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Greatest All-Time Collection of Middle Date Large Cents (Part 3): A General Interpretation of the Naftzger 2 Auction Results

By Greg Reynolds for CoinLink

In Part 1 of my series on the auction of the Naftzger Middle Dates, please find an overview of this collection, general remarks regarding die varieties, my probably not original view on defining types of Middle Date cents, and and a discussion of Naftzger’s cents from the year 1839. In Part 2, I talk about scarce dates and I list some of the high quality type coins in the Naftzger Middle Date collection. In Part 3, there is a broad interpretation of the results of the auction, and a discussion of the 1817 cent, with fifteen stars. In Part 4, there is an analysis of the prices realized of scarce dates from the 1820s. In Part 5, prices realized for Naftzger’s cents from the 1830s are discussed.

1817 15 Star Large Cent - Finest KnownOn Sunday, Feb. 1, at the Beverly Hills Crowne Plaza Hotel, the firm of Ira & Larry Goldberg auctioned the late Ted Naftzger’s collection of U.S. cents that date from 1816 to 1839, the so called Middle Dates. Most of Naftzger’s Early Date large cents, and many of his Proof Middle Dates, were sold privately in 1992. Several important Naftzger Early Dates, however, were auctioned by the Goldbergs in Sept. 2008, including a pristine gem 1796. Naftzger’s Late Dates (1839-57) will probably be auctioned in September 2009. Although I expected record prices on Feb. 1, and some crazy bidding, I am stunned by the prices realized. An 1823 realized an astonishing $299,000 and many other Naftzger Middle Dates sold for astronomical prices, especially considering that Middle Date business strike large cents are not very rare.

The 1823 and her non-identical twin, the 1823/2 overdate, are the rarest Matron Head large cents, a type which was minted from 1816 to 1835. The Coronet Head large cents that were minted from 1835 to 1839 are of a distinctly different type (or subtype), though are still Middle Dates. The relative rarity of the 1835-39 type is the 1839/6 overdate, which is almost always collected as a distinct date. The best of Naftzger’s three 1839/6 cents realized an incredible $264,500. As far as I know, the previous auction record for an 1839/6, which was set in early 2005, is $14,950.

Almost all of the Naftzger Middle Dates discussed herein have been graded and encapsulated by the Professional Coin Grading Service (PCGS). These large cents have also been graded by the cataloguers, Chris McCawley & Bob Grellman (M&G), and their grades are referred to below as ‘M&G’ grades.

“Over the last few years,” McCawley observes, “the grading services have tightened their grades on early copper coins such that the certified grades are closer to EAC [Early American Copper specialists’] grades than they were before.” The dual effects of this recent grading practice, according to McCawley, is that more copper specialists are “accepting certification” and more collectors of silver and gold coins are being drawn to copper.

Over the last fifteen months, I have reported several times, in a few articles, on new auction records for copper coins and patterns. I am certain that there has been dramatically increased demand for U.S. large cents. There is both a greater quantity of collectors and more demand from long-established collectors of pre-1858 U.S. copper coins.

I agree with McCawley that copper collectors have become more accepting of the two leading grading services, especially of PCGS. Additionally, Greg Hannigan remarks that “the Naftzger coins that are PCGS graded 65 or higher did extremely well at this auction.”

Hannigan has “been collecting large cents for more than thirty years” and he has “been a dealer for about a decade.” Hannigan bought “a little more than a dozen coins” at the Naftzger Middle Date sale, and he tried to buy many others.

Hannigan observes that “people who have collected all sorts of coins for a lot of years are now spending a lot of money on choice early copper coins. The last three high-end copper auctions have done really well, and that has gotten more collectors of silver and gold coming to copper. ” Hannigan adds that “the grading of many famous or gem quality large cents by PCGS over the last few years has been a magnet that pulled collectors of early type coins to copper.”

Though McCawley and Hannigan (and myself) agree that independent certification has played a major role in recently attracting collectors to copper coins, they emphasize other aspects of the coins. “Some coins in this auction brought very, very strong prices,” states McCawley. “Years from now, however, we will look back and say that many others sold at bargain prices. In some cases, the certified grades do not really reflect the great quality of some of these coins.” Hannigan puts forth a similar view, “sometimes when coins bring a lot of money, it is not always because of the variety or the grade. Often, its the pedigree or the overall look of the coin.”

McCawley declares that “there is more to quality than just a numerical grade. Many of the coins came earlier from collectors who had a great eye for large cents. It is very important to consider the pedigrees.” Indeed, for more than 125 years, collectors have considered pedigrees to be very important factors in determining the desirability of specific large cents.

