A fascinating statistical article by David Lang

[EZ_E]

Coin boards helped popularize the hobby in the 1930s, but they also changed its demographic makeup. David W. Lange examines how they also boosted the values of neglected minor and fractional coins.

 

 

Last year I published a book on the history of coin boards and the people who produced them. Introduced in 1935, these simple boards made coin collecting a popular and widespread hobby for the first time. They also changed the demographic makeup of the numismatic hobby and boosted the values of scarce 20th-century minor coins and fractional silver coins, which the more established collectors had largely neglected to that point.

 

At that time, veteran collectors considered it pointless, and almost comical, to examine coins found in circulation, but the creation of collecting boards for current or still-circulating older series proved quite compelling to the newly minted hobbyists. They weren’t particularly interested in half cents and three-dollar pieces; instead, they sought the elusive 1909-S V.D.B. cent and 1916-D dime. Such issues were still to be found in the 1930s, but this required searching through thousands of coins.

 

In my own collecting, I’ve purchased a number of coin boards still holding original collections taken from circulation. This has provided me with an understanding of both how rapidly coins wore at the time and which issues were likely to be found. The latest coins added were typically Uncirculated or very close to it, while those five years old at the time were most likely to still be just barely About Uncirculated. Ten years, however, reduced the average grade to Very Fine, and at that point the flattening of the protective rims led to even more rapid wear. The grades declined quickly, typically dropping a whole grade for every four years of circulation.

 

This knowledge helps to explain why Barber silver coins of the 1890s are seldom found in the popular grades of Fine through Extremely Fine. By the time these pieces began to be saved in the 1930s, all that had entered circulation were 35+ years old and extremely worn. Contemporary minor coins (cents and nickels) were of a harder alloy, and they were thus to be found over a broader range of grades during the 1930s.

 

For firsthand accounts of circulation finds of the time, there is no better source than old issues of the Numismatic Scrapbook Magazine. This publication was the voice of the popular hobby, and it was created with newer collectors in mind. Several diligent searchers of coins from circulation published their results during the late 1930s and into the early 1940s, and these surveys are quite revealing. Though the outcome of such searches varied considerably from one region of the country to another, they are still fairly representative of what one could hope to find at the time.

 

Dr. J. Robert Schneider pored over 20,000 cents obtained in Illinois and Iowa, and his survey revealed how rare the key date Lincolns were as long ago as 1938. He found no 1909-S V.D.B. cents and just a single 1931-S. Other very rare issues were 1913-S and 1914-D (three each) and 1922 No D (just one). He reported a total of only 13 Indian Head cents still circulating. In Texas, Quinton Lothan likewise found no 1909-S V.D.B. cents among the 5,000 examined and just three of the 1914-D. Single examples each were found of 1911-S and 1914-S. Mr. B. S. Moore of Greenville, South Carolina, examined a whopping 100,000 cents! He turned up just a single 1909-S V.D.B. and only two each of the 1922 No D and 1926-S cents. He did, however, find some 116 Indian Heads.

 

For other denominations, the results were similarly revealing. In 1938 Dr. Schneider surveyed 5,000 nickels in the Midwest. Not surprisingly, missing Liberty Head dates included 1885, 1886, and 1912-S. Single examples each were found of 1887 and 1888, while only three 1894 nickels turned up. All Buffalo nickels were found, with the sole exception of 1913-S Type 2. Rarities then included 1913-D T2 and 1913-S T1 (three each), 1914-D (two), 1915-S (two), 1917-S, 1921-S, 1926-S and 1931-S (one each). Some 14 Liberty Head nickels were already dateless, as well as 678 Buffaloes!

 

Of the 5,000 dimes Schneider examined there were a total of 14 Barber pieces he could not locate. All but five of these were “S” Mint issues, always elusive outside of the West. He found just a single 1916-D, nine and three respectively of the 1921(P) and D issues, six 1926-S, and only three 1930-S dimes. For the low mintage dimes of 1931, he found 15 (P), seven D, and eight S. Seven Barber dimes were then dateless and some 36 Mercuries.

