first decade, membership in the PNG was by invitation, and only a small number of dealers were asked to join. As time passed, the PNG achieved stature, experience, and wisdom, and the membership rolls expanded. The PNG, a not-for-profit organization, is comprised of leading professional numismatists across the United States and abroad. The depth and breadth of the membership brings a rich diversity to the group and has made its progress possible. Q The Professional Numismatists Guild limits its membership to dealers who possess and demonstrate three essential qualifications: Knowledge of the subject, arising from extensive experience; a Responsibility to sell only fully authenticated and accurately described items of numismatic value; and Integrity in assuring the buyer of a safe, honest, and satisfying transaction. joining the guild To join the PNG, a dealer must have experience in the field, must certify that he or she has significant financial worth, and must be elected by a majority of the present members. All PNG members are subject to the rules and regulations of the Guild, which include an arbitration procedure for resolving disagreements between buyers and sellers of numismatic properties. The Professional Numismatists Guild enhances the field of numismatics through adherence to strict ethical and professional standards, cooperative projects with the American Numismatic Association, educational efforts geared to hobbyists, and other programs to benefit what has rightfully been called the world s greatest hobby. Contents Introduction 1 Collecting Rare Coins 2/3 Rewards of Collecting 4/5 Numismatic Gallery 6/7 Buying Rare Coins 8 The Consummate Collector 9 Smithsonian Exhibit 10 Grading Rare Coins 11 Conclusion 12

3 Introduction Who can hold a copper coin from the Revolutionary War and not wonder if it spent the night with a shivering soldier at Valley Forge? Who can look at a worn silver dollar struck in 1882 in Carson City, Nevada, and not wonder how many whiskeys it purchased after a hard day s ride for its many owners? How many older faces light up at the sight of a Buffalo nickel, reminding them of the afternoon at the movies it purchased? Old coins are a cherished link to the past, and because they were objects of value, they were seldom discarded. Although many were melted and recoined, some were buried and discovered centuries later, enabling their new owners to, again, appreciate the art of the engraver and to better understand the society they served. From ancient Greece and Rome, through the Middle Ages, Renaissance, and Industrial Revolution, coins survived the ravages of war, plagues, and famines to become an accessible link to the densely woven tapestry of human history. As a result, hundreds of thousands of people over the years have found that numismatics, the study of coins, is a richly rewarding and educational experience. Collecting coins can be both a satisfying hobby and a profitable investment. The information on the following pages provides an overview of numismatics as an art form, as a hobby, as an investment opportunity, and as a barometer of historical change. Winter settles in at picturesque Valley Forge National Historic Park in Pennsylvania.

4 Collecting rare coins, continued the beginning of united states coinage T he federal government established the Philadelphia Mint in 1792 and began striking half cents and cents for circulation in Silver half dimes, half dollars, and silver dollars followed in Gold $5 and $10 pieces were struck in Today, only the cent, nickel, dime, quarter, and half dollar are struck for circulation. During the past 200 years, the United States has issued many other denominations, including the two-cent and three-cent pieces, twenty-cent piece, and gold coins of the denominations of $1, $2.50, $3, $4, $5, $10, $20, and $50. The largest coin denomination the massive $50 gold piece was struck on several occasions, including during the California Gold Rush and in 1915 for the Panama-Pacific International Exposition. One of the most exciting aspects of numismatics is the tremendous variety of collecting themes. The following list illustrates some popular approaches to collecting coins and serves as a starting point to stimulate interests and ideas. type A type collection consists of one example of each major change in the design or metal used. For example, a type collection of nickels would include the Shield nickel ( ), the Liberty nickel ( ), the Buffalo nickel ( ), and the Jefferson nickel (1938 to present). Collecting by type is extremely popular due to the wide variety of designs and the long time span represented by the collection. series With a focus on one design type, a complete series collection includes one example from each date and mint. As an example, a Mercury dime series collection would include one coin from each year 1916 to 1945 and from each of the three mints that struck the coins Philadelphia, Denver, and