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Some Observations About Early Dollars – Part III

NSDR Journal

Vol. XVI No. 2

May 1999

Some Observations About Early Dollars

Part III

By John J. Haugh

            (Editor’s Note: The following is an excerpt from the Introduction of a soon-to-be-published book on Early Dollars by Jules Reiver. It is available through Krause Publications. This is the third of three articles that will appear in the NSDR Journal. We are thankful to John Haugh, Jules Reiver and Jim Stoutjesdyk of Heritage Rare Coins for allowing us to present this sneak preview to our readers.)

UNCERTIFIED (“RAW”) VS. “CERTIFIED” EDs

            The argument between proponents of uncertified (or “raw”) and “certified” (coins encased in plastic holders, graded by “independent” services which issue limited guarantees) will probably never end. Though the early copper collectors are the most vocal of collector groups opposed to these “holders,” ED enthusiasts are a close second. Many ED collectors are specialists remain adamantly opposed to “certification.”

Certified proponents argue holders have reduced counterfeits, made grading more consistent, and have curbed the tendency to “buy the coin as VF, sell as XF-AU,” as well as given collectors and “investors” more confidence. Opponents of certification argue the process siphons needed money from the hobby, leads to “holder worship”, encourages hair splitting between grades and encourages “coin doctors” to make minor adjustments, then cover up their handiwork through adding artificially dark toning (or other “masks”), and have coins upgraded by services. Moreover, many ED collectors – especially those used to being able to “handle and feel” their coins, as well as examine the rims and lettered edges – believe strongly that holders inhibit the joy of owning and examining them.

Holders do preclude the examination of the edge lettering and the outer edge of the rims. A number of collectors will buy EDs in holders, then “crack” them out. Each side’s vocal advocates can recount anecdotal, true horror stories to back up their positions. Opponents of certification can, for example, point to certified coins sold by reputable auction houses as “AU” which are now in “MS” holders. Proponents can recount true incidents of uncertified EDs catalogued as AU – or sold at that grade by dealers – which later proved to be holed and plugged, clearly a lesser grade, or even counterfeit.

This writer belongs to neither camp, buying, selling and stocking both uncertified and certified. The most sensible alternative is to follow the maxim “buy the coin, not the holder.” The trend of the market clearly favors certification for more expensive and scarcer coins. But, as one wry observer quipped recently, “they (the certification services) won’t really prevail – if ever – (with regard to EDs) until there’s an awful lot of funerals.”

I found it both perplexing and amusing to recently watch a self-proclaimed “sophisticated” collector carefully examine certified Draped Bust Dollars from only two services (PCGS and NGC). After much time spent studying several coins under magnification, he paid a premium for a lovely 1800 in a NGC holder. Then he loudly announced he “despised” holders, explaining he would “crack” the coin out of the NGC holder. Yet he had completely ignored uncertified specimens and ANACS certified coins of the same variety – clearly of better quality – at less cost in the same case. That collector, a nationally prominent expert in his own field of endeavor, who has collected and studied EDs for over two decades, was relying on the judgment of others (graders), who may have half his knowledge and experience.

HAVE WE SEEN “INFLATION” OR “DEFLATION” OF EARLY DOLLAR GRADING OVER THE PAST 15 YEARS?

            Some specialists, who have carefully followed the Flowing Hair/Bust dollar series over the past three to five decades, can easily document their argument that grading standards have “relaxed” or “loosened” over that time period. They point to examples of EDs appearing raw in sales, especially from 1930 to 1980, graded XF to AU then, which are now in certified holders, 10 to 15 points higher. Opinions vary as to why this has occurred. The converse is also true. Those who contend that grading standards have in fact “tightened” can point to examples previously graded (uncertified) as “AU” which are now in VF/XF holders.

