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Interest in Proof Sets Fluctuates Over Time
By Paul M. Green

The plain vanilla proof set often has been out of the headlines and just a quiet part of the market. The present generation of collectors has so many sales options to choose from that the proof set commands less attention than it once did. If anything, the best way to describe the changing role of the proof set in the rare coin market might well be to simply suggest to owners, "You're not in Kansas anymore," as the historic proof set market could almost seem as old-fashioned as the "Wizard of Oz" might seem as a movie in today's Hollywood.

Into the 1960s the proof set as a collection was one of the most uneventful parts of yearly coin buying. In fact, it actually took a certain amount of effort even to get on the mailing list of the United States Mint, then called the Bureau of the Mint.

There were no toll-free numbers and assorted ordering options. You had to convince the Mint to send you an ordering form and then you had to get a money order and send it in to receive your set.

Months later a rather simple envelope would arrive and you would have your set, which you would examine briefly before putting it in a safe place where it would rest for months without ever being seen again.

The thought of selling the set or breaking it up to sell the individual coins was literally unknown. After all, the coins were from Philadelphia until the change to producing sets in San Francisco in 1968, and coming from Philadelphia if you needed a Philadelphia cent or half dollar from the year, you would simply get a business strike. No right thinking person it seemed at the time would consider breaking up their proof set simply to fill a hole in their regular collection.

As the coins were produced in Philadelphia there was also relatively little premium for most. With normally high mintages, there was simply minimal demand for something like a 1959 half dollar even if it was a proof. Moreover, the idea of proof singles was something that was not really frequently discussed as there had been no proof-only singles during the 20th century.

The proof-only single had been fairly common during the 19th century and as a result collectors of the 1800s were probably more concerned about proof- only singles than were collectors of the 1950s. In fact, the last proof-only single was probably the famous 1895 Morgan dollar and even that situation was not quite clear as the 1895 had a mintage that suggested there had been business strikes. The problem was that it appears the 1895 mintage was a clerical error. No one could find a business strike, leading everyone to the conclusion that the total listed in official records was 12,000 pieces too high.

If there had been significant historical price moves in proof coins it was primarily because the issues had very small mintages and were oftentimes not regularly available for all collectors. Proof prices if anything, moved because of the rarity of a given date and not because the proof set market had suddenly become active.

Actually, the history of proof coins was and to a degree still is unclear. Even today there is serious dispute as to whether 1907 high-relief Saint-Gaudens double eagles in a few cases were proofs and that is only one example of many as from the very first there is debate.

There is, for example, a truly extraordinary 1793 Chain Cent graded MS-67 by the Professional Coin Grading service. The coin was almost certainly specially made either as a first strike or as a very early strike. The fact that it has survived suggests it was probably a presentation piece and that raises all sorts of questions about such a special coin, but finding agreement as to exactly what it or other early issues were intended to be by those making them at the time or how they were made is nearly impossible as we simply do not know.

Certainly, there is no question that while there might have been what we would consider proofs, or what we at minimum call specially produced coins, any notion of an organized proof set program was still years in the future.

If you wanted to establish a date that virtually everyone would agree was a time where the Mint was in the business of making proofs that date might well be 1817, as roughly at that time there were proof coins being created with examples reported for large cents and half dollars with quarters and dimes known from the following years, while the first proof half cent would seemingly have appeared in 1825.

Our information is not perfect and discoveries can always be made and debated, but with relative certainty we can suggest that the period around 1817 was the first real period where proofs can be found.

The idea of a proof set probably took longer, but we know that by 1834 the concept existed for the simple reason that it was in that year that the State Department ordered proof sets for a diplomatic mission that included giving a set to the Sultan of Muscat and another to the King of Siam. That order for special sets proved to be significant for a number of reasons.

The most important aspect of the sets created in 1834 was that officials were confronted with a problem in that the silver dollar and gold eagle had not been produced since 1804 when their production had been suspended. Officials did not want to present sets lacking a couple of denominations, so they consulted the records to determine the last production date for both the gold eagle and silver dollar.

That date according to the records was 1804. What the records did not show was that the gold eagles made in 1804 were actually dated 1804, but that the silver dollars produced that year were dated 1803 as the practice of using dies even in years following the date on them was not at all unusual at the time.

The decision was to simply order special strikes of an 1804 gold eagle, which actually turned out to be slightly different from the original, as one had a plain and the other a crosslet "4," but in the case of the 1804 silver dollar, that was an entirely new issue that would become the most famous of all U.S. silver dollars.

The sets created in 1834 were, however, for the State Department and as a result they did not start a trend. What proof production there was tended to be individual coins and not a program offering complete sets. It is certainly possible that advanced collectors of the period might have assembled complete sets, but at least at the time there was no regular offering of sets.

