PRESERVING MEMORIES

Handling Coins Through the Ages

Coin collecting in the U.S. has been a rough-and-tumble pursuit since it rst red up in the 1850s. Kindred collecting areas such as stamps have never shown a comparable tendency toward the vigorous disputes that have long enlivened the numismatic world.

Part of the resiliency of coin collecting can be attributed to the composition of the coins themselves: Coins are made from metal and, unlike stamps, are innately easier to store and preserve.

Historians believe that popular coin collecting can be traced back to the decision of the U.S. Mint and Treasury to discontinue the copper large cents and half cents in 1857, replacing them with a new 19mm copper-nickel Flying Eagle cent and simultaneously eliminating well-worn foreign silver coins then in widespread use.

Pioneer collectors began trying to assemble date-by-date collections of cents without any real idea of what coins they would need for such collections. Joseph J. Mickley of Philadelphia began by trying to nd a cent of his birth year, 1799.

From that time until the 1970s, American coin collecting went through several phases of increasing popularity, gradually evolving from the “Hobby of Kings” of the 19th century to a great popular pursuit during the Depression years and into a billion-dollar hobby-industry a er World War II. Perhaps the greatest future-determining change in

modern times was the introduction of thirdparty grading in 1978 and of encapsulation of independently graded coins in 1986.

Younger collectors in June 2019 may have a hard time imagining the operation of the coin market before 1986, when popular slogans included “buy the book before the coin” and “know your coins and know your dealer!” Gaining knowledge took work and the state of reliable knowledge about U.S. coins in 1930-1950 was still fairly abysmal.

When collecting took off in the mid-19th century, there were no reliable independent catalogs. Pioneer collectors like Mickley were pretty much “on their own” as they sought coins for their collections. Some spent years searching for large cents of 1815, not knowing that no cents of that date had ever been struck.

The few dealer price lists and auction catalogs then in circulation contained much misinformation, guesswork and outright falsehood. Prized by collectors today, auction catalogs by such pioneer dealers as Edward Cogan, Ebenezer Locke Mason, Edouard Frossard, W. Eliot Woodward, Captain John Haseltine, J.W. Scott, brothers S. Hudson, and Henry Chapman were certainly lively if not objective. These and most other such catalogs were made lively by free-wheeling assaults on rivals and their catalogs.

Little or no attention was paid to libel

laws as dealers slugged it out, lambasting each other’s supposed ignorance or dishonesty, assailing “new discoveries” publicized by their rivals and the supposed incompetence of their auction lot descriptions. Collectors had to navigate among these shoals of free-wheeling rivalry on a “who do you trust?” basis. Collectors offen formed close attachments to dealers that they came to know and believed they could trust.

Numismatic organizations existed 1857-1880 in a very few locales including Boston and New York, where the American Numismatic Society (ANS) served a generally scholarly collecting community as it continues to do today. These organizations actively avoided attracting large memberships. The Boston group refused membership to Lorin Parmelee, one of America’s greatest early collectors, on the grounds that as a successful bean baker, he was “in trade” and hopelessly socially inferior.

No popular-level national group appeared until 1891 when Dr. George F. Heath of remote Monroe, Michigan, launched the American Numismatic Association (ANA) to bring together collectors all over the country, especially those outside the large cities. Heath soon learned a dismal lesson: many dealers opposed the new ANA, fearing that it might educate captive customers to a higher standard than that they had imposed as the only dealers these collectors had ever known.

Truly objective guide books did not exist until New York’s great dealer-publisher Wayte Raymond began issuing his Standard Catalogue of United States Coins in 1934. It now became possible for collectors to obtain objective ideas of value of most U.S. coins from a source not looking to sell them the same coins, a truly revolutionary shiff.

Early History of Coin Storage

Paper goods manufacturer Martin Luther Beistle of Shippensburg, Pennsylvania, invented high quality coin albums featuring stifi covers and thick cardboard pages with die-cut holes for most U.S. coin denominations.

Sliding strips of clear plastic-like celluloid protected the coins from careless handling. Wayte Raymond acquired Beistle’s patents and marketed the books as the National Coin Albums. Their distribution throughout the country also helped transform the face of American collecting by providing organized housing for collectible denominations and increased sales of Raymond’s huge holdings of U. S. denominations by date.

