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With gold prices high, eyes turn to smaller sizes

gre0325a.jpgWorld mints are reducing the size of some of their current commemorative gold coin output to prevent sticker shock among buyers.

This serves as a reminder that there is a market for gold coins smaller than the popular one-ounce bullion size. For collectors of U.S. coins, there is no better place to start than the Coronet Head $2.50 gold coin, also known as the quarter eagle.

The Coronet Head quarter eagle was an interesting denomination and one which lasted quite literally for more than 65 years without any significant design change. That is highly unusual and it makes the Philadelphia Coronet Head quarter eagle an unusual collection as Philadelphia was the one facility which produced the Coronet Head quarter eagle for the entire time.

At the time when Philadelphia produced the first 18,859 Coronet Head quarter eagles back in 1840, the quarter eagle was a denomination that was just starting to find its place in circulation. While authorized back in 1792, the quarter eagle had essentially seen no regular commercial use until at least the mid-1830s. At first quarter eagles had been viewed as near novelties with no commercial use. Then in the 1820s the prime purpose of any quarter eagle was basically to be exported and sold for a profit as they contained too much gold.

gre0325b.jpgFinally, with the reduction of gold in the gold coins in the 1830s, the quarter eagle had the potential for use. The mintages suggest there was some use in circulation. Even so, after mintages of over 100,000 in 1834-1836, the totals fell back to under 50,000 a year from Philadelphia plus whatever small number would be made at other Mint facilities. That was the situation in 1840 when the design change was made to a Christian Gobrecht Coronet Head.

The historic 1840 currently lists at an available-date price guide listing of $160 in F-12 but $6,000 in MS-60. That higher MS-60 listing is certainly justified. After all, it?s an historic coin with a mintage under 20,000. The Professional Coin Grading Service reported seeing a mere five examples in Mint State. That is not nearly enough of a supply to meet collector demand, making the 1840 Coronet Head quarter eagle in Mint State a solid purchase in terms of its potential.

gre0325c.jpgSomething very hard to explain happened in 1841. In that year Philadelphia produced a proof-only date. It was unusual because proofs were not heavily collected at the time, and unusual because it was just the second year of the design. We cannot be sure of the precise mintage. It has been suggested it might have been 20 pieces. The 1841, sometimes called the ?princess,? is extremely tough today.PCGS reported nine examples graded, and interestingly enough about half of the total had been mishandled over the years. That makes a nice example in proof a very rare and significant coin with a price likely to be dictated by competing bidders at whatever auction it may appear. With some coins with similar total numbers known now topping $1 million, a high price for an 1841 would not be a surprise.

The 1842 quarter eagle mintage would prove to be very low at 2,823. That total makes the 1842 a very good date with a $500 listing in F-12 while an MS-60 lists for $20,000. The PCGS total of the 1842 was a single MS-62 and the grading firm had seen fewer than 30 examples in all grades combined. That makes the 1842 a sleeper even at its higher prices as realistically your chances of finding a nice 1841 may well be better than finding an 1842.

gre0325d.jpgThe 1843 mintage would soar to over 100,000 pieces, making it available in circulated grades. The 1843 is, however, a difficult coin to find in Mint State, as are other dates from the 1840s. The 1843 lists for $3,000 in MS-60 but PCGS reported only eight. There were few if any collectors back in the 1840s. At $3,000, with the number reported, the 1843 is a good deal, but with its mintage most assume it is common and it gets no attention.

With a mintage of 6,784, the 1844 is another better date. It has listings of $225 in F-12 and $7,500 in MS-60. Consider that F-12 listing for a moment. For $225, which is far less than you would pay for a coin like a 1916-D Mercury dime or 1909-S VDB Lincoln cent, you are getting a gold coin with a mintage of well under 10,000 pieces. It?s a great deal at $225 and it?s only possible because there are so few collectors.

The next few dates fall into the pattern of being available in circulated grades but tough in Mint State. Then we come to 1848. The regular 1848 Coronet Head quarter eagle from Philadelphia had a mintage of 7,497, which produces a $315 listing in F-12 and a $7,000 listing in MS-60. That is about right as PCGS had seen just eight examples in Mint State.

gre0325e.jpgThere was, however, another 1848 quarter eagle. There were the 1,389 coins made with ?CAL? added on their reverses. The story was simple: the first shipment of newly discovered gold arrived from California and the President and secretary of War, who had apparently taken a good deal of criticism over the war with Mexico, decided to use that gold to make a point that the war had been worthwhile. That saw some of the gold used to make quarter eagles with ?CAL,? which makes any example extremely historic.

