By Stanley Apfelbaum President, PCI
This is, truly, an astounding work which you hold in your hands. Walter Breen covers every aspect of the subject of United States Proof Coins !
I believe that proof coins may indeed be the subject of a fine investment portfolio, and I direct your attention to two specific areas:
a. A type set of proof coins;
b.The proof sets of 1936 through 1942.
But first ...
A CURIOUS ANOMALY
It is no less an expert than Walter Breen who stated in a recent letter to the writer of this chapter that: "We are now, for better or worse, but mostly for worse, stuck with only a ten-point gap between ordinary Mint State and pristine superb Mint State coins, a gap representing a price differential Often far greater than that between ordinary Mint State and Fair! When Dr. Sheldon standardized his grading scale, a Good 1794 copper coin averaged double a Fair, a Fine averaged three times a Good, a VF five times a Good, EF eight times a Good, and Uncirculated twelve times a Good or five times a Fine, three times a VF; a bright red Unc. went for something like 15% more than an ordinary light olive or light brown. These ratios in price gave rise to the famous Sheldon Scale of 1-70. Now they no longer mean what they did then in terms of any hypothetical "science of cent values," especially when they are being stretched and compressed to apply to silver and gold coins to which they were never intended to apply. These numbers have become totally arbitrary, and in the Mint State 60-70 range, they are extremely inconvenient."
What Walter is getting at, is that there should have been a much larger gap between Mint State 60 and Mint State 70 - probably 100 points, possibly a 200 point gap, rather than the inadequate 10 point gap that is being used today because of the original thesis of Sheldon. As Walter Breen points out, the Sheldon scale of grade and values is no longer applicable, and is impossible truly to apply to silver and gold coins. What has this to do with Proof coins?
Every year Walter Breen provides a most important service for the "Red Book" (The Yeoman Guidebook), in compiling auction records on all important coins sold during the year, which then serves as part of the basis for price changes for the yearly editions of that most important catalog. In a recent analysis of the auction prices brought by proof coins during the year 1976, Breen tabulated the price range, the lows and highs brought by proof coins of various series. This study was to show the widening gap between a proof piece that might be dull, or hairlined, or even slightly cleaned, and a piece which is a Gem Proof coin with no contact marks, full lustre, and no signs whatsoever of circulation or of any surface contact with another object. He notes that (for example) Proof 3Â¢ coins range in prices realized follows:
TRIMES. RANGE OF PROOF COIN PRICES BROUGHT AT AUCTION IN 1976.
Note the disparity between the "common" proof coin and its Gem counterpart. More than a 50% difference exists on balance. Let's look at another series:
HALF DIMES. RANGE OF PROOF COIN PRICES BROUGHT AT AUCTION IN 1976.
The tabulation for Dimes shows much the same thing, as well as for Quarter Dollars. Always the gap ... a disparity of an average of about 50% difference in price between an ordinary piece and an uncommon piece. Half Dollars show the same disparity, which leads to the opinion of your writer that the difference between the superb uncleaned, non-hairlined, sans contact-mark pristine proof coin as compared to the ordinary proof coin, is similar to the difference in price differential to that of the ordinary Uncirculated business strike, as compared to the Gem Brilliant Uncirculated coin. Walter says: "We are beginning to see in practice, if not in print, how the term "Proof" covers a vast range of actual quality, and the price structure is beginning to reflect the recognition." The series in which this showed up most dramatically in 1975 (it has been much the same since then) was the 20Â¢, in which an ordinary Proof with the usual signs of cleaning, for 1875, might bring $300 or $350, compared with four-figure prices for Gems; much the same story for 1876 and - at a higher level -for the 1877 and 1878.
The point is made. Quality speaks for itself. The future realization of profits for the rare coin investor depends upon the quality of material purchased. It is almost certain that a Gem Proof coin will increase in value at a much higher rate than that of its poor sister coin, the cleaned and mishandled lesser piece, selling for the lower price. Thus ... pay the price! That's the lesson taught to us by the demonstrated disparity between the grades within the proof coin field.
And now to both of my specific thoughts on Proof coin investment today ...