Coin Collecting

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COIN COLLECTING

Sometimes called the "Hobby of Kings," coin collecting is a branch of the science of numismatics—the study or collecting of coins, tokens, medals, orders and decorations, paper money, stock certificates, checks, and notes of financial obligations. When one learns that a 1933 Saint-Gaudens twenty-dollar gold coin issued by the U.S. Mint sold for over $7.5 million on 30 July 2002, one might indeed be led to think that coin collecting is a rich man's hobby, particularly since this coin was once owned by King Farouk of Egypt. Practitioners of this hobby, however, range from children to adults from every economic level of society.

A Short History of Coin Collecting

Coin collecting began over 2,000 years ago soon after the advent of coinage, with some of the earliest collections probably being hoards. Without banks, people tended to hold on to the coins of greater value—those having higher silver or gold content—while spending those that were plated or of debased content. Some, because of their artistic beauty, were doubtlessly retained longest. During the Renaissance period, Europeans developed an intense interest in classical arts and ancient Roman coins came into such high demand that forgeries made expressly for this market began to appear in the sixteenth century. These Paduan forgeries, primarily the work of Giovanni da Cavino, are today also considered valuable and collectible. Through the end of the Victorian period, an educated and refined gentleman of culture had a collection of antiquities, including a coin cabinet.

U.S. presidents, including John Adams and Thomas Jefferson, were coin collectors as well as students of antiquity, but the earliest collections of U.S. coins were actually assembled in Britain, where collectors developed an interest in the coinage of the former colony. Coin collecting in the United States developed slowly through the nineteenth century, but two major collector organizations—the American Numismatic Society (ANS) and the American Numismatic Association (ANA)—were formed in 1858 and 1891, respectively.

The World's Columbian Exposition of 1893 impacted the popularity of coin collecting through the minting of the first U.S. commemorative coins—a half dollar depicting Columbus on the obverse and the Santa Maria on the reverse, and a quarter dollar that depicted Queen Isabella of Spain on the obverse only. Both were sold at above face value in order to assist in financing the fair, but many remained unsold and numerous half dollars were subsequently placed into circulation. By the end of the nineteenth century, there were over twenty full- and part-time coin dealers in business in the United States.

The past century, especially the last three decades, saw an explosion of interest in the collecting of U.S. coins. By the mid-1960s, the number of coin dealers had increased to an estimated 8,000 to 10,000. In the early 2000s, with many part-time dealers operating over the Internet, the number was approximately 50,000. The creation of a circulating commemorative series with the Bicentennial coinage of 1976 and the introduction in 1999 of the state quarter series created a public awareness of and interest in the hobby. Of the nearly 1.7 billion Bicentennial quarters minted for circulation, few were found in change by 2003, and the half dollars and dollars were hardly ever encountered. An additional 21 million coins of each denomination were minted for collectors as proof and uncirculated sets. The U.S. Mint generated a similar interest with the state quarters series, and Congress authorized an expansion of commemorative coinage—half dollars, dollars, and gold pieces—issued to honor people and events in our history. In 2003, collectors were excited to learn that the Mint would be issuing a newly designed nickel coin for the first time in more than 60 years. Two new nickels were announced that year—one featuring the Lewis and Clark expedition and another the Louisiana Purchase.

Collectors and Collections

While many hobbyists will collect whatever they chance to find in circulation or purchase from the U.S. Mint, others are more selective, concentrating their efforts in particular areas of interest. For some, their involvement with the hobby may be no more sophisticated than dropping coins into a box or jar, a behavior often classified as hoarding behavior; these individuals are probably only marginally aware of their role in the hobby. Other participants in the hobby include novices, advanced collectors, dealers, and investors.

The novices include those who notice such aspects as dates and mint marks as well as foreign coins that they find in change. Novices often purchase coin albums to organize their growing collections and may expand into different denominations as their interest grows.

The advanced collector often specializes in a particular area of collecting, investing time as well as money in coins, publications, and travel to conventions and organizational meetings. While there is no complete listing of collecting specializations, they may be broadly classified as based on

• Time period (ancient, medieval, modern)
• Country (foreign, U.S.)
• Composition (gold, silver, copper/bronze)

Within those major categories coin-collecting specializations can be further classified—as in the case of U.S. coins—as:

• Series (each date and/or mint mark from a series, such as Lincoln cents)
• Type (a coin of each major design within a denomination—Shield, Liberty Head, Buffalo, and Jefferson nickels, for example)
• Commemoratives (special issues honoring events or people)
• Colonials (Pine Tree shilling, Fugio cent)
• Patterns (trial strikes of new coin designs or different metals)
• Pioneer (gold and private issues)
• Errors and or die varieties (off-center strikes, brockages [when a struck coin "sticks" to a die, the next coin struck will have a mirror image of the design from one side impressed on the opposite side, known as a First Strike Mirror Brockage])
• Unusual money (engraved coins, elongated cents, magicians' coins, coin jewelry)
• Exonumia (coinlike objects), including Medals (U.S. presidents, National Parks, World's Fair); Tokens (Hard Times, Merchant, and state sales tax tokens; Civil War "cents;" ration coupons; wooden nickels); Encased postage stamps; and Currency (fractional currency, large notes, military currency)

