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Fresh Material, Pedigrees and Auctions
By Greg Reynolds

In September, the Southern California rare coin auctions and the Long Beach Expo were lively and demand for rare coins was strong. There are three Long Beach Coin, Stamp & Collectible Expos each year, and Heritage conducts the official auctions. Prior to each Expo, Superior Galleries, the Goldbergs, and sometimes B&M, separately conduct coin auctions in the Beverly Hills area.

On the bourse floor, one leading wholesale firm had almost exactly the same total revenue for rare coins, along with almost the same profit margin, at the Sept. 2008 Long Beach Expo as at the Sept. 2007 event. The year 2007 was very good for the coin business, and the year 2008 is as well.

While the overall U.S. economy seems to be slowing, and is plagued by problems in financial sectors, coin markets were very healthy in September, and probably still are in October. External factors did not heavily influence the auction results. Prices realized and bidder enthusiasm was, for the most part, a function of the quality, importance and pedigrees of the coins being offered.

While I have, in so many reviews, focused on the details of coin auctions and the coins included, I am here putting forth a few broad analytical points regarding notions of collector-consignments, pedigrees and fresh material. Of course, there are other factors that that play roles in the prices realized in coin auctions. I discus the other factors in other articles.

For a coin to be ‘fresh,’ it needs to have been ‘off the market’ for at least five years. In some cases, ten years or more are required for material to be viewed as ‘fresh’ by potential, leading bidders.

A real exciting lot in the Superior auction was an 1839 ‘Type 1′ $10 gold coin, in large part because it was clearly part of a consignment of fresh material. I am not certain that a collector consigned it, though it is clear that it was not consigned by one of the leading dealers on the auction circuit. It could have been consigned by an estate, an investor, or someone who just bought this coin ‘on a whim’ a long time ago.

The first type of Liberty Head Eagles (U.S. $10 gold coins) is often called the ‘Type of 1838′ as opposed to the regular 1839 to 1866 ‘No Motto’ issues which are of the so called ‘Type of 1840.’ (Yes, Eagles of 1838 and 1839 are often categorized, correctly in my view, as a separate design type. Please see my article on 1839 Eagles)

This 1839 ‘Type 1′ Eagle was in a first generation PCGS holder (and thus it was certified at some point from 1986 to ‘89 or so). It was graded “MS-60,” and I emphasize “was” as it has probably been upgraded. Moreover, regardless of its grade, it is a sharply struck, attractive example of a rare type.

Indeed, coins of this type are extremely rare in grades above MS-60. At the January 2005 FUN Platinum Night event, the finest known business strike of the type, an 1839 that is PCGS graded MS-66, brought $402,500.

In the September Superior sale, bidders were eagerly anticipating this lot. A minute or two before this 1839 Eagle came ‘on the block,’ I could hear people talking about it and/or stirring in their seats.

One widely read wholesale price guide values an MS-60 grade 1839 ‘Type of 1838′ Eagle at $10,000 and an MS-63 at more than $30,000. Collectors, however, are typically willing to pay much more than wholesale levels for rare coins that they need for their respective sets. Besides, as high grade coins of this type tend to trade at auction rather than on networks or among dealers at shows, wholesale price guides may be wrong. After a heated, though brief, bidding contest, this 1839 Eagle sold, to a floor bidder, for $50,600. Bidding excitement and a strong result stemmed, in part, from the fact that this Eagle was consigned by a collector, or at least not a dealer, and it was part of a consignment of ‘fresh material.’

Consider the 1876-CC Twenty Cent piece that realized $264,500 in this same Superior auction. (Please click here to see an earlier article of mine regarding this coin.) The consignor acquired it in 1986. It was clearly part of a complete collection of Twenty Cent pieces. It realized more than it would have if a dealer had consigned it, or if it had been auctioned within the past five years. Collectors like to hear about and read about collections being sold. Unfortunately, the consignor chose to remain anonymous. I believe that on average, though not always, collections will realize more at auction if collector-consignors reveal their names and some information about their collecting objectives and habits. Such information about the owner of a coin provides the respective coin with more of a history and adds to the identity of the coin.