San Francisco. commemoratives Commems were struck to mark special anniversaries or occasions. They were usually silver half dollars, but dollars and gold coins also have been issued. ancients Ancient coins were invented by Greeks in Ionia just after 700 B.C. The invention of coinage meant the end of barter and the beginning of international commerce. The first coins, called electrums, were made from a mix of gold and silver nuggets found in streams. Greek coins also were made of copper and bronze. The most common denominations were silver drachms and tetradrachms, and gold staters. Greek coins are miniature sculptures of great beauty, depicting gods and goddesses of the city and animals especially lions, eagles, and bulls. The coinage of Alexander the Great represents Alexander as Hercules, with Zeus holding an eagle on the reverse. Throughout his life, issues of Alexander were made from the treasures he captured while conquering the world. Those same coins paid the fearless soldiers in his army. Roman coinage used the same metals but carried a different message. Lifelike portraits of Julius Caesar, Augustus, Marc Antony, Nero, Marcus Aurelius, and more than 120 others adorn the obverses of the gold aureus, silver denarius, and bronze sestertius they issued. Both the obverse and reverse legends described the emperors accomplishments. q Collecting Morgan silver dollars Byzantine coinage was issued primarily in gold solidi and copper folleses, and usually bore a cross or portrait of Christ in addition to a portrait of the emperor. Size The coins contain nearly one ounce of silver. With striking visuals, ancient coins can offer a near-photographic image of past cultures. And although rarities worth thousands of dollars exist, the vast majority cost from $5 to $500. is particularly popular. Struck or made from 1878 through 1921, these dollars have a unique and appealing combination of attributes: Affordability Many dates are available in uncirculated (Mint State) condition for less than $20. Rarity Some dates are extremely rare if they are in high states of preservation. Beauty Designed by George T. Morgan, a well-preserved dollar is a work of art most people can appreciate. colonials These were usually copper pieces struck during the 17th and 18th centuries, and served as circulating coins in the years prior to America s independence. Before the first U.S. mint opened in 1793, coins were issued by individual states, private coiners, or foreign mints. Two designs are attributed to Benjamin Franklin. pioneer gold and patterns During the mid-19th century and throughout the Gold Rush of the 1850s and 1860s, several private mints issued gold coins. Today, these fascinating relics of Americana are quite rare. Patterns are trial or experimental pieces struck as examples of a proposed design. Most of the designs or patterns were never adopted for regular-issue coins and were struck in very limited quantities. world coins Coins have been struck since about 700 b.c., and have been issued by almost every nation in the world. People who appreciate history, geography, languages, or culture will find unlimited opportunities in the field of world coins. PAGE Q The 1896 $1 Silver Certificate, History Instructing Youth. More than 57 million were printed, but only currency a fraction of these exquisite notes exist today. Some of the world s finest artists made their mark not through paintings or sculpture, but with paper money. Designs on old currency crafted by artists and engravers reveal volumes of history. They unravel the mysteries of rulers, the downfall of governments, and shifts in world dominance throughout the centuries. During the past decade, collecting paper money has been one of numismatics fastest growing fields. Each year, several conventions are held specifically for currency collectors. Collecting paper money offers a wide variety of challenges to suit each collector s personality. 2 3 the educational notes T he Educational notes of 1896 are considered by most experts and casual observers to be the most beautiful of all the paper money issued by the United States. Although millions of these notes were printed, only a fraction exist today. The $1 Silver Certificate, History Instructing Youth, began as a sketch of a symbolic History by W. H. Low on May 24, The sketch became a painting that now hangs in the Bureau of Engraving and Printing. The final design was modified only slightly from the painting. The $2 Silver Certificate is heavy with symbolism as well, and features five female figures. The design was originally intended for the $50 note until it was decided that a $50 note would not be issued. The $5 Silver Certificate of 1896, designed by an artist named Shirlaw, depicts Electricity Presenting Light to the World. The Watch and Ward Society of Anthony Comstock objected to the sensuous nature of the design, and many of the dirty dollars, as they were named, were recalled.