Whether it is famous collectors themselves or their respective dealer-agents who carefully selected coins, coins that come from phenomenal collections should be, and often are, valued higher than coins that come from anonymous sources. In all my years of attending and analyzing coin auctions, I have definitively concluded that great coins from fantastic collections bring higher prices realized, on average, than the same coins would if they lacked ‘names.’ This is true of coins that are consigned as part of named great collections and/or coins that carry stated important pedigrees from the past.

Although the Naftzger collection is the best, the second-best all-time collection of Middle Dates may be that of Floyd Starr. Starr’s large cents were auctioned by Stack’s in New York in 1984. Starr acquired all of Howard Newcomb’s Middle Date cents in 1945. Starr also obtained exceptional Middle Dates from other sources. Newcomb was a very sophisticated collector who wrote the best known work on Middle Date cents. His system of attributing die varieties, of Middle Date cents, is still used in the present. There are current experts, too, who are very refined and cultivated.

McCawley was “very impressed by the buyers in this sale.” There was more than one “reason why we saw high prices for high quality PCGS certified coins. Of course, the general quality of the Naftzger Middle Date cents was astonishingly high. Copper collectors have become much more accepting of PCGS certification. Further, the sophistication level of the buyers is higher now,” McCawley declares. A key point, in McCawley’s analysis, is that “the level of connoisseurship has greatly increased over the last five years.”

Many new collectors of large cents and some previously established large cent collectors have become more intensely interested in high quality coins. Over the last two years, demand has increased for both gem Mint State coins and for choice circulated coins with minimal marks and original surfaces. Last year, in my discussion of Husak’s 1793 Liberty Cap cent, I noted that the premiums for quality have increased dramatically over the last ten years. In contrast, the premiums for superb quality 18th and 19th century U.S. silver coins were much greater during the 1988 to 1991 period than such premiums have been during this decade.

McCawley finds that a “larger than ever before number of large cent collectors have either learned to grade themselves or are being advised by expert graders, or both for some buyers. The great collections that have come on the market over the last three years have served very important educational purposes. One important consequence is that seeing such great large cents has helped collectors and dealers improve their grading and has given people confidence” in their ability to grade and otherwise interpret large cents.

The prices realized at this Naftzger 2 sale demonstrate, in my view, that the incredibly strong demand was for scarce dates rather than for die varieties. Hannigan agrees, “the scarce dates brought very strong prices, more so than the die varieties.”

Certain major varieties that have the status of distinct dates are regarded as such here. Below, I mention the record price for the Naftzger 1817, with fifteen stars. In part 4, I discuss high prices for the better-dates of the 1820s. As will be explained in part 5, all three of Naftzger’s 1839/6 cents realized incredibly strong prices.

Naftzger’s rare die varieties were typically among the finest known, if not the finest. For subtle die varieties, especially those that are almost never demanded by date-collectors, bidding was not that intense and prices were not astronomical.

There are sixteen varieties of 1838 cents. Most are not rare. As the differences among most of these varieties are subtle, it would not make sense to explain them here. Most collectors will not remember the details of varieties that are not often viewed as having the status of distinct dates.

For one of the rarest die varieties of 1838 cents (Newcomb-15), the Naftzger coin is M&G graded 40 and is said to be one of the four finest known. It was formerly owned by luminaries, including Walter Breen, Del Bland and C. Douglas Smith. It sold for $2530, less than its estimate. According to M&G, there are fewer than seventy-five known of the Newcomb-15 variety. (Please do not expect me to remember any of the details of the N-15 variety.)

1838 Large Cent Newcomb-16The next lot, #436, contained another 1838 of a different, rare die variety. It is PCGS certified 64-Brown and M&G graded 60+. Large cent researchers determined that it is the first or second finest of this (Newcomb-16) variety. It realized $4887.50, slightly less than its $5000 estimate. In contrast, many scarce dates in the sale brought much more than the cataloguers or anyone else that I know estimated, and numerous scarce dates realized multiples of the previous auction records for their respective dates. Collecting ‘by date’ is a much more popular undertaking than collecting ‘by die variety.’

Jim McGuigan estimates “that there are fewer than one hundred people who collect the Middle Dates by die variety.” McCawley suggests that “there are probably a little more than a hundred, but some of them are not very actively collecting. A few collections of die varieties are dormant.” It is not unusual for coin collections to sleep while their owners attend to other matters.

