Coin Rarities & Related Topics: Collecting Modern Coins
News and Analysis on coins, coin markets, and the coin collecting community #24
A Weekly Column by Greg Reynolds
The purpose this week is to put forth clear, constructive points regarding the collecting of modern U.S. coins. Readers who are already familiar with modern coins may wish to skip to section three, where John Albanese, Jeff Ambio and I provide advice and guidelines for collecting modern coins.
Before the rare U.S. coin auction climate starts to heat up again, I am continuing to address issues that are of interest to beginning and intermediate collectors. This week, I am revisiting the topic of modern coins, partly because many readers last week falsely and unfairly concluded that I was condemning modern coins. I was not saying that only pre-1934 coins should be collected and I was not referring to the artistic elements of the designs of coins minted after 1934. I was discussing the FACTS that distinguish classic from modern U.S. coins.
Indeed, there is a need to clarify some matters relating to recommendations for collectors and values in the marketplace. Last week, I wrote a two part series on 1933/34 being the dividing line between classic coins and modern U.S. coinage. (Please click to read part 1 or part 2.) Two weeks ago, I covered dealer recommendations regarding modestly priced coins for beginning and intermediate collectors.
Jeff Ambio certainly understood my central points last week. Ambio is the author of three books regarding U.S. coins and is one of the leading cataloguers of coin auction lots. In regards to “the 1933/34 diving line, I [Jeff] agree with your basic contention that coins minted prior to that period are much scarcer than those minted after. I [Jeff] also agree with your opinion that collectors paying huge sums of money for post-1934 coins in high grades should reconsider their buying strategies.”
The collecting of State Quarters is discussed in the second section. Strategies for collecting modern coins are addressed in the third section.
I. Commonality of Modern Coins
Although post-1934 coins are generally extremely common in contrast to pre-1934 U.S. coins, people who very much like post-1934 coins and enjoy collecting them should do so. Last week, in part 2, I emphasized that people should not spend large sums on a post-1934 coin solely because such a coin is, or is claimed to be, a condition rarity.
Indeed, I am against the rather common practice of spending thousands of dollars for common coins. For example, auction records reveal that a considerable number of businesses strike Roosevelt dimes have each sold for thousands of dollars.
Generally, I am very concerned about people spending even $35 over face value or bullion (‘melt’) value for a very common coin. Mint errors and recognized unusual varieties are different topics. I am herein referring to standard issues. I am aware that the 1955/1955 Double Die cent is scarce overall. It is, though, a mint error, or, at least, an accidental issue. U. S. Mint officials did not plan in advance for the numerals and some other devices of these cents to be doubled. Errors and unusual varieties require separate discussions, and tend to be exceptions to rules.
While I will write about Mint Errors in the future, the discussions herein relate to standard business strikes and Proof U.S. coins. There are millions of post-1934 coins that have never been submitted to the PCGS or the NGC, and many of them would receive high grades if these were submitted. Consider, for example, that nearly 2.2 million 2003-S ten coin Proof Sets were minted, plus more than 1.2 million 2003-S five clad State Quarter sets. These totals do not include another 1,125,755 2003-S Proof sets that feature silver quarters, a silver dime and a silver half dollar. There were thus made nearly 3.3 million 2003-S Proof Jefferson Nickels. How many collectors are interested in 2003-S Proof nickels?
Every single business strike dime issue since 1940 has a mintage of more than twelve million. In terms of dime mintages, the one hundred million milestone was surpassed in 1941, when more than 175 million Philadelphia Mint dimes were struck. The two hundred million level was reached just a year later, in Philadelphia in 1942. More than three hundred million dimes were minted in Denver in 1962, many of which are around now mostly because of their silver content. Well over one billion dimes were minted in Denver in 1964, and the one billion threshold has been crossed many times by dime issues since 1964. Indeed, since 1964, a mintage of 300 million for a business strike dime issue would be considered very small. As an aside, not that there are fewer than 300 million U.S. citizens.