5 Rewards of Collecting, continued how value is determined F actors that contribute to the value of a coin include the beauty of the design, a coin s historic significance, its bullion or metallic value, and the number of coins known to exist. Surprisingly, age is not necessarily important. There are U.S. coins issued within the last 50 years that are worth thousands of dollars. By comparison, there are 2,000-year-old ancient Roman coins worth less than $10. Following are some other factors that affect value: rarity Rarity can be defined by the number of coins minted in a particular series, or the number of coins known to exist. Rarity is an important consideration because, in general, the rarer the coin, the higher its value. popularity Coins in a popular series will sell for more than coins in a series collected by only a few. condition or grade As coins enter into circulation, portions of the design are worn away and the coin becomes less desirable to a potential collector. Some coins received fewer contact marks at the mint or have been more carefully preserved since their striking. A coin in Uncirculated or Mint State is worth more than one of the same variety in a lesser state of preservation. Proof coins, which were struck with mirror-like surfaces for collectors, can be very valuable in a high state of preservation. market The coin market fluctuates in sometimes cyclical patterns, thereby affecting price and consumer demand. PAGE Rare coins combine beauty, craftsmanship, and historic significance into a fascinating collectible. For many collectors, buying rare coins also has produced mid- to long-term profits. Some rare coins have increased in value tremendously, making diligent, discriminating collectors quite wealthy. Even for collectors who wish only to store value effectively or generate modest returns on resale, rare coins offer several advantages over other collectibles, including: Q 1879 Four Dollar gold piece or Stella. Two types were struck in the two years this coin was issued. The flowing hair type shown above was designed by Charles E. Barber. The other, called the coiled hair Stella, was designed by George T. Morgan. The gold Stella offers a unique combination of rarity, condition, and popularity. intrinsic value Gold and silver coins have intrinsic value, not only as legal tender, but also by virtue of their precious metal content. Although they trade at a premium over this value, rare coin prices are not solely dependent upon dealers maintenance of an investor market. Although coin prices can be quite volatile, collector demand is the basis of the rare coin market. documented rarity The total number of each U.S. rare coin cannot be greater than the number actually minted, which is a matter of public record. And because U.S. rare coins have been studied and traded throughout most of the 20th century, the number of surviving coins from each issue is, in most cases, well researched and documented. Of course, the periodic appearance of a previously undocumented coin is always exciting. independent grading The authenticity and condition of rare coins is subject to independent verification. Grading services, such as Numismatic Guaranty Corporation (NGC) and Professional Coin Grading Service (PCGS), are trusted by auction houses, dealers, collectors, and investors. These services have certified billions of dollars in coins over the past 20 years and have backed their work with guarantees. Independent price guides publish bid and ask prices of rare coins based on recognized grading standards. liquidity Rare coins are bought and sold daily in a worldwide marketplace that includes major auction houses, thousands of dealers, nationwide coin shows, and computer buy-sell networks. This gives rare coins a liquidity that simply does not exist with other collectibles. It is simple to monitor the market value of a carefully assembled rare coin collection by consulting trade publications and talking to professional numismatists. affordability Rare coins come in every price range. Investors do not have to risk large sums of money to invest in rare coins, and they can costaverage to further hedge their risks. Even a small initial investment can grow through careful management and strategic acquisitions, always within the investor s budget. buying from a png dealer Perhaps most important, the Professional Numismatists Guild (PNG) gives rare coin investors and collectors a number of protections not found with other collectibles. A coin dealer must pass a background