Will sellout result in ‘Marine Corps fever’?

You can count on the Marines. News that the Marine commemorative silver dollar sold out Sept. 15 proved that.

 Actually, we normally count on the Marines to defend the country. No matter what the odds, the history of the U.S. Marine Corps is without peer as no obstacle is too large. Of course, even the Marine Corps had never faced the prospect of selling 600,000 silver dollars. Experienced Marines were not fazed even though no silver dollar commemorative had posted sales that high since the World Cup Soccer dollar over a decade ago. In fact, silver dollar authorizations had even been dropped to 400,000 or 500,000 simply because there was no expectation that more dollars than that could be sold.

A sellout might certainly surprise some, but not any current or former Marines. The achievement will almost certainly be taken in stride by the Marines; selling 600,000 silver dollars is to the Marines just a another goal to be reached in a 230-year history of always reaching their goals.

Of course, the sellout of the Marine Corps 230th anniversary silver dollar presents us with a variety of issues. Frankly, there are no good historical models to follow, and that will make what happens in the near future all the more interesting.

 The fact that some did not expect such a sellout might well have been a result of optimistic thinking in the past. After all, there have been other commemoratives involving the U.S. military in the past but this is the first time where one seems to have truly reached its potential. There are still a few million World War II veterans and millions more people whose lives were marked by that conflict, but the World War II silver dollar sold just over 400,000 pieces.

There are also potentially millions of Vietnam veterans and families, and once again the sales while not disappointing were not even close to a sellout with a total close to 300,000. The 2002 West Point Military Academy dollar was a similar situation.

 Moreover, the potential sales are sometimes far greater in the thinking surrounding many programs than in the eventual reality. The Jackie Robinson commemorative program was the classic. It was assumed that since the Mint and Major League Baseball were pulling out all the stops to promote the Jackie Robinson commemoratives, the potential sales were enormous. As it turned out, the sales were disappointing – and that is putting it mildly. The nation’s baseball fans and sports collectors apparently had little or no interest in coins.

The fact that sales rarely reach the authorization limit leaves us with very few models where we can even begin to consider what might happen with the Marine Corps dollar in the future. Once again, the authorization total at least in recent times has basically been seen as the best-case scenario. Most of the time the total is not even seriously threatened. If there are doubts, at the same time the Marine Corps dollar was selling out, the John Marshall silver dollar was struggling to break past the halfway point for sales of its authorization.
There is actually a pretty good case to be made that sometimes in the past when issues have sold out it, the authorization was lower than it might have been. The classic case is the Statue of Liberty gold $5 of 1986.

The sales of commemoratives back in 1986 were certainly far higher than they are today. The modern commemorative program had just begun and no one was really an expert at predicting what might happen from one program to the next.

That was especially true of gold issues. At the time there had only been one gold issue and that was the $10 for the Los Angeles Olympic Games. The sales of the Los Angeles Olympic $10 had been split a variety of ways, with every Mint facility producing at least one version of the coin. Congress did not like that as it looked exactly like what it was, which was an attempt to increase sales by getting the nation’s collectors to buy one Los Angeles Olympic $10 from each of four facilities. That was not going to be allowed with the Statue of Liberty $5.

That was perhaps the only reason anyone could imagine for the Statue of Liberty $5 gold not selling all of its eventual authorization of 500,000 pieces. There were, however, an assortment of reasons why the 500,000 pieces would be easily sold out. One of the major reasons was that the novelty of gold commemoratives was still very real. The United States had not issued a gold coin since 1933 until the Los Angeles Olympic $10. In fact, its gold recall order of 1933, while not outlawing gold coins, had in fact placed severe restrictions on what gold coins could legally be owned. The Los Angeles Olympic $10 was really the end of what had been 50 years of misunderstandings and restrictions. Coupled with the fact that the Los Angeles Olympic commemoratives were only the second modern commemorative coin program, there was enormous interest and that continued into the Statue of Liberty program.

 The combined sales of the Los Angeles Olympic $10 had been safely over 550,000 pieces. The Statue of Liberty $5 was far lower in price than the Los Angeles Olympic $10 and that usually results in higher sales. The Statue of Liberty is also a worldwide symbol. The Olympics are an international event as well, but many nations issue Olympic coins and international sales could not be expected in any numbers. The Statue of Liberty, however, is a different matter as it has a special appeal not only to many Americans but also to many people all over the world.

