No single factor determines rarity. Many factors have to be considered before declaring a coin "rare."
A few of the factors that can lead to a coin being considered rare are total mintage; normal or abnormal attrition as a result of circulation, accidental loss or destruction, and official and private meltings; and the level of public and collector interest in a coin at the time it is being released into circulation.
Remember, however, that "rare" is relative. So, too, is value; a rare coin may not necessarily be valuable if no or little collector market exists for it.
Mintages
The total mintage represents the number of coins struck at the issuing Mint. It sets the upper limit of potential collectible examples.
The number of genuine specimens available to collectors can never be more than the overall number of coins that were initially struck.
Except that is not the full story, for several reasons.
Actual mintages are uncertain for some coins. In cases of standard bookkeeping practices early in U.S. Mint history, especially for 18th and 19th century coinage production, the original mintage numbers currently published in reference books and research journals may only be approximations.
The U.S. Mint's earliest records reflect the number of coins delivered during a calendar year.
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JUST ONE EXAMPLE of 1933 Saint-Gaudens gold $20 double eagle, of the 445,500 pieces struck, is legal to be privately owned. Ten more examples surfaced in private possession in 2004, revealed in 2005, but they are now in government custody. The Mint considers these 10 examples illegal to own, maintaining the rarity of the piece that sold for more than $7.59 million in 2002.
Images courtesy of HeritageCoins.com.
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The actual year in which the coins were struck and the date or dates on the coins are not noted separately in Mint records.
As an example of this procedure, the Treasury received 50,000 Draped Bust quarter dollars in April of 1807, according to the only record existing today for the delivery.
Researchers believe the shipment could have included coins dated 1805, 1806 and 1807, but collectors likely will never know for sure.
Mintages also can be uncertain due to later restriking. Some Mint officials in the 19th century operated an unofficial side business of producing rare coins for sale to dealers and collectors.
For example, researchers believe that after the Philadelphia Mint struck original 1856 Flying Eagle cent patterns, it restruck the coin during two distinct periods.
The total estimated mintage for the coin of 2,050 encompasses the originals and both series of restrikes.
Official records give modern collectors a pretty accurate accounting of the number of original pieces struck and distributed. The number of off-the-record restrikes can only be estimated.
As noted, total mintage, barring new production, is the top limit. Once coins are released into circulation (today by banks and other financial institutions that have received the coins through the Federal Reserve Banks, where they are shipped by the Mint), the number of collectible examples begins to spiral downward.
Coins may become worn beyond recognition, hoarded by consumers or melted and reclaimed for their metal value and possibly used for recoining.
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NEARLY THE ENTIRE production of 4,000 1873-CC Seated Liberty, No Arrows quarter dollars, struck in January of that year, was melted pursuant to provisions of the Silver Act of Feb. 12, 1873. Only five examples are known.
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Coins may be lost: some buried in the ground individually, others by the thousands in shipwrecks, still others when trucks hauling them from the Mint to the Federal Reserve catch fire and burn (as happened last year to a shipment of 2005-P Kansas quarter dollars).
Such disruption to the available supply of collectible examples does not always occur in equal proportion to the number of coins minted.
Certain coins exhibiting an unusually large original mintage are sometimes extremely difficult to obtain in pristine grades. Such coins are considered "condition rarities" and may garner exorbitant levels of money at auction although the coin is relatively common in low grade.
Coins may become slightly rarer through illegal acts. Relatively common coins, such as the 1889 Morgan dollar and the 1916 Winged Liberty Head dime, both struck at the Philadelphia Mint, without Mint marks, have experienced attrition through fraudulent alteration. The altered coins are misrepresented and sold as the more valuable Branch Mint counterparts to the Philadelphia Mint coins: the 1889-CC Morgan dollar (mintage 350,000) and 1916-D Winged Liberty Head dime (264,000).
Jewelry makers can also contribute to lower survival rates for coins.
According to numismatic lore, some of the famous 1879 and 1880 gold $4 Stella pattern pieces, minted in small numbers (as originals and restrikes), were holed and made into earrings for presentation to the wives of members of Congress. The 1879 Flowing Hair Stella had an estimated mintage of 425 coins; the 1880 Flowing Hair, just 25. The 1879 Coiled Hair Stella had a mintage of 25 coins; the 1880 Coiled Hair type, just 20 coins. Holed examples of Stellas are known, indicating some truth to this story.
Melting
In addition to the occasional destruction of coins by accident or carelessness, coins have often been intentionally melted in large quantity for their precious metal content.
The U.S. government has been a zealous smelter of U.S. coins, although private enterprise has contributed greatly to the melting of many silver and gold coins.
When great increases have been experienced in the prices of precious metals, especially gold and silver, many millions of coins are melted privately because the intrinsic value of the metal is worth far more than the face value of the coin.
Those melting the coins rarely keep records of the dates and Mint marks of the coins being melted, making research difficult for collectors.
Melting U.S. coins for their bullion content has been a problem since the very beginning of federal coinage.