Few understood the chemistry of cardboard in the 1930s, when the sulfur content promoted bands of very colorful toning around coins’ rims, giving birth to the auction term “National Album toning.” These albums were durable but costly, putting them beyond the easy reach of many collectors.

Coin cleaning was widely practiced, ranging from bicarbonate of soda to commercial preparations such as Silvo and Brasso which inflicted much damage. Dips included CCC and CCD to brighten and then tone down newly cleaned bronze cents. Youngsters just starting out could do extensive damage with pencil erasers and mercury for silver coins.

Paper 2x2 envelopes were in widespread use with handwritten or typed descriptions on their fronts. Here again, sulfur in the paper could interact with the coins although sales of “tarnish-proof paper” helped ward ofi damage for committed collectors.

Coin collecting remained a preserve of the well-to-do into the 1930s. During the Great Depression, however, the masses invaded collecting via the “penny boards” invented by J.K. Post of Neenah, Wisconsin. These boards triggered a nationwide hunt for Lincoln cents to form date collections housed in inexpensive cardboard folders. Even in the depths of the Depression, anyone could squirrel away “pennies” in the hope of gain. Full folders could then be sold to interested dealers and new empty folders acquired to start the process over again.

Rights to the penny board were acquired by Whitman Publishing of Racine, Wisconsin, and nationwide marketing was directed by their key employee R.S. Yeoman, making them a national phenomenon that helped dealers as well as collectors. The late A.M. Kagin and his brother, Paul, were fond of recalling the business that the penny boards brought to their coin shop in Des Moines, Iowa, as the boards did with other dealers all over the nation.

Whitman soon introduced inexpensive blue coin albums for U.S. denominations to compete with Raymond’s more costly product. These newer housings did little to protect the coins from handling, falling out and oxidation.

Whitman’s next revolutionary contribution was the publication of the “Blue Book” and “Red Book,” formally the Handbook and Guide Book of United States Coins launched in 1941 and 1946, respectively. Both volumes appeared annually at reasonable cost and were distributed nationwide through Whitman’s unmatched network built to handle the firm’s popular Little Golden Books all over the country.

A new world dawned for coin collectors all over the U.S. after World War II. New coin collectors entered the field by the thousands, armed with the new coin books, founding new coin clubs and revitalizing conventions all over the U.S. A new era began for established dealers like the Stacks of New York, Abe Kosoff of New York and California, John J. Ford Jr. and Charles Wormser of New Netherlands in New York.

ANA held its last small-town convention in Davenport, Iowa, in 1946. Hereafter, large cities and vastly larger convention sales became the rule. Publishing blossomed with new specialized books including Dr. William H. Sheldon’s U.S. Large Cents, later retitled Penny Whimsy, that created a subset of utterly devoted specialized collectors.

Soon, new specialty clubs were organized to bring together collectors with interests in many specialized areas.

The numismatic press exploded, finding monthly appearance too limiting for a boldly expanding market. For decades the field had been limited to The Numismatist, organ of the ANA, and the independent Numismatic Scrapbook

published in Chicago by Lee F. Hewitt. The market was moving at an ever-faster pace, giving birth to tabloid newspapers, beginning with the initially biweekly Numismatic News (Krause Publications, Iola, Wisconsin) in 1952 and weekly Coin World (Amos Press, Sidney, Ohio) in 1960.

The weekly price “Trends” helped Coin World attract thousands of subscribers. Availability of relatively precise pricing data also nourished an ever-expanding inrush of speculators into the Theld, now christened investors. Numismatics had always had its share of speculators, notably in the overheated 1930s world of commemoratives. The new and growing tidal wave of investors focused their spotlight on the never-resolved issues of condition and value.

Condition and grading had obsessed collectors since the beginning. The longtime guru of early copper, psychologist-numismatist Dr. William H. Sheldon was perhaps right when he once defined, “grading – an attempt to justify price.” Even Joseph J. Mickley’s generation knew instinctively that a virtually unused cent was more desirable than another worn smooth. One of the greatest attractions of the “Redbook” was its presenting variations in condition and price in black and white.

In the 1940s, most generally recognized grades were Fair, Good, Very Good, Fine, Very Fine, Extremely Fine, (later) About Uncirculated and Uncirculated (or Mint State). About Uncirculated was introduced for the vast distance between Extremely Fine and Uncirculated, but this handy term triggered spirited opposition from traditionalists fearing “weasel words” they believed would only help dealers.