Under the circumstances there was good reason to think that the Statue of Liberty $5 could easily sell out all 500,000 pieces. The Mint helped by issuing regular totals of sales. When it was seen that 400,000 coins had sold basically the first month, that made the sellout certain. I and many others, upon seeing that total, promptly ordered extra coins. In the end many never got their coins as their orders were too late or mishandled. Whatever the reason, there were many thousands of orders that would not be filled.

With the announcement that all 500,000 coins were sold, the Statue of Liberty $5 promptly started to rise in price. That was “Statue Fever,” as a three-coin set involving the $5, silver dollar and clad half dollar, which had been offered in the pre-issue period for $170, began to move in price first to over $300 and eventually to nearly $500. What made it all the more interesting was that in most cases the prices were for future delivery as the coins had not yet been shipped. So intense was the interest that a cherrywood box that would house a six-coin set with examples of the three coins both in proof and brilliant uncirculated and which was backordered was selling for $100. It might have been the only time in U.S. numismatic history where there was a market in a box.

The price rise of the Statue of Liberty $5 was dramatic, and as it worked out so was the fall. Although there was enormous interest in commemoratives at the time, many who had purchased the $5 had purchased more than one in anticipation of the price increases. Those extra coins were for sale and they quickly swamped the market because people who had not ordered at $175 were even less likely to buy sets at $500.

Since 1986, with the decline in size of the market for modern commemorative gold coins, the $5 Statue of Liberty gold coin has never recovered in price. Its current listing is $140 in proof or uncirculated.

The next case of a modern commemorative selling out was similar in that there was reason to think the 500,000 authorization would not be enough. It was the 1992 White House dollar. In this case, it is possible that the lawmakers who authorize the commemoratives simply did not take the White House dollar seriously.

What was happening in 1992 was the first real test of whether the modern commemorative program could be kept under control. The historic commemorative program, which ended in 1954, had always been criticized for having too many issues that lasted too long.

Lawmakers with the first 1982 George Washington half dollar claimed that would never happen again, but in 1992 they found themselves between a rock and a hard place. There had been a longstanding desire on the part of one key lawmaker, Frank Annunzio, to have commemoratives for the 500th anniversary of the first voyage of Columbus. There was no stopping a commemorative program for the Columbus voyage.

 There was also no stopping a three-coin set for the 1992 Olympics. At the time the Olympics seemed to have a special relationship with the Congress and even though the games were not being held in the United States, there were going to be Olympic commemoratives.

 That meant two three-coin sets in one year, and that was not supposed to happen.

On top of all that there was a request for coins to mark the 200th anniversary of the White House. Having already had a similar issue for the Congress, it was pretty hard to deny the request for a White House coin, but what they could do was make the White House program small, involving just a silver dollar and authorizing just 500,000 coins.

Lawmakers, in establishing a 500,000 authorization, had simply overlooked the average sales of silver dollar commemoratives at the time. A 500,000 authorization was not large. In fact the three silver dollars of 1992 would show the Olympic silver dollar with proof sales of 504,000 plus over 187,000 BU sales. The Columbus silver dollar did not quite reach 500,000 but had there been fewer programs that year it too would have probably reached 500,000. It should have come as no surprise that the White House dollar also sold out its 500,000 authorization.

In fact there was something of a repeat of the Statue of Liberty situation as the White House dollar did rise in price. Eventually, like the Statue of Liberty $5, it would lose its speculative increases. In addition, the market for silver dollars has not generally been strong enough to result in enough demand to dry up a 500,000 coin supply, and that prevents the White House dollar from increasing significantly in price. Its listings today are $38.50 in MS-65 and $46 in Proof-65 and those levels are higher than its issue price.

The other case of a modern commemorative selling out was again a 500,000-coin authorization, but this time it was for the 2001 American Buffalo silver dollar. There is no way to point to the authorization of 500,000 coins as being inadequate. At the time, commemorative silver dollars were not positing sales even close to 500,000. Yet, the 2001 American Buffalo silver dollar sold out all 500,000 pieces and even saw lawmakers proposing additional mintages.

