One of our first videos using Hangouts On Air with the help of John Ellis from SEOWise.co where we talk about rare coins – the Carson City Morgan Dollar – a topic covered in one of our earlier blog posts. We are trying to put together more videos like these where we get into the facscinating topics of gold, silver, jewelry, diamonds, coins, and other things. You can check our CanadaGold YouTube Channel: http://goo.gl/slSqOj
In What Makes a Coin Valuable we found out that there are several different things to consider when evaluating coins. There are the niddy-gritty details that numismatists look for such as condition, toning, and rare varieties, but most of the time, a coin is considered valuable because there aren’t a whole lot of them. In other words, we are considering their availability or mintage
More supply, less value. Less supply, morevalue
Most currency coins have a very high mintage because they are meant to supply an entire country with them. And because there are so many being made each year, often a country will have coins minted in different locations. To indicate the different mint facility, the coin will be stamped with a mint mark, and these variations can add value because they are unique to other coins of the same type.
A great example of this is the historic U.S. Morgan Silver Dollar (above). Minted between 1873 and 1904, and briefly in 1921, the Morgan Dollars were made to be silver trading dollars. After 1904, silver reserves ran low and the U.S. mint stopped making these coins. Many were taken out of circulation and melted for their silver under the 1918 Pittman Act, and others were kept in the U.S. Treasury’s vaults, thus never seeing the light of day. It’s relatively short life-span made it a sought after coin for collectors. However, one particular Morgan Dollar rises above the rest in terms of value and collectibility: The Carson City “CC” Morgan Silver Dollar.
Carson City Mint 1870-1893
Carson City, Nevada was one of five mint locations along side Phildelphia, San Francisco, New Orleans and Denver that was producing the coin. Carson City was built because of the Comstock Lode discovery in 1859 – the largest gold and silver mine in U.S. history. This alone made Carson City a major city during the frontier gold rush, a time of the Wild West, economic expansion, and the U.S. Civil War. Some of the mined gold and silver was sold to the Carson City Mint, and minting began in 1870.
Each mint facility had their own mint mark: No mark for Philadelphia, “S” for San Francisco, “O” for New Orleans, “CC” for Carson City, (and “D” for Denver for the 1921 Morgan Dollars).
What was so special about the Carson City Morgan Dollar? What made it stand above the rest? A lot of this story comes from its mintage, and what happened to the Carson City variety after the Morgan Dollars were taken out of circulation. There were only twelve minting years in Carson City (1878-1885, 1889-1892) and the mint facility was poorly equipped compared to the other mints, thus far fewer were made suitable for circulation. Once the Morgan Dollars were taken off circulation, many were melted down, while others were stored in the Treasury’s vaults. It wasn’t until the 1960s when the Treasury finally opened the vaults to collectors and started selling the Morgans for face value. The Carson City variety, however, were held back because of their particularly low mintage numbers. The General Services Administration was invited in the early 1970s to oversee the management and sale of the Carson City Morgan Dollars, and because of their mint-state, rarity, and historical significance, they became sought after and extremely valuable.
The Carson City Morgan Dollars range between $200 and $4000 depending on the year. Certain years have very low availabilities (or survivabilities) such as the 1879, 1889, 1892 and 1893. By all means, this is not the rarest of coins, but they do hold considerable value to collectors wishing to complete their set of Morgan Dollars. If you have a Morgan Dollar and want to see where it stands, check out Amazon’s Coin Store.
At one point in time it was very common to see circulated silver coins. On January 2nd, 1908 when Canada opened its first Royal Mint in Ottawa, the “first coin” (half-dollar) was a silver coin (92.5% silver/7.5% copper). From then until the late 1960s, Canada, much like everyone else, produced silver coins, with exception to the penny (bronze) and the five cent (nickel). But the 1960s marked the death of silver currency coins. It wasn’t just Canada, but most countries around the world were making nickel or copper-nickel coins.
Seeing a silver coin nowadays is a treat. They have become collectible pieces where their numismatic (collectors) value and silver value are far higher than its face value. What happened in the 1960s? Where did all the Canadian silver coins go?
The beginning of the end of Canadian silver coins can be traced as far back to World War I. The reason for this is because the silver content in coins depended on the spot price of silver. Between 1908 and 1919, Canadian silver coins were made with 92.5% silver. However, after 1919 (the end of WWI), almost all Canadian silver coins contained 80% silver.
Looking at the graph below you can see that between 1914 and 1919 the price of silver jumped from $0.50/oz to over $1/oz.
In other words, the war’s affect on silver prices influenced Canadian silver coinage. Up until 1922, the five-cent coin was originally made with silver, but was converted to nickel (hence its name) to reduce the cost to make the coins.
Although silver prices dropped in the 1930s ($0.25/oz in 1932), this did not mean that Canadian coins would revert to 92.5% silver or that the five-cent coin would once again be made with silver. After the Great Depression and World War II, silver prices would begin to climb again, marking the next stage in the death of the Canadian silver coins.
The silver prices use the headline Consumer Price Index (CPI) with a base of January 2012
In 1968, Canadian silver coins would take another hit to their silver content, going from 80% to 50%. Once August rolled around, it became prohibitive to mint silver circulation coins, thus all circulation coins were made with nickel or copper-nickel. Overall, the rise in silver prices had some effect on limiting its use, not just for coins but also for manufactured goods. Not only was it more expensive to use silver in coins, but the demand from silver investors encouraged the metal to be allocated more toward bullion than secondary resources.
Since 1968, the only Canadian silver coins we see are either commemorative coins or bullion coins. The bullion coin—the Canadian Silver Maples (below; left)—are worth their weight in silver, whereas the commemorative ones, like the 1976 Olympic coins (below; right) are collectibles, and are worth more than just their silver value.