Bidding went wild on Sunday, Sept. 14, when the Goldbergs auctioned the Ray Rouse collection of half cents and an important selection from the Ted Naftzger collection of large cents. Please see the articles that I have already written about the Rouse 1796 ‘No Pole’ half cent and the Naftzger 1796 Liberty Cap cent, which set an auction record for a copper numismatic item of any kind. In terms of die varieties of half cents, the Rouse collection was phenomenal. The Naftzger collection, when it was intact, was the best all-time collection of large cents. In many instances, I have seen high quality, rare early copper coins fail to sell at major auctions, and those unsold copper coins were usually consigned anonymously. The fact the Rouse and Naftzger coins were part of landmark collections greatly contributed to collector participation. The enthusiasm of the bidders in the room created a special and intense aura.

Almost all of Rouse’s half cents had circulated, and many of them are of somewhat low quality. Even so, collector enthusiasm pushed the auction total for his collection to more than $1.28 million. From the Naftzger collection, just forty-four early large cents (without a Chain cent) yielded almost $2.9 million!

A collection, however, does not have to be one of the best of all time in its respective field in order to generate bidder enthusiasm. It just has to be logically and carefully assembled in accordance with the pertinent values and traditions of coin collecting, which evolve over time. Registry sets are a relatively new tradition, which has become integrated into the cultural framework of coin collecting in the U.S.

Of course, anonymous consignments will, in many cases, bring very high prices. I am theorizing about results ON AVERAGE, not about any one or even any thousand single instances. In the B&M sale, there was a 1931-S Buffalo Nickel that is PCGS graded MS-67. It realized $63,250 after opening at around $48,000. The previous auction record for a 1931-S nickel was probably not much more than $10,000. Typically, PCGS graded MS-66 1931-S nickels sell at auction for between $1200 and $1900. In this case, it may have been the grade of the coin that mattered the most. This nickel does have a dazzling look.

Some bidders strongly desired this 1931-S, for a registry set or for some other purpose, and probably did not care about the consignor. It may, possibly, have brought even more money had it been part of a very famous collection of Buffalo Nickels, but I am not arguing that is so.

I realize that not every bidder is going to care about the issues that I raise. I have had thousands of conversations with collectors about auctions, though, and I am convinced that a large number of collectors are dramatically more enthusiastic about auctions of great collections and are minimally interested (if it all) in offerings of completely anonymous, unnamed consignments with no mention of pedigrees. Likewise, they tend to be ‘turned off’ if an offered coin has been ‘on the market’ for a considerable length of time.

This is the second part of my reflections regarding fresh material, pedigrees, and the effects of collector-consignments, with references to my theory that these three factors strongly contribute, ON AVERAGE, to higher prices in coin auctions. In both parts, I mention examples from the September 2008 coin auctions in Southern California.

The star of the September B&M sale was the freshest of material. It was an 1851 U.S. Assay Office, Augustus Humbert, California $50 gold coin that is graded MS-65* by the NGC. As it has never been on the coin market before, it could not have been any fresher. Evidently, it was found in the early 1970s at a location near where it was minted in 1851. Yes, I was skeptical when I first heard this story. My inquires suggest, however, that this story could well be true. Information from three sources tended to ‘add up’ and fit together. It was thus a non-dealer consignment of a 100% fresh coin that has a curious story.

The price realized of $460,000 is very high and is probably an auction record for a business strike territorial $50 coin. Even so, I wonder if the coin would have brought an even higher price if the consignor revealed his name and more information about the circumstances of the discovery, along with a reason as to why he consigned it this year. Coins with histories tend to be (though are not always) worth more.

The auction record for a U.S. Assay Office $50 coin is the $500,000 price realized in March 1980 for the Garrett 1851 that was catalogued as a Proof. I have never seen it. There was, though, a tremendous story regarding the Garrett family collection, and the Garrett auction catalogues were full of pedigree information along with other historical points. Plus, QDB wrote a book about the Garrett collection and the history of U.S. coinage around the same time as the Garrett I sale in 1979. While Garrett auction prices seem low in 2008, they were very high at the time largely because the collection was so great and widely publicized. Key additional factors were the freshness of the material, the history of the collection, and the pedigree information regarding specific coins in the auction catalogues.

