Coin Collector Blog

Mullen Coins Collection Blog provides valuable articles and content about coin collections, rare coins, currency, antiquities and interesting reviews of news and events within the numismatic community.

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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.  

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As we discussed before, during the early years of the Great Depression far fewer coins were minted. An economy in a tailspin meant that coins were circulating less and fewer people were collecting them. The exception to this coin dearth in those early years was the 1932 quarter dollar minted in honor of the 200th anniversary of George Washington’s birth.

Originally, the Treasury Department intended to strike a half dollar, and in cooperation with the Commission of Fine Arts and the Washington Bicentennial Commission, it held a competition. Entrants were to design the obverse of this new coin using the celebrated bust of Washington sculpted by Jean Antoine Houdon as inspiration. Laura Gardin Fraser, talented artist and wife of sculptor James Earle Fraser, was a prolific medalist. In 1932 she designed the George Washington Bicentennial medal, and she entered this contest along with 97 other people. The Commission chose her design unanimously - but the U.S. Treasury declined to use her design on the coins it produced.

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Previously we’ve talked about the scarcity of U.S. coins minted during the years of the Civil War. Collectors looking for coins from another historic period - the Great Depression - will also have to search for some of them, particularly the ones struck during the earliest years of the 1930s. What was going on during this period, and why are coins from this era harder to come by?

The stock market crashed in October of 1929, and some of its effects were felt immediately. Fortunes were lost overnight, and millionaires jumped out of buildings rather than face financial ruin. For working class Americans who had not invested in the stock market, it took a little longer for this disaster to affect them, but in time the economic collapse brought them down too. Subsequent years saw unemployment at rates as high as 25 percent.

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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.

The United States entered World War II after the Japanese attack on Pearl Harbor in December of 1941. During the war years, the availability of metals significantly decreased as they were assigned for artillery use. This meant a change in the metal composition of the coins minted, therefore in 1943 the copper cent became a zinc-plated steel penny. U.S. mints struck more than a billion of this new coin between the mints in Philadelphia, Denver, and San Francisco. The public didn’t particularly take to it, although coin collectors have softened on it over the years and have come to view it as a novelty. These steel cents are available for purchase very inexpensively in either circulated or uncirculated condition.
 
The 1943 copper cent is another story. The reason that some 1943 pennies are so collectible is - as is often the case - due to a minting error. In 1943 between 30 and 40 Lincoln wheat cent coins were struck on copper planchets, likely leftover from 1942.  Because of their rarity, the Philadelphia copper cents are worth more than $45,000, the San Francisco copper cents are worth $100,000, and the one known 1943-D (Denver) copper cent is likely worth more that $500,000. No question they are the most collectible U.S. cents on the coin market.

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.

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Collectors of U.S. coins will no doubt be familiar with the many iterations of the Lincoln cent, but most of the public will go their whole lives without paying any attention to the details of this ubiquitous coin. It’s as familiar to Americans as baseball, and yet it’s completely overlooked, the story behind this everyday object unknown. 

Interestingly enough, the man behind this famous miniature portrait of Lincoln wasn’t American. He was Victor David Brenner, but he was born Viktoras Baranauskas to a Jewish family living in  Šiauliai, Lithuania - which in 1871 was a garrison town on the edge of the Russian Empire. At age 19, rather than be exiled to Siberia, he immigrated to the United States and settled in New York City.

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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 errorsthey 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.

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We’ve talked numerous times about how coins have historical consequence. Most are designed or minted as a commemoration of an important event or person or are the result of politicking or maneuvering by various people in power interested in maintaining their power. Another way coins have historical importance is that they can be used to date or identify people, places, or things.

Recently archeologists in Kalkriese unearthed eight Roman coins that historians believe may be the key to identifying the site of Rome’s greatest defeat: the Battle of Teutoburg Forest. You may wonder how the site of Rome’s greatest defeat could have gone missing, given the importance of Rome in the ancient world and the fact that this battle was hardly obscure and went on to have far-reaching effects for Rome and greater Europe. It’s an interesting story.

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The British gold sovereign is another coin that was designed and minted as a result of a politics.

People unfamiliar with the strife, plotting, unseating, and court intrigue that resulted when Henry of Bolingbroke, one grandson of Edward III, rose up and deposed Richard II, another of his grandsons, might be interested to know that the civil war depicted in the popular television show, Game of Thrones, is loosely based on the chaos of this period - the Wars of the Roses - in English history. For nearly a century, the country saw assassination attempts, imprisoned kings, secret marriages, brothers betraying brothers, and, of course, the famous missing and murdered Princes in the Tower.

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People often wonder why certain coins are so expensive and others are worth very little at all. Is there any rhyme or reason for this and can coin collectors in Grand Rapids and elsewhere predict at what prices specific coins will sell or auction for?

The answer is yes - and no. Like most everything in our economy, price is determined by supply and demand. This is a basic principle of economics. If there is an oversupply of bananas at the store, the store will lower the price in order to get rid of its inventory. In the case of bananas, the price will lower faster because of the short shelf life of the produce, but price can drop (or rise) suddenly for non-perishable goods like coins as well.

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Most people are familiar with the idea that certain coins are valuable in terms of money. They can be bought or sold and retain value based on their condition, scarcity, and design. However, not as many people think about the ways that coins serve history as evidence of human activity and behavior patterns, how they can establish dates for historians or archaeologists, or what they tells us about humanity’s changing values over time.

