News and Analysis regarding scarce coins, markets, and the collecting community #11

A Weekly Column by Greg Reynolds

After discussing the Proof 1804 Eagle that has repeatedly sold privately for startling sums, I will discuss a few famous rarities that will be offered in Boston. Indeed, I have discussed other coins in these auctions in a few past columns. There are, though, a startling array of rarities in the upcoming auctions, and I have not yet covered the offerings of a “Proof-60” Kellogg $50 gold coin, two gold-plated Half Unions, and the worst known (though still attractive) 1854-S Quarter Eagle.

I. Proof 1804 $10 Gold Coin

As I have been writing extensively about famous rarities for years, I could hardly resist writing about the Proof 1804 Eagle ($10 gold coin) that was just sold by Laura Sperber to Bob Simpson, who is the leading collector of patterns and has landmark collections in other areas as well. Although the sale price has not been disclosed, it may be fair to assume that the price is between $2.5 million and $7.5 million.

There probably exist four Proof 1804 Eagles, and this one is NGC certified ‘Proof-65 Ultra Cameo.’ Further, this coin has been approved by the CAC. John Albanese, the founder of the CAC, and earlier of the NGC, was involved in enabling Simpson to acquire this coin. In 2007, a coin firm in upstate New York arranged for one of their clients to sell this coin to another one of their clients, for a reported price of “$5 million.” Coincidentally, the owner of this firm is also named Albanese, though he is not related to John.

This same upstate New York Albanese coin firm sold this same exact Proof 1804 Eagle earlier, in 2005, for a price that they reported to be “$2,274,000.” A famous collector, who refers to himself as “TradeDollarNut,” has publicly stated that he was offered this same coin, in 2001, for “$587,500.”

The value of many gold rarities has multiplied since 2001; a five to ten times increase in value is not unprecedented. Consider, as examples, the post-2005 values of many gold rarities that were included in the auctions, in 1999 and 2000, of the Harry Bass collection. It is not unusual for a Bass rarity to be worth multiples now of the price it then realized.

It is also true that this same 1804 Eagle was NGC certified ‘Proof-64 Cameo’ in 2001, or earlier, and remained so certified in 2003 and maybe later than 2003. At some point, it was PCGS graded “Proof-64.” Certainly by 2007, the NGC upgraded it to “Proof-65” with an “Ultra Cameo” designation.

How rare are Proof 1804 Eagles? It seems that there exist four, though it has been argued that there are only three. The Bass-Dannreuther book (Whitman, 2006) states “3 known,” but also indicates that the issue is “R-7+,” which means an estimate of four to six in existence. The “3” may have been a typographical error. The tenth edition of the Judd book (Whitman, 2009), which is the leading text on patterns and related pieces, lists this issue as Rarity-“8,” which means two or three or thought to exist. This same section, however, lists an auction result for a Proof 1804 Eagle that is incorrect. Oddly, the Judd book values a gold Proof 1804 Eagle at “$1,500,000.”

If there are just three, it would have impossible, in 2009 or 2010, for someone to purchase one for $1,500,000. The Eliasberg-Bass Proof 1804 Eagle is impounded in the Harry Bass Core Collection, for at least a long time, maybe forever. The ‘King of Siam’ 1804 Eagle remains in the ‘King of Siam’ Set, as far as I know. If the current owner were to dismantle the set, then the current owner would ask millions for the ‘King of Siam’ Proof 1804 Eagle.

As I just became aware of Legend’s sale of a Proof 1804 Eagle on Tuesday morning, I have not had time to research this issue before this column was posted. I am almost certain, however, that the Baldenhofer Proof 1804 Eagle exists and is different from the Eliasberg-Bass coin.
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The 1867 Rays Shield nickel business strikes are conditionally rare coins in the highest Mint State grades, but they are generally obtainable for a price. The 1867 Rays Shield nickel proof coins, however, are celebrated rarities, well-known to series specialists and advanced numismatists.

John Dannreuther, director of research at PCGS, has delved extensively into the die diagnostics and Mint history surrounding the 1867 With Rays and No Rays proof issues–and reissues. Much of what follows is from the summation in the Bowers Shield and Liberty Head nickels Guide Book and from Dannreuther’s PCGS article, published in the June 2007 PCGS Rare Coin Market Report and reprinted on www.shieldnickels.net, titled “Third Obverse Die Identified for Proof 1867 Rays Nickel.”

