Coin-heads, Coin Tales, and a Bad Penny
When did I became a coin-head? It must have been the summer of 1943 or ’44, age eight or nine, at ELHEDO Lodge, my Grandparents’ picnic grounds on Lake Moraine in upstate New York. The older three of we seven cousins (I just made the cut) collected entrance fees of fifty cents per car. A driver handed me a Columbian Exposition commemorative half-dollar, dated 1893; I'd never seen such a coin. Grandma allowed me to keep it.
Or perhaps it was when I got an Indian head penny in change, around 1946 or so; Mom gave me a Whitman Penny date folder and I was hooked.
Why do we collect coins? There are coin-heads even older than I. The old Romans collected coins -- of Greece, Corinth, Lydia.
Why? Because coins have value, have history, and have artistry. One can't ignore a coin. Maybe, as I, you even reflexively stoop to pick up a penny. No? Certainly a dime.
The earliest metallic coinage system was Lydian, around 650 BCE. Their coins were of electrum, a naturally occurring amalgam of silver and gold that was the basis of Croesus’ fabled riches.
Ancient coins show us a societies’ values, what gods or rulers mattered to them, even what their rulers looked like. We would not know how ugly Leopold of Hapsburg was were it not for the need for his coins to have authenticity if Austrians and their trading partners were to trust the coinage. Leopold’s portrait painters flattered him and minimized his “hogmouth.” But not his coin designers.
Pedestrian, cluttered coin designs are the norm, but there are beautiful coins, too. Among universally admired are the Greek Tetradrachms. Here is Athena, (about 440BCE) Goddess of strategy and wisdom, she in her war helmet as guardian of Athens and in her manifestation as the Owl of Wisdom. As such, she even made it into Winnie the Pooh. I admire even more this Carthaginian Drachma (330BCE) featuring their goddess of the seas, Tanit, surrounded by her dolphins, wearing pearls, her hair more like seaweed than curly locks. The reverse features the Arabian stallion on which the Carthaginians conquered northern Africa.
Favorite American coin? Most people choose the $20
gold piece sculpted by St. Gaudens. But
I prefer the more elegant Buffalo Nickels (1913- '38) designed by James Earl Fraser. The nickel unintentionally but cynically “honors” a culture we tried so hard to exterminate while stealing their lands and driving the buffalo
to near extinction. It is undeniably beautiful, preaching simply Liberty and
E Pluribus Unum (further cynicism?) without the sanctimonious In God We
Trust.
So I am a coin-head. In high school, I did a
semester-long research project on the founding of the US mint. Paper currency
was distrusted and coins were scarce; we used the Spanish “dollar”, the 8-Reales,
as legal tender (and still legal tender as late as 1858.) People literally split it into eight “bits” for small change (hence our “2 bits” or 25₵.) Issuing our own coins was essential
to our commerce and esteem among nations. Both Jefferson and Hamilton gave it
top priority; Washington promised action in his first State of the Union report
to Congress in 1790; informally he promised that US coinage would be underway
by the end of his first term, fall of 1792. In April of ’92 the Coinage Act was
passed. The mint building was competed and equipment installed, but what about the copper or silver? A $10,000 bond was required to get underway and Congress was
dragging its feet on appropriation to buy sheet copper. Hamilton, Jefferson and
the President wanted something more impressive than just copper cents and half
cents. A coin of silver! It would not only impress but also produce a profit: seigniorage it’s called, the difference between the cost of making a coin and
its face value, and seigniorage is kept by the mint. (Yes, mints make money
making money; the US mint generated a $318mm profit in 2019.)
It’s probably an apocryphal story, but a charming one: Martha and
George sent over to the mint one of the many silver tea sets admirers had
showered on them. The silver melted down
and minted gave Washington silver half-dismes (pronounced deems) to show, the
first coinage of the USA. Newly minted half-dismes were handed out personally
by Jefferson to his Republican admirers, by Hamilton to his Federalists, and by
President Washington to friends and Senators; the bulk were released into
circulation. So if a collector has one, as I did – read on – he may have had a
coin that once lay in the palm of one of those three seminal Americans. A mint condition 1792 Half-disme once owned
by first Dir. of the Mint, David Rittenhouse, sold at auction in 2018 for $1,985,000. Not bad for a 5₵ piece.
What determines collector coin value? Demand, i.e., how
many collectors lust after it; rarity, i.e., how many were minted and
how many survive; and condition, i.e., is it badly mangled, just worn
away, nearly new, or bright as a penny just out of the mint? The price
difference between a worn, circulated example and one in mint-condition can be
tenfold.
