Is History Heating Up as a Market Factor?
BY PAUL GREEN
Some things are priceless, and historical value may very well be one of those things. We are all aware that certain coins hold a special place in history, and it is simply assumed that historical importance is factored into their price. Specific evidence of history playing a role in prices is hard to identify, but it appears that in a few cases we can see where historical importance may be playing a role in higher coin prices.
Back in June of 2005, an MS-64 1794 silver dollar became the 16th coin of the United States to realize a price of $1 million at auction. At that grade it had to rank among the top few 1794 dollars, but at the same time it’s not the best in most minds. What made the price interesting is that with the possible exception of a couple special examples, a price of $1 million has not regularly been suggested for that coin, even for Mint State examples.
The 1794 dollar was one of the first silver coins produced at the relatively new United States Mint. It was probably a mistake at the time, as officials decided to produce dollars even though their equipment was good only for coins the size of a half dollar. As a result, there was a very suspicious mintage of just 1,758 coins. The best guess is they probably tried to mint 2,000, and only 1,758 managed to meet what were very minimal quality standards. With its low mintage, the 1794 silver dollar (while not usually well struck) is historic and rare.
Given those circumstances, a nice 1794 is going to bring a very high price. The problem is that with perhaps 125 examples known in all grades combined, most had not considered the possibility that an especially nice piece might be a $1 million coin. That changed in 2005, perhaps suggesting that buyers are adding historical importance to an already very nice and elusive date. Much the same can be said of an MS-64 1776 Continental dollar sold at the same time. Its price of $126,500 was more than twice the previous record for the date (set in 2003), meaning the 1776 had soared in a very short period of time. The best explanation was that in two short years, someone had decided that historical importance made it worth a far higher price.
In a related vein, we saw the sale of an MS-65 1796 "No Stars" $2.50 quarter eagle for $1,380,000 at that same auction. This case was less clear simply because the coin, as an MS-65, was regarded by virtually everyone as the finest-known example of the date. That said, like the 1794 dollar, the number of known examples of the historic 1796 "No Stars" quarter eagle (the first produced by the United States) is high enough that most were not expecting even the finest-known example to top $1 million. Again, it appears that the bidders were attaching some significance not only to the fact that the coin was the finest known, but also to the fact that the coin was especially important and historic.
It hasn’t simply been coins featured at auction that have shown higher prices due to the possibility of perceived historical importance. When it comes to historically important coins of the United States, there are few in the same class as the 1793 Chain Reverse cent. This was the first coin produced by the United States Mint, which opened for business that year. It would be difficult to find a more historic coin than the first produced by the U.S. Mint.
There has always been some value given to the special place in history held by the 1793 Chain Reverse. That has to be the reason it has generally been priced at levels close to the 1793 Liberty Cap cent, even though the 1793 Liberty Cap had a low mintage of 11,056 (as opposed to the Chain Reverse total of 36,103). Those mintages translate into fewer available 1793 Liberty Cap cents today. If you look at grading service totals it is not a small difference, as they grade about 8 examples of the 1793 Chain Reverse for every one of the 1793 Liberty Cap.
Historically, the 1793 Liberty Cap has usually commanded a higher price. Sometimes the two types have been about the same, but if you look at some recent price guides, things have changed for grades like G-4, as some now put the more historic (but certainly more available) 1793 Chain Reverse at a much higher price than the Liberty Cap. That change can only be explained by a greater demand because of historical importance. There is just no other way to justify a higher price for the much more available Chain Reverse cent, as the numbers all suggest that the Liberty Cap should be significantly more expensive.
It’s hard to determine whether the trend will continue – perhaps even expand – but it is worth remembering that when you are considering a historic coin, its historical importance might very well factor in for a higher price. Just what historical importance may mean for a specific coin is difficult to determine, but it appears to be making a difference – sometimes a significant one! Some historical importance is priceless, and that could be very important in terms of both future prices and the availability of a coin you might want for your collection. For the time being, the trend seems to apply primarily to coins from the 1790s, but it could always expand to other issues. The 1856 Flying Eagle cent, while technically a pattern, has always been extremely popular because of its rank as the original small cent. Other issues, such as the first Morgan dollar, could also be considered historic. In every case, additional demand means higher prices are likely. It even opens the avenue for collecting coins of significant historical importance. A basic type set for the past century or even a complete U.S. type set could be assembled from the first dates of a specific type.
When it comes to history and coins, the two just naturally go together. If collectors start assigning a greater importance to the historical value of a coin, we might well see some fascinating changes in the future.