There is much truth to the generalization that certification services were more conservative 10-15 years ago than now, though there are notable exceptions, as with all generalizations. Some ascribe the trend to a “conspiracy” where certification services routinely loosen and tighten standards simply to induce more “resubmissions,” thus increasing their fee income. Some point out wide discrepancies between the same varieties, clearly of the same quality, from the same service, suggesting greed, avarice and/or favoritism. Other point out that grading is part science, part art, with much of it being subjective, contending that some dramatic discrepancies are the result of grader inexperience and/or grader “turnover” at the services.

Compounding the controversy, some “coin doctors” can enhance the look of high grade coins, including EDs, which have lots of detail (they say “meat”). A coin this writer sold in one holder as AU50 (a fair grade) was show to me four months later in an AU58 holder (different service) toned much darker. Laser technology, powerful scopes, miniature tools and “luster enhancing” chemicals are sometimes used to try to “upgrade” a coin. But, such efforts also often fail, or result in a lower grade. Nevertheless, view “certified” EDs – especially those graded AU53 to MS63 and darkly toned – skeptically and carefully. On the other hand, many darkly toned, high grade specimens became that way naturally because of age and/or environmental factors.

Other notables, including Bowers, contend that grading has in fact “tightened” since “certification” took hold leading to more careful scrutiny, better standards and more uniformity. They can point to numerous examples to prove their point. This writer remains neutral on the point, though in agreement with most of the arguments made by stalwarts on each side of the issue.

Though many “conspiracies theories” abound, I have yet to meet a professional grader or cataloguer who did not convey a genuine dedication to doing the best, most accurate job possible. My personal belief – certainly not shared by all – is that much alleged “grade inflation” in the ED arena is primarily due to more experience and knowledge about weak strikes, imperfect planchets and other “flaws” found in the Flowing Hair/Bust dollar series, as well as to graders seeing more examples because of increased volume/turnover (compounded by air travel and “overnight” services).

HOLDER ENVY

            At the moment (early 1998), the pecking order among the competitive services – in terms of collector/dealer interest – is PCGS, NGC, ANACS and PCI. In a perfect, sensible world, all experienced collectors should buy the coin for its strike, eye appeal and overall condition, regardless of status (certified or uncertified) or holder brand. The true ED specialists, who have labored “in the vineyards” for years (or decades) largely follow the sensible precept “BUY THE COIN, NOT THE STATUS (CERTIFIED OR UNCERTIFIED) OR HOLDER BRAND.” Regardless of which “service” one prefers (or abhors), all should give careful consideration to that precept, more often spoken than followed. “Novices” understandably prefer “certified” EDs because they do come with a limited “guarantee.”

Much of the special “cachet” given to PCGS and NGC holders is due to innovative marketing and advertising. Although ANACS is generally placed “third” in the dealer/collector interest “pecking order,” some who see the most EDs concede (privately) that it is the most “consistent” grading service with regards to EDs. Some of the best “buys” this writer is aware of come when specialists “cherry pick” EDs in PCI holders, though some react to that “brand” holder as though it contains a dangerous contagion. The best possible advice remains the same as always: BUY THE COIN, NOT THE HOLDER!

CLEANED AND DIPPED EARLY DOLLARS

            In the early years of coin collecting/accumulating, it was a common practice – indeed, encouraged, — to lightly clean and/or lightly dip coins. This was routinely done to remove dirt, grime, debris and ugly toning, as well as add “luster” and/or improve “eye appeal”. As the United States’ oldest dollar coinage, most EDs have been subjected to at least light cleaning and/or light dipping one or more times in their 200-year (plus or minus) history. On various occasions, light burnishing or “whizzing” was even considered acceptable or tolerable. As tastes changed, and a more sophisticated understanding and appreciation of coins in their “natural” state became the norm, those practices have gradually come to be considered inappropriate to unacceptable.