The ongoing search for answers brought Dr. Sheldon to his then-revolutionary numerical grading scale, initially focused on the precise grading of copper large cents of 1794. Each recognized grade would bear a number based on market value at the moment Sheldon put pen to paper. A coin graded Good then sold for $4.00, therefore the numerical grade would be Good-4; a Mint State coin sold around $60, ergo Mint State-60, a literally perfect coin (if one existed) would sell for $70 and so on.

Grading controversies now racked the numismatic landscape. ANA President Virginia Culver tackled the grading issue by appointing veteran professional numismatist Abe Kosoff to head a blue-ribbon panel that would formulate (it was said) a workable solution. Kosoff announced that ANA was extending the Sheldon scale to all United States coins from half cents to $20 gold pieces.

Adoption of and adherence to the Sheldon Scale would, it was fondly hoped, cut back on complaints against dealers advertising in the numismatic press and among collectors buying coins from each other. All of these inevitably argued about grades of coins they wanted or the grades of coins they wished to sell. Few remembered Sheldon’s barbed slogan, “I grade this coin at $25 (or $100 or whatever).”

Coins offered in numismatic publications were often argued over after they were examined by potential buyers. Most complaints filed against dealers were about grade, with or without the Sheldon scale. The inrush of wholly uninformed investors vastly increased this problem. When Coin World advertising announced that it would accept numerical grading in ads, an especial bumptious dealer belligerently announced that his coins were “MS-90!” After all, they were HIS, right?

As we have seen, over-grading and overcharging were certainly not new, but had long been perennial problems. Then by the 1960s, another massive complication appeared over the horizon: Americans were becoming aware of precious metals that they had largely ignored since the mid-1930s. Silver bullion had begun its inexorable climb that soon necessitated abandonment of the traditional .900 silver from U.S. coinage.

Then U.S. Mint Director Eva Adams discovered a coin shortage, which she loudly blamed on coin collectors, threatening to jail them to end this supposed shortage. Legitimate collectors deplored Ms. Adams’ attacks, citing layover time in coin-operated vending machines as the real reason for the largely illusory shortage. In due time the release of hundreds of millions of the new copper-nickel clad copper dimes and quarters rectified this situation.

Meanwhile, the ranks of largely uninformed investors continued to swell. Now more newcomers were buying silver and gold rather than collector coins at ever-increasing prices. Realizing that this largely new market rested on uniformed speculators, new dealers appeared to service them, steering them into what they called “rare coins” and reciting figures from the Salomon Brothers Reports that purported to reveal the wonders of rare coin investment.

When this structure of poorly understood speculation began to wobble, these dealers began to publish hopeful stories about a supposed “bullion link” to the rare coin market that never existed. Increasing worry inspired hopeful reports that “Wall Street is coming to save us!” Just who was going to be saved was left undefined, and “Wall Street” money (such as there was) would prove to be no real help at all.

The bullion market had indeed gone mad during 1979, with silver approaching $50 per ounce, and gold vastly more. Behind the scenes, the Hunt brothers, secretive Texas oil millionaires, were working on an ambitious plan to corner the silver market. Later they invaded the ancient coin field with similarly poorly researched enthusiasm.

As this was bubbling in the background,” investment” dealers found themselves holding massive profits from bullion sales and rushed to reinvest this money into rare coins, notably at the record-shattering Garrett Family auctions being conducted by veteran professional numismatist Q. David Bowers, then in his third decade among the nation’s top dealers.

Many of these dealers had managed to forget the Internal Revenue Service (IRS), which now came baying down the trail to tax the bullion profits, triggering a hysterical sell-ofi of rare coins to raise cash for this sudden and very real tax emergency. All of this led directly to the most savage market correction in history.

The effects of this collapse endured for years. Somewhat overshadowed by these developments was another earthmoving development: the arrival of third-party coin grading through the newly created American Numismatic Association Certification Service, ANACS. Growing out of the Culver-Kosoff effort to standardize grading and grading terminology, ANACS was originally conceived as a weapon to combat the epidemic of counterfeiting that washed over the numismatic world in the late 1960s and early 1970s.

