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Liberty Cap 1793 Large Cent Brings Record $632,500
Posted By Greg Reynolds On March 7, 2008 @ 8:55 am In Auction News,Commentary and Opinion,Heritage Auction Galleries,Market Reports & Prices,US Coins | 1 Comment
by Greg Reynolds for CoinLink
Walter Husak’s collection of early large cents, 1793-1814, sold for an unbelievable $10.7 million on Friday, Feb. 15, at the official Heritage auction of the Long Beach (CA) Coin, Stamp & Collectible Expo. (For an introduction to the collection, see my preview article on CoinLink.) A 1793 Liberty Cap large cent, and a 1794 Liberty Cap cent of the famous variety with the Starred Reverse, each sold for $632,500, an auction record for a one cent piece and for a copper numismatic item of any kind.
This Husak 1793 Liberty Cap cent is graded AU-55 by the Professional Coin Grading Service (PCGS). Further, there is agreement among many large cent experts that this coin is indeed of Almost Uncirculated grade. It is characterized by a very small amount of even, honest wear. Before analyzing the $632,500 price for this Liberty Cap cent, it makes sense to review auction records for copper items, particularly large cents.
A copper numismatic item is at least 90% copper and is a coin, another monetary instrument (including certain tokens), a pattern of a coin, or a medal. From May 1996 until January 2008, the auction record for a copper numismatic item stood at $506,000, which is the price realized for the Eliasberg 1796 ‘No Pole’ Half Cent that Bowers & Merena auctioned in New York.
At the same 1996 Eliasberg sale, an auction record for a regular issue large cent was set when a 1793 Liberty Cap cent sold for $319,000. The large cent record was broken when ANR auctioned the Oliver Jung 1793 Chain Cent, PCGS certified ‘MS-65 Brown’ for $391,000 in July 2004, in New York City. This record lasted for only a few months. In Nov. 2004, ANR auctioned a NGC certified Fine-12 Strawberry Leaf 1793 Wreath Cent for $414,000. Soon afterwards, in Jan. 2005, a new record was set when ANR again auctioned a a different PCGS certified ‘MS-65 BN’ Chain Cent, coin, for $431,250. Steve Contursi was the buyer.
On Jan. 10, 2008, in Orlando, a 1792 ‘Fusible Alloy’ cent pattern was auctioned on Heritage’s Platinum Night for $603,750. As I explained in my article about it, this result clearly was an auction record for a one cent piece, though a 1792 ‘Fusible Alloy’ pattern is not a coin. Moreover, this ‘Fusible Alloy’ cent may consist of the experimental silver and copper “fusible alloy,” or of some other alloy. It thus may not be correct to categorize it as a copper numismatic item.
Curiously, an auction record for a copper numismatic item was set three days earlier in Orlando, on Jan. 7, when Stack’s auctioned a silver dollar ‘pattern’ struck in copper for $529,000. It is one of only two known 1838 Gobrecht dollars that were minted in copper; such copper dollars are generally termed die trials. Gobrecht silver dollars are 89% or 90% silver. Usually, U.S. silver dollars are 90% silver.
There is no doubt that regular issue, early cents are 100% copper or nearly so. Almost all metal blanks used to strike coins have traces of metals that are not prescribed, as no refining process is perfect. The Husak “AU-55″ 1793 Liberty Cap and the Husak 1794 Starred Reverse are regular issue large cents, and are thus nearly 100% copper. Trace metals often affect the color; this Husak 1793 Liberty Cap may have been so affected, as it is partly gray.
As there are only four known 1793 Wreath Cents of the Strawberry Leaf variety, the $414,000 price paid for one in 2004 may be a better value than $632,500 for this Husak 1793 Liberty Cap. Besides, the 1792 ‘Fusible Alloy’ cent pattern, which sold for $603,750, is one of just six to eight known of that issue.
I have carefully examined almost all of the U.S. coins that have sold for more than $500,000 each at auction, and I find this Husak Liberty Cap cent to be the least exciting of the group. It is true that others are very enthusiastic about it, and that it has almost no noticeable contact marks or scratches, an excellent feature for a large cent.