Yes, there are post-1934 business strike issues of quarters and halves that have mintages of less than ten million. I am concerned, though, about people spending substantial sums on coins for which more than two million were minted and a very large number were actively saved by collectors or silver hoarders. Since 1950, the United States has been a very affluent nation and coin collecting is a very popular hobby.
For individual post-1934 coin issues, there could be anywhere from ten thousand to ten million high grade pieces that have never been certified plus numerous low grade pieces extant as well. The number of individual coins that grade from 66 to 69, and become known to the coin collecting community, may rise substantially, particularly in cases where the market values of the respective coins are significantly greater than the pertinent certification fees charged by the PCGS and the NGC.
Consider the mintages of such coins and the fact that coin collectors, dealers and speculators have been actively saving current U.S. Mint issues, in large quantities, at least since before 1950. In the 1950s and early 1960s, there was wild demand for uncirculated (Mint State) rolls of 1950-D nickels until buyers realized that there were so many thousands of such rolls in existence that all their demands could be easily satisfied. Prices for uncirculated rolls of many modern issues plummeted in the early to mid 1960s.
John Albanese declares that, “for coins from the 1940s, 1950s and 1960s, there has got to be hundreds of thousands of gem coins waiting to be found in uncirculated rolls. It just takes patience.”
II. Collecting State Quarters
Some readers of last week’s columns are under the impression that I was telling them not to collect State Quarters. This is not so.
“If someone wants to collect State quarters,” Kris Oyster says, “I [Kris] would wholeheartedly suggest collecting raw coins out of circulation; it would be challenging and fun.” I (this writer) agree. With some patience, a collector could put together a set of business strike State Quarters from change, perhaps occasionally supplemented by the searching of a few rolls from banks. A collector who does not have the patience to wait to find all of them in change could buy a few at small or medium sized coin shows for less than one dollar each.
Last week, I was criticizing the practice of spending from $50 to $8000 for individual State Quarters that grade MS-67 or MS-68. While I am not questioning that such market prices prevail, such expenditures are not logical, given the commonality of the coins and the traditions of collecting coins in the U.S. Jeff Ambio agrees, for many modern coins, a collector may acquire “a lovely MS-66 for a fraction of the price that it would cost to buy, say, an MS-67. The MS-67 is not worth the [super] premium for these common modern coins, especially since there is often little visual difference between it and an MS-66 valued considerably less.” Ambio aims his comments here at modern coins in general, and his remarks certainly relate to most post-1934 quarters.
Also last week in part 2, I emphasized that many State Quarters that have never been submitted to the PCGS or the NGC may qualify, in the present or in the future, for MS-67 or higher grades. For State Quarters and many other modern coins, it is just impossible to determine the condition rarity of individual issues. A pertinent point is that coins stored in albums may naturally tone over time, and some (though not nearly all) uncirculated post-1934 coin issues will legitimately increase in grade.
Proof State Quarters are not as common business strike State Quarters. From 1999 to 2008, the U.S. Mint issued Quarter-only sets, each year, with five Proof State Quarters. According to Numismedia.com, the current values for such five Proof State Quarter sets are as follows: 1999-S $30, 2000-S $8, 2001-S $41, ’02 S $20, ’03-S $10, ’04-S $15, ’05-S $13, ’06-S $16, ’07-S $19 and ’08-S $45. Each of these prices is for five different Proof State Quarters in a U.S. Mint sealed container. These are not rare coins, and I cannot perceive, from a logical or historical perspective, these being worth dramatically more than the prices just listed. Those who find these coins to be appealing may wish to buy these sets at current levels.
Keep in mind that the respective mintage for each Proof clad State Quarter issue is typically well over two million and almost all of them survive. Besides, the U.S. Mint also issued silver Proof Quarters of the exact same designs, which command premiums over the Proof clad issues that I am discussing here. The silver Proofs are less common, but there are also fewer collectors demanding them. Mintages for some of the Proof silver State Quarters are well over one million. Whether a collector buys silver Proof State Quarters or clad Proof State Quarters depends upon his or her tastes, preferences, and budget.