Early silver dollars and other U.S. silver coins were often exchanged for the silver Spanish colonial issues.
The heavier U.S. coins were then exported and melted. This melting reduced the number of coins of any particular issue available to later collectors.
Official changes in weight standards have also encouraged melting.
The standard weight of each U.S. gold denomination was reduced in 1834, resulting in most of the pre-1834 gold coins being melted (and resulting in almost universally high prices today).
A number of pre-1834 gold $5 coins had original mintages of 10,000 coins or more, yet today they are represented by, literally, only a handful of surviving examples.
When President Franklin Roosevelt ordered gold coins withdrawn from circulation nearly a hundred years after the 1834 reduction in weight, and U.S. citizens were prohibited from owning many gold coins, incredible numbers of coins, including issues with great numismatic value, were turned over to the government (or never released) and eventually melted.
These included the 1933 Saint-Gaudens gold $20 double eagle, of which 445,500 examples were struck.
According to government officials, none of the 1933 Saint-Gaudens double eagles were ever officially released into circulation. The government retained two examples for the Smithsonian Institution and melted the rest, or so it thought.
Despite government efforts to hold and destroy all of the 1933 Saint-Gaudens double eagles, some entered coin collections. Philadelphia jeweler Israel "Izzy" Switt purportedly possessed 25 examples in the late 1930s and early 1940s, although he only admitted (to the Secret Service) to selling nine coins.
During the 1940s, aided by the information Switt provided, the U.S. Secret Service recovered the nine examples from collectors and dealers; the government later destroyed all nine pieces.
Another example surfaced in 1996 during a Secret Service undercover investigation, and after five years of legal action between the Mint and the British dealer who imported it, an out-of-court settlement was reached that allowed the example to be sold in 2002 (it brought more than $7.59 million). It is the only such example monetized and declared legal to own.
In the fall of 2004, 10 more 1933 Saint-Gaudens double eagles surfaced, turned over to Mint authorities by the Switt family (Israel Switt is deceased).
The 10 examples are now held at the Mint's Fort Knox Gold Bullion Coin Depository in Kentucky, while a legal challenge seeking retention of ownership by Switt's heirs is likely being prepared. Mint officials have said that they will not destroy these pieces as they did with the coins Switt sold more than half a century ago.
Mass meltings of silver coinage have occurred, too. The price of silver in 1853 reached the point that all silver issues, except for the 3-cent coin, were worth more than their face value, leading to their being melted by speculators. The government corrected the problem through decreasing, by approximately 7 percent, the weight of the half dime, dime, quarter dollar and half dollar. (Silver dollars were not lightened.)
The Mint placed arrows on either side of the date on the lighter-weight coins to distinguish them from the coins struck before the weight change.
This was done not to signal to the public the weight change but to aid the Treasury in withdrawing the older, heavier coins for melting, and thus, earn a profit for the government in the process.
The arrows were removed from the coins after 1855, although the lighter weight was maintained.
In 1873, an insignificant increase was made in the weight of the dime, quarter dollar and half dollar (the standard silver dollar was eliminated as a denomination by the same law adjusting the weight of the other coins).
Again, arrows were placed at the date to denote the change, even though no withdrawal of the pre-1873 coins was necessary.
Some coins had already been struck in 1873 at the lighter weight and without the arrows at the date. Such coins were to be melted but a few surviving examples struck at the Carson City Mint resulted in a fabulous rarity. Only five examples of the 1873-CC Seated Liberty, No Arrows quarter dollar are known.
The ban on producing silver dollars was short-lived; the denomination (at the old weight) was reauthorized in 1878, largely at the urging of silver miners (consumers didn't want the coins).
From 1878 through 1904, and again in 1921, hundreds of millions of Morgan dollars were produced, with much of the mintage placed immediately into storage in Mint-sewn bags due to the low demand for the denomination.
More than 270 million of these surplus coins were melted after World War I.
Although large quantities of unwanted and unnecessary silver dollars were melted in 1918, pressure exerted by silver miners in the United States and their supporters was again powerful enough to have more unneeded and unnecessary coins struck.
The result was the production of tens of millions of Morgan and Peace dollars in 1921, and just Peace dollars through 1935, the majority of which were stored in Treasury's vaults, unneeded in commerce.
Opening the vaults
Some of the stored silver dollars gradually made their way into circulation (requests for the coins increased at holiday time, for their use as gifts).
This gradual release at times had a major impact on the coin market. In 1962, as the annual holiday demand for silver dollars as gift approached, the Treasury Department began distributing hundreds of thousands of 1903-O Morgan dollars. At the time, the 1903-O Morgan dollar was considered a very rare coin (most of the mintage having never entered circulation), with an Uncirculated example worth $1,500. The sudden dumping of hundreds of thousands of Brilliant Uncirculated 1903-O Morgan dollars onto the market resulted in a dramatic drop in value; the price of a BU example dropped from $1,500 to $30 in short order.
A similar drop was recorded for the 1904-O Morgan dollar, for the same reason and at the same time. Brilliant Uncirculated examples fell in value from $350 to $3.50 in a short time.
