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.

There are many things that make objects valuable. Origin, usefulness, condition, scarcity, and history all make a difference when considering value. We understand this easily when it comes to other items. For instance, a pipe may have value to someone who likes to smoke a pipe and no value to someone who doesn’t. A pipe made from rare or valuable wood might have value as a piece of artistry. The same pipe once owned by Sir Arthur Conan Doyle would be a very sought after item among Sherlock Holmes fans, and if it could be proven that Conan Doyle smoked that pipe while he wrote A Study in Scarlet that item would even more valued for the role it played in the history of an iconic fictional character. The proof that that particular pipe was owned by Conan Doyle and smoked during the writing of a specific novel would be its pedigree. It’s much the same with coins.

We’ve often discussed the importance of scarcity in regard to coin value. Mint origin is also important to collectors who like to locate and purchase all variations of a certain coin. Coins that have never circulated are much more valuable than ones that have. All of these things factor into the determination of value. If a coin has a rare pedigree, this can make a large difference as well.

Previously we talked about the Great Depression and what its effects were on coins minted during that era. However, the largest coin disaster of the 1930s was Franklin Delano Roosevelt’s infamous gold confiscation. His Executive Order 6102 of 1933 strikes fear, or at least anxiety, in the hearts of some coin collectors (and gold bugs) even now. Many coin collectors view the U.S. government’s confiscation of gold with anger and loathing as well as feelings of foreboding for the future. When a government has the right to or enforces a perceived right to confiscate gold bullion and gold coins from its own population, what does that mean for coin collectors today? Well, it’s not as ominous as you might think.

While what happened is a tragedy for historic gold coins and collectors, it’s unlikely to reoccur today because FDR’s confiscation of gold was done to bail out the Federal Reserve which in years prior to the Depression had issued millions more in gold-clause notes than it had gold to back them with. Today the Federal Reserve no longer has to pay back its liabilities in gold. It hasn’t since 1971 when President Richard Nixon closed the international dollar-gold exchange window.  

Last time we discussed the origins of the 1909 Lincoln cent. This coin has been around for over a hundred years in various forms, and we’ve gotten used to seeing it in purses, on sidewalks, in cup holders in cars, and under the cushions of our couches. Have you ever wondered if any of those pennies you’ve overlooked for years are valuable? Many of them are. In fact, the most rare type of Lincoln wheat cent - the 1943-S - sold for $1 million dollars in 2012.

Interestingly enough, the same thing happened in reverse the following year when the 1944 Lincoln wheat penny was stamped on leftover steel planchets. The U.S. Mint returned to using copper for coins in 1944, recycling metal that came from spent ammunition shells. These pennies differed from the pennies minted between 1909 and 1942 which were 95% copper and 5% zinc and tin. Pennies minted from 1944 to 1946 contained no tin so they were slightly different in color than the earlier version, but this is only visible in uncirculated coins now. The 1944 steel cents are worth upwards of $125,000 as well.

Coin collecting has come crossover with other hobbies like stamp collecting or antiquing in the sense that these hobbies involve people seeking out everyday items that have managed to increase in value over time, no matter their original value.

When a single coin is minted among thousands, tens of thousands, or millions, the odds that it will become very valuable over time are small. However, as we discussed before, coins can be struck with errors, they can be melted down, or otherwise be lost to time, with the result being that a once common coin becomes very rare. People will pay a great deal of money for rare coins. The same is true for everyday objects, and some of them are very coin-like so they have quite a bit of overlap with coins.

Can you guess what the very first commemorative coin the U.S. Mint issued was and when?

If you guessed the 1892 Columbian half dollar, you would be right. This coin was unique in American history in its historical significance, its purpose, and its appearance. Let’s examine these further.

Double eagles are another type of collectible coin rooted in a key period of American history - which makes collecting them interesting for both coin and history aficionados.

Would there have been a double eagle coin without the California Gold Rush? Very likely not. The double eagle, a $20 U.S. coin, was first minted in 1849, two coins in proof, after an Act of Congress authorized them. Prior to this there was neither gold in quantity to mint them or a practical necessity for a $20 coin. Double eagles began to be minted regularly the following year, in 1850, and continued to be until 1933. Before 1850, the largest coin denomination was the $10 eagle. Since the face value of the new coin was twice that of the eagle, it was called the double eagle.

Those unfamiliar with the ins and outs of coin collecting may be surprised to learn that coin errors - mistakes made when coins are minted - often enhance rather than detract from the value of said coin. While flaws that decrease a coin’s attractiveness can also decrease its value, error coins, or flawed coins made in the mint during the coin-making process, are also rare. This is because minting defects happen rarely, particularly with the advent of modern technology. Additionally, most error coins are detected before they are issued into the coinage, and they are recycled and remade in their proper form.

In order to understand why errors occur, it’s useful to understand how coin minting has been done historically and is done now. Here’s a fun primer from the U.S. Mint. A problem in each step of the minting results in a different type of coin error. Here are some of the most common types:

As with any hobby, any good coin collector wants to find other people who share his passion and are willing to participate in exploring it with him. There are many groups, local, state, national, and international, dedicated to bringing coin collectors together, but another way to make this goal happen is to convert the people around you to your hobby.