A collector of large cents ‘by date’ needs only one 1793 Liberty Cap cent. Finding one of any variety that grades AU-50 or higher is very difficult.
The Jan. 2008 PCGS Population Report indicates that only eleven 1793 Liberty Caps of any variety have been PCGS graded above EF-45, with only two of the eleven being above 60, an MS-62 and an MS-64. Chris McCawley, a recognized expert in large cents, asserts that these “eleven probably include resubmissions” of some of the same coins. I would not be surprised if these eleven amount to only three to six different coins.
The online NGC census does not list any 1793 Liberty Caps as grading above EF-40! There are some large cent collectors who prefer uncertified coins, and there are Liberty Cap cents that have never been submitted to PCGS or NGC.
General reference books, and online price guides, provide the impression that 1793 Liberty Cap cents are available for less than $70,000 in EF-40, for from $100,000 to $125,000 in AU-55 and from $135,000 to $250,000 in ‘Mint State’ grades. Ten years before, in Feb. 1998, this same Husak 1793 Liberty Cap cent realized $90,750 at auction, about one-seventh of its Feb. 2008 price. As of March 4th of this year, the value for an AU-55 grade 1793 Liberty Cap cent is “$100,000” in the PCGS price guide and “$118,800” in the Numismedia price guide.
While large cent experts knew that general price guides underestimated market values for high grade 1793 Liberty Cap cents, the $632,500 price realized was still a surprise. Recently, many experts thought that the Eliasberg, uncirculated 1793 Liberty Cap cent is the only one that is worth more than $450,000, and that an AU-55 grade Liberty Cap would be worth from $150,000 to $300,000.
The phenomenal Eliasberg 1793 Liberty Cap grades well above 60. It may be the sole 1793 Liberty Cap that the PCGS has graded MS-64. If so, it is plausible that the PCGS would assign a higher grade to it in 2008. At the Eliasberg sale in May 1996, Husak unsuccessfully competed for it. He bowed out before the level reached $200,000.
Husak wonders if the 1793 Liberty Cap that the PCGS has graded MS-62 is the high grade 1793 Liberty Cap that was earlier in the epic Garrett family collection? A while ago, Husak saw the Garrett 1793 Liberty Cap. He also examined another 1793 Liberty Cap cent that “has the sharpness of an AU grade” but he “did not like it” partly because he determined that it had been mistreated in the past. Husak strongly prefers the one he obtained to these two and believes this record setting coin to be the “second finest” collectible 1793 Liberty Cap cent.
This PCGS graded “AU-55″ Liberty Cap sent that sold for $632,500 is of the least rare variety of 1793 Liberty Cap cents. The other varieties are much rarer and are really only of interest to collectors of die varieties and researchers. All the 1793 Liberty Cap cents mentioned here are of this least rare variety and the values mentioned pertain to the least rare variety.
McCawley suggests that “there are about a half dozen 1793 Liberty Cap cents that grade AU-50 or higher.” Moreover, McCawley reports that he was still bidding, “for a client,” as the price level for this Husak 1793 Liberty Cap climbed above $500,000. He emphasizes that “it could be years before another high grade 1793 Liberty Cap cent, with nice surfaces, becomes available”!
Even so, as there exist around 300 1793 Liberty Cap cents in all grades, $632,500 is a shockingly high price for one, in my opinion. It is true that some determined, affluent large cent collectors seek all varieties of 1793 Liberty Cap cents. The fact that there could be as many as 175 extant of the same die variety, as the one that sold for $632,500, adds to the shock.
McCawley relates that a Very Good grade (in terms of wear) 1793 Liberty Cap would probably retail for $10,000 to $25,000, “an average Fine might be worth from $20,000 to $40,000, and a really nice Fine from $50,000 to $100,000,” depending largely upon the “quality of the surfaces.” McCawley explains that the price range for a mediocre to average Very Fine grade (in terms of wear) Liberty Cap cent “overlaps” with that of a “nice Fine” as “surface quality is of paramount importance to early copper collectors”! In general, a Fine-12 grade large cent, in terms of the extent of wear, could be worth more than an EF-40 grade large cent of the same date and variety.