In coin markets, there is substantial difference in price between a Proof-63 State Quarter and a Proof-68 State Quarter. It is nowhere near, though, the difference in price between a MS-63 State Quarter, which is worth face value, and a PCGS graded MS-68 State Quarter, which, depending upon the individual State Quarter issue, is worth from $26 to $8750, according to the PCGS price guide.
The connoisseur who wishes to acquire Proof State Quarters individually may be satisfied with those that grade from Pr-65 to Pr-67, as these are very attractive and do not cost much more, in absolute terms, than Pr-63 pieces. Jeff Ambio agrees. For most beginning collectors who like State Quarters, buying Proof State Quarters in their original Mint packaging will be satisfying and enjoyable.
A Proof-67 or -68 grade State Quarter will usually cost just a few dollars more than a more typical Proof-65 or -66 grade representative of the same issue. For those who can easily afford, and really appreciate, Proof-68 State Quarters, spending just a few dollars more per coin may make sense. Certified Pr-69 and especially “70” Proof Quarters command much larger premiums. Furthermore, a certified “Proof-70” State Quarter may cost two to ten times more than a “Proof-69” representative of the same issue that is certified by the same grading service. I would not recommend buying certified “Proof-70” State Quarters. These are common coins and “70” grades are controversial. I emphasize that Proof-65 to Proof-68 Modern Proof coins are attractive and will be satisfying to almost all collectors who are interested in such coin issues.
III. Guidelines for Collecting Moderns
John Albanese, too, is concerned about people spending thousands of dollars on certified, post-1934 coins, especially those that have been minted since 1980. John was the sole founder of the NGC in 1987 and he founded the CAC in 2007. Before Albanese sold his NGC shares in 1998, the NGC generally did not grade coins minted after 1964, as these were regarded by Albanese as being “too common” and coins that were “often misrepresented” in the marketplace.
“For people who have decided to buy U.S. coins minted during the last thirty years, they should buy coins in their original government holders,” John advises. Most such modern coins are gems. Further, Albanese suggests “that people who like very modern coins put together sets of Silver Eagles. They are large and beautiful. Although they obviously are never going to be rare, they have great eye appeal. Leave the Proofs in their original government holders and put the business strikes in Dansco albums. Silver Eagles often tone nicely,” Albanese relates. Silver Eagles are one ounce U.S. silver coins that have been minted since 1986.
For post-1934 coins in general, Albanese focuses on silver coins. “For people who like silver coins or just wish to invest in silver as a precious metal, unc rolls of Franklin Halves may be purchased for just a couple of percentage points over melt [silver bullion content]. Some rolls include gems.” Furthermore, Albanese recommends unc rolls of Roosevelt Dimes, 1949 to 1964. “Most of these can also be purchased for just a little over melt.” Also, Albanese points out that uncirculated Mercury Dime rolls were almost never melted, even in 1980. There are still a lot of them around and they are not expensive.” MS-65 and higher grade Mercs, of many dates, “can be found in rolls.”
A collector or silver investor, Albanese says, can assemble circulated sets of modern silver issues for around “melt value” [silver bullion content]. Indeed, John emphasizes that nice circulated examples of almost all post-1934 silver, business strike Washington Quarters can be purchased for melt value. Furthermore, “you could buy 90% of a Mercury Dime Set or even 90% of a Walker Set for melt value by just going to coin shops or small coin shows,” Albanese reveals. For Mercs and Walking Liberty Half Dollars, John is referring to 90% complete sets of whole series “from 1916 to the end,” not just from 1934 on.
