Change is Good

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Louis Eliasberg, the Baltimore financier who died in 1976, famously collected U.S. coins, amassing examples of each denomination, type, year and mint mark ever produced. His extraordinary holdings included an exceptionally rare 1933 Double Eagle $20 gold coin. No coin collector since has accomplished his comprehensive feat—and probably no one ever will—but all recognize the single-minded passion that led Eliasberg to pursue so Herculean a goal.

The vast majority of coin collectors in the United States focus on U.S. coins, says Rodney Gillis, an educator at the American Numismatic Association, and most of them build sets comprising either one example of every type or of every year and mint mark for a single type. A great thing about coin collecting is that you “can do something very nice at lots of different price points,” says Gillis. “For $100 or $150, you can have a complete set of Franklin half-dollars,” a classic design, made from 1948 through 1963, that features the bust of Benjamin Franklin on the obverse and the Liberty Bell on the reverse.

According to Robert Korver, a director emeritus of Heritage Auction Galleries, which sells coins and other collectibles at its Dallas headquarters and other locations, as well as online, the numismatic market today is the “hottest it’s been in two decades.” He attributes the intense interest not just to high metal prices but also to the advances in Internet auction sites, where collectors can easily view images of coins before bidding. (In fact he credits the superhigh resolution of the pictures on Heritage’s Web site with making it the leading numismatic auctioneer.) As Korver sees it, the ease of buying online drives up demand, which in turn drives up prices. Harvey Stack, of the New York-based dealer Stack’s, cites too the extraordinary popularity of the U.S. Mint’s issues of commemorative coins, such as the series of U.S. state quarters, which was first released in 1999 and ends this year.

Rare coins in good condition can command truly stratospheric prices. At a July auction that Stack’s held in Baltimore, a number of early American coins fetched six-figure sums. And more than 20 U.S. coins are known to have sold for more than $1 million. Last year the California dealer Ronald Gillio arranged the private sale of a 1913 Liberty Head nickel, an alumnus of the Eliasberg collection, for $5 million. And in a joint sale in 2002, Stack’s and Sotheby’s sold a 1933 Double Eagle for $7.6 million, the most ever paid for a coin.

Designed by Augustus Saint-Gaudens, the celebrated 19th-century American sculptor, with the figure of Liberty on the obverse and a flying eagle on the reverse, the gold $20 coin was produced from 1907 through 1933. Most Double Eagles in excellent condition can be bought for less than $1,000. What makes the 1933 issue so valuable is that shortly after it was minted, the United States went off the gold standard, and the circulation of coins in this metal was outlawed, so the issue was never released. Most of the 445,000 coins were destroyed, but at least 10 are believed to have been stolen and sold by George McCann, the Mint’s chief cashier. Over the years, agents from the U.S. Secret Service recovered them. The one sold in 2002 was the last, put on the block in settlement of a suit against its owner, the British dealer, Stephen Fenton, filed by the federal government, which split the proceeds with him.

Another numismatic niche is ancient coins, typically either Roman or Greek. “They say that Roman collectors are interested in history, and Greek collectors are interested in art,” says the New York coin connoisseur Jeff Benjamin. “The Romans didn’t have newspapers, so when the emperor wanted to get a message across, he did so by putting it on the back of a coin.” The announcements might be mundane, like the notice of a tax reduction, or they might be celebratory, like the proclamation of a military conquest. Benjamin specializes in post-Republican Roman sestertii, bronze coins about the size of a half-dollar that were issued from the middle of the first century B.C. through the third century A.D. Prices range from $25 for worn specimens to more than $100,000 for ones in pristine condition, especially those produced for Nero, which are noted for their fine engraving.

Another hot area is Russian and Eastern European coins, whose prices have spiraled upward thanks to the acquisitiveness of the latest generation of post-Soviet gazillionaires. In February, Stack’s sold a 1621 Polish gold 100-ducat piece for $1.4 million—a “world record for a non-U.S. coin,” according to the dealer. Issued by King Sigismund III to celebrate Poland’s hard-won victory over the Ottoman Turks in the Battle of Chocim, the coin is 2.75 inches in diameter and weighs a whopping 12 ounces.

Benjamin advises those looking to enter the market at a relatively high level to “read the books first, then buy the best you can afford.” For ancient coins, he suggests Roman Coins and Their Values, by David Sear, and Coinage and History of the Roman Empire, by David Vagi. For U.S. issues, Gillis recommends the Official Red Book: A Guide to United States Coins, published annually by Whitman Publishing, which also produces the definitive guides to world coins and paper money.

Coin collectors, like collectors of anything else, need to be wary of forgeries. According to Paul Song, of Superior Galleries in Woodland Hills, California, coins and paper currency are targeted by counterfeiters at issuance, so age is not a reliable indicator of authenticity. Some contemporaneous fakes, labeled as such, even fetch decent prices at auction. The Stack’s July sale, for example, included 10 counterfeit coins and notes, among them a forged 1740 Rhode Island 20-shilling bill that fetched $4,600. In ancient coins, “you’re more likely to find fakes in gold than in silver or bronze,” says Benjamin. “Ancient gold looks like [modern] gold, while ancient silver and bronze acquire recognizable patinas.” Noting that there are various grading services that can authenticate and value coins, Stack nevertheless advises that “the best thing to do is go to a reliable dealer.”

Although the rise in bullion has driven up the price of mid-range coins, few dealers credit it alone with the field’s upsurge in interest. Most numismatists aren’t out to make a quick buck. Their satisfaction comes from building collections and acquiring rarities. “I carry with me in my pocket a 1923 gold Double Eagle identical in every way to the 1933, with the exception of one digit in the date,” says David Redden, the Sotheby’s auctioneer in the sale of the recordsetting coin. “It’s hard to distinguish between the two coins, but the difference is all the difference in the world.”

"Change is Good" originally appeared in the November 2008 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's November 2008 Table of Contents.