Contrary to popular belief, all services will holder and grade (without “net grading” down) Flowing Hair and Bust dollars which have been lightly cleaned and/or lightly dipped. They generally draw the line at coins where the cleaning/dipping has been conducted in such a way that the fields have been damaged (“hair-lines” visible under low magnification, fields dull and/or lifeless because of harsh treatment). Some insist the distinction is “without a difference.” Others argue a line “has to be drawn somewhere.” This writer surveyed 14 collectors and dealers who see and handle a large number of Flowing Hair and Draped Bust dollars, asking two simple questions, for both certified and raw examples:

Question                                                                                 Answers Average

                                                                                                Raw                             Certified

(1)   How many EDs have been

lightly cleaned at one time

in their past?………………………………………………………79%………………………………76%

(2)   How many EDs have been “dipped”

at one time in their past?………………………………………74%……………………………….71%

As can quickly be seen, those who are most knowledgeable feel nearly all EDs have been lightly cleaned and/or lightly dipped at one point, whether “uncertified” or “certified.” With combined (cumulative) ED experience of over 350 years, once can assume the consensus of those 14 is close to reality.

A good number of surviving EDs have, at some point, been harshly cleaned (leaving hairlines and/or disturbing the “fields”). Most services will not “holder” these. Others will “net grade” down to what they perceive the market level to be at that time (e.g. “XF details, cleaned and tooled, net VF25), or note the specific “defects.” Nevertheless, as one witty ED specialist observed, “I Scoop those up too, especially the R-5 or higher, often move briskly, usually at a premium. Common varieties (R-1 to R-3) with similar defects trade at a discount. Nicer EDs, in general, trade well above “graysheet” bid prices.

The editors of the COIN DEALER newsletter (popularly referred to as “the graysheet”), whose figures are obviously below the “real market” for better specimens, defend their figures as a “fair average.” They point out that EDs are scarce, infrequently appearing on electronic bid/want/ask services or in auctions (even “major” ones).

It is certainly true that there are so many variables, varieties and different rarity ratings within specific years that averaging prices for EDs would be a daunting task. Simply be aware it is nigh impossible to buy better quality EDs at or below “sheet,” as they trade above “graysheet” averages – often at large premiums – depending on condition, eye appeal and rarity.

The few “coin doctors” who employ advanced technology to make minor changes to EDs coins and/or add “luster” to surfaces, often attempt to cover evidence of their handiwork. Most graders, acutely aware of that practice now, more closely examine coins with a high grade “look” but unusual or overly dark toning, rejecting many. A few nevertheless slip through, and a good number of “upgraded” EDs (especially those graded from 1993-97) remain available in the market. Before purchasing “darkly toned” EDs, or those with “unusual” coloring in high grade holders (AU55 to MS63), examine carefully under a binocular (some use a “spectrum”) scope, or have a specialist do so for you.

DAMAGED, RETOOLED AND REPAIRED EARLY DOLLARS

            A good number – experts opine 20% to 35% of the Flowing Hair and Bust dollars which survive – have been damaged or abused, then reworked (holed and later plugged, initials or scratches removed, weakly struck and/or worn areas “enhanced,” as well as “messed with” to improve denticles and mask or eliminate “rim dings”). Most such prior handiwork is obvious, under magnification or binocular (some use a “spectrum”) scope examination. Major auction firms usually take great care to carefully describe such tampering, to avoid coins being returned and to protect their reputations. The same is true for most dealers specializing in EDs. Despite care, some slip through such scrutiny and end up in the holders.

In general, EDs with such damage and repairs trade at a discount, especially the more common varieties (R-1 through R-3). Those quite scarce or truly rare (R-5 through R-8) often trade more briskly, even though damaged, abused and/or expertly (or crudely) repaired. The elusive 1794 trades quickly, regardless of defects. Some holed EDs have been so expertly plugged that the repair is virtually impossible to detect, especially when retoned (naturally or artificially). EDs with graffiti (initials, scratched Xs, name of ships, etc.) are heavily discounted, but some collectors actively seek those with lovely counterstamps, initials and/or major defects.