Still, the supply of silver dollars in government vaults remained plentiful and might have lasted indefinitely had the price of silver not risen above $1.29 per ounce - the point at which the coins would be worth $1 in precious metal content - in 1967. The public, which once wanted the coin only at Christmastime, increased the redemption of paper silver certificates for silver dollars straight from Treasury vaults.
When it was discovered that a few bags of Seated Liberty dollars, dated 1859 and 1860, had been released at face value, thousands of collectors and speculators rushed to the Treasury to see what else was held in storage. Within months, the stockpile of silver dollars fell from literally hundreds of millions to less than 3 million, and several additional formerly scarce coins had become quite common.
By the end of 1968, the government stopped redeeming silver certificates in silver.
Most of the 3 million dollars retained by the Treasury were Uncirculated coins struck at the Carson City Mint. Most of these pieces were dated 1882, 1883 and 1884, all considered scarce.
With an end to redemption of silver certificates, Treasury officials had to decide what to do with the dollars. It decided to go into the rare coin business and sell them at premiums to collectors. They were turned over to the General Services Administration, the government agency that disposes of federal property, and a sales program was implemented with the advice of the coin collecting community. After seven successive sales by the General Services Administration beginning in October 1972, even the 1882-CC, 1883-CC and 1884-CC Morgan dollars had been sold to collectors.
The rarity of some coins can be explained by the high mintages of other coins. In many instances, the heavy production of one denomination, such as silver dollars, was made at the expense of other denominations. Mintage figures for dimes, quarter dollars and half dollars of 1878 to 1890 and for cents through half dollars for 1921 to 1928 were small because of the focus on silver dollar production.
Similarly, the production of fractional silver (dimes, quarter dollars and half dollars) increased in 1890 because of the Sherman Silver Purchase Act. However, the output of dollars dipped between 1893 and 1895 because of opposition to them from President Grover Cleveland, not because of the increased production of the other denominations. Cleveland blamed the silver dollar for the business panic of 1893.
The 1893-S Morgan dollar is a major rarity, with a mintage of 100,000. Authentication is required since it is the target of counterfeiters who may alter Philadelphia Mint 1893 Morgan dollars.
Mint records can also be inaccurate or misleading. Records suggest that 12,000 circulation-strike Morgan dollars were delivered by the coiner in 1895, although only Proofs and impaired Proofs worn from circulating are known. For decades, collectors wondered whether the supposed circulation-strike 1895 Morgan dollars were among the millions of silver dollars stored in government vaults, and eventually among the millions of coins melted after the war. However, a close examination of Mint records by researcher Henry Hettger indicates that the 12,000 coins delivered in 1895 were struck in 1894, making it likely that the dollars were dated 1894, not 1895.
Careless handling
Once collecting became a popular pastime in America in the early 1860s, collectors became concerned with a coin's condition; they wanted the best examples available. This usually meant Proof coins. If the number of Proof coins of an earlier year was insufficient to meet current demand, the Mint could often be induced to strike a few backdated coins. In some instances, as noted earlier, these "semi-official" restrikes have become important collectibles.
Several hundred collectors in the United States in the 19th century began to focus on obtaining one example of each date of each denomination in which they were interested. This was accomplished with a Proof coin delivered to the collector from the Philadelphia Mint.
No interest was shown in collecting by Mint mark. Thus, many issues produced at the Branch Mint facilities at San Francisco, New Orleans and Carson City are unknown in Uncirculated condition.
The national economy has a great deal to do with the number of coins that survive, especially in high grade from a particular era. During times of recession or depression, few coins are produced and fewer people have the surplus funds to acquire coins for safekeeping and as collectibles. Some such eras are the Great Depression of 1929 to 1939 and the 1949 and 1958 recessions.
Saving lots
Rarity can also be affected by the public's saving of large quantities of coins after a design change. For example, in 1883, the Mint released the first of two versions that year of the new Liberty Head 5-cent coin. The reverse features a large Roman numeral V to represent the denomination, but no other indication of the denomination. After some were reportedly plated in gold and passed as gold $5 half eagles, Mint officials revised the reverse design by adding the word cents to it.
When the public became aware of the change in design through news reports, they pulled massive numbers of the first version (lacking the cents) out of circulation, and ignored the new With cents version. Since the design change came rather quickly, more of the With cents version were struck (16,026,200) than of the No cents version (5,474,300). However, prices for the second version are consistently higher than for the first, lower mintage version. The public's widespread saving of the first version, and its ignoring of the second version, meant more of the lower mintage coin was saved than of the higher mintage version.
Ultimately, though, rarity only translates to value if a strong market exists for a particular coin. Many commemorative coins issued since 1982 are worth less than their issue prices because of low collector interest today (these tend to be the coins ordered in large numbers when sold by the Mint). In contrast, prices for other commemorative coins sold since 1982 that few had an interest in purchasing when the Mint was offering them have now climbed to many multiples of their issue price. The low sales, and renewed collector interest and awareness of their rarity, have translated to higher prices.