We mentioned this before when we talked about the Spanish piece of eight. The success and breadth of influence of the Spanish empire worldwide was partly due to this coin. When they found silver riches beyond imagining in Bolivia, this elevated the status of Spain relative to other countries in Europe in the world because silver was inherently valuable. It could be used to pay soldiers to fight Spain’s wars. It could be used to trade for goods and services other countries couldn’t bargain for. It could finance further exploration. The Spanish took their silver with them in coins wherever they went, and war and commerce followed. Any time a piece of eight is discovered in a dig site far, far from Spain, it tells you more about the might and influence of the Spanish.

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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.

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An American Civil War enthusiast who goes looking for tangible Civil War history in the form of coins might be disappointed to find out how few coins exist that relate directly to this conflict, particularly Confederate coins. This is the case for a number of reasons.

The economic character and position of the North was quite different from that of the South. Northern states had far larger and more populated cities, much more industry, and a more modern economy. Comparatively, much of the South was still quite rural, and its exports - cotton being king - were raw goods. The people of the South imported most of their manufactured goods, many of which were made in the factories of the North with immigrant labor.

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In the twentieth century the dollar became the global reserve currency when in 1944 the world’s developed countries met at Bretton Woods, New Hampshire and pegged the exchange rate of all their currencies to the U.S. dollar. Prior to that, most countries were on the gold standard which meant that, upon demand, they would redeem their paper currency for gold and kept enough gold in reserves to do so.

Eventually the United States abandoned the gold standard, when Richard Nixon completely untethered the value of the dollar to gold, but by then the U.S. had the most robust economy of any country in the world, so it remained the dominant reserve currency. Is there a country in the world where you cannot exchange dollars for the local currency?

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Before the Morgan dollar, or even the pinetree shilling, metal coinage existed in the American colonies. Much of it was coinage that had been brought over with the early settlers from their home countries, but one particular coin originated in the Americas and could not, in fact, have existed as it did except for the wealth found in the New World. This is the Spanish piece of eight.

If you know your American history, you’ll know that the English were not the first to explore North America. They were simply the ones who settled most of what is now the United States and Canada. Many countries in Europe were interested in finding and claiming new territories. These include France, the Netherlands, Portugal, and, of course, Spain.

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Previously we discussed the situation of coinage in the American colonies and how a shortage of coins led to the creation of the Pinetree Shilling by the Boston Mint. Here was a coin that came about because of necessity but was never officially accepted by the authorities in Great Britain. Political chaos caused by the English Civil War and its aftermath stalled any action, however, and the Pinetree Shilling continued to be minted in Massachusetts until 1682, long after Charles II became king. It was a highly useful coin.

Another colonial coin had the opposite story: it was conceived of not as a practical tool, but as a way to help the tin mining industry. It had at least the pending sanction of King James II, but it was very likely never in circulation due to yet another overthrow of the English Crown. This was the American Plantation Token of 1688.

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Sponsored by Democratic Senator from Nevada, Key Pittman, the Pittman Act of 1918 “authorized the conversion of not exceeding 350,000,000 standard silver dollars into bullion and its sale, or use for subsidiary silver coinage, and directed purchase of domestic silver for recoinage of a like number of dollars.” 

The main reason for the passage of this act was the need to finance the Great War in Europe. Wars require troops, armaments, and munitions, and all of that requires money. Gold quickly became scarce as all money of intrinsic value does during war, but America had quite a lot of silver dollars in circulation. There were far more than were being used for commercial needs, although eventually America’s entrance into the war did create a demand for all coins. 

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When people think about American money, they think about the coins and currency that are probably sitting in their wallets right now. It never occurs to many people that there weren’t always dollars and quarters, nickels and dimes. But, of course, American money has a history like every other tool out there, and before there was U.S. currency people still used money to buy and sell things. What did they use?

While every July 4th we celebrate Independence Day, it’s important to remember that the American colonies weren’t a country, per se, until after the Revolutionary War was well under way and delegates to the Second Continental Congress drafted the Articles of Confederation and Perpetual Union and then went back to their own colonies to see it ratified. This finally occurred in 1781. Remember, the war ended in 1783, and this needed to occur in order to manage military and monetary affairs, as well as to solicit the support from foreign countries needed to win the war.

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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.

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The coining of the Morgan dollar followed the Fourth Coinage Act of 1873 which demonetized silver bullion. The “Free Silver” issue is something Americans might have a hard time understanding now, but prior to 1873, people could bring their silver (or gold) bullion to the mint and, for a small processing fee, have it made into coins which would be worth their face value and could be spent.

At that time the ratio of the value of gold to silver was 16:1, meaning that 16 ounces of silver was considered equal in value to one ounce of gold. The problem was that, with increased mining of silver in the west, the price of silver was dropping rapidly, which meant that savvy bullion owners could take their devalued silver to the mint and, by having it made into coin, make a profit.

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b2ap3_thumbnail_fractional.jpgAmerican history has frequently been one of fads and extremes, and the fifth decade of the nineteenth century gives us another fine example: the California Gold Rush. While Americans had been moving westward almost since they put foot on Plymouth Rock, on January 24, 1848, at the time gold was discovered at Sutter’s Mill, what we know today as California was a part of Alta California, a Mexican territory. San Francisco was tiny; only 200 people lived there in 1846.

That changed almost overnight. Despite the fact that there was at the time no straightforward or fast way to get to the West Coast from the East, a flood of Americans and immigrants set off by ship traveling either all the way around the tip of South America or down to Panama, overland, then up the coast via the Pacific Ocean. Others drove wagons west on the California Trail. The influx of 300,000 people from all around the world created a number of problems, and one of them was currency.

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