Coins Certified as of 11/25

A Quick Look at Silver-Clad Kennedy Half Dollar Circulation Strikes

Talk about an under-appreciated series. The silver-clad Kennedy half dollar has always played second fiddle to its one-off 1964 and 1964-D 90% silver counterparts. And while roll hunters enjoy finding these 40% silver pieces (with their current intrinsic value of just over $4) scattered among bank rolls, the real excitement comes from studying and collecting this important and oft-neglected series of mid-century American coinage.

No write up on the Kennedy half is complete without a description of the circumstances surrounding its creation. We'll spare you the drama over the effort to get the slain President's likeness on a coin as soon as possible, but we will say that the timing of the coin's release couldn't have been worse, considering the transition away from circulating silver that was going on at the time.

Needless to say, public shock and heartbreak surrounding Kennedy's assassination led the public to save the coin as a memento. Silver speculators, it seems, claimed much of what was left. The decision to continue production with a debased silver composition while every other circulating coin was fully debased all but snuffed out any chance that the coin would survive as a circulating medium. Still, the government did make an effort to get these coins into the stream of commerce and it's only now, due to the elevated prices of precious metals, that we see a fuller appreciation and understanding of them.

So without further ado, here's a look at each of these issues, starting in 1965.

1965: A New Coining Composition

1965-dated silver-clad half dollars entered circulation in the spring of '65. Distinguishable by the slight pinkish hue of the rim (on some issues) and (obviously) the date, speculators hoarded the coin and so it failed to remain in circulation for long. Silver prices in 1965 meant that the 40% silver half dollar was intrinsically worth 19 cents at the time of issue. That value increased to over 30 cents in 1968, and was over 70 cents by 1974.[1] Because of inflation, this meant that as the purchasing power of a fifty-cent piece diminished by nearly 50%, the value of the coin's metal increased by about 300% during the same period.

And while the coin is still readily available, it's unclear how many out of a mintage of almost 66 million survived the smelting oven. It's possible that the number is still several million, but how many of those have been well-cared-for and how accessible are these coins to the marketplace? When looking for exceptional pieces, the key is to not have to go through piles and piles of recycled material. We think it's clear, looking at the number of coins submitted for grading over the 25 years that PCGS has been in business, that the pool of fresh, high quality examples accessible to dealers for picking out PQ pieces isn't all that deep. With silver at nearly $30 an ounce, and the value of an MS-65 specimen being six times melt, and the value of an MS-66 being more than sixty times melt, you'd think the motivation was there for bulk buying and grading.

As far as the examples that PCGS has graded are concerned, most are in the MS-63 to 65 range. It may come as a surprise to see modern issues graded in the lower mint states with any regularity, but what we believe happens is that submitters have a hard time differentiating between MS-64 and MS-65. When a coin isn't typically found in quality, one tends to compare it to its peers. When one has a dearth of truly nice samples, an MS-63 might look like a 64, an MS-64 might look like a 65, and an MS-65 might look like a 66.

The lack of mint sets means that there's no store of half dollars from this date that are almost guaranteed to be made from fresh dies. In addition, while the coin's composition was softer than the Cu-Ni clad that would be adopted for the denomination in 1971, the silver-clad planchets were slightly harder to strike up than the 90% silver halves that came before. Still, the 1965 Kennedy half did tend to strike up well. But like every other issue in this short set, you really have to get a feel for the spread inside each grade. Strong attractive coins at MS-65 and MS-66 will jump out at you and deserve a premium over current pricing levels.

· For those who'd like to include varieties in their set, a really cool doubled star DDR exists for this date (FS-802).

1966: Beauty and the Beasts

Ok, maybe it's not fair to call every coin that's not cert# 21637943 - the issue's sole MS-68 – a beast, but you won't find one single coin from this date run that rivals that piece in terms of surfaces and luster. That coin more closely resembles the collector's uncirculated bicentennial half dollar than a coin struck en masse for circulation, and we have no doubt that it will be one of the most highly prized examples of the Kennedy half dollar series for generations to come.

For whatever reason, the '66 is the toughest to find nice. It has half the population of MS-66 coins as the 1965 and 1967 issues, and the price of the '66 half keeps going up and up and up. It's amazing to think that the coin sold for under $50 on Teletrade in the late 1990s!

Most graded examples from this date fall between MS-63 and MS-65. In the wild, however, you're looking at a series that mostly comes MS-60 to MS-63. Dealers and collectors have been fooled time and time again by nice looking MS-64s that pretend to be 65s. Pricing in MS-65 has held remarkably steady for the past fifteen years. Exceptional toners have brought in considerable premiums, but given the extreme difficulty of finding pieces in MS-66 or above, any truly nice MS-65 is a great buy at current market levels.

· PCGS attributes the FS-101, a nice DDO. And like the regular issue, it's very scarce in gem.

1967: The Last Philadelphia Circulating Coin Struck in Silver

1967 was the last of the three Special Mint Set years, which again means that no ready reserve of business strike examples in mint set packaging remain by the hundreds of thousands for collectors and dealers to plunder. Like rolls from the previous two years, most of the coin hoarding wasn't done by collectors or dealers, but by speculators. Most of the nearly three hundred million coins struck are believed to have been melted, and finding original unsearched rolls at this late date is a bit of a challenge - and a longshot if you expect to find examples that grade MS-65 or better.