There was another interesting event a few years later and that was the production of the first branch mint proof. While proofs produced at facilities other than Philadelphia would remain the exception to the rule where proofs were concerned, the fact is that there was a number made in other facilities over time and they usually were important.

The opening of the New Orleans Mint provided an opportunity to produce special issues and it appears that perhaps as many as 20 special 1838 half dollars were produced to mark the event. With such a small mintage, the 1838-O is a significant rarity today and one with a special place in history as it really opened the door in terms of proof production at facilities other than Philadelphia even though few would have considered it important for that reason back in 1838.

It is probably no accident that the Mint began to produce proofs routinely for sale starting around 1860. The roots of the idea of producing proofs for anticipated demand probably tapped events surrounding the 1856 Flying Eagle cent. The 1856 Flying Eagle cent was basically a pattern designed to show lawmakers what a new and smaller cent would be like. The little show and tell conducted in Congress resulted in approval for the new small cent and it also resulted in a number of the 1856 Flying Eagle samples being pocketed by members of Congress and others. The Flying Eagle cent was technically approved and released the following year, but word of the 1856 coins leaked out and collectors beat a path to the Mint asking for examples.

In the end, the Mint produced both proof and business strike 1856 Flying Eagle cents that were sold to collectors. That made collectors happy but the sale of perhaps a couple thousand 1856 Flying Eagle cents opened eyes at the Mint to the possibility that there was a small business possible in selling proof coins to collectors.

During the 1860s despite the fact that the Mint was busy with a Civil War and all of the complications that included a change in the composition of the cent, a new two-cent piece and the introduction of new copper-nickel three- and five-cent coins, a small and regular production of proofs took place. The program was still in its early stages and as a result some of the proofs of the period are better while others such as the small motto two-cent piece, 1864L Indian Head cent or 1867 "with rays" nickel are significant rarities in proof.

In some cases the mintages of the period are suspect. We have reasonable information as to the likely totals, but we are uncertain that the entire mintage was sold. In fact, there are stories of unsold coins being acquired for face value by some who had contacts at the Mint and that fact suggests that melting of unsold coins was a routine practice as a circulated coin would simply be slipped into the proof supply, which would be melted and as the coins were not checked no one would have discovered the trade.

We could hardly expect the proof program such as it was to grow during the difficult period of the Civil War. In addition, once the war was over, economic times were tough well into the 1870s, but despite the problems, the popularity of proofs with collectors is hard to dispute.

The mintage totals for proofs during the period from 1860-1890 would vary for a variety of reasons, but the long-term trend was definitely to higher mintages. In fact, there is very strong evidence that collectors of the period were happily assembling some sets using only proofs. The mintages might have been less than 1,000 pieces, but the supply of many proof dates from the period and especially in the case of key dates is actually far better than our supply of MS-65 pieces for the same period.

It might seem odd, but a number of denominations were only being made in Philadelphia and in the case of those denominations that included the lower denominations that were more popular with collectors, a proof would fill a hole for a date at least as well as a business strike. As it turned out, the proofs would generally receive good care as they were only acquired by collectors and that means today if you want a cheaper version of a date like the 1877 Indian Head cent, the way to get it is to buy a Proof-65.

The situation continued for many years and in addition there were periodic instances where a date would be produced only in proof. The proof-only dates were especially common during the period when Morgan dollar mintages were required. Perhaps the nation did not need some denominations or perhaps the strain of producing Morgans required lower mintages of other denominations, but whatever the reason, there were assorted proof-only dates.

The 1895 Morgan dollar is the most famous proof-only date for most and it was the only proof-only Morgan. It is not, however, the lowest mintage or most valuable proof-only date as proof gold coins of the 1800s are legendary, with mintages sometimes below 100 pieces with just a small number surviving, as there were few to collect and save such upper denominations at the time.

The dawning of a new century saw changes in proofs. Even the types of proofs being produced would change. The matte proof was introduced. Such a coin ended up with a dull or granular surface, while the satin finish proof would end up with a different appearance.

A sand blast proof is a variation on the matte proof, while a Roman finish proof is seen on some gold coins from 1909-1910 and it is a variation on the satin finish.

The evolution would continue with brilliant proofs being produced until the 1970s when they were replaced with frosted proofs still seen today, although in a couple of cases the Mint has dusted off the idea of matte proofs for special offers.

Around 1916 the relatively regular offering of proof singles or small sets was stopped. As there had never been an official program, there was no reason given for the decision, although there were definitely fewer proofs in the following years, there were still a few, such as matte finish 1921 Peace dollars and perhaps two dozen brilliant proof 1921 Morgans.

For roughly two decades it was definitely the exception to find a proof, but then in 1936 the first of what are considered the modern proofs appeared. The 1936 set including five denominations and had sales of 3,837 sets.