There are any number of ways a collection can be organized; most
common for kids are date and mint sets of a particular design, like my Lincoln
Head pennies. My 1909 – 1960 Lincoln date and mint set was complete, in part by
having spent one whole Saturday with a friend, son of the President of a small,
Maryland bank, going through sacks and sacks of pennies, every penny in that
bank. We found several we needed and upgraded worn examples we had, thrilled
when we discovered a penny worth $2 or $3 or so. I sold that Lincoln set in
1961 to help pay for birth of our second child, Steve. It brought $360; it would sell today for
about $2,700.
A second sort of collection, the Type Set, contains one example of
each design of coin. I set out to build a type set of US copper, silver and
base metal coins (no gold.) Before 1999, when the mint went wild honoring states and national parks on the reverses of
quarters, new ones every three months, a complete type set would be around 80 coins depending how one defines a distinct type. By the late 1980s, I had acquired 71 of them, including #1, my prize, an extremely fine example of that 1792 Half-disme. I didn’t complete the set because it would have taken more than $240,000
to do so back then (I had three kids, a large mortgage and college expenses
coming; later, divorce intervened.)
This is the mint-perfect Rittenhouse specimen that sold for near $2mm two years ago. Its hurried design was derided: Ms. Liberty looks a fright and the eagle more like a chicken. But note its serious motto. LIB. PAR. OF SCIENCE & INDUSTRY: liberty, parent of science and industry. These were the values our secular, founding-father-Humanists held dear.
My example, far less valuable of course, still accounted for more than 50% of the proceeds when in 2000 I sold the collection to help Ann buy a retiring Dean Witter broker's business.
On the other side of the counter: I ventured into serious collecting under the tutelage of two remarkable numismatists, David Bowers and James Ruddy. In 1972, as Director of the US side of General Mills' Craft, Game & Toy Div., I explored and then engineered the extension of our hobby interests into collectables. The coin and stamp businesses were predominately single-proprietorships, former hobbyists who found they could make a living buying and selling. Among the few exceptions we found a mass market stamp, album and accessories firm and a unique coin dealership, Bowers and Ruddy Galleries. Dave Bowers and Jim Ruddy had become industry leaders by developing widely-adopted standards of grading, creating a high-speed process for accurately photographing and enlarging illustrations of coins, publishing high-quality, quarterly mail order catalogs that were almost textbooks on numismatics, and by earning an impeccable reputation for integrity.
The Redfield Hoard: In 1974, rumors swirled through the gossipy coin dealer world that a hoard of rare silver dollars had come to light, sort of, and that a sharp Hollywood dealer had connived to get a hold on the secret hoard. In Reno, a local eccentric, LaVere Redfield, had died. Belying his looks -- unshaven, always in jeans and old flannel shirts, always driving a beat up Chevy truck -- he was a shrewd real estate investor in Nevada farm land and a high-roller at the local casinos. Redfield distrusted both government (he had served time for tax evasion in the '50s) and banks. He converted his real estate profits into silver dollars, common currency in Reno because of the casinos, and took his gambling winnings in silver dollars. Bank bags of silver dollars held 1,000 and weighed over 60 pounds. Redfield would truck them home and slide them down a coal chute into a coal bin which he walled off inside the basement. When his heirs broke into the old coal bin they found over 400 bags of silver dollars with instructions: don't tell the IRS about these coins! In all, of the 407,600 silver dollars, more than half were alleged to be uncirculated.
The dealer, Steve Markoff, had convinced the probate court that the hoard would break the market if it were known what numbers, dates, mint marks and condition it held. He petitioned the court to allow the estate to make a private deal under a provision of Nevada law that allowed quick sale of an estate's perishable commodity, like a load of tomatoes or something, avoiding probate delays. Markoff had apparently struck a deal with the estate at around $3mm, grossly undervaluing the hoard. Other dealers protested and the court ordered that an auction be held. But the court played Solomon and cut the baby in half: bidders were told how many coins and of what designs were in the hoard, but not what dates, mints, and conditions. Would-be purchasers, except fpr Markoff, would be bidding nearly blind.
From the sheer volume and what the trade knew of Markoff's search for capital, they surmised that to bid would take more capital than these sole proprietors could muster; they turned to Bowers and Ruddy because they assumed, correctly, that we had access to the deep pockets of General Mills. After much hemming and hawing, for coin hoards were certainly different from gunning Cheerios, I wangled authorization for up to $7mm to be gambled on purchasing the hoard. An armed bank dick accompanied the certified check, and me, to the Reno court house. Only Markoff and we; the bidding rose to $7mm; I went to $7.2; Markoff got it for $7.3mm. He parceled it out over the next two years through a number of sub-dealers, not including us, of course. In the meantime, Jim and David were framed as pirates, GMI as an interloper to the tight little clique of coin dealer entrepreneurs. We estimate that over two years the hoard generated more than $13mm in sales, setting up Markoff with a capital nut to eventually enter the film world and become a would-be mover shaker in Hollywood. Jim took his fall from grace particularly hard; for David, the numismatic scholar, it was a bruise soon healed. For me, General Mills soon offed me into a new role.