Although rises in silver prices killed Canadian silver circulation coins, they have also made them worth far more than their face value. For example, a 1950 twenty-five cent coin is worth roughly $2.50 today. That’s 100 times it’s face value!
Next time, we will talk more about the Canadian commemorative coins. If you have any questions, leave a comment.
What’s the difference between a 1918 Canadian 50-cent coin and a 1921 Canadian 50-cent coin? Easy answer: 3 years. Informative answer: the 1921 is far rarer (suspected that only 75 exist), and is worth 25,000 times more (estimated to be worth $249,000 USD).
Of course, that seems obvious enough. Besides rarity, there are other aspects which can determine a coin’s value. To coin collectors where hundreds and thousands of coins are out there to be acquired, the difference between one coin and another can come down to the smallest detail, and yet can differentiate their values immensely. Mintage/supply, grade/condition, toning, composition, and rare variations/errors are factors within the discipline of numismatics (study of currency) that effect the value, and that coin collectors consider when they seek out rare coins.
If you have a coin and you want to see if it’s a rare coin, checking the mintage and the number of currently available coins is your first step. Mintage is the number of produced coins. Using the economic principle of scarcity, when there is a high supply of a particular coin, it’s not worth a lot because there are plenty to go around. This is why most circulated coins or the change in your piggy-bank tends to be worth nothing more than its face value. The 1921 50-cent coin example is one coin which was in circulation but was taken out and melted down. Its drastic cut in supply made it a rare coin. However, a high demand in spite of a coin’s high supply could increase that coin’s value. This happens when a coin is part of a set or has a mint mark separate from other coins of the same type.
A coin’s grade or condition, next to rarity, is the most important factor when evaluating the worth of a coin. Like anything collectible, a mint condition and well maintained piece is more sought after, thus more valuable than a slightly damaged piece. The American Numismatic Association uses an adjectival scale to grade a coins condition. The key things to look for are a) overall wear and b) loss of design details.
About Good (AG)
Very Good (VG) – 25% original detail
Fine (F) – 50% original detail
Very Fine (VF) – 75% original detail
Extremely Fine (XF) – 95% original detail
About Uncirculated (AU) – 95-99% original detail
Uncirculated (Unc.) – 99% original detail
Mint State (MS) – 100% original detail and no signs of wear or handling
Toning is the discolouration of the coin when the metal reacts with oxygen and chemicals in the air. This obviously is a factor in grading coins, and would be considered a form of wear on the coin. But often toning can add value to a coin because it’s a natural wear, and to some collectors this is an appealing quality. The key word is “natural”. As soon as you touch it with your bare fingers, scratch at its surface, or even try to restore its original colour, the value of it drops tremendously. (Tip: Never touch the sides of rare coins. Always hold them on the edge with gloves).
A coins composition or metal content can also determine the value of a coin. Most coins are made with copper or nickel or a combination of the two metals (bimetallic coins), but higher-end specialty coins and bullion coins are made with precious metals such as gold, silver or platinum. For obvious reasons, precious metal coins are worth a lot and have guaranteed investment value. Sometimes, a coins composition adds that rarity factor. For example, during World War II, Canadian nickel was reserved for the war effort, so the five-cent nickel coin was made with tombac instead. Even though tombac is not an expensive metal, the variation in its metal composition made it a sought after coin by collectors.
Rare variations and errors make coins extremely valuable just because they are unique and there are so few of them (again the principle of scarcity). Rare variations could be limited edition coins that are made to commemorate an event or person, or a difference in the mint mark or design in a particular year. Then there are extreme rare variation coins such as the Canadian 1936 “dot” penny made in the final year of King George V’s reign. A miniscule dot was placed below the date on the reverse side of the coin. Only three versions of the coin are known, and have been auctioned at around $250,000 USD.
Errors are mistakes in the design when technical difficulties occur during the minting process. Coins that slip through this way are some of the rarest coins. The American 1937-D three-legged buffalo nickel is a famous coin because the die (imprint on the coin) was over-polished, wiping out one of the buffalo’s legs.
You might have realized that I have left out Age as a factor of value. Of course the age of a coin adds value, but it’s no guarantee that an old coin is worth a lot except its face value. The other factors above have higher priority to collectors, unless it’s an ancient coin.
Personal Preference: Collection Themes, Aesthetic Design, Historical Significance
Other reasons why a coin could be so valuable are up to the collector. Coin collections and themes play a part in determining if a coin is valuable or not. Each collector looks for little subtleties or details such as country, year, mint marks, variety or limited edition coins, subject or heritage coins, personage coins, and period coins such as coins made during an empire or a king’s reign.
Then there are collectors that are more interested in the aesthetic design than its grade or rarity. Sometimes we forget that artists are designing the coins we hold in our hands, or the commemorative coins that come out each year.
Of course, aesthetic design could be how a coin was worn down or toned a particular way, which makes for added uniqueness. Naturally blackened Victorian pennies, which have only the most raised surface showing the underlying copper, meaning the head is clearly presented.
Historical significance is one of the most popular reasons we collect coins. Haven’t you found an old coin—a coin older than you—and imagined where it had been up until you found it? Geoffrey Cope, a writer at CoinWeek.com, said: “Art in the form of coins is not only what we study but the emotion when we hold a piece of history.” I have a German mark from 1871, the year the German states unified into a single nation. It’s in Good (G) condition, an old coin, but millions were produced. However, it’s the historical significance that matters me, and holding a piece of history like that, the emotion I feel, is much more valuable than dollars and cents.