I hypothesize that there are more than five thousand people who collect Middle Dates ‘by date’ and more than fifty thousand who acquire one to four Middle Date large cents for type sets. McCawley agrees that “thousands of people are collecting sets ‘by date’ from 1816 to 1857. Someone can collect both Middle Dates and Late Dates in Very Fine or better and probably not have to spend more than $200 per coin except for the 1821 and 1823,” and except for the four major overdates if these are considered to be separate dates.

If the 1839/6 is omitted, a whole 1816 to 1839 set in Very Fine grade, of all the issues that I consider to have the status of distinct dates, could be purchased for $6000 to $10,000, This set would include, in addition to the readily apparent dates, two 1817s, an 1823/2, and an 1824/2, but not a so-called 1826/5. Unfortunately, it would be difficult to estimate the value of an 1839/6 in Very Fine grade, and even an 1839/6 cent in Fine grade would would certainly cost thousands of dollars in the current market environment.

A set of Middle Dates and Late Dates, by year, without any overdates would be easier, much less expensive, and surely fun. “In most cases,” declares McCawley,”for less than $100 per coin, a collector could buy problem-free Very Fine Middle Dates and Extremely Fine grade Late Dates.” Besides, coin collections are typically built over a long period of time. The major overdates could be added in the future.

A ‘set’ that includes just one large cent from each year is interesting and much less expensive than collecting all the issues that are listed in most major price guides. In my view, however, which I believe is consistent with traditions relating to U.S. coin collecting, readily apparent overdates and certain major varieties are distinct ‘dates’. The word ‘date’ in the field of coin collecting means much more than just a year.

A date-collector will typically acquire both an 1817, with the standard thirteen stars on the front (obverse) and an 1817, with fifteen stars. As these stars are relatively large, the look of an 1817, with thirteen stars, as obviously distinct from an 1817, with fifteen stars. These are not subtle varieties; they are different issues, and thus distinct ‘dates’!

The 1817 with fifteen stars is not rare, but is very scarce. The Naftzger piece is not the finest known but is certainly one of the top five. It is PCGS graded 65 and M&G graded 63.

Well “before this auction,” Jim McGuigan , would have valued the Naftzger 1817 with fifteen stars at “$8,000 to $12,000.” McGuigan is a long-time dealer and a early copper collector.He “expected” this Naftzger 1817 “to sell for $11,000 to $15,000,” as he realized that some bidders at this auction were likely to pay more than the same coins might be worth in other settings.

“Before the sale,” McCawley “would have guessed” a price realized of “$20,000 to $25,000.” In January 2009, the PCGS price guide valued this 1817, with fifteen stars, at “$15,000,” and this value was then raised after the sale to reflect the auction result. After opening at $5750, the Naftzger 1817 cent, with fifteen stars, sold to a floor bidder for $50,600, which McGuigan declares “a bizarre price.”

McCawley believes the fact that none of the coins were going to be ‘bought back’ contributed to the intense bidding activity. “Everyone knew all the coins were going to change hands. Every coin was going to a new home at the end of the Naftzger Middle Date auction.” As I have noted many times before, collectors like to compete for coins that are part of a truly great collection, especially an epic one.

“Sometimes, for [his] collection,” McGuigan reveals that he will “pay what some people think are stupid prices.” When McGuigan needs a particular half cent for his set, he does “not mind paying more than what others think is reasonable.” So, Jim “understands” why some collectors “paid really high prices” at this auction of the Naftzger Middle Dates.

When more than one dedicated, enthusiastic collector has his (or her) ‘heart set’ on a particular coin in a landmark auction, it is not unusual for price guides to be disregarded. Long or explosive bidding contests, and startling prices, however, are more likely to be for coins that are extremely rare or for almost rare to very rare coins that are of amazing quality in absolute terms. There are no very rare dates in the Middle Date series. (Proofs are a different topic.) The 1823, 1823/2 and 1839/6 are probably the only ‘dates’ that are rare, or almost so, though none of these are extremely rare.

At this Naftzger 2 sale, there were many instances of a coin that is one of the five finest known of a scarce date, even if it just grades AU-58, realizing an unprecedented price that is multiples of the previous auction record for that same date. Specific coins are mentioned in Part 4 and in Part 5. The theme of a choice representative of a scarce date, not a very rare date and not even a superb gem representative of a mildly rare date, bringing about explosive bidding, and an astounding record, is the most fascinating and pathbreaking aspect of this auction.

©2009 Greg Reynolds

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