Three Different Obverse Dies Used

Dannreuther has established that three different obverse dies were used for the 1867 Rays proofs, which were restruck at various times, all paired with a single reverse die that was lapped on each reuse. The first obverse used, Dannreuther-1, shows the characteristics below:

–The left base of the 1 in the date is over the right side of a dentil.

Dannreuther writes concerning the first use of this obverse that it likely was used to produce 10 to 15 1867 With Rays proofs earlier than previously believed. Earlier research by R.W. Julian had indicated that, when the order was given on January 21, 1867, to suspend coinage of the With Rays design, chief coiner Archibald Louden Snowden had so far supposedly “refused” to make any 1867 With Rays proofs for sets. However, Dannreuther believes that is likely untrue since, based on the die emission sequence and die state information he has established, Dannreuther-1 is the earliest known stage of this obverse die. Dannreuther writes:

“Most likely, the 25 Proofs reported delivered on February 5, 1867 are the ones with the Pattern reverse, as determined by specialist Douglas Kurz. These No Rays Pattern reverse Proofs have a very slightly different (but later) stage of State a, indicating that some With Rays proofs were probably struck in January or early February right before the No Rays Proofs with the Judd-507 Pattern reverse.”

The appearance of “hollow” leaves, a lump or dot at the lower-left forepart of the fletchings, the absence of visible recutting on the 7, etc. would indicate later die states and presumably coincide with a lesser degree of the marked field-device contrast also evident on this coin.
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The period 1965 to 1967 was an interesting time in US numismatic history. The price of silver had risen to the point where it made no sense to make higher denomination coins out of silver. In addition, there was a widely reported coin shortage, despite record production levels.

As the mint scrambled to adjust, a number of emergency measures were taken. Production of 1964-dated coinage continued well into 1965 until the new clad planchets were ready. Then, to make sure that there was enough of the new coinage to go around, the mint decided both to cease production of proof coinage and to do away with mintmarks. The only concession of any kind made to coin collectors were the Special Mint Sets of 1965-67, not true proof coins, but high quality circulation strike coins similar in some ways to the satin finish coins in mint sets today.

In 1968, the mint resumed the use of mintmarks and the production of proof coinage, but with a new twist. Proof coins, like the prior Special Mint Set coins, were now made in San Francisco, and the S mintmark reappeared after a 12 year hiatus. Initially, the San Francisco Mint also manufactured some circulation strike cents and nickels, but their dimes, quarters, and halves were strictly proofs. The mint would eventually also make Susan B. Anthony dollars for circulation, as well as silver-clad Ike dollars and bicentennial coinage for collectors.

During the first year of S-mint proof set production, an unexpected hitch occurred. In a few sets full of S-mint coins, the dimes had no trace of a mintmark! This came about because at that time all coinage dies were prepared with no mintmark, which would be added only upon arrival at the branch mint. On one die, that didn’t happen, and an instant rarity was made.

Walter Breen opined that about six examples of the 1968 no S dime were known. If that is true, then Heritage has sold each of these coins an average of at least three times apiece. Nevertheless, the 1968 no S dime is clearly an extremely rare coin, likely R.6 or low R.7, surpassed in rarity among 20th century dimes by only one coin.

Heritage’s upcoming 2010 April-May Milwaukee, WI CSNS US Coin Auction includes a rather unique proof set: one each of the five collectible missing mintmark proof coins. Along with the 1968 no S dime, the set includes the 1970 no S dime, the 1971 no S nickel, the 1983 no S dime, and the 1990 no S cent. While none of these coins is as rare as the 1968 S-less dime, each is highly desirable, and a key to its respective proof series. All of the coins in the set grade Proof-68 or 69, and show the eye appeal expected of latter-day US Mint products.

Incidentally, the sole 20th century dime that is rarer than the 1968 no S proof dime is also an S-less proof. A mere two examples are known of the 1975 no S dime, and neither Heritage nor the major grading services has ever handled one!