Setting counterfeiting aside, ANACS published the Official A.N.A. Grading Standards for United States Coins and quickly shifted its emphasis to grading of coins for the numismatic marketplace. The grading guide triggered controversy by using line drawings to illustrate grades and through use of adjectival grades that were at variance with market terminology: MS-65 was called Choice Uncirculated while the market term was Gem Uncirculated, etc.

ANACS had originally been situated in Washington, D.C., to limit political interference in its work by ANA politics. In 1978 ANA Executive Director Edward C. Rochette announced the service’s relocation to ANA headquarters in Colorado Springs and the start of ANACS grading. He engaged noted numismatist and writer Tom DeLorey to begin the grading of coins being submitted.

ANACS was an immediate success with collectors but aroused violent controversy with dealers. Coins were authenticated and graded, then returned to their owners with a photo certificate stating its grade. Here a problem arose as many coins were resubmitted again and again by disappointed owners. Coins and certificates were easily separated unless carefully handled and stored.

Dealer criticism included Q. David Bowers’ objection that ANACS undermined established trust between dealer and customer. Popular silver dollar writer Wayne Miller devoted pages of his Morgan and Peace Dollar Textbook to immoderate diatribes against the service and its personnel.

ANA derived substantial revenue from ANACS fees, enough to worry Ed Rochette about his organization’s non-profit status, and before long the service became embroiled with the national organization’s chaotic internal politics. For all of this, ANACS persevered, serving many collectors who now believed that they had no need of knowledge to succeed in coin collecting or investment.

The next quantum leap came in 1985 with the confident announcement of “the final solution to the grading problem” by a new entity, the Professional Coin Grading Service (PCGS). Early on, PCGS leader David Hall and the group of major dealers soon referred to as “the seven popes” proclaimed a new dispensation for professional numismatics by eliminating collectors’ “need to know” and need to rely on uncertain dealers.

PCGS grades would be assigned and finalized by a consensus of experienced dealers. Assigned grades were to be accepted without question by participants, making “sight unseen” buying and selling of PCGS certified coins a certainty. Back talk or rejection of PCGS grades would result in expulsion from the new gravy train, a threat that introduced and enforced internal discipline among participating dealers.

Perhaps the most visible element in the PCGS revolution was the introduction of the rigid plastic, sonically sealed holder for both coin and filament recording the assigned grade, the capsule or “slab” that has dominated the U.S. coin market ever since.

PCGS did not invent the slab. That honor goes to far-away South Africa, where the colorful creator of the proof Krugerrand, one-time securities dealer Elie Levine, used clear plastic slabs to encapsulate what he marketed as proof examples of the South African one-ounce bullion coin, the Krugerrand, ranked by his “S 100” grades.

Soon after, mega-marketer Paramount International of Englewood, Ohio, began selling silver dollars from the vast horde of eccentric Nevada hard money fanatic LaVere Redfield sealed in rigid plastic holders that also enclosed red cardboard inserts inscribing one of the two gold-stamped numerical grades used inside.

PCGS raised a hurricane of controversy with its confident claims. Its announcement of the introduction of 11 grades of Uncirculated raised controversy to a boil. Success came at a price, as John Albanese, one of the original founders of PCGS, hived off and organized the competing Numismatic Guaranty Corporation of America, Inc. (NGC), and enjoyed raving ongoing success.

Mention might be made of the dozens of rip-off imitations and would-be rivals that were soon grouped by the market under the term “Third World grading services” and which generally amounted to little. It was soon apparent that PCGS and NGC dominated the coin market and had changed the face of U.S. numismatics forever. Most collectors and dealers were “sold” on the concepts of slabbing, and there would be no going back.

ANACS faded rapidly, its name acquitted by Amos Press of Sidney, Ohio, whose head, J. Oliver Amos, continued to cling to the idea that computerized grading could be perfected and really end all disputes over grading and value. Though vast amounts were spent on this quest, computerized grading was never perfected.

By the early 21st century, knowing your coins and knowing grading were no longer dire necessities. Dominated by two massive firms, the U.S. auction field could now relax, take vastly less care with grading and cataloging. Firms could abandon the search for world-class numismatists and skilled catalogers and rely on youthful applicants prepared to work for much less than yesteryear’s respected experts.

All they had to do, after all, was tap the keys on their keyboards as they handle pre-graded coins in plastic slabs. What’s the problem? Questions continued to be raised, giving rise to verification services that confirm grading service grades. What might come next is anybody’s guess and continues to add to the fun of coin collecting.