by Leon F McClellan as published on columnarios.com

Have you ever wondered why a United States quarter-dollar is called “two-bits”? Or, a half-dollar “four-bits”? Do you know why we call our basic monetary unit “dollar” instead of something else?

Two-bits, four-bits, six-bits and eight-bits make reference to the eight-reales silver coin of New Spain and Mexico. It is also called piece of eight and circulated in the English Colonies and freely in the USA following the Revolutionary War. As a matter of fact, the eight-reales coin was legal tender in the United States until 1857 and was the world’s most used coin at one time. It is the renowned piece of eight that became part of the Spanish Main pirate lore.

The coins minted until 1734 technically, are called a cob coins, because they were originally made by hand stamping “tail ends of bars” or “cabos de barra”, which were sliced as planchets from rudely cast, more or less round, bullion bars which were assayed and carefully weighed. “Cabo” might well have given us the name of cob, although it does mean a lump or small mass (as of coal). The second definition comes from the Dutch “kubb”.

Cob coinage was made at the first mint in the Americas in Mexico City, established in 1535. Authorized by a Spanish Royal Decree dated 14 September 1519 to melt, cast, mark and put aside the royal-fifth of the gold and silver being collected from the Aztecs in Mexico City (Tenochtitlan). He used the palace of Axay catl (father of Moctezuma II) for the task. This may be considered the first foundry of New Spain and of all North America.

When Cortes moved into a home in 1521 in what is today the Mexico City suburb of Coyoacn, he established the second foundry in order to meet the demand for currency and produced “more than 130,000 castellanos”, according to information in documents collected by Francisco Antonio de Lorenzana. “Castellano” (Castilian) was the current coin of the time. These were the first cobs of the New World. The royal fifth was faithfully sent to Spain in the Spanish galleons.

When the Viceroyalty of New Spain was established by Spanish Royal Decree signed by the Queen of Spain the 11th of May of 1535, the Casa de Moneda (house of coin or mint) was formally established. Beginning sometime in April of 1536, according to the best estimates, the first mint of the Americas started coining operations.

Cobs did not start pouring-out into world marketplaces until the reign of Phillip II, after 1556. These crudely minted reales (literally, royals) of silver were undated until 1580 when some were and others were not marked with the year of coinage. The first pieces of eight were struck in Spain, as early as 1497, although it was not until after 1572 that the Casa de Moneda in Mexico City struck them. Before that time, only denominations smaller than eight-reales were struck in Mexico. (more…)

By Doug Winter – www.RareGoldCoins.com

The second part of this study on San Francisco double eagles deals with the Type Two issues struck from 1866 to 1876. [EDITOR: Click Here To Read Part One]

There are no absolute rarities in this series as with the Type One issues but there are a number condition rarities as well as affordable dates that are easy to locate in Extremely Fine and About Uncirculated grades.

Let’s take a look at each date and focus on the higher grade coins as these tend to be the most interesting Type Two double eagles from this mint.

1866-S With Motto:

After a small number of No Motto double eagles were struck in San Francisco in 1866, the change was made to the new With Motto design. The 1866-S With Motto is desirable as a first year of issue date but it is not really rare in terms of overall rarity. It tends to be found in lower grades (EF40 to AU50) and is nearly always seen with heavily abraded surfaces and poor eye appeal. It is scarce in properly graded AU55 to AU58 and rare in Uncirculated with an estimated two to three dozen known. It is extremely rare in MS62 above and none have been graded better than this by PCGS or NGC. The population figures in MS61 seem to be very inflated at both services and a few of the coins that I have seen in MS61 holders are marginal at best for the grade. The current auction record is $39,100 set by Bowers and Merena 7/06: 1667, graded MS62 by PCGS.

1867-S:

The 1867-S is a bit more available than the 1866-S With Motto in terms of overall rarity. In Uncirculated it is actually more rare with an estimated 15 or so known. The finest is a single MS63 at NGC; another five or six are known in MS62. This date is typically seen with a flat strike, very “ticky” surfaces and poor luster. Examples with good eye appeal are quite hard to locate and are worth a good premium over typical coins. Properly graded AU55 to AU58 pieces are very scarce and any example that grades above MS61 is extremely rare. The current auction record is $22,425 set all the way back in 2002 by Superior during the ANA auction; this was for a coin graded MS62 that is still the best that I can recall having seen.

1868-S:

The 1868-S is the most common Type Two double eagle from San Francisco struck during the 1860’s. It is plentiful in grades below AU55 but it is scarce in properly graded AU58 and rare in Uncirculated. I think there are around three dozen known in Uncirculated with most in the MS60 to MS61. Above MS61, the 1868-S is extremely rare. The highest graded is a single MS64 at NGC; the services have combined to grade four in MS62 with just one of these at PCGS. This date comes better struck than the 1866-S and 1867-S and has better luster as well. Like all San Francisco double eagles of this type, it is plagued by excessive surface marks. The natural coloration is often a pleasing rose-gold; others are found with orange-gold or greenish-gold hues. The current auction record was set by Heritage 2006 ANA: 5644, an NGC MS62 that sold for $32,200.
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By Gary Tancer – Coin Gallery of Boca Raton

With any investment: stocks, bonds, real estate, collectibles; if you do not have extensive knowledge in that field, it is always advisable to consult an expert. The coin business is no exception to this rule.

The advent of grading services such as PCGS in 1986, and NGC in 1987 was extremely beneficial to the collector or investor because they no longer had to rely on the seller for the grade of a coin who, let’s face it, usually had a vested interest. However, the third party grading services, which have no interest in the selling of coins, simply collect a fee for selecting a grade they judge appropriate.

In a perfect world, any amateur could use the internet or weekly sheets available to get a good idea of the value of a coin based on its grade. Unfortunately, this alone will only get someone so far.

The grading services, in my opinion, do a decent job grading; however, lately we have seen that there can be dramatic differences between the pricing of a coin for the same grade. This is why I am writing this article. In an ideal world, an MS 65 is an MS 65, and every coin graded would have the exact same value, but, as most people are realizing, this is not the case.

There are several factors in the determination of a graded coin’s value. Luster, color, and originality are only a few attributes that can add or detract from the value of a given coin compared to another of the exact same type. This is seen especially in auction prices realized; how a coin with the same date and same grading service, can have a 10%-100% variation in price. For example, in April of this year, a 1911-D $2 ½ in NGC AU58 sold at auction for $8625. Two months later, another 1911-D in NGC AU58 sold for $5463. In another April auction, a 1914-S $5 Indian in NGC AU58 sold for $805 while, in the same auction, another coin of the same date, grade and grading service sold for $546.

Today there exists CAC, PCGS Secure Plus, and NGC Secure Plus; though, these also can be confusing with regard to which coins are worth the high end of the spectrum and which are worth the low end. The reason for these new services is because mistakes happen, and grade inflation has occurred over the last 24 years.

In my opinion, CAC does a fabulous job and has made their presence felt in the coin business today. But as far as PCGS Secure and NGC Secure, they are too newly established for me to voice an opinion. This leads back to the title of the article. Even though many feel CAC does a great job, there remain plenty of quality coins that are highly desirable that do not meet their strict standards. That’s why expert coin graders/dealers are still needed to interpret anything and everything in between.

The difficulty is finding these expert dealers and building trust and a rapport. Most quality retailers deal directly with their customers or have educated employees working for them. You can research a dealer to see how long they have been in business, if they are active in going to coin shows and their membership in professional associations. A final factor in determining a high-quality numismatic dealer will be how receptive he is to buying coins back that he sold. I, for one, look forward to buying back any coins I’ve recommended to my customers in the past.