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Phenomenal Excitement for a circulated 1870-S Dollar

By Greg Reynolds for CoinLink

1870-S Dollar from Stacks Oct 16 2007 sale In the Stack’s auction of Oct. 16th & 17th in New York City, four of the coins sold are Great Rarities. As extensively covered already on CoinLink, a PCGS certified Proof-64 1894-S dime realized $1,552,500, an auction record for a dime. Before the auction, I wrote a preview article regarding the 1876-CC Twenty Cent piece, PCGS graded MS-64, which was sold for $350,750, another auction record!

An upcoming article will be devoted to Kellogg $50 gold coins, and will include coverage of the one that Stack’s sold on Oct. 16. The topic here is the sale of an 1870-S Liberty Seated silver dollar on Oct. 17. The Stack’s cataloguer graded it as “Very Fine-20.” It is generally accepted that this 1870-S dollar has never been submitted to either the Professional Coin Grading Service (PCGS) or the Numismatic Guaranty Corp. (NGC) for grading and encapsulation.

King Farouk - EgyptAlso, it is widely believed to be the 1870-S silver dollar that was formerly in the epic collection of King Farouk, who was the Egyptian monarch from the mid 1930s to July 1952. Bidding for the Farouk 1870-S Liberty Seated Dollar on Oct. 17 was intense and joyful.

In order to put the dollar amounts involved in perspective, it is necessary to discuss the values of other 1870-S dollars, and the reasons why potential buyers are willing to pay particular amounts. Yes, there are logical reasons for coin prices.

Only nine 1870-S silver dollars are truly known to exist. There are highly questionable rumors regarding the existence of two others.

The Rudolph-James A. Stack, Norweb and Eliasberg pieces are the three finest known, and stand well above the other six. The finest known Rudolph-James Stack piece was auctioned by Stack’s for $1,092,500 in May 2003. When it sold for $462,000 in March 1995, most onlookers were stunned. The Norweb piece, the second finest, had realized $126,500 in Nov. 1988. According to the CU-PCGS index, markets for rare coins were stronger in 1988 than in 2005. It is true, though, that during the period from 1988 to 1991, most of the intense action in coin markets related to coins that graded 65 or higher. There was then minimal interest in coins that grade less than 63. Trends change.

The Rudolf-James A. Stack 1870-S was PCGS graded MS-62 by 2004. At least since July 2004, it has been owned by the collector who refers to himself as ‘TradeDollarNut.’ He paid more than the $1,092,500 that it realized at the May 2003 Rudolph auction. If it qualifies for a 62 grade, it barely does. Though weakly struck, it has excellent, reflective original surfaces, and is an attractive coin, with minimal technical imperfections.

After Nov. 1988 and before Jan. 1996, the Norweb 1870-S was graded AU-58 by NGC, which I thought was fair. Only the following numbers are used for Almost Uncirculated grades: 50, 53, 55 and 58. Even so, from my perspective, the Rudolph-James A. Stack piece could be analytically graded 59 and the Norweb piece should be graded 57.5.

The Norweb piece is my favorite 1870-S dollar. I very much like the detail, color, and overall appearance of the coin, assuming its appearance has not changed since the last time that I saw it. It could be logically argued, however, that the Rudolph-James A. Stack 1870-S is of significantly higher quality than the Norweb 1870-S. There will never be unanimous agreement regarding the grades of coins.

The Eliasberg piece is now PCGS graded AU-53. It was formerly NGC graded AU-50. Charles Browne reports that he graded it as “EF-45″ at the Eliasberg ‘97 event, as did I. Grading standards have loosened over the last ten years. Moreover, it had the sharpness of an AU-53 or -55, even in 1997. The Eliasberg collection cataloguer’s 45 to 50 grade (47.5?) was probably a ‘net grade’ where imperfections, contact marks and other factors are considered, along with the extent of wear, in determining an overall, single numerical grade. Grading is not easy. If the Eliasberg 1870-S still looks like it did in 1997, then the current AU-53 certified grade is certainly fair. It has minimal wear and attractive toning, and is a very appealing coin overall.

The Eliasberg 1870-S dollar showed up at the 2007 ANA convention in Wisconsin. Steve Contursi spotted it, and knew immediately that he wanted it. Contursi’s firm and Stanford Coin & Bullion jointly acquired the Eliasberg 1870-S, and these two firms continue to jointly own it. The Eliasberg 1870-S has not sold at auction since the Eliasberg ‘97 sale.

Before the Farouk piece sold on Oct. 17, the last 1870-S dollar to sell at auction, and the only one to do in many years, is the Richmond-Lee-Ostheimer piece. At DLRC’s Richmond II sale on November 29, 2004, in Baltimore, it realized $414,000. Jack Lee was the successful bidder.

The Richmond-Lee 1870-S has several, long, noticeable scratches and quite a few shorter ones, though I really like that coin. It has pleasant toning, a rich, medium-gray color. Under 5-times magnification, very few contact marks can be seen. It is much more sharply struck than the Rudolph-James A. Stack 1870-S. It is soothing overall.

The Richmond-Lee-Ostheimer 1870-S was NGC graded EF-40 at the Richmond II sale, and ‘crossed over’ and became PCGS graded EF-40 less than a year afterwards. Perhaps PCGS and NGC graders acknowledge that it has the sharpness of an EF-45 to AU-50 coin, but is downgraded to 40 because of the long scratches? These scratches did not upset me.