Examples of specialized collections include portraits of the Roman emperors and empresses; coins minted by the Crusaders; coins of the Napoleonic era; Condor tokens of England; obsolete U.S. coins (half cents, silver and nickel three-cent pieces, half dimes, twenty-cent pieces); Liberty Seated design coins of the United States (nineteenth century); modern U.S. commemorative coins; and mis-struck coins (there are nine types of errors: off-center strikes, wrong planchet or metal, blank planchet, brockages, clipped planchet, double or multiple strikes, broadstrikes, overstrikes, and die errors).

Two other groups of numismatists include the dealer and the investor, both of whom have a primary interest in the profit-making potential of the hobby. Just as some individuals invest funds in the stock market, others invest in high-grade, rare coins with the expectation that the rising market will provide a good return. The dealer, like the stockbroker, makes money by doing business with either the investor or the collector. While many collectors are not pleased with the activities of investors (which may drive up prices), many also expect to eventually sell their collections at a profit. Beginning collectors are often advised to collect items they enjoy without expecting to make profits, because investing does require both knowledge and capital. Investors purchase coins based on their condition (proof and uncirculated coins generally being preferred), scarcity (low mintages), or both.

Terminology Used

Like most specialized fields, numismatics has a vocabulary of terms that, while understood by advanced collectors, can be perplexing to a novice or noncollector. Two excellent listings can be found on the Internet at the following addresses:

http://www.coinworld.com/NewCollector/Glossary.asp

http://www.coinfacts.com/Administrative/glossary.htm

At these sites one can find definitions for condition grades from poor to proof, numerical grading codes, error terminology, knife and lettered edges, Fugio cents and other colonial issues, and other terms that one is likely to encounter in the numismatic literature.

Organizations and Collections

For each collecting interest there is probably one or more organizations devoted to the subject as well as several larger organizations, most of which can be located on the Internet. Some of these include

• the American Numismatic Association (ANA) (http://www.money.org/index.shtml)
• the American Numismatic Society (ANS) (http://www.amnumsoc.org)
• the Professional Numismatists Guild (PNG) (http://www.pngdealers.com/Public)

There are nearly fifty active specialty organizations in the United States involved with coin collecting, as well as numerous local or community organizations devoted to numismatics. These organizations include diverse groups such as the Associated Collectors of Encased Coins, the Civil War Token Society, the Elongated Collectors, Liberty Seated Collectors Club, Love Token Society, and the Token and Medal Society (for a more complete listing, see http://www.money.org/clubnatl.html).

Several major collections of U.S. coins have been assembled for viewing by the public or study by serious collectors. Most notable among these are the National Collection in the Smithsonian Institution and the collection of the American Numismatic Society. Other collections are held by universities (such as the Garrett Collection, housed at Johns Hopkins University) and museums; or may be displayed at annual numismatic conventions.

Publications

Numerous periodicals and books are available to inform the coin collector. Periodicals include Coin World, Numismatic News, and The Numismatist as well as other weekly or monthly magazines. Bookstores, especially those with major Internet sites such as Amazon and Barnes & Noble, generally offer 250 or more publications, both current and out-of-print. Specialized Web sites devoted to coin collecting offer extensive listings of current publications.

Developments and Trends

The Internet had a major impact on coin collecting by making dealers more accessible to the collector market. Many dealers who formerly advertised in hobby publications began including web addresses where collectors could view the actual coins and purchase them electronically. Additionally, Internet auction sites facilitated direct transactions between collectors, resulting in higher profit for the seller and lower cost for the buyer than if transacting business through a dealer. The auction sites also benefited the dealers, many of whom sold surplus or slow-moving items while also advertising their web addresses as a means of increasing their clientele. As of 2003, it was not unusual to find 75,000 or more different items listed on eBay and other online auctions under the category of "U.S. coins."

A second major influence on the hobby of coin collecting was the advent of professional grading and the "slabbing" of coins. Although grading does not provide absolute uniformity between particular service providers, it does provide the collector with a professional opinion. Combined with slabbing, where the coin is placed within a protective holder, grading serves as a near guarantee that the coin is genuine and as described. This assurance is of particular value to individuals who seek high-grade investments. A difference of a few points in grade (between MS60 and MS64, both signifying uncirculated coins) can mean a difference of a few hundred to thousands of dollars in value. While slabbing was initially limited to U.S. coins, it has expanded to include ancient and foreign coins as well. For high-value coins, this trend will probably continue.