Who should you start with? Well, cross off the people you know have no interest in collecting, paying attention to value and detail, or exploring history. Those are prerequisites for this hobby. To quote a famous book, “Cast not your pearls before swine.” Instead, look around your circle of acquaintance for like-minded souls, and, if they are few and far between, look younger. While you may have coworkers or friends with similar interest, people get set in their ways as they age. The great thing about younger people is that they have so much world to be introduced to, and they are still excited about that introduction. So if you have kids or nieces and nephews, they may the ideal audience to share your coins with.

As a Grand Rapids coin dealer, we at Mullen Coins have an especially strong interest in the detection of counterfeit and altered coins. In point of fact, anyone who deals with rare coins will develop a basic understanding of how to detect counterfeits, whether out of interest or necessity. If you are considering purchasing a rare date coin, or if you are looking to sell your coins, you may need to pay special attention to authenticity.

I urge you to occasionally sell some of your coins—you will become a wiser, more educated collector. [You may also avoid unpleasant surprises when you do decide to sell some or all of your collection.]

Learn from my own story…I started collecting coins as a child.  Like most new collectors, my method was a trip to the bank to get rolls of Lincoln cents to search for better dates to put in my Whitman blue book.   It was a really fun treasure hunt.  I was buying valuable coins at face value!  But I did not sell any.

When it comes to rare coins Grand Rapids (as well as other places across the country) Mullen Coins has many collectors who specialize in early American commemoratives. Indeed, commemoratives have been popular with collectors and history buffs ever since their inception, as we describe in our recent post about “Why Collectors Enjoy Commemoratives.” As an example of what makes commemoratives an interesting specialty, we can take the mystery of the 1922 Grant with Star commemorative silver half.

As the story goes, the Grant commemorative was originally requested by the Ulysses S. Grant Centenary Memorial Association, with the idea of raising funds to erect monuments and coordinate special observances in Ohio for the 100^th anniversary of Grant’s birth. Originally, a bill was approved by Congress in 1922 to mint 10,000 gold dollars and up to 250,000 silver half dollars.

Would you love to own a treasure chest? Filled with coins and other treasures?

For Christmas, two of my Grand Rapids clients displayed a true creative streak! They gifted each of their four adult children with a full treasure chest--loaded with his divided coin collection and other little beads and chocolate gold coins. You could pull this idea off for Valentine’s Day or other celebration.

Depending on how you become interested in coin collecting, and where your interest leads you, you may someday find yourself talking to a Grand Rapids coin dealer about U.S. commemoratives. For those not familiar with the term, commemorative coins in the United States are issued to honor people, events, institutions, or places. Commemoratives have developed into a separate class of coins, intended as collector’s items or as an economic investment. They can be either circulating or non-circulating.

• Circulating: Technically, there are a few examples of circulating commemoratives that are intended to be used for commerce, and the U.S. Bicentennial Quarter (1975-1976) and the 50 State Quarter (1999-2009) programs serve as prime examples. For these programs, the designs were only issued for a limited time, and were intended to draw some attention to a specific event or person.
• Non-circulating: In most cases, commemoratives are non-circulating legal tender (NCLT), and are often produced in gold or silver.  The funds raised by the sale of commemoratives have been used to pay for monuments or fund a specific project, as an alternative to raising taxes. For example, the 1925 California Diamond Jubilee half dollar was issued to help fund the state’s celebration, and the famous 1893 Isabella Quarter was issued to help raise funds for the World’s Columbian Exposition in Chicago.

It’s easy to see how the history and provenance of any one rare coin can become a passion for any coin collector (and especially for this Grand Rapids coin dealer!).

But what makes a coin collection or its collector particularly famous? The reasons vary. Some collectors, like Wayne Gretzsky, are otherwise-famous people who have also become known as coin collectors. In other circumstances, a high-quality collection becomes famous because it is publicly accessible, such as the Smithsonian collection or the U.S. Mint collection, mentioned in “5 Best Places to See Rare Coins.”

One question I am sometimes asked (by people who know that I am a Grand Rapids coin dealer) is, “What are the trends in rare coin values?”

In general, over long periods of time, rare coin values tend to increase.  This has certainly been the case for rare coins over the past two years… but the key word is “rare.”   When a coin’s value is largely determined by rarity (along with condition and desirability) vs. bullion content, values tend to rise over time.  However, when a coin’s value is largely tied to the spot price of silver and gold, its value will rise and fall with the value of the metal.  Gold and silver prices have declined in the past two years; hence, bullion coin values have also declined.  

Whether you’re an avid rare coin collector or a Grand Rapids coin dealer, insuring your coin collection can be one of the best ways to protect your investment and give you peace of mind. With an annual cost that is often around 1% of the value of your collection, it may be worth considering for any collector. For professional collectors and dealers, the cost is even a deductible expense. 

Many beginning collectors assume that their homeowner’s or renter’s insurance policy covers their rare coin collection. It’s true that some homeowners’ policies will cover small coin theft, but many policies have exclusion clauses. Read your insurance policy carefully to find out what it does and doesn’t cover.