Saturated Numismatic Niches
Low mintages and aggressive marketing have created coin collecting niches that history shows may not hold their long-term value.
Founded in 1964, the Paramount International Coin Corporation was the world’s first publicly owned coin company.
One of the firm’s specialized niches early on was the promotion of proof sets issued by economically poorer nations. The first set marketed was in 1966 for Panama. Containing coins with a face value at par to U.S. money and a 90 percent silver One Balboa with the same content as the old Morgan and Peace Dollars, these sets quickly rose in price.
The success of this issue inspired other nations such as Sudan and Liberia to work with Paramount at issuing their own proof sets. By the early 1970s, several nations in the Caribbean were issuing proof sets and commemorative coins, many of them desirable because some or all coins contained silver.
When it became legal for Americans to again own gold coins, even more foreign governments issued gold commemorative coins.
Eventually, there were so many issues touting “low” mintages that collector markets were saturated. Today, many or most of these silver and gold coins trade on the basis of the value of their precious metal content.
There are a number of other “non-circulating legal tender (NCLT)” coin issues over the years that have already fallen to minimal value or trade on the basis of precious metal content. Among some more notable “duds” or “duds-to-be” are:
U.S. $10.00 First Spouse Gold Coins issued from 2010-2016 and again in 2020. Many of the latter issues in the series have mintages below 3,000 in proof or below 2,000 in uncirculated condition. For American coins, these would be lower mintages, but the awkward marketing system discouraged them from gaining public awareness and popularity.
U.S. Statehood Quarter Series issued from 1999 to 2009 were so popular with the public that massive quantities were struck. Between the Philadelphia, Denver, and San Francisco mints combined, over 400 million of each coin were put into circulation. With greater supply than demand, almost all now trade at or close to face value.
Great Britain 1965 Churchill Crown, which has no precious metal content and lost its legal tender status.
Great Britain 1981 Prince Charles and Lady Diana 25 Pence wedding commemorative. Although these still have their legal tender status, the circulation strikes have no precious metal content.
Many issues where small nations have licensed the issue of NCLT coins that never circulated within their respective borders. Among such issuers were/are the Cook Islands, Liberia, the Marshall Islands, Niue, St. Helena, the Solomon Islands, and Tuvalu. If you can think of a cultural fad theme from any time over the past half century, it seems like there is probably one or a set of coins issued to commemorate it. Cumulatively, there are thousands of such issues, so which ones will have any possibility of trading at a premium in the future?
Finally, there are well-established mints that are issuing far more coins than the collector base is likely to support. For instance, the Royal Canadian Mint issues more than 300 different Canadian coins annually. Do you know even one collector who is determined to own a specimen of every issue? Maybe an occasional exception might retain numismatic value in the future, but do you feel confident identifying them?
Rather than purchasing coins on the basis that the sales literature persuades you they are a good investment, instead consider if you are willing to hold the piece or pieces over the long term, even if values stagnate or decline. If you want to own it or them on that basis, then go ahead and buy.
Last column’s numismatic trivia question.
Last time I asked—Who was the first U.S. Postmaster General to be depicted on U.S. currency? Benjamin Franklin, who first appeared on the Series 1914 $100.00 Federal Reserve Note, was appointed as Postmaster General by the Second Continental Congress on July 26, 1775. He still held that office when the Congress voted for independence from Great Britain on July 2, 1776, and approved the language in the Declaration of Independence on July 4, 1776. In the fall of 1776, Franklin left for Paris to work to gain French support for the Revolutionary War. Franklin’s comptroller of the post office and his son-in-law Richard Bache replaced him as the second Postmaster General on Nov. 7, 1776.
This week’s trivia question
Here is this week’s question. What was and is the legal tender status of U.S. Trade Dollars? Come back next week for the answer.
Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador. He is also the recipient of the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, the 2017 Exemplary Service Award, the 2012 Harry Forman National Dealer of the Year Award, and the 2008 Presidential Award. Over the years, he has also been honored by the Numismatic Literary Guild, Professional Numismatists Guild, National Coin & Bullion Association, and the Michigan State Numismatic Society. He is the communications officer of Liberty Coin Service in Lansing, Michigan, and writes “Liberty’s Outlook,” a quarterly newsletter on rare coins and precious metals subjects. He now volunteers with the National Coin & Bullion Association as its Industry Issues Advisor. Past newsletter issues can be viewed at www.libertycoinservice.com. Some of his radio commentaries, "Things You ‘Know’ That Just Aren’t So,” and “Important News You Need To Know,” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio archives posted at www.1320wils.com).
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