 

Schneider likewise surveyed circulating quarter dollars and found a single Seated Liberty piece among the 5,000 examined (1876-S). All Barber issues were found, with the exceptions of 1896-S, 1899-S, 1901-S, and 1913-S. Tough dates included 1892-O and 1908-S (one found of each), as well as 1895-S, 1896-O 1901-O, 1903-S, 1909-O, 1911-S, and 1912-S (two each). Standing Liberty quarters were equally hard to complete as a series, due the rapidity with which the dates on 1916-24 issues wore away. Missing issues included 1916, 1917-D Type 2, 1917-S T2, 1919-S, 1921, 1923-S, and 1924-S. Of the pre-1925 dates, the most common was 1923(P), and it surfaced just 16 times out of 5,000 pieces examined. While some 43 Barber quarters were then dateless, a whopping 1462 Standing Liberties had no visible date! This is just 22 years after their introduction.

[cladking]

The coin boards just sucked everything out of circulation that was even remotely interesting in very short order. Some coins that would be valuable today could still be located up until WW II but the big increases in average wealth assured they would be gone by the end of the war.. By 1958 it was mostly a vast wasteland for scarce old coins.

 

It's fascinating how much can be learned from these old albums and the coins in them.

 

Thanks for the thread.

[RWB]

This is consistent with mint estimates of the useful life of a circulating coin being 25 to 30 years. Until about the mid-1960s the Mint Bureau had an active program of recoinage for badly worn and damaged coins. The mint accepted worn coins at face value, melted them and struck new coins from the bullion, accepting the loss on the mint’s account books.

[just-john]

it will be interesting to watch the post 1982 Lincoln cents in circulation since they don't seem to hold up as well as pre 1982 copper cents .Most of the 2008D cent I've taken out of circulation this year are spotted and rim nicked already.Guess they don't make em like they use to

[World Colonial]

There is at least one factor that should probably be added to explain these results: the market value of these coins at the time. The 1909-S VDB has a mintage of "only" 486,000. Its hardly rare and in my estimation common but this mintage is miniscule compared to almost every single other cent in circulation at the time. Presumably, most collectors (and possibly many in the general public) would have been aware of the mintage as well as the removal of the intials well before these collectors conducted their searches.

 

Another possibility is that a coin like the 1931-S cent (with a mintage of also about half million I believe) was not that widely distributed.

 

At least the 1909-S must have sold for a "significant' premium to its face value at the time, even though it would seem ridiculously low by today's standars.

[RWB]

There are several lists of cents that collectors were looking for in the mid-1930s. These are in the personal papers of Treasury Secretary Henry Morgenthau. I'll look for the lists in my files this evening, but I recall the 1931-S as being the #1 coin sought.

 

(The correspondence - mostly between the Secretary's office and several of Morgenthau's nephews and children - indicate that 1909-S VDB, 1909-S and 1931-S were the cents most wanted. The Secretary had a complete set of commemorative halves nearly all of which he purchased at issue price or market price from coin dealers.)

[cladking]

The '31-S cent sat in storage a long time because there was insufficiient demand. The mint was taken very much aback when a wast coast promoter offered to buy the entire production for face value which was somewhat more than $10,000 if memory serves. This was quite probably the impetus for the mint no longer making short mint runs of coins; they didn't want to feed speculators.

 

This has likely had an enormous impact on the direction of the hobby since now the focus was forced to turn to varieties and gems if rarity was desired in current coin.

[DWLange]

The 1931-S cents had an unnatural distribution, due to the severely reduced economic activity of the Depression years. I wrote about this for The Numismatist's April 2005 issue, and that column was reprinted a year or so later in the NGC Newsletter. I'm attaching it below:

 

The San Francisco Mint Coins of 1931, Part One

 

Every coin collector dreams of having a time machine at one time or another. Where would you go? To Philadelphia in 1793? To Carson City in 1870? I believe a lot of collectors would choose San Francisco in 1931, a year when just three denominations were coined at that city’s U. S. Mint, all of them in relatively small numbers. While not great rarities, these issues are quite appealing for their low mintages, and it would be a thrill to scoop them up at face value.

The year 1931 was smack in the middle of a worldwide economic depression unequaled before or since. Factories were closing, and banks and businesses were failing in record numbers. Britain abandoned the gold standard, as would the USA just two years later. A quarter of the American workforce was unemployed at a time when there were no government relief programs of any kind. Local charities and missions were completely overwhelmed by the needy. Many young men and women, having no prospects of work, took to the road to lessen the burden on their families.