That results in a price today of $7,500, which is up from $5,600 in 2002 and $3,700 back in 1998. It and other early sets featuring the few proof Walking Liberty half dollars and Mercury dimes are popular, but difficult to find in their original holders. We see the situation in high prices such as $4,350 for the 1937 set while all others through 1942 are in a range from $1,375 to $1,900.

The proof set program was really just getting started when World War II broke out. The fewer than 4,000 sets sold in 1936 had reached 21,000 in 1942, but the impact of the war was seen immediately. The final year in 1942 saw both 5- and 6-coin sets reflecting the fact that the nickel was changed in the fall of 1942. The 6-coin set featured both the regular and new composition nickels, with the 6-coin set currently at $1,475 while the 5-coin set featuring only a regular composition nickel is at $1,375. The two sets of 1942 were the last until 1950 as the Mint turned its attention away from special sets and to the special needs of a nation at war.

The return of the proof set in 1950 saw a new price of $2.10 and that price would last until 1964. The sets of the 1950s tend to reflect the growing interest in coin collecting as the sets of 1950 and 1951 had sales in the 50,000 to 60,000 range, which results in price of $740 for the 1950 and $630 for the 1951 while the higher mintage 1952 and 1953 are $285 and $250, respectively.

Sales were increasing and the 1954 and 1955 sets reflect that fact as well as experiments with packaging as the 1955 set came in either a box or flat pack with prices today between $110 and $168.

The sets from 1956 through 1964 tend to be the most readily available group from the $2.10 proof set price era. The better sets from the period are the 1956 and 1958, although in the case of all sets from the era, there is a potentially surprising factor having an impact on supplies as the sets from the era were subject to melting when the price of silver rose to its peak in early 1980.

Historically, there has never been another period where proof sets were melted in quantity, but if silver reaches certain levels it could be tempting once again.

There were no proof sets during the period from 1965-1967 as the government in its attempt to discourage collecting was offering only so-called Special Mint Sets. Finally in 1968 with the national coin shortage over, the government returned to proof set production, but with some changes as the issue price was raised to $5, but the biggest change was that the sets were produced in San Francisco and not Philadelphia and the half dollar, quarter and dime were all proof-only.

The changes would continue with the nickel becoming proof-only in 1971 and the cent following in 1975, making every proof set since that time a set of five or more proof-only San Francisco coins and that has had a dramatic impact as collectors assembling sets need those San Francisco coins to complete their them. Moreover, the addition of silver sets in 1992 has added to the situation as the silver proof-only San Francisco coins in the silver sets are also potentially an addition to a regular collection of a denomination.

The proof-only singles alone are interesting, but the sets over the period have produced an interesting group of errors such as in 1971 when 1,655 sets had nickels lacking a mintmark, which puts those sets at $1,850 today. There have been others as well, including a no-mintmark dime in a few 1968 sets, which are now priced at $17,500, and the 1975 no-mintmark dime set is an even higher $46,500 price. Later sets included a 1983 with no- mintmark dimes and a 1990 set with a no-mintmark cent and with all error sets being at least $1,000, they make for an interesting group for the specialist and for those lucky enough to obtain one in their regular order as a pleasant surprise gift from the Mint.

The trend toward more offerings has included variations on the regular set, with commemoratives being added to create Prestige sets and other combinations. Of course, the once simple $2.10 proof set has given way to a situation where collectors can spend a good deal more simply acquiring the basic sets from a specific year. The $2.10 option of 1963 had been replaced with an explosion of proof set and partial proof set options.

The situation has also changed dramatically in terms of what happens to sets in the secondary market. A set used to move only slightly in price for long periods, but now with sets being broken up for the sale of certain singles, the supply of any given set is always in doubt and that has produced prices that can move up or down wildly in a relatively short period of time. A 2001-S silver set for example was priced at $31.95 from the government but it is now $89 while the regular 1992-S set has actually fallen below its issue price. The 1983-S set is also down, but the 1997-S set went from an issue price of $12.50 to $60 and then back to $26.50 while the 5-quarter 1999-S set which sold for $13.95 is also $49.95. Such price swings are totally foreign to those who paid $2.10 for a 1959 set only to see it at $2.20 in the mid-1960s.

The continued growth in interest in the proof-only San Francisco coins that include 50-state quarters is not likely to change in the near future and that means we are in for a period of very volatile prices when it comes to various proof sets.

A shortage of a specific date can very easily push a set higher and with so many dates to potentially be in short supply it seems likely that the future of proof sets will almost always see at least one set having a period of rising prices at any given time. Those who collect proof sets in the old-fashioned way simply to have a collection can ignore the ups and downs. But can anyone really ignore those price swings?

 



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