Charles Morgan and Hubert Walker
February 11, 2013
Let's face it, folks. As long as there are cheap mint sets at hand, the perception that an endless hoard of modern coins waits to be sprung on collectors at a moment's notice will never leave us. And when I say modern coins, know that I'm referring specifically to business strikes. The population differential between business strikes and proofs is wide open, which clearly tells us that the market-makers in moderns are playing it safe – it's much easier to find a PR69DCAM proof in the Clad era than it is to find an example in MS-66 or better. For people to realize this fact, mint sets need to become scarce.
Never mind the fact that your typical mint set has been handled, handled, and handled again, with most of the contents not looking as fresh as the day they left the mint. Those that appear "fresh" and unopened (or are advertised that way) are already seeing sharp price rises over the picked-through sets that fill most bargain bins. Maybe it's just us, but if trends continue, we may witness a sea change in the way mainstream dealers deal with moderns (at least out in the open).
What remains for the rest of us, as numismatists and stewards of the hobby, is the concerted destruction of mint sets, specifically those made between 1968 and 1981. The sooner this is done, the better.
Before we get into why this is necessary, let's lay out a case for modern coinage.
1. All classic periods were modern at some point. The boundary between old and new is always shifting.
2. In the Post-Silver era, most numismatists concerned themselves with coins from the silver period and ignored clad coinage.
3. Before registry sets, there was no sophisticated market for modern coinage, which delayed the hunt for high-grade moderns.
4. The modern period is effectively over. We're now in a postmodern, or ultra-modern, period, which is marked by different aesthetics, production characteristics, and cultural concepts.
5. Modern coinage is the most democratic area of numismatics, and quite possibly the most important for the growth and sustainability of the hobby.
The first point is obvious. What is new eventually becomes old. American coinage has seen a number of "modern" periods slip into the realm of the classic. When the small cent debuted, it was a modern coin produced at unprecedented levels. Who now would suggest that collecting Flying Eagle cents was an unworthy enterprise?
When the Bust designs gave way to Gobrecht's Seated Liberty series, those were considered modern coins. Who now could ignore the numismatic value of coinage produced at such a historic time in American history?
Interest in moderns has always been met with skepticism and derision. Q. David Bowers long ago wrote about the Michael Higgy Sale, which - to the surprise of many - saw the birth of the modern coin market as we know it.
But even those "modern" coins, like Fraser's Indian Head nickel and Weinman's Winged Liberty dime, have slipped into the catalog of classics.
The second point is all too true and most tragic. At the recent FUN Show in Orlando, PCGS major domo David Hall, whose brilliance as a numismatist goes without saying, put asked those in attendance if they believed that the United States stopped producing coins in 1964. By a show of hands, nearly 2/3rd of those in attendance agreed that this was the case. While everyone is entitled to their perspective and should collect series in which they enjoy. This position is logically and numismatically without merit. Yes, a completely debased coinage is fundamentally different than coinage based on intrinsic value. And yes, once clad-sandwich coins drew all of the silver out of circulation, America's relationship with its money was different than it had been throughout its history. The ramifications of this difference will be debated for many years and the final analysis won't be written for at least a generation.
But at the end of the day, our tiny circulating discs are still coins and coins still work like money. If silver coinage represented American economic power in real terms, then clad coinage represented American economic power based on faith and credit. Rare is the person who buys a house with gold or silver bullion. And not many people can pay for their house in full, up front. It makes sense that a system like this would have an equivalent monetary policy.
So, to those in attendance who answered in the affirmative to Mr. Hall's question (which posits that moderns aren't coins because they're not "money", and they're not money because they're not intrinsically valuable),let us remind them that it is the economic code we live by that determines what is money and what are coins. And if numismatics is the study of coins, then why stop that study at some arbitrary date? We may be in a slide towards the oblivion of circulating physical money, but that doesn't make the appreciation of it any less important. Are we stacking bullion or collecting coins? It's an important question.
Our third point concerns the very nature of third party grading. Ask any collector of high-end modern material if they'd be so heavily invested in their series were it not for set registries and third party grading and the answer would probably be no. While grading coins is as much an art form as a science, the perception of scientific impartiality has created a sophisticated market where fractional improvements in quality can lead to sizeable increases in value.
The Set Registry, which may very well become the most significant development in coin collecting, emphasizes quality. It drives collectors to seek out the best remaining pieces. This is why we feel that once certain things are done, such as the culling of mint sets, then the realization will set in that the long-assumed hoards of moderns may not actually exist.
Our fourth point needs some elaboration. We make the case that the Modern era ended in the early 1980s. Thereafter, everything about coinage differed from what came before. Only when collectors see the passing of the so-called "Modern" era, replaced by the present period, will we see the critically important coinage of the '60s, '70s, and early '80s in the proper light; not in terms of an investment (that's an ancillary goal) but as a numismatically important chapter of our nation's history.
Next, most modern coins are only collected in mint state. I'm sure if you take a census of the state of coinage from any of the modern years, the actual numerical mint state will vary wildly. At this point, the competition for high-quality mint state examples isn't really that robust. Spectacular examples, whose scarcity in the market is already quite obvious, sell for much less money than their classic counterparts.
The specter of easy availability still haunts the modern collector. The more sophisticated you become in this area, the easier this landscape becomes to navigate. The more familiar you become with the quality and availability of many modern issues (especially 1965-1985), the more you realize how difficult it is to flood the market with high-end coins.
That's not to say there won't be hoards or crashes with certain dates. These things are inevitable. Collectors of high-end Eisenhower dollars were more than a little nervous at the news that Littleton had purchased a hoard of unopened mint-sewn bags of Ike dollars from a bank in Montana. But they woke up the next morning considerably calmer once they considered the sheer improbability that those bags held dozens or hundreds of top pop Ike dollars. To date, that hoard has added no coins to PCGS top population grades.
And this is what makes the search for moderns so democratic. It's a collector's era. Collectors are the ones in control of the hunt, collectors are the ones making the top end coins, and collectors know their series better than dealers. The 2010s are like the early 1960s were for classics, when Morgan dollars were plentiful and numismatists were cherry picking all of the tough dates.
Perhaps all moderns need to cast out the phantasm of collectability and scarcity is something as simple as the destruction of mint sets. With those raggedy old things gone, maybe collectors and dealers will begin to focus on moderns the way they do classics - with one eye toward quality and the other on scarcity.