Auction Prices Provide Historical Perspective

By David L. Ganz
Numismatic News

Auctions fascinate and engage us.

It’s not just eBay, but also mail-bid auction sales, live auctions and other sale methods where items go to the highest bidder.

dollar_1It’s a combination of skill – to win an item at the high bid but at the lowest possible price – knowledge (in knowing what to bid on, and how high to bid) and resources to accomplish the goal.
Sometimes it’s just a case of luck. Some 30 years ago, for example, I attended a Saturday morning auction of New England Rare Coin Galleries in New York City and walked in just as a 1922 uncirculated Peace dollar hit the block. It was rare, but the bid was uncovered – no reserve – and it was mine for a shouted $5 bid to auctioneer Herb Melnick, who knew how to coax extra dollars and bids on higher end items.

Another example, more interesting but less numismatic, came at an auction conducted by a major auction house 20 years ago cataloged as an “engraving of the presidents’ ” I looked at it and recognized it for what it really was: a presidential commission, signed by Abraham Lincoln and his secretary of war, Edwin Stanton. A nice prize for diligence.

Auctions are also important price histories, which show trends for individual coins and the marketplace as a whole. They show a story line that allows both graphic, chart and written comparisons to be made over an extended period of time and to give an impression of market segments as well as the whole shooting match.

I’ve been going to auctions regularly for more than 30 years, and I retain the sale catalogs. It’s useful, I find, to know where the bidding starts, where it ends and who the players are who bid on key lots. It also helps in the eventual pedigree of a coin – knowing who had the coin, and when.

That in turn allows for following values up and down over extended periods of time.

For more than 30 years, I’ve also charted coin prices for key dates – coins like the 1804 silver dollar, the 1913 Liberty nickel, the 1794 silver dollar and others – which I have augmented by acquiring older numismatic literature to round out the collection of information.

In 1973, when I worked in Iola, Wis., for Krause Publications as an assistant editor for Numismatic News, one of the most exciting stories took place in October, when the Gilhousen collection was first sold by Superior Galleries. Television producer Ralph Andrews was the buyer, but the quote from Larry Goldberg over the phone lines the next day was staggering.

“I just sold the first $100,000 coin,” he said, and it was big news.

It may seem commonplace right now, but in the backwater times of the 1970s, a sixfigure sale of a coin was something else. (The Ellsworth collection, which contained a 1794 dollar in uncirculated, for example, was purchased intact by Wayte Raymond for $100,000 in the 1940s.

The 1794 dollar is a coin with a story, and an impressive price record – not to mention pedigree. For convenience, I’ve started back more than a century ago, 1903, when the Murdock collection was sold in London and an uncirculated 1794 dollar brought £48, or about $230.40, in the sale.

dollar_2The announcement by Goldberg was a watershed, for it marked the true beginning of consideration of numismatic items as genuine investment vehicles worthy of consideration by Wall Street types, and others. Barely five years later, the Federal Reserve Bank of Boston used its prestigious New England Economic Review to quote from the Salomon Brothers Survey of tangible assets to show that coins were indeed more than a collectible.

Of course, that’s not the final story for 1794 dollars.

Q. David Bowers, in his definitive Complete Encyclopedia of US. Dollars (1993), traces some of the subsequent history. It eventually wound up in the 1975 Bowers & Ruddy Newport Collection sale (Lot 371) where it realized $75,000; from there, it went to the block in heated competition. By that time, the Dow was at 857 and the CPI was 53.80 (again, 1982=100).

By 1984, the Amon Carter specimen (originally purchased at the 1947 Will W. Neil collection sale conducted by B. Max Mehl for $1,250) hit the block in uncirculated condition (described as proof-like by cataloger Norman Stack). It was a significant event for the numismatic community.

Ed Milas, of RARCOA, was in attendance and told me at the time that he “had $150,000 to bid and I thought that would take it.” He estimated its pre-sale value at $120,000 and seemed very confident. Bidder 187, Huge Sconyers, instead took top honors at $240,000 ($264,000 with the buyer’s premium).

By this time the Dow had moved to 1,212 and the CPI had started its inflationary march to 103.90.