With that low mintage, any example is also very tough. Listings today are at $8,000 just in F-12 while an MS-60 is listed at $50,000. Interestingly enough, PCGS reported 25 examples in Mint State, far fewer than the $7,000 regular 1848. There is special demand for the 1848 ?CAL,? a coin some have suggested is the first commemorative of the United States. Even if it?s not a commemorative, to think that the 1848 ?CAL? quarter eagle is a coin made from the first gold from the streams of California is enough to make anyone with a sense of history pay more.

In 1849 there would be a mintage of 23,294 Coronet Head quarter eagles at Philadelphia, which puts the 1849 in the available group in circulated grades. It is, however, still not readily available in MS-60 or better. Its MS-60 listing is $2,600 and PCGS reported just about a dozen in Mint State.

gre0325f.jpgThe dates that followed make the 1849 look scarce. The 1850 would have a mintage of 252,943 and the other dates up to 1858 would even see mintages topping one million, the 1,404,668-piece 1853 mintage being the high. It was a period when the American people seemed to use gold coins heavily.

Other denominations had high mintages as well, with some gold dollar mintages topping a million at a time when silver dollars would frequently not even reach 50,000. The large mintages also sometimes translated into large numbers in Mint State today, and that is harder to explain. There were basically no gold coin collectors at the time. The 1853, for example, lists at just $350 in MS-60, and that is about right as PCGS reported well over 300 examples in Mint State. For a gold coin of the period, that is a highly unusual total. It?s possible some examples emerged from European hoards or even domestic hoards. Note, though, that 1853 is a very early date when it comes to European hoards, at least for the coins being Mint State. The vast majority of the Mint State gold coins found in Europe were dates starting about 1880. It cannot be explained fully, but collectors can be happy that the 1853 is one early date they can acquire in Mint State at a low price.

The mintages started dropping below 100,000 in 1858 when it was just under 50,000, and the declines continued each year until the 1861. These dates, while lower mintage than most of the 1850s dates, are still relatively available in circulated grades and more available than many earlier dates in Mint State.

The 1861 is a repeat of the available dates of the 1850s with a mintage of more than a million and hundreds of examples reported in Mint State. Once again, those hundreds of Mint State coins reported today are unlikely to be a result of collectors and dealers at the time, simply because of the high numbers. While having a mintage of below 100,000 pieces, the 1862 is also available. Then the impact of the Civil War was seen on Philadelphia quarter eagle production.

There were a number of factors resulting from the war that would have an impact. Specie payments were suspended and the public began to hoard both gold and silver issues. The Mint facilities in Charlotte, Dahlonega and New Orleans quickly fell into enemy hands. Under stress, it appears that Philadelphia was responding primarily to needs as they arose. In the case of gold, the coins needed were for international transactions and reserves to back the new National Bank Notes. Quarter eagles with their low denomination were thus not a priority at such times. The year 1863 saw only a proof mintage believed to be 30 pieces, making the 1863 a coin listed at $95,000 in Proof-65.

The Philadelphia mintages that followed were also low. No date until 1871 even topped 5,000 pieces. That makes the group uniformly scarce. The 1864, mintage 2,874, and the 1865, mintage 1,545, are especially difficult as is seen in price listings of $2,500 for an F-12 1864 and $2,400 for an F-12 1865. The listings may seem backwards based on the mintages, but apparently they are not so strange based on the survival rates. PCGS reported grading eight examples of the 1864 and 16 of the 1865 in all grades combined. The 1866, with a mintage just over 3,000 pieces, would also be tougher with a $650 F-12 listing, but the others show surprisingly small premiums.

The parade of lower-mintage dates would continue until 1873. The 1871 had a mintage of only 5,350 but the prices appear reasonable. The 1871, for example, is listed at $160 in F-12 and $2,200 in MS-60. The numbers suggest it might be cheap in circulated grades, but there are 68 reported by PCGS and 22 of them were called Mint State. In addition, there are seven more proofs. While the totals are small, with limited collector numbers, especially regarding top-grade pieces, there is not much pressure on the prices.