check, meet financial requirements, and obtain the approval of his peers to become a member. To remain a PNG member, a dealer must conform to a strict Code of Ethics. degrees of circulation Q 1883 Morgan silver dollar in Very Fine condition Q 1881 Morgan silver dollar in Extremely Fine condition Q 1905 $2.5 Liberty gold coin certified by Disclosure requirements exceed those Numismatic Guaranty Corporation (NGC). NGC is the official grading service of the in any other collectibles area and are Professional Numismatists Guild. more stringent than the federal government s requirements for tangible asset investments. In the event of a dispute, a member must abide by binding PNG arbitration, which is swift, unbiased, and inexpensive. All collectibles investments are risky, but only in the rare coin business have dealers joined together through the Professional Numismatists Guild to protect the interests of collectors and investors. Q 1880 Morgan silver dollar in About Uncirculated condition The member-dealers of the PNG believe in the power of knowledge and the confidence that numismatic education can bring to collectors. They are dedicated to sharing that knowledge with collectors and investors alike in order to make the hobby safer and more enjoyable for everyone. One of the most important assets for any collector is a relationship with a dealer they can trust. PNG member-dealers are bound by a strict Code of Ethics to provide accurate and honest advice to the collecting public. For more information about the PNG, and to see a list of dealers in your area, visit the PNG s Web site at Q 1883 Morgan silver dollar in Uncirculated condition

6 PAGE 1880 Seated Liberty Quarter 1907 High Relief Double Eagle Photo courtesy of Tom Mulvaney Photo courtesy of Tom Mulvaney St. Gaudens Type 6 7

7 the 1913 liberty nickel A coin of tremendous rarity only five were struck. A coin of controversy no mint records exist to tell when, how, or why the coins were made. The Buffalo nickel was introduced in 1913, ending the Liberty nickel series that began in No Liberty nickels were struck in Or so it was thought. In 1919, a coin dealer and former mint employee Samuel Brown began advertising to buy 1913 Liberty nickels. He first offered $500 per coin. In 1920, he raised his buying price to $600 per coin, and when the national convention of the American Numismatic Association (ANA) met that summer, Brown proudly displayed five specimens. The five 1913 Liberty nickels stayed together until 1942, even though they had several different owners. One owner of the coins was Colonel E.H.R. Green, the son of Hetty Green, the famed Witch of Wall Street, who made millions of dollars while living a life of squalor and rage. The five coins are now dispersed. One is in the American Numismatic Association museum; one is in the Smithsonian as part of the National Collection. PAGE 8 9 Several good sources are available for purchasing rare coins. Each source has its advantages, and much depends on the experience of the purchaser and the type of material desired. local dealers A local dealer can be an excellent source of information. Coins can be examined in person and questions about the hobby answered. Some establishments deal in a variety of collectibles, including stamps and baseball cards. However, locating a shop whose main business is rare coins is the best alternative for finding the necessary expertise. numismatic conventions Conventions provide the opportunity to view a large number of coins. A regional coin show is an excellent place to meet and compare prices among various dealers. A national show offers an excellent selection of coins and the nation s most experienced dealers. National conventions are limited to only a few major cities during the year. Although private exhibits and public seminars for hobbyists are an important part of each convention, dealers spend the majority of their time inspecting and purchasing coins. Internet Ancient Rome meets 21st century technology as hobbyists and dealers browse dozens of Internet sites that feature rare coins. Qualified buyers can participate in live auctions. Hobbyists can pick up tips on coin collecting and peruse online catalogs to find out which coins dealers have in inventory, as well as some of their prices. auctions When large collections are sold, the owners or their heirs typically contact one of the larger numismatic auction firms. The auction firm will accept the coins on consignment and sell them at a public or mail bid auction. Many of