Regarding post-1934 coins in general, Jeff Ambio provides collecting advice, at my request, even though he is not thrilled about post-1934 coins “for the reasons of relative commonness that Greg pointed out in last week’s columns. If someone were to collect post-1934 coins, I [Jeff] would [suggest] those series where there is another criterion to determine rarity other than the number of coins known or the number of coins believed extant in a certain grade. In other words, I [Jeff] like Franklin Half Dollars because you have added criteria of strike that can actually help to establish genuine rarity for Full Bell Lines examples of certain issues.”
Jefferson Nickels may have five or six full steps on the reverse (back of the coin). It is becoming increasingly popular for people to collect Roosevelt Dimes with a ‘Full Torch’ or ‘Full Bands’ on the reverse. Though I (this writer) recognize that these designations are very popular with collectors, I (this writer) feel compelled to disagree with Jeff on this point. I just do not find these features to be of tremendous importance from a technical or aesthetic standpoint.
Ambio continues. “I [Jeff] would absolutely stay away from really modern coins like Statehood Quarters, Sacagawea Dollars, Presidential Dollars, etc. There are just so many of those coins around, and most are very well made. If someone were to collect modern series, other than the likes of Franklin Halves with their FBL criteria, I [Jeff] would select the grade level just before the PCGS and the NGC population figures drop off markedly. In other words, don’t pay huge premiums for a coin that looks like a major condition rarity now [as] it might not be in a few years after more coins are certified. Top-of-the-pop supposed condition rarities of modern coins are ticking time bombs” because these will no longer be strongly demanded after many more such coins are certified, Ambio emphasizes.
Here are my (this writer’s) guidelines for collecting post-1934, U.S. coins: (1) A collector should buy coins that he or she really likes. If a collector is unsure, then buy a few coins in different series, and in different grades, and study them, before deciding which series to collect. Collectors must decide which coins interest them. (2) Always keep in mind that modern coins are (with few exceptions) very common.
(3) If a collector is a connoisseur and appreciates the differences relating to single points above 65, pay a little more for superb gem coins. Do not pay many multiples of the price of the same coin issue in the next grade below.
John Albanese asserts, “For coins from the 1940s, 1950s and 1960s, there has got to be hundreds of thousands of gem coins waiting to be found in uncirculated rolls. It just takes patience.” Undoubtedly, more than a few of these gems grade MS-67.
(4) Remember that, for each modern coin issue, the number that is certified in grades from 65 to 70 may dramatically increase in the future. If a ’69’ grade coin is worth multiples of a ’68’ grade coin of the same issue and both have values well above a PCGS or NGC certification fee, then the number of ’68’ and ’69’ graded coins of the respective issue may rise dramatically over time. In such a case, a ’66’ or ’67’ grade coin may be a better value. Jeff Ambio strongly agrees.
(5) Be hesitant to pay substantial premiums for cameo effects on Proofs. Think first. (6) If a collector has already decided to spend more than $250 each on modern coins that grade above 65, he or she should buy PCGS or NGC certified coins AND seek the advice of experts.
(7) Formulate a collecting objective that has a finite ending point, such as State Quarters, Franklin Halves, silver Roosevelt Dimes, or 1982 to 1999 dated Modern Commemoratives. Do not feel pressured to keep buying future U.S. Mint issues to complete sets. If a collector plans to collect all modern commemoratives or all gold [bullion] “eagles” from 1986 onwards, he or she may need to buy many issues that do not yet exist, at unknown prices, to complete a set. A plan for a modern coin collection should be limited to coins that already exist. With objectives that have finite ending points, a collector may form a plan and a budget in the present.
(8) Most importantly, coin collecting should be fun. A collector should acquire coins that he or she can easily afford and find to be very appealing. If a collector chooses to build sets of common coins, then he or she should pay modest amounts over face or precious metal (‘melt’) value for such coins.
©2010 Greg Reynolds
About the Author
Greg Reynolds is a numismatic writer, researcher and analyst. Greg has examined almost all of the greatest U.S. coins and most of the finest type coins and patterns, He has extensively researched the pedigrees of important numismatic properties, and he has written about and analyzed numerous auctions, private sales and collections.
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