The following article first appeared in the January 2016 issue of Penny-Wise, the official journal of the Early American Coppers Society. Re-published with permission.
Let me start by saying that I don’t like the word “custodian.” It was probably my first experience of “Politically Correct Speech” when our grade school class was advised that we were not to call Mr. Townley the “janitor,” but the “custodian.” (This was in Omaha, sometime before 1960.) And yet, “custodian” is the best word to describe our inevitably temporary custody of our numismatic treasures, whether that custody is measured in months or decades. During that interval, we are expected to treat them with due respect—we are to treasure them. (“Treasurer” would be a better word, were it not for its connotations of balance sheets, rather than sheer enthrallment.) The very sense of treasure implies that others, perhaps many others, would love to get their hands on this coin of ours. What if that isn’t the case? What if, for reasons of finance, or collecting fashion, or sheer fate, we become the end-consumer by default?
Much is written, to encourage impecunious collectors, along the lines of ‘What you can buy for under $100.’ Fine. What if that is, say, a Shield Nickel, With Rays? The PCGS Price Guide puts an 1866 XF-40 example at $95. Very affordable. But the PCGS Population Report notes 534 examples graded between XF-45 and AU-58: a pool of collectors who already own a lightly-circulated coin that’s probably better than yours. And an additional 1265 examples have been certified in Mint State! Do you really think people will be beating down your door when you go to sell your XF-40? No. You, in effect, will be an end-consumer of that coin—meaning, it’s yours, enjoy it, but expect a dime on the dollar when you go to sell. Because it’s interesting, and it’s certainly historic, but it’s not rare. I strongly suspect that the same scenario applies to many of the highly-touted products of the contemporary U.S. Mint, albeit at prices ten times as high, or higher. Who will be your buyer? Not that I expect you to name them, but I do suggest that some consideration should be given to whether they will exist.
The same question occurs to me, at the other end of the purchasing spectrum. I was struck, during the first Pogue Sale, when the Sotheby’s auctioneer actually got the giggles when someone ‘cut’ a bid on him, at the $45,000 level, offering an additional $1250 rather than the standard increment of $2500. (This was on Lot 1055, the ex-Matthew Stickney 1806 quarter, PCGS 64) He clearly had trouble believing that someone still bidding on a mid-five figure objet d’art actually hoped to get it for less than the full increment! And yet unlike French Impressionists, the air is pretty thin, in the numismatic marketplace, once the price tag passes $50,000. That particular bidder won the lot, for $54,344 with the buyer’s fee. But can he assume that he will be just the latest entry in a long pedigree chain, at ever-increasing prices? Indeed, can he even be sure, on the “morning after,” that his underbidder isn’t heaving a sigh of relief? In the end, will he be happy owning a very special coin for the rest of his life, should it come to that?
These ruminations are based, to some extent, on recent personal experiences. I remember Sheldon’s comment, “Do not invest more in any luxury, such as an old penny, than you feel you can good-humoredly afford to lose.” The context is elaborated in the subsequent sentence: a prospective thousand-dollar coin purchase. (Penny Whimsy, page 57) I first read those words in 1978-9, when it seemed that any coin was a better place to have money, than in cash itself. I thought back then,“That’s silly. Nobody is going to ‘cheerfully lose’ $1000 on a coin purchase.” Well, yes they can. Lose, that is. (Whether or not we preserve our good humor is the only thing that’s really under our control.) It all depends upon how badly the next guy in line wants it. Or if there indeed is a ‘next guy’ in line. For series vastly more popular than Shield Nickels, and far more abundant than mint state Bust Quarters—say, early copper—up until now there always has been. Enjoy the coin a few years, then pass it on to its next ‘treasurer,’ usually at a small profit. Coin collecting as “savings,” not high-return “investment.” But this state of affairs is under threat from multiple angles:
An aging collector demographic. Declining interest in the rarity of the coin in the holder, as opposed to the number on the holder. Increasingly sophisticated counterfeits. But the best solution for all these problems remains, to share your passion for the coin itself: Who engraved its dies? How was it struck? Does it show a crisp early state of the dies, a clashed and shattered late state, or something in between? How does this answer affect its rarity? Was it struck in a time of political turmoil or tranquility? How might the answer to that question explain something unusual about it? How crucial a role did it play in the economic environment into which it was released? What could you buy, among ordinary household goods, for 10 of them? For 100? Who owned this particular example in 1976? In 1936? In 1916?
America’s early copper coinage is early American history. The historical associations that the coin should evoke, in the hand of the loving amateur, raise questions far too important to be left to the academic historians. And that a mute disc of coined metal can evoke such questions is really a pretty special thing! So, get out there and share what you’ve learned about it! To kindle such passion-in-depth in another person, is the true numismatist’s best defense against becoming the end-consumer of any coin, whether it cost $25 or $25,000.
Images courtesy of Stack’s Bowers.