The bad penny turns up again: two years later, Markoff had the chutzpah to sue Jim, David, General Mills and me for $10mm for business interference! Imagine: we had increased the value of the estate to its heirs (and to the Nevada IRS) by some $4mm! We should have been lauded, not sued. Anyway, the case was thrown out of court, but only after nasty depositions about who had leaked Markoff''s insider deal.
I was looking forward to the 1980 Moscow Summer Olympic Games especially since Wheaties always featured an American gold medalist. But little did I know what I was in for. In January of '77, David called. He had received an invitation, almost a summons, to appear two weeks hence in Moscow at the Vneshtorgbank, the Soviet Bank of Foreign Commerce, to present proposals for marketing and distributing in the West the commemorative Russian Olympic coins. Commemorative Coins are a big deal to Olympic organizers, a major source of incremental earnings. And Moscow needed earnings. What should we do asked David; who should I talk to? I huddled with my old mates and we decided that David, a GMI lawyer (another David), and I, since I knew more about coin collecting and marketing than most in Minneapolis and had gotten GMI into this strange coin dealer world, should head off to Moscow and see what was up. After a scramble in Washington to get visas, after long flights, I found myself walking at midnight in Red Square in a light, February snow fall. Magical: could Eleanor Waller ever have imagined her son could be here?
The next day we presented ourselves and closeted with three officials, one the young program manager who spoke good English, the second his boss who had some English, and the third an associate who neither spoke nor understood English and who sat silently at a desk in the corner. It became evident that they were not interested in our advice; the coin denominations and metals were set, the prices were set, the sales goals by country were set. The only things they wanted to know was how much we'd pay for the contract and what quantities of sets should be packed in each shipping crate -- 24, 36, 48 or what? We went to lunch. Neither David drank so I said I'd handle the toasts and they'd stay sober for the afternoon. The vodka appeared, the toast proposed, and I manfully tossed off my tumbler of vodka; then became aware that the ten officials hosting us had taken but tiny sips of their glasses. Ah, so. I did not get too soused for the afternoon discussion in which we asked lots of questions about production, packaging, design and so on. Back at the hotel and over dinner that evening we agreed that this was not for us. But having come this far and feeling responsible to the hobby and to Soviet/US relations, we decided to give them our best advice. We worked until 3am on our presentation of what we thought a Russian Olympic Commemorative Coin program should be.
The next morning, I explained that we felt we were not the right partner, but we would give them our best assessment of the market and our best advice. They politely listened. We started with product: their plan was to make the largest value coin, the lead item, out of platinum. David advised against it. Platinum coins are grayish and collectors less interested in them, preferring gold and silver. We also suggested a different make-up of sets. The program manager became agitated; his boss seemed to enjoy his discomfort. Next we turned to sales goals, which we felt were way overly ambitious in light of their intention to limit sales and distribution to foreign markets and to deprive Soviet citizens the right to buy the commemorative sets. The program manager protested that North American markets had been very strong for coins of the '76 Montreal games. I responded by pointing out the strength of Canadian sales, i.e., the home market. The Treasury in Ottawa had just released their final report on the Montreal coin program, a report replete with data on sets and individual sales, sales by market, and so on. I reached into my brief case and withdrew the report while asking had they yet seen the report. Yes, yes the increasingly agitated program manager answered. I'd be happy to leave this with you I said; no, no -- we have it said the program manager, whose brow shone with perspiration. I started to put it away when the silent third man wheeled his desk chair into the middle of the room, stretched out his hand, and said "I'd like to have that report, please."
The meeting ended soon after and we took our leave, wondering what damage we had done to the career of that earnest though wishful program manager. The Davids headed home. I took advantage of being in Russia and arranged for a long weekend in Leningrad. That, too, delivered a set of memorable adventures -- but for another time. My souvenir sample Olympic coin our bank hosts gave each of us was confiscated by Russian Immigration when the night train to Helsinki stopped at the Finnish border. The officer duly gave me a receipt -- in Russian of course. (Night Train to Helsinki-- that might make a good title for another post about wandering alone one February in Leningrad.)
The point is . . .
. . . these adventures came my way because I had been a coin-head since childhood and probably always will be -- at least until I get hit by a bus someday, bending over in the street to pick up a penny.
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