By around 1873 gold coins were beginning to return to circulation. That brought an 1873 mintage of 178,025 at Philadelphia, the total being divided between open and closed ?3? examples. The closed ?3? came first but officials did not like the appearance which meant a change to the open ?3.? With a significant mintage, however, both are available although the open ?3? is more available in Mint State at a listing of just $300. More than 200 examples of the open ?3? have been graded at PCGS.

After the large 1873 mintage, the totals declined again in 1874 to just 3,940 pieces. This date, too, is relatively inexpensive, listing at $170 in F-12 and $2,100 in MS-60 where about 15 have been graded by PCGS.

The 1875, however, stole the spotlight  in the case of 1870s dates with its mintage of 420 pieces, 20 of that total believed to be proofs. The 1875 lists for $1,750 in F-12 with an MS-60 at $21,500 and a Proof-65 at $32,500. In fact, its numbers known are low with PCGS reporting just 36 coins overall, four being called Mint State along with 11 proofs.

No other dates from the 1870s can really compare with the 1875 although the 1,652-mintage 1877 cannot be dismissed easily. Once again it?s a date with great prices as an F-12 lists at $275 while an MS-60 is just $3,250 with about a dozen being reported at PCGS.

The 1878 and 1879 would have higher mintages, the 1878 at 286,260 while the 1879 was at 88,990, making those two dates available. In the 1880s the mintages went back down to very low levels, which would continue until 1893. The reason in this case is likely to be found in the required high mintages of Morgan dollars at the time. Philadelphia along with San Francisco and New Orleans would be responsible for most of the large Morgan dollar mintages of the period, and that was likely to have an impact on other denominations. Once again, not being a high priority, the quarter eagle was one denomination where normal mintages could be reduced, and that is seen in totals always below 20,000. In a couple cases, like the 691-mintage 1881 and 887-mintage 1885, the totals were below 1,000.

Even with such mintage figures, the 1881 and 1885 are not as expensive as might be expected. The 1881 lists for $900 in F-12 while the 1885 is $400 in the same grade. To obtain coins with mintages under 1,000 for those prices has to seem like a great deal, and it is as in all grades combined PCGS has seen 51 and 55 coins, respectively, for these two lower-mintage dates.
The other dates of the period are also good deals, but in fact there are enough even of low-mintage dates to suggest the price listings are accurate. The 4,088-mintage 1886 is listed at $1,100 in MS-60 but PCGS has graded more than 35 examples as Mint State and in addition there are nearly 30 proofs.

Relatively low-mintage dates would continue until 1897 when the mintage again passed 20,000. From that point on, Philadelphia mintages rose to higher levels. Even in MS-60 the dates are available at around $275 in MS-60 although the 1900 is a little more expensive at $415 even though it had a mintage of 67,205.

The presence of a slightly tougher date is not unexpected as dates from the period are prime candidates to have been discovered in overseas hoards. While quarter eagles as a general rule were not in European or other bank vaults in large numbers ? generally the coins found in vaults would be upper denominations ? there were still some numbers of quarter eagles discovered. Every gold denomination is though to have been found in at least limited numbers. In the case of quarter eagles, the Mint State examples discovered were likely to have been dates after 1880, especially the last 15-20 years of production.

While we cannot point to specific hoards from specific countries or banks, the fact remains that the grading service numbers suggest Mint State totals that could not possibly have been a result of regular collector and dealer saving at the time. The quarter eagle might have been more heavily collected than an upper denomination like double eagles, but the fact remains that there is almost no possibility that the collectors and dealers of the day would have been responsible for the sometimes hundreds of examples seen. That makes the most likely source bank holdings from other countries. Naturally, those holdings would be hit-and-miss in terms of the dates being represented. That produces a couple less available and a number of more available dates. The Mint State price listings tend to be amazingly accurate in terms of reflecting not the mintages, but rather the surviving supply of a given date today.

With the decades of production, there are many interesting Philadelphia Coronet Head quarter eagles. For those assembling a collection, the possibility of assembling a complete set is remote, primarily because of the 1841. There are, however, a wide range of other possibilities, including simply purchasing interesting dates and good values as they become available. It makes for an interesting set of opportuniti es both for study and for collecting in a less-collected but extremely historic group.  

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