Against this backdrop it’s not hard to imagine how that the demand for additional coins dropped to a trickle. In fact, so little activity occurred at the nation’s mints that the overall U. S. Mint payroll fell drastically. From more than a thousand employees at the end of 1918, the number of persons employed at the three active mints declined to just 392 by 1933.

A total of 866,000 one-cent pieces was struck at the San Francisco Mint in 1931, the second lowest mintage for a circulating coin in the entire Lincoln cent series. Nearly all of these were coined before the end of the Mint’s fiscal year on June 30, the remaining odd 66,000 pieces coming sometime later. As the existing supplies of cents were adequate for the very limited commerce of that time, most of these coins were simply bagged and put away in storage. It was not until things picked up a bit in 1934-35 that the 1931-S cents began to be shipped to banks for distribution.

In the meantime, collectors were unlikely to obtain this date through normal channels, having instead to purchase examples directly from the Treasury Department. It was the Treasury’s practice at that time to offer coins to collectors at face value plus postage. The purchaser, however, was limited to just two coins of any date, denomination and mint, had to state the purpose for which the coins were desired and had to include separate payments for whichever mints were to furnish the coins! This cumbersome system remained in place until 1948, when the Treasury first began to offer pre-packaged, complete date and mint sets of the previous year’s coins at fixed prices.

Though the market for current and recent USA coins was in its infancy in 1931, there were a handful of dealers who placed ads offering various dates of cents and nickels in uncirculated condition, only rarely advertising the higher denominations. Even these dealers had difficulty obtaining cents dated 1931-33 at the time of minting, since the coins were idling in government vaults until needed. A 1985 letter from longtime dealer Norman Shultz of Salt Lake City reveals just what happened:

The 1931-S cents were sent to the Federal Reserve Bank here in 1935—500,000 of them. One of the fellows working here called me and told me they had these, and how many did I want? In 1935 money was scarce with any coin dealer, and I took a $20.00 sack. I sold it to a lawyer for the Southern Pacific in Los Angeles for 40¢ each. A year later he sold them back to me for 30¢ each. This will give you some idea how tight money was. The bank would not lend me money to buy coins even when I offered to put up face value in rare coins.

The lawyer to whom Shultz referred may have been Maurice D. Scharlack, named by Walter Breen as the possessor of some 200,000 examples at one time [2008 note --- it was not Scharlack, who lived in Texas and was not a lawyer]. Another holder of large quantities was San Francisco coin dealer Richard A. Webb. This pattern of hoarding was common with the 1931-S cents. By the time they began to be released, their remarkably low mintage had been published in numismatic journals, and they were immediately targeted by speculators.

The result of such distribution was predictable. 1931-S cents always seemed to be available from dealers in uncirculated or lightly worn condition, but this date was seldom to be found in actual circulation. Throughout the 1940s and ‘50s, collectors periodically reported their good fortune at finding the coveted 1909-S V.D.B. and 1914-D cents within bank rolls or pocket change, but the 1931-S cent seemed to elude nearly everyone.

Since the completion of a Lincoln cent collection from circulation is no longer a goal of today’s collectors, the hoarding of this date in uncirculated condition may now be seen as a good thing. Though poor storage methods over the years has limited the number of fully red gems to be found, uncirculated 1931-S cents of lesser quality remain fairly available to hobbyists at reasonable prices. Imagine how rare this date would be if its small mintage had been released immediately and had experienced widespread circulation.

 

[RWB]

Excellent article, David -- as usual!

 

Secretary Morgenthau bought a couple of 1931-S cents for 40-cents and 50-cents each in mid-1937. They were for his nephews.

 

(Now I have to find the distribution lists for 1931-35 to verify Shultz...)

[DC Dawg]

The above conversation is why I love numismatics and love to read the works of those who research this history.

 

Scott

[EZ_E]

The above conversation is why I love numismatics and love to read the works of those who research this history.

 

Scott

 

Ditto. A personal thanks to you, Dave. You never disappoint! (thumbs u

[thebeav]

Great stuff.....Thank you....

 

Paul