In fairness, it should be pointed out that, for this Sept. 2008 sale, the B&M cataloguer did an excellent job of describing this specific U.S. Assay Office $50 coin and of discussing the history of these California $50 gold coins issued by U.S. Assayer Augustus Humbert. Even a new collector who never heard of such a coin could learn a great deal about the history and physical characteristics of these $50 coins in a few minutes just by reading the catalogue description.

I have seen more than ten August Humbert, California fifties that have been certified as grading MS-60 or higher. The incredibly few contact marks, the richness of the luster, the level of detail, the quality of the planchet (prepared blank), and the overall brilliance of this $50 gold coin, amazed me. Adam Crum of Monaco Rare Coins was the successful bidder, via telephone. At the Monaco table at the Long Beach Expo, there were two Humbert U.S. Assay Office fifties that are each NGC graded MS-63. This coin has much more dynamic surfaces than either of those. It is really a startling coin.

Collector, or at least non-dealer, consignments also did well in the Heritage Long Beach auction. When a collector employs a code name, his (or her) coins are thus part of a semi-anonymous collector-consignment, which has more cultural and historical significance than a dealer-consignment or a totally anonymous consignment.

The “Nevada Collection of Seated Quarters” in the [2] Heritage Long Beach auction was clearly formed by a collector. Many of these Liberty Seated Quarters had been ‘off the market’ for a long time and these quarters just had the ‘look and feel’ of a carefully and logically assembled collection, though one that was a ‘work in progress.’ Moreover, many of the “Nevada” Liberty Seated Quarters were pedigreed to important collections and/or landmark auctions in the past. A few were formerly in the R. L. Miles collection. Others came from the Richmond collection. (I wrote at least five articles about the Richmond collection for Numismatic News.)

Unsurprisingly, the “Nevada” quarters brought high prices. My guess is that most of them went to serious collectors.

Consider the “Nevada” 1872-S quarter. It is PCGS graded MS-66 and could very well be the finest known. It was owned by Charles Cass in the 1950s and by the Norweb family from 1957 to 1988. So, it was previously in two really great collections. On Sept. 18, it brought $86,250, an auction record for an 1872-S quarter. Indeed, this result is more than $20,000 above the next highest auction price for an 1872-S quarter.

An MS-65 grade 1927-S Saint Gaudens Double Eagle in the Heritage sale realized $161,000, which is a very strong price in the current market for Saints. Although the current consignor is anonymous, this coin was previously in the collections of Dr. Steven Duckor and Jay Brahin. These are both famous collectors who are widely recognized for their fine taste and sophisticated approach.

A 1913-S Saint in the same sale was also formerly in the Jay Brahin collection. It is PCGS certified MS-65. In comparison, John Kutasi’s 1913-S, also PCGS graded MS-65, brought $29,900 in a Jan. 2007 FUN Platinum Night 2 event. While I did not see the Brahin 1913-S, I thought the Kutasi 1913-S is a very attractive, solidly graded coin. The $40,250 price for the Brahin 1913-S in September 2008 is high.

Returning to the 1927-S, the Heritage cataloguer remarks that a “pedigree to either the Duckor or Brahin collections is extremely important. A pedigree to both collections is a mark of distinction for any coin.” Duckor, especially, has become a legend. It is stated in the catalogue that Duckor acquired it in July 1980 from a New England Rare Coin Auctions event.

Though I believe that Dr. Duckor owned it for more than a quarter-century, I have found that it was offered in the Akers’ session of Auction ‘90. This is not a point mentioned in the Heritage catalogue. My guess is that Dr. Duckor was the consignor in 1990 and that this coin did not then sell. Because a boom in coin markets ended in March 1990, and for other reasons, a significant number of the coins offered in Auction ‘90 did not sell.

This Duckor-Brahin 1927-S is PCGS graded MS-65, and I thought it is fairly graded. In 1990, David Akers graded it as “65+.” Finding an equal or better 1927-S Saint would not be easy. Those potential buyers who are unsure about this coin may fairly assume that both Duckor and Brahin had very favorable impressions of this 1927-S. I hope that it is now in a cherished, high quality set of Saints. A set is enhanced when a coin is added that was previously in widely recognized, great collections.
 



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