COUNTERFEITS

            Counterfeit EDs are encountered, especially the 1794 Flowing Hair, the 1799 Draped Bust, and the 1804 Novedel Draped Bust (many 1801s have been re-engraved to make the “1” a “4”). Some counterfeits are quite remarkable, blessed as genuine by advanced experts (see Reiver’s discussion of two identical 1794s, each with ANA authenticity certifications, one of which is obviously a near perfect replica of the other, in the text of this work.) Some counterfeits have the exact weight, fineness and size of genuine counterparts, achieved by melting an inexpensive common variety and producing a perfectly genuine “planchet.” That planchet is then used to replicate a rare date or variety. Fortunately, such unusually expert counterfeits are themselves quite scarce. Any reputable dealer or auction house will promptly reimburse purchasers of EDs – later shown to be counterfeit – in full.

Seasoned ED veterans uniformly advise all to examine the purchases and known who they are dealing with. On the other hand, when offered true rarities in ED series at price levels absurdly below market, one should skeptically and critically examine the proposed purchase, obtaining independent opinions.

This writer suggest readers not allow the few downsides of the fascinating and exciting Flowing Hair and Draped Bust dollar series (which is the case for all “type”) interfere with the joy and challenges it presents. EDs occupy a special place in the history of our country as well as the evolvement of our coinage system. They are perhaps the most fascinating “type” one could focus on and will give the “casual” collector, the “advanced” collector, as well as the “specialists” much joy and fascination.

SPECIAL NOTE REGARDING RARITY RATINGS

            Rarity ratings are the considered judgment of the person compiling them based on personal observations, the considered opinions, the considered opinions of colleagues and those colleagues the compiler respects. They are both “subjective” and “objective”. As more collections and individual specimens have come onto the market, and have been sold through the auctions, (being carefully described and/or photographed) rarity ratings have changed (up or down) over the years. They are “fluid,” always subject to revision. The rarity ratings used throughout this discussion were developed by W. David Perkins of Colorado, a noted ED specialist. They reflect his latest opinion, as of the Spring of 1998. I find them reliable and consistent with my own experience.

SOURCES

BOOKS AND LITERATURE

Bolender, M.H., The United States Early Silver Dollars, From 1794 to 1803, Reiver Revision, 4th Edition, Krause, 1958

Bowers, Q. David, Silver Dollars & Trade Dollars of the United States Vol. One, Bowers and Merena Galleries, Inc., 1993

Breen, Walter, Complete Encyclopedia of U.S. and Colonial Coins, Doubleday, 1988

Bressett, Kenneth E., The Baffling Case of the Plugged Dollars, The Numismatist, March, 1993

Bressett, Kenneth E., 1795 United States Silver Dollar with Official Plug, paper delivered to American Numismatic Society, Oct. 30, 1993

Coin World, numerous issues, 1969-1997

Haseltine, John W., Type-Table Catalogue, in Haseltine Sale Catalogue, 1881

Numismatic News, numerous issues 1973-1998, Krause Publications, Iola, Wisconsin

Pilliod, Chris, 1795 Half Dollar with Center Plug, Privately published, August 1997

Rare Coin Review, numerous issues, 1984-1998, Bowers and Merena, Wolfeboro, N.H.

Raymond, Wayte, Descriptive List of Die Varieties of Early Silver Dollars, Coin and Medal Bulletin, 1916

Yeoman, R.S., Guide Book to United States Coins,1997 Edition, Whitman, 1988

INTERVIEWS

Extensive interviews were conducted with dozens of coin dealers, Early Dollar specialists and numismatic historians (some of whom wish to remain anonymous). Among the individuals interviewed: Jules Reiver, W. David Perkins, Jim Matthews, Russell Logan, Lano Balulescu, Chris Pilliod, Martin Oghigian, Tate Chesbrough, Bob Merrill, Jim MCGuigan, Martin Mansfield, Steve Fischer, Mark Borckardt, Jack Beymer, Rob Retz, Coleman Foster, George Eggimann, and David and John Feigenbaum. Although indebted to all of the above (and others), the author is especially grateful to Messers, Reiver, Perkins, Matthews, Oghigian, Borckardt and McGuigan for their sharing of insight and experience. The opinions expressed above are mine, not theirs. Undoubtedly, each would dissent from one or more. As a noted numismatic historian once exclaimed, “Differing opinions help keep the hobby interesting.”

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