Heritage recently auctioned two different PCGS graded “VF-30″ 1793 Liberty Cap cents. I believe them to be different coins. One sold for $54,625 in Jan. 2006, and the other for $57,500 in Jan. 2007. For the second one, by putting forth an “EAC-15” designation, the Heritage cataloguer implicitly notes that copper specialists may value it in terms of the market price for a Fine-15 grade coin.
Additionally, it is likely that both these PCGS graded “VF-30” 1793 Liberty Cap cents would realize more at auction if offered now, in March 2008. My discussions with McCawley and other large cent specialists in combination with my own reasoning suggest that a 1793 Liberty Cap of Very Fine grade, in terms of the extent of wear, could now be worth anywhere from $50,000 to $200,000, depending upon the surface quality and aesthetic appeal of the individual coin.
To interpret this $632,500 result for a 1793 Liberty Cap cent, it is necessary to analytically distinguish the demand component of collectors who are assembling large cent sets from the demands of type coin collectors who seek only a few large cents. The price for a 1793 Liberty Cap cent is not relevant to typical ‘type coin’ market prices for large cents of the whole 1793-96 Liberty Cap type, as there are thousands in total of the later dates in existence, including a fair number of ‘Mint State’ grade pieces.
In the registry of the Numismatic Guaranty Corporation (NGC), the general type set and the specific large cent type set each require only one Liberty Cap cent (1793-96). All type sets in the PCGS registry that include large cents, however, require two Liberty Cap cents, one with a beaded border which must be a 1793 Liberty Cap and one from the 1794 to 1796 period.
It is true that 1793 Liberty Cap cents have beaded borders and the 1794-96 Liberty Cap cents have dentils at the periphery, not beads. Before the introduction of the PCGS registry, however, the concept that the ‘beaded border 1793 Liberty Caps’ constitute a separate type was not accepted by more than a very small number of collectors.
Consider collectors who are assembling PCGS registry type sets, are assembling type sets that may in the future be PCGS registered, or have adopted the parameters set forth by PCGS regarding large cent types. All such type coin collectors would demand both a 1793 Liberty Cap and a 1794-96 Liberty cap cent for their respective type sets. So, while someone assembling a PCGS registry set has a motive to pay a great deal for an “AU-55″ 1793 Liberty Cap, how much would large cent specialists pay?
In the second half of the 20th century, the large cent collecting community did not place a tremendous premium on the highest quality coins when decent, lower quality examples of the same respective varieties were available. A premium of $25,000 was unusual and a premium of $100,000 was unthinkable. Circumstantial evidence suggests that the Eliasberg 1793 Liberty Cap that sold for $319,000 went to a type collector via the successful bidder. Husak reveals that he “did not pay more than $100,000 for any one large cent.” It was very unusual for any large cent specialist to do so.
As I witnessed many large cent collectors bid ferociously at the Husak sale, there may well be a relatively recent trend among such collectors to pay dramatic premiums, much higher than ever before, for large cents that are highly ranked among the finest known of their respective dates or varieties. Even considering such fervor, I strongly question whether even two large cent collectors would pay a premium of $400,000 to $575,000 over the value of a Very Fine grade (in terms of wear) 1793 Liberty Cap. The Husak “AU-55″ 1793 Liberty Cap is not the finest known; it is not uncirculated; it is not extremely rare; and it is not a terrific coin.
I hypothesize that at least one of the three top bidders is assembling a very high quality type set, probably for the PCGS registry, that absolutely requires a 1793 Liberty Cap cent. Registry sets are competitively ranked in accordance with overall numerical scores, and a 55 grade coin would contribute much more to an overall score than a 20 or 30 grade coin. Indeed, adding a 20 grade coin to a mostly gem quality set may have a serious negative impact on such a set’s grade point average.
I will never again think of 1793 Liberty Cap cents in the same way. Along with thousands of coin enthusiasts, I look forward to seeing what happens when other 1793 Liberty Cap cents are auctioned in the future. As a result of the Eliasberg and Husak sales, 1793 Liberty Caps have become very famous.
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