the nation s rarest and most expensive coins are sold in this manner. Q Enlarged to show detail, this 1913 Liberty nickel realized nearly $1.8 million at a March 2001 auction. mail order Local dealers and coin shows are good places to obtain coins; however, many of the more expensive and rare coins are advertised and sold by the nation s major dealers. For most people, it will be necessary to conduct some business via telephone and mail. A collector should also seek a dealer who is a member of the Professional Numismatists Guild, an exclusive dealer organization with strict requirements for membership. Members of the Professional Numismatists Guild are full-time professionals in numismatics. They are well qualified to assist collectors from the novice to the expert. buying rare coins, continued The Consummate Collector John Jay Pittman, one of the most famous collectors of the 20th century, was a man of ordinary means who lived in Rochester, New York with his wife and three children. Q John Jay Pittman Pittman was born in North Carolina in 1913, the oldest of seven children. In 1934, he earned a degree in chemical engineering. He moved to Rochester in 1936 to work for the Eastman Kodak Company, a job he held for most of his life. Outside of his job, Pittman pursued numismatics with a fervor unmatched by even the most avid collector. He was active in local and regional coin clubs and attended as many coin shows as he could; he read hundreds of coin articles, numismatic books, and rare coin auction catalogs; he got to know all the major dealers in the business; and he was an active member of the American Numismatic Association, where he served multiple terms as a governor, and ultimately, president of the organization. Pittman s passion for numismatics enabled him to put together one of the most legendary coin collections of the 20th century. From the end of World War II until the early 1970s, Pittman methodically assembled a collection of some of the most outstanding coins imaginable. Pittman s knowledge, foresight, and determination kept him one step ahead of others when obtaining his coins. He appreciated the rarity of early Proof issues that were generally unappreciated, but were bargains at the time. Pittman demonstrated that you don t need a large bank account to enjoy the great hobby of numismatics. He was a man of humble beginnings and modest means, working hard to pay his bills and mortgage. In fact, he lived in the same small home in a mostly blue-collar Rochester neighborhood from the late 1930s until his death in His wife of over 50 years, Gehring, was a mathematics teacher in the public school system. Numismatic Success Even after his collecting slowed down, Pittman remained a familiar face at hundreds of coin shows, where he continued to exhibit portions of his collection. Pittman s comprehensive and diverse collection was organized into three auctions that took place from 1997 to Pittman s timing, knowledge, and willingness to take educated risks paid off in a collection that ultimately realized $30 million. turning $75,000 into $30 million little known fact about the A Pittman Collection is that the original investment Pittman made on his coins was less than $75,000. His confidence moved him often to take risks others would not even consider. In 1954, Egypt was in turmoil. King Farouk had been overthrown and civil unrest was the order of the day. When it was announced the King s coins would be auctioned in Cairo, Pittman and his wife took out a second mortgage on their home and attended the sale amidst the rioting and gunfire in Cairo. Some of his best purchases were made at this memorable sale. Pittman s collection contained none of the so-called classic rarities like the 1913 Liberty nickel, 1894-S dime, or 1804 silver dollar. The coins he acquired were unappreciated examples of other true rarities that were trading under the radar at the time he bought them. John Jay Pittman truly was the consummate collector. COIN Purchased/sale paid price ReAlized 1822 Proof Quarter Dollar 1948 B. Max Mehl Sale $42 $110, Proof Quarter Dollar 1953 B. Max Mehl $50 $176, Proof Half Dollar 1961 Kreisberg-Schulman $725 $132, Complete Proof Set 1949 Numismatic Gallery $750 $522, Proof Eagle 1954 King Farouk Sale $562 $550, Proof Half Eagle 1954 King Farouk Sale $635 $467,000 Q Prices realized from the Pittman Collection, auctioned from 1997 to 1999, demonstrate Pittman s collecting acumen. Shown at right (enlarged) is a Proof Eagle that brought $550,000 in the 1998 sale.