David Schweitz views the Farouk 1870-S as having “much more eye appeal” than the Richmond-Lee 1870-S. He is bothered, much more than I am, by the scratches on the Richmond Lee 1870-S.

1870-S Dollar from Stacks Oct 16 2007 sale - Reverse Of the nine known 1870-S dollars, I have examined six, and I have repeatedly read that the Eureka 1870-S has extensive scratches and contact marks. None of these seven is a superb coin. All have some imperfections that are at least mildly irritating, and the Carter-French and Boyd-Cass pieces have very serious problems. The Carter-French 1870-S dollar, though, is attractive in an odd way, and might someday represent a good price value, given the megabucks that the better pieces command.

My impression of the Farouk 1870-S is very positive. Matt Kleinsteuber, a grader and trader for NFC coins, is more enthusiastic about this coin than I am. Matt exclaimed, “I love this dollar.” He adds that it was probably “lightly cleaned, very, very long ago.” On the whole, Kleinsteuber views it as “a beautiful, mostly original coin”!

Charles Browne put forth a contrasting view. Browne declares that “I would agree with the opinion of the cataloguer in calling it a VF-20, but I think it just makes it when the old cleaning [is taken] into consideration. If it were a common date coin in any auction, I would not even give it the time of day. Two seconds in my hand and I would pass. That is just my way of dealing with cleaned material.” A Connecticut dealer also expressed some reservations about the Farouk 1870-S.

In my view, the Farouk 1870-S is a really neat coin. On the whole, the coin was very lightly cleaned more than a half-century ago, maybe even a whole century in the past. Some small areas of the coin have been moderately, or maybe a little more than moderately, cleaned. There were a couple of very small cleaned areas that I could not quite figure out, but these were not distracting. I admit that I employed a 5-times magnifying glass just briefly when viewing the Farouk 1870-S, and I did not use a more powerful glass. At the time, it did not occur to me that I might have missed something.

I certainly do not expect Very Fine grade Liberty Seated Dollars to have flawless surfaces. It was my impression that this 1870-S is of higher quality than many Very Fine grade Liberty Seated dollars of any date! It has even wear, very few contact marks, very light rim imperfections, and no serious problems that I noticed. Moreover, it has naturally retoned a dusky-gray color that I find to be desirable. The Farouk 1870-S is appealing for its grade, which I take to be Very Fine-25.

Though the Rudolph-JAS, Norweb, Eliasberg and Richmond-Lee 1870-S dollars all rank above this one, in my view, this Farouk 1870-S is much more desirable than three others. It is highly plausible that this Farouk 1870-S is of higher quality than the Wolfson-Miles 1870-S. If so, it could be the fifth finest known.

There are hundreds of people who collect Liberty Seated dollars ‘by date,’ and this 1870-S would be a wonderful addition to a set. It is unsurprising that several bidders, or the buyers they represented, were so enthusiastic and were willing to pay far more than the values indicated in price guides.

The PCGS price guide values an 1870-S in VF grade at $200,000, while the Numismedia price guide indicates $300,000, a curious difference. Charles Browne stated that “most price guides have generally underestimated the market values of better date Liberty Seated coins, especially of mintmarked dollars.” Browne is a grader and market analyst. He has more than thirty years of experience at major auctions and shows, and as a grader at PCGS.

I have described how the Farouk piece fits into the condition rankings for 1870-S dollars. Additionally, past auction prices for other 1870-S dollars have been cited, along with the characteristics of the respective coins. Even with all this information and more, it would have been hard to estimate the auction result for this coin. At the event, my sense was that the participants and observers really did not know what to expect.

For the Farouk 1870-S, bidding opened at $230,000. At least six participants were in the running as the level rose from around $250,000 to more than $275,000. A Southern dealer bid $322,000. John Kraljevich bid $345,000, though not for his own account.

Three or four paddles were up as the level reached $414,000, the previous result for the Richmond-Lee EF-40 grade 1870-S dollar. I was already fascinated that the price had surpassed the $400,000 level.

Bill Nagle certainly bid $437,000. Two others bid $460,000. David Schweitz indicated $506,000, perhaps a record for any U.S. silver coin that grades Very Fine or lower? Undeterred, Nagle sprang right back with a $529,000 bid. Schweitz then captured the piece with a bid of $552,000.

Schweitz reports that he was not representing anyone else. The Farouk 1870-S coin is now entirely his.

Is the result logical? The 1870-S is clearly the rarest business strike silver dollar. Further, it is rarer than the Proof-only 1804 dollar, of which fifteen are known.

There is some debate as to whether the 1866 ‘No Motto’ dollar is a true coin, or falls into the category of patterns, broadly defined. In late 2004, I wrote an article for a leading coin newspaper, in which I presented arguments, partly dependent upon research by John Pack and John Kraljevich, that suggest that the 1866 ‘No Motto’ dollars may have been minted in late 1865 or early 1866. If so, then the 1866 ‘No Motto’ would be the rarest silver dollar, as there are only two known. If the 1866 ‘No Motto’ was struck between 1868 and 1878 under questionable circumstances, then it may be that an 1866 ‘No Motto’ silver dollar is not really a coin.

Regardless of the status of the specially struck 1866 ‘No Motto’ silver dollars, there is no doubt that the 1870-S is the rarest silver dollar that was actually struck for circulation. It is a legendary rarity. The depth of the bidding is almost as impressive as the price realized. Never before has there been such excitement over a Very Fine grade silver coin.

©2007 Greg Reynolds

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