Grade distribution for this set (per submissions to PCGS) sees most quality specimens clustered in the MS-63 to MS-65 range. There are a few more MS-66s from 1967 than 1965, but both population totals may be exaggerated given the big jump in value from MS-66 to MS-67. We wouldn't be surprised if there were actually fewer than 70 coins from each date presently in PCGS holders and of that number, how many are truly exceptional for the grade? Eagle-eyed buyers will certainly be rewarded down the road as any further climb in silver prices is only going to thin the herd of silver-clad Kennedys even more.

1967 marked the end of the Philadelphia Mint's 174-year history of producing silver coinage for the nation's economy. It would take the re-launch of the United States commemorative program in 1982 before the Philadelphia Mint would strike silver U.S. legal tender coins again. In this case, it was the 1983-P Los Angeles Olympics commemorative dollar. Unlike the silver-clad half dollars, it was the high cost of the coin, and not the silver content necessarily, that made sure those coins wouldn't circulate either.

It would be four more years before Philadelphia struck another Kennedy half dollar for circulation.

· PCGS attributes three doubled dies from this issue: the FS-103 (DDO) has very pronounced doubling in the motto and the first few letters of LIBERTY. FS-801 (DDR) has seen strong bidding for coins in the MS-64 and MS-65 (top pop) range.

1968-D: An Issue That Comes Nice

Uncirculated mint sets returned in 1968 and half dollar production moved to Denver when Philadelphia bowed out. Of the six issues of this silver-clad set, the 1968-D is the most abundant in gem, with over a thousand examples certified MS-65 or above, with a whopping 335 graded MS-66 and 20 pieces graded MS-67! The difference in quality between the Denver Mint's product in 1968 and what came out over the course of the three previous years was dramatic, and in many ways indicative of the rivalry the branch and main mint would have with one another over the course of the next decade. You can really see this play out when it comes to Eisenhower dollars, which the Philadelphia Mint had a dreadful record of producing with any eye for quality. But we digress.

Due to its quality, the 1968-D is a good starting point for collecting the set. It helps would-be specialists develop an eye for quality and develop their own tastes. Unlike some of the issues in this set, the '68-D will likely prove to be a coin where finding an MS-66 in the raw is achievable with a little effort.

· Also, while looking for your own beautiful examples, keep an eye out for FS-101, a minor TDO with tripling visible in the right side of the motto.

1969-D: Silver-Clad as a Circulating Medium Bows Out

In 1999, a golden toned 1969-D Kennedy half dollar in MS-67 sold on Teletrade for $283. Today, you might get a sniff of an average-looking MS-66 for that kind of money; even MS-66s sell in excess of $320. In 2005, that same 1969-D sold at Heritage. The hammer price leapt up to $4,313, an increase of 1424%. In 2013, the population of the coin at that grade sits at just three. With the proper venue and promotion, it's not inconceivable to see one of the three specimens bringing close to $10,000 at auction.

As with most of the issues from 1968-1970, mint sets give you the best odds for finding higher end pieces. Unfortunately, finding truly unsearched mint sets is hit or miss, and those still sealed in U.S. Mint shipping boxes go for upwards of three times the going rate of your typical opened mint set. Distribution and the massive silver melts continue to be a serious obstacle to those seeking out their own world class coins.

1970-D: Overlooked Modern Key Date (For Quality)

We're not ones to follow the conventional wisdom when it comes to assigning key date status to modern coins, but in our opinion the 1970-D has all the earmarks of being one of the great modern issues. It may not be scarce, but when it comes to assembling a set of quality pieces, the 1970-D isn't an easy pull.

Now, more than forty years after their release, the paucity of attractive pieces relative to the two plus million pieces struck gives us confidence in our belief that there will be much more demand for gem quality pieces of this issue in the future. And probably sooner than later.

A small percentage of 1970-Ds were struck on prooflike planchets, giving them a nice, reflective appearance. Most prooflike examples are marked up rather heavily[1], so finding one in MS-65 or above will take some doing. Still, with the chances of finding one with exceptional mirrors and exceptional surfaces being low, we believe such a coin would be a standout in a series replete with interesting issues. Also, high grade pieces that were pulled out of government packaging and left to tone naturally in albums are extremely scarce (CoinFacts has yet to publish a single image of a 1970-D that we'd call a toner), which means that if a truly exceptional piece with eye-popping color ever hit the market, we'd expect someone to pay moon money for it.

A Short Silver Series That's Worth the Effort

Overlooked for too long, this short set is only now starting to come into its own. With the growth of interest in the formerly unpopular Franklin half dollar, history has proven that collectors eventually warm up to all series once they're far enough removed from the present day. The Kennedy half dollar is an unusual series that serves partly as a memorial to our last slain president and partly as a bridge over the chasm between two distinct periods of American coinage.

Silver hoarders and profiteers may have held onto the coins as a hedge against inflation, but collectors are starting to wake up to this short set's very real numismatic potential. Here's hoping enough great material is out there for those collectors dedicated and patient enough to take the plunge.

[1] Typically with die polish lines, but these silver-clad issues tend to come heavily bag marked.

[1] http://minerals.usgs.gov/minerals/pubs/commodity/silver/880798.pdf

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