8 Grading is an attempt to describe the state of preservation of a rare coin. Nearly all collectors and investors prefer coins in a pristine state, and rather elaborate guidelines and techniques have evolved to convey to the buyer some sense of a coin s appearance and value. Today, rare coins are graded on a scale from 1 (worn nearly smooth) to 70 (perfect), with uncirculated or Mint State coins occupying the range from 60 to 70. Price differences between these grades often are substantial Baldwin Horseman $10 In an attempt to ensure impartiality and fairness in the grading process, several independent services were formed in the late 1980s that function only to authenticate and grade coins. The two largest services involved in the grading and certification of rare coins are Numismatic Guaranty Corporation (NGC) of Sarasota, Florida and Professional Coin Grading Service (PCGS) of Newport Beach, California Double Eagle Class I Dollar An Inspiring Display Featuring Treasures from Our Nation s Numismatic Collection Ngc is a proud presenting sponsor of Stories on Money, the new numismatic exhibition in the Smithsonian s National Museum of American History. Visit this engaging exploration of how coins reflect history during your next trip to Washington, D.C. Stories on Money is scheduled to run for several years. To plan your visit or for more information, please go to Proud presenting sponsor Smithsonian National Museum of American History Kenneth E. Behring Center PAGE 3 Q At Numismatic Guaranty Corporation (NGC), each coin received is carefully checked (1) for accuracy against its submission invoice. Numeric labeling and generic packaging provide anonymity as coins enter the grading room. NGC uses a grading scale based on the widely accepted Sheldon Numerical Scale. The final grade assigned is determined by a consensus of at least three expert opinions. Once the process is complete (2), the coin is sonically sealed inside a capsule. The sealed coin is then returned to the grading room for verification by another expert (3). Only after this final verification is complete is the coin returned to the marketplace with its guaranteed NGC grade. NGC boasts a staff of graders selected from a group of numismatic experts. When purchasing circulated U.S., ancient, or foreign coins, certification is less critical. Differences between circulated grades are usually easier for most collectors to discern, and price fluctuations are typically not as wide, although there are exceptions. Ancient and foreign coins are generally less price-sensitive in high grade, and collectors of these coins often prefer to purchase them uncertified. Although certified coins provide some assurance of quality and value, grading is a subjective process. This makes the choice of a dealer more important. Most dealers try to assign accurate grades to their uncertified coins, but a potential buyer should also learn as much as possible about the aspects of grading. Books on the subject of grading are available from most dealers and through numismatic publications aspects of coin grading T he grading of coins involves several considerations. The state of preservation is perhaps the most important. A coin that appears to be new is more desirable than one that has lost its surface details to years of wear and tear. Other factors that play a role in grading coins include: strike The strike refers to the impression a die makes on a blank coin planchet. Sometimes a coin will appear worn, when in fact the coin was imperfectly struck, or struck from a worn die. luster Luster is the special reflective quality of a coin s surface that is produced by the striking process. A coin with radiant luster will command a premium over a duller specimen. toning Over time, many coins acquire coloration due to natural oxidation. This oxidation, or tarnish, can be attractive and does not detract from the value. A colorfully toned coin is more desirable than one that is dark or dull by comparison. bag marks After coins are produced they are placed in mint bags for storage. The term bag marks refers to the tiny nicks or similar marks that appear on a coin s surface due to contact with other coins. Coins with very few bag marks are desirable.

9 Conclusion There is no better mirror of the past than tangible objects left by the civilizations and societies that flourished and declined throughout history. And of all the remnants of prior generations, perhaps none is more widely available, more affordable, and more intriguing than the coins used by ordinary people. Although everyday objects from ancient civilizations, such as clothing, jewelry, and artwork, have all but disappeared or are priceless museum pieces the magnificent copper, silver, and gold coins used to purchase those items survive in sufficient quantities to enable even those of modest means to acquire and appreciate the art of centuries past. The equestrian statue of General George Washington in the Public Garden in Boston.

10 The eagle on the Great Seal of the United States closely resembles that used for the reverse of Draped Bust coinage in the late 18th and early 19th century. Image courtesy of Whitman Publishing, LLC