The coin next showed up in the collection of Jimmy Hayes, which he sold through Stack’s in October 1985 as he prepared to run for Congress. Hayes was known for his discerning eye for high-quality, better-graded material – and in this coin he had hit a true mark.

David W. Akers attended that sale and spoke with me prior to the auction. He graded the coin MS-63+ and said that he had come to the sale expecting to buy the coin. It opened at a respectable $75,000 from a mail bidder, and moved rapidly in $5,000 increments to $80,000, $85,000, then $90,000. Kevin Lipton jumped in with a bid of $ 100,000, and it was off to the races.

When the smoke cleared minutes later, Akers had the bid at $200,000 (a $220,000 total price with buyer’s fee). The market for the coin was stabilizing, but not moving steadily upward. The Dow had advanced to the 1,547 mark and the CPI was at 107.60; gold was at $318 an ounce – a long way from the $35 an ounce it had been in 1968 and prior going back to the 1930s.

Another MS-63 specimen was the Amon Carter piece that showed up in a Superior Sale of the Hoagie Carmichael collection in January 1986. That brought $209,000 and traced its pedigree to the Mehl sale of the Will W. Neil collection of 1947, and by extension, the earlier Carter coin at $264,000 – a net decline over the two-year period. (The Dow was at 1,896 and the CPI was at 109.60, gold was at $368 an ounce.)

The companion Lord St. Oswald piece, sold to A.H. Baldwin and Lester Merkin on behalf of Ambassador and Mrs. R. Henry Norweb, was sold by Bowers & Merena in 1988. The price then: $242,000. Bowers said that which of the two coins is better (at MS63) remains a “toss-up”.

Not too many years ago, in 1995, Stack’s sold another 1794 dollar (described as gem brilliant uncirculated) in its Numisma ’95 venture with Akers and RARCOA. The final bid: $577,500. Its pedigree: Fred Boyd.

Since 1995, a number of 1794 silver dollars have hit the market, but most in about uncirculated condition, or extremely fine, or even fine – not uncirculated. The coin in that superior state of preservation is a genuine rarity.

Latest was the American Numismatic Rarities sale last year when a 1794 dollar took top honors with a $1.15 million final bid. This, too, has a pedigree showing that it came from the Boyd collection.

But if the first coin to hit $100,000 was a surprise in the 1794 silver dollar, there were lots of guesses as to which would be the first coin to reach $1 million – either by private treaty (i.e., a dealer sale) or by auction route.

It almost made no difference what the coin was – it was the concept of getting there, and there was plenty of speculation when it would occur, what the coin would be and whether the sale would be public or private.

By 1978, more than 15 coins had broached the $100,000 benchmark, and the race to a million was on. As the 20th Century ended, the million-dollar barrier, a Rubicon of sorts, had been breached three times ‘ once for a 1913 Liberty nickel ($1.485 million) and twice by different 1804 silver dollars ($1.815 million and $4.14 million, respectively).

Of considerable significance, beyond the one-shots, is that the overall market has risen – the high-priced singular items, like a tide, have lifted the rest of the ocean of coin rarities. Thus, coin prices of $30,000 or higher are no longer considered the novelty that they were a quarter century ago.

No one can really predict where the next level of coin prices will go, but what-is clear is that the rising tide has transformed the marketplace, adding a zero to the pricing of yesteryear, in the process creating a wholly new investment vehicle whose future will be grasped sooner rather than later.

Best evidence is that all 1794 dollars were coined on Oct. 15, 1794, from silver bullion deposited by David Rittenhouse, then director of the U.S. Mint and a prominent Philadelphia scientist. All 1794 silver dollars coined on this date were delivered to Rittenhouse. Thus, all 1794 silver dollars can trace their pedigree to him, who passed them out to friends, many of whom kept them, others were spent and circulated. The silver bullion deposited by Rittenhouse varied greatly, and there were many gas bubbles in the silver ingots, which later caused the laminations and planchet cracks that plague approximately 30 percent of the 1794 dollar population.

The 1794 silver dollar is an American classic, it is the first year of issue of our monetary unit, was struck in extremely limited quantities and the total known population is between 125 and 150 coins in all grades. Only about 12 uncirculated specimens are identified. Their sale prices offer a unique point of comparison of the date and the rare coin economy.