The coin simply caught the fancy of buyers. It might have been helped by the fact that it used the very popular James Earle Fraser Buffalo nickel design, but there is really no good way to point to one factor or another and suggest those factors as the reason for the surprising sales.

There is another interesting part to the 2001 American Buffalo silver dollar sales, and that is that it has been less volatile in terms of prices than the Statue of Liberty $5 gold or White House dollar. As interesting, the American Buffalo silver dollar has not only increased in price to current levels of $130 for the MS-65 and $150 for the Proof-65, but it has also managed to keep going higher without any of the declines seen in the case of the others.

The logical question at this point is what pattern will the Marine Corps silver dollar follow, or will it have still another pattern unlike any of the others? It is not an easy question to answer as there are some possible differences.

Certainly one factor that has to be considered is that the Marine Corps silver dollar was one officials got right. They changed what had been the generally accepted authorization limit of 500,000 coins to 600,000. In light of the impressive sales, that extra 100,000 coins should not really matter although it cannot be simply dismissed. That extra 100,000 coins could make a difference long term. Had there been another 100,000 examples of the Statue of Liberty $5, it would have probably still sold out. The White House dollar is less certain and the American Buffalo dollar probably would have also sold out.

Where the extra 100,000 coins can make a difference is longer term when the initial excitement dies down. Of the three sellouts, in every case were there an additional 100,000 examples suddenly placed on the market there is reason to suggest that prices would suffer. Had there simply been an extra 100,000 sold at the outset, the price increases seen in the case of the White House and American Buffalo silver dollars might not have been as high. While that extra 100,000 Marine Corps dollars may not make a difference today or tomorrow, the fact remains it is possible that it will slow down the Marine Corps dollar in the future.

Balancing out the 100,000 extra coins may well be the Marine Corps itself and the spirit of current and former Marines. For the first time it appears that a group being honored on a commemorative has really taken that honor to heart. Others were certainly excited as well but their interest never translated into significant extra sales. The Vietnam dollar as well as the Prisoner of War dollar of the same year seem to be stronger in price than might have been expected considering their mintages, but that strength has come over time. The Marine Corps dollar had unusual sales from the start, which clearly suggests that many Marines who were not regular collectors wanted their dollar.
What happens over time will be very interesting. Certainly the Marine Corps dollar is likely to have its own speculation resulting in higher prices. It might not be quite the equal of Statue of Liberty fever in 1986, but it seems almost certain that there will be price increases at least for a while.

The issue is whether the Marine Corps silver dollar, like the American Buffalo silver dollar, can not only keep any higher prices that may develop on the secondary market, but also continue to rise in price, suggesting support from buyers who are not normally coin collectors.

There are not currently 600,000 active silver dollar commemorative collectors. That means the Marine Corps dollar will need to find added buyers. Based on its initial sales, that may not be a problem as apparently many Marines and former Marines who do not collect coins want this coin. There are well over 600,000 of them and if the interest continues to expand, there is no telling just how high it might go in price.

We cannot really be certain just what the market for the Marine Corps dollar will be like in a year or two. As everyone should have learned from the selling out of the 600,000 authorization, when it comes to the spirit of the Marines you should never rule out anything. Their enthusiasm has made the Marine Corps dollar a success far beyond what many thought possible. Some said they would buy all of the Marine Corps dollars and other doubted it, but the Marines put their spirit and their money where their mouths were so this coin has to be seen as having an unlimited potential and a unique one as well.

There is a factor that might be worthy of just a moment of consideration as well. If the buyers of the Marine Corps dollar who are not currently coin collectors, they could potentially make a huge difference in the current commemorative coin market. Perhaps they will not collect all modern commemorative silver dollars, but what if they decide they do want the World War II or Vietnam dollars, just to name a couple possibilities. Even if only a small number were to make that decision, they could easily pressure current supplies and push prices higher. We cannot be sure that will happen but it certainly cannot be ruled out.

Whatever the long-term results, the fact is that the Marines and the Marine Corp dollar have already had a significant impact in the rare coin market. What that will mean over time is hard to say, but it can safely be said once again that in the rare coin market the Marines have landed. Things may never be quite the same, and that could be a good thing for everyone.