If you’ve had a chance to browse Mullen Coin’s online inventory, you’ll see that we have a category for copper coins that is subdivided into small cents, two-cent pieces and large cents. What is the difference between a small cent and a large cent? Here we will discuss early American cents and which ones are most rare and valuable.
Previously we’ve talked about the reasons for investing in bullion. In this blog we’ll discuss the advantages of silver and why buying silver in bullion or coins might be a good addition to your overall investment portfolio.
Coin hoards are discovered quite frequently. Just last month, in October of 2018, three friends with metal detectors found a hoard of 18 silver Roman coins in Yorkshire. These coins are over 2,000 years old. In September, hundreds of Roman coins were unearthed in the basement of an Italian theater. These fifth-century gold coins were in wonderful condition, stacked carefully in a soapstone jar. How that can be? How can coins that are thousands of years old still be so well preserved? To answer that, we’ll ask these questions: What? Why? Where?
One of the underlying traits of human behavior is the tendency of people to seek out true value. This applies to crowds staking out a department store on Black Friday, and it also applies to coin collectors. People know value when they see it, and they search it out. In economics the principle of Gresham’s Law describes how the perception of true value affects which coins remain in circulation.
You may have seen this piece of advice on Mullen Coins’ Evaluations page:
The single biggest mistake you can make as a collector: Cleaning your coins. Your collection will likely be worth much less if the coins have been cleaned! An uncirculated coin that has been cleaned is not longer an uncirculated coin! Please do not clean them! The occasional exception to this rule would be a rare coin in heavily circulated condition that has dirt of PVC... in that case professional restoration might be an option.
Judas Iscariot’s 30 pieces of silver is so well known, so infamous in history, that it’s a euphemism for betrayal in Western culture. Have you ever wondered what those 30 pieces of silver were exactly - or how much they were worth? Scholars have debated these questions for years. Let’s go through some of their ideas.
The details of this story are found in the biblical book of Matthew, chapters 26 and 27. Before the Last Supper, Judas Iscariot, one of Jesus’s disciples, went to the chief priests and arranged to hand over Jesus to them, saying:
One of the really wonderful things about coin collecting is that behind every coin is a story. Coins are art, coins are instruments of commerce, but above all, coins are history. In this article we’ll highlight Alexander the Great’s quest to conquer the world and how coining money helped him achieve that goal.
The coins that Alexander III minted would become standard currency for hundreds of years, but when his father, Philip II, died, what he inherited was not wealth, but debts. In the treasure chambers of the Macedonian crown were only 60 talents and some gold and silver objects that could be melted down. Alexander couldn’t rule Macedonia on that budget, so he borrowed money - 800 talents. He needed it to fund an army to fight off the Thracian invasion of his father’s empire.
The United States Mint unveiled its first “pink coin” in October of 2017. This coin, designed by Emily Damstra of the Artistic Infusion Program, is intended to raise awareness of breast cancer as well as funds for the Breast Cancer Awareness Foundation’s research programs. This is an interesting case for how activism and coin collecting intersect. Sales of the coin began in mid-March, and so far seem successful.
The Breast Cancer Awareness 2018 Proof $5 Gold Coin is the first pink gold coin that the U.S. Mint has ever produced. It is 85% gold, 14.8% copper, and 0.2% zinc and features a design of two women, breast cancer patients past and present, and a butterfly on the obverse. In the upper background of the obverse is a ribbon which references the pink ribbon the public has come to associate with the battle against breast cancer. A tiger swallowtail butterfly flies above the women and under the word “LIBERTY.” The butterfly is also the focus of the reverse.
There is no shortage of advertisements encouraging people to invest in either gold or silver bullion as “the greatest investment of all time.” If you watch television, you’ve probably seen them and wondered if the hype about bullion is real. While it’s true that gold does retain value over time better than many other investments, you are guaranteed to lose money on gold if you buy it when the price is high and sell it when the price is low - just like with everything else. So what is bullion and why should you consider including it in your investment portfolio?
Bullion is “a bulk quantity of precious metal, usually gold or silver, assessed by weight, typically cast as ingots or bars, and sold by major banks and dealers.” Bullion is also available in coin form. Since 1986 the U.S. Mint has produced gold, silver, and platinum coins - the American Eagles - for banks, coin dealers, precious metal dealers, and brokerage firms to purchase, guaranteeing their precious metal content. There are two types of bullion coins. These are:
The California Gold Rush was a life and state changing event. Americans and people from all over the world crossed oceans and the Great Plains, driven by the desire to pan for gold and strike it rich. Because of the sudden arrival of all of these diverse peoples in a boomtown economy, trading was complicated. Numerous solutions filled the gap temporarily, but it wasn’t until the U.S. Mint opened a branch in San Francisco that the economy had enough currency to run smoothly. Recently a $5-dollar Half Eagle surfaced in the possession of a New England man. This coin is so rare that coin dealers dubbed it a fake, but numismatists now believe it to be the authentic output of the early San Francisco Mint.
We’ve discussed California fractional gold before. These were privately minted coins, created to address problems that a currency vacuum had created. The people who traveled to California brought their own coins, but miners and settlers found it difficult to trade with so many varieties of coins. As a result, private jewelers stepped in and minted their own coins - over 450 varieties of California fractional gold. Fractional gold minting helped to oil the economy from 1848 to 1854.
Anyone familiar with American coins will be familiar with the image of Lady Liberty. When Congress passed the Coinage Act of 1792 it mandated that the new U.S. coins should have the emblem of liberty on them. Lady Liberty has been a common image on our coins every since, her image representing freedom, peace, commerce, military strength, and, of course, liberty. The way she looks has changed throughout the years, however.
The very first large cent and circulating coin that the U.S. Mint produced was the Flowing Hair Cent in 1793. On this coin, Lady Liberty’s hair flows out behind her as if it is being blown dry. Her forehead slopes down into her nose in a straight line. She is not particularly beautiful. The free flow of her hair was supposed to illustrate freedom, but many people thought it made Lady Liberty look unkempt instead.
Do you have an Indian Head gold piece in your coin collection? If not, why not? Both the half eagle and quarter eagle Indian Heads are great coins with a rare incuse design and an interesting history.
The Indian Head Design
This time of year the news is always full of stories of people being generous to others, and invariably there will be a report of a valuable coin being dropped into a Salvation Army kettle. On December 15, in fact, someone donated a gold 1979 Krugerrand coin in this way in Reno, Nevada. Even more interesting was the report that an anonymous donor was giving $86 million dollars worth of Bitcoin to charitable causes. This is a new twist on an old story!
For the coin enthusiast, the holidays are always a good time to spread numismatic cheer. In fact, it’s tradition. The wise men brought the infant Jesus gold, frankincense, and myrrh, after all, and, according to legend, St. Nicholas gifted bags of silver coins to the girls of a noble family that could not afford their dowries. This is what began the habit of hanging out stocking for St. Nicholas to fill. Most parents do not fill Christmas stockings with coins, but why not? It’s hard to find good stocking stuffers.
Last time we discussed some of the practical considerations coin collectors need to keep in mind if they intend to leave their collections to their heirs. This time we’ll talk about whether you should leave all or part of your collection to your loved ones. What are some reasons you might choose to gift or sell it beforehand instead of leaving it to friends or relatives in your will?
Families are complicated, and, sadly, money can cause problems in families. These problems can persist for years after an estate has been transferred. The question of fairness in terms of who gets what and who might deserve it more often comes up in these situations, even when people explain their wishes in person to everyone. If you think there’s a possibility that your heirs will fight over your collection or that hard feelings will arise between them because of it, it might be better to sell the collection ahead of time and leave cash amounts behind in your will. While it’s very satisfying to leave a collection to someone who will value and cherish it, weigh that against any damage that might be done to relationships because someone feels slighted or overlooked.
Coin collecting, like golf, is a hobby people can and do enjoy over a lifetime and one that can grow more enjoyable and satisfying with age (and additional resources). At Mullen Coins we see many older clients, and some of them are at the point in their lives when they are trying to decide what they will do with their collections due to downsizing, investment liquidation, or when making a will. No one enjoys thinking about death, but for many collectors, their coins are personally very meaningful, and so it’s appropriate that they are afforded this consideration.
The first thing that all coin collectors need to decide is if they want to sell all or part of their collections or if they want to transfer them to their heirs. This may be a complex decision if the collection is quite valuable, if there are multiple heirs, or if one or more of the heirs has an interest in coins. For people who are worried about arguments breaking out among family or friends later, selling a collection and dividing the money between heirs is one way to bypass that problem.
While supply and demand are the primary factors in determining the price of most goods, including coins, the price of gold and precious metals is affected by a number of more complex variables. One of these is political or economic instability. The U.S. economy has experienced a great deal of instability over the past decades and was nearly brought down entirely by the Financial Crisis of 2008, the worst economic disaster since the Great Depression. The fear that accompanies these types of events directly impacts the price of gold. This is why we saw the price of gold skyrocket in the years following 2008.
For anyone who has accumulated any wealth, asset security is a real concern. For decades the stock market was seen as a place where one could get a reasonable return on an investment, especially over longer periods of time. After multiple stock market crashes, the collapse of the tech bubble, and the near total collapse of the market in 2008, that is less true. Risk averse investors will now accept a lower rate of return for the assurance that their assets will not disappear overnight, and gold is one of the safe havens they flock to when currency markets are volatile. Gold coins and bullion at least are tangible assets in a way that paper stock shares can never be. It’s hard to have true confidence in numbers on a computer screen. It’s not like holding a bar of gold in your hands.
Did you know that 5-cent pieces haven’t always been called nickels? During George Washington’s presidency, the half-dime was first produced as part of the American money experiment that replaced the pounds-and-shillings monetary system of Great Britain. In 1792 the Coinage Act introduced the U.S. dollar to the world. One silver dollar was worth 10 dismes or 100 cents. The dismes became known as dimes, and half dimes were also struck and became a commonly used piece of American coinage for many years.
We don’t know much about the first half dismes. Legend has it that Martha Washington may have served as the model for the Lady Liberty portrait on its obverse side. George Washington himself may have supplied some of the silver for its first minting. The U.S. Mint in Philadelphia wasn’t even fully constructed at this point, and the half disme was the first American coin struck. Legend says this happened in the cellar of John Harper’s saw-maker shop.
In an earlier blog we discussed the various forms of physical gold that buyers can purchase and invest in and how their value corresponds to the market “spot price” at any given time. Gold has always been valuable, but how valuable it is currently corresponds to any number of factors. In a souring economy or one with unstable investment options, gold can look like a safe haven for the investor. In a booming economy the demand for gold tends to abate somewhat.
While gold is a solid investment choice and Mullen Coins endorses the philosophy of investing 5%-10% of one’s total assets in physical gold and silver as a hedge against the unknown, it’s important to be careful when purchasing. There are many gold scams out there for the untried or unwary buyer. In fact, there are so many that the Federal Trade Commission has a page on its website addressing questions about buying gold, and recently the office of the Texas Attorney General issued its own tips for avoiding fraud in the gold market.
Late last month when Minnesota governor signed H1A into law, it was great news for Minnesotans who want to invest in bullion. This is because the bill contained a sales-tax exemption on precious-metals bullion, ushering Minnesota into a group of 35 states that have a full or partial sales and use tax exemption on precious-metals bullion and coins.
While it may seem against Minnesota’s best interest to collect less in revenues from businesses selling bullion, studies done in other states show that the sales tax revenues from other sources are increased by these kinds of exemptions. Because some states do not charge sales tax, buyers from other states will purchase bullion or collectible coins in those states rather than pay taxes in their own state. This is terrible for local coin dealers in states that border states with exemptions, as was previously the case with Minnesota. The competitive disadvantage for them translates into fewer sales, fewer employees, and less money in payroll and income taxes collected.
We’ve discussed before what a problem counterfeiting is in the coin world. In recent years counterfeit coins have proliferated in America so frequently, many of them imported from China via online sales, that the U.S. Mint has issued warnings. A few years ago, when the stock market was in freefall and real estate rapid lost value, collecting coins became not just a hobby but an investment for many people. The characteristics about coins that make them valuable - origin, condition, scarcity, and history - do not fluctuate much over time and, unlike bank accounts, coins are not hackable (although they can, of course, be stolen). Counterfeiting is a significant threat to collectors, however, and anyone involved with coins has an incentive to stop it.
In April the European Central Bank issued new €50 banknotes they designed to be far less vulnerable to counterfeiting. These orange-yellow bills were designed in consultation with Stanford neuroscientist David Eagleman to so that anyone - not just currency experts - would be able to spot a fake. The usual security measures are present, including watermarks, color-changing inks, threads, and microprinting, but instead of relying on high tech measures, the ECB took a new tack: focusing on face recognition. This is because the general populace doesn’t look at their money very carefully and the human brain isn’t designed to spot inconsistencies in objects that often decorate paper money.
