The surviving number of Proof sets and Uncirculated Mint sets issued by the United States Mint may be smaller than many may think.
Each year, the Mint produces sets in quantities ranging from hundreds of thousands to the low millions, for dealer and collector consumption.
Not all of these sets, however, remain as sets in their original packaging.
Untold thousands of sets are opened annually, driven by collector demand for individual coins within those sets.
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COLLECTORS WANTING a 1970-D Kennedy half dollar to add to their collections have to purchase the Uncirculated Mint set for that year or buy a coin removed from a set, since no half dollars were struck for circulation.
Image courtesy of HeritageCoins.com.
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That demand for individual coins can drive up the price of an intact set and encourage the breaking up of sets, with the individual coins sold to the collecting populace.
Just how many sets are broken apart is uncertain.
Proof coins had been available to the public from the U.S. Mint as singles, in some instances, and in sets, from 1858 to 1916 and from 1936 to 1942.
Sales of Proof coins packaged exclusively in sets began in 1950, first with the coins held in individual plastic sleeves housed within a cardboard box, and then from the spring of 1955 to 1964, in polyethylene plastic holders housed within a paper envelope.
Uncirculated Mint sets have been a collecting staple since 1947.
Collectors can buy both Proof sets and Uncirculated Mint sets directly from the Mint, and undoubtedly many keep the sets intact in their original packaging while others likely break them up. According to some dealers, their collector customers opting for individual coins from the Proof and Uncirculated Mint sets do so mostly because of the quality of strike and lack of handling of the coins after striking in comparison to coins struck for circulation.
Proof coins, generally, are considered the cream of striking quality, with examples often struck two or more times on a coinage press using greater pressure than used for coins struck for circulation, all to bring up the sharp, needlelike features in individual coin designs.
Both the dies and planchets receive special treatment before their use.
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COLLECTORS MAY desire to acquire an entire roll of coins, like these 1976-D Eisenhower dollars acquired from Uncirculated Mint sets, and store them as a roll in a single tube or maintain the individual coins in their original Mylar plastic compartments cut from the original sets.
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Current Uncirculated Mint set coins are also of a higher quality than the circulation coins, though the extra care used in striking the coins for the sets is a recent innovation.
Many collectors opt to include such Uncirculated Mint set coins in their denominational collections in lieu of circulation-quality pieces.
The circulation-quality coins are struck at higher speed and in larger quantities, and often exhibit less-detailed strikes and more eye-detracting defects.
According to some dealers - including Ken Pines from Coast to Coast Coins in Columbia, Md., and Kirk Kelly from the Coin Depot in Columbia, S.C. - in many cases, the impetus for breaking apart the sets is for a collector to maintain his or her collection of a particular series or denomination by date and Mint mark.
Those collectors often house those collections in special display albums, or possibly in the plastic holders of an independent third-party grading service.
Some collectors may want total completeness and will try to obtain one of each coin struck in the various options available - circulation quality, Uncirculated Mint set and Proofs.
The latter two options will require breaking up established sets, thus limiting the number of remaining intact sets from those originally released.
"It's all a case of supply and demand," Pines said. "The prices of many of these sets are driven up by the demand for the individual components.
"If the parts aren't worth as much or more than the set price, it's not worth breaking the sets up."
The addition of new coin series, such as the Sacagawea dollar, State quarter dollars and the 2004 and 2005 Jefferson 5-cent coins from the Westward Journey Nickel Series, has also added to the collector interest for individual coins from sets.
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THE 1973-D Eisenhower dollar, shown, along with the 1973 dollar struck at the Philadelphia Mint, are desired because they can only be found in the year's Uncirculated Mint sets, not in circulation. Image courtesy of HeritageCoins.com.
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"State quarters have been hot since they came out in 1999," Kelly said. "Sacagawea dollars are hot as well as the half dollars." His firm breaks apart thousands of Uncirculated Mint sets and Proof sets annually.
Kelly said he can go for a week or two and not have to break up any sets, then have a spurt where he's breaking up 5,000 to 10,000 sets or more.
Collectors aren't his only customers. He'll often sell rolls of individual denominations from the sets wholesale to other dealers for sale to their collector customers.
According to Kelly, Sacagawea dollars, Kennedy half dollars and State quarter dollars are most in demand as single coins, followed by the Jefferson 5-cent coins. They are trailed by demand for the Lincoln cent and Roosevelt dime.
Also fueling the dismantling of sets is the trend of collectors and dealers seeking the best possible examples to submit for third-party certification, so the number of intact sets continues to dwindle.
Collectors and dealers have additional options when selecting sets to break up, with the addition of Silver Proof sets and regular and Silver State Quarter Proof sets in the 1990s, and other special annual sets including a new issue.
Out of necessity
In some cases, sets have been broken apart because certain coins are available from no other source. For example, two sets are the only sources for circulation-quality Kennedy half dollars.
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UNCIRCULATED MINT SETS are usually broken up for specific coins in order to assemble denominational collections. In the case of the 1987-D Kennedy half dollar, shown still in the part of the original set packaging in which it was sold, the coin, along with the 1987-P Kennedy half dollar, was only available in sets. No Kennedy half dollars were struck in 1987 for circulation.
Image courtesy of John O'Connor / jociv on eBay.
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In 1970, the denomination was not struck for circulation at all.
None of the denomination was produced at the Philadelphia Mint.
The 1970-D Kennedy half dollar was only included in the 1970 Uncirculated Mint set, so a collector who wanted an example had to either acquire the set and then separate the coin from its original packaging, or acquire a coin removed from a set by someone else, in order to maintain a complete Kennedy half dollar collection.
The U.S. Mint released 2.15 million of the 1970 Uncirculated Mint sets, and it's likely a considerable number of those sets were broken apart just to acquire the half dollar.
The same is true for the 1987 set, only with a few twists. The Kennedy half dollar was struck at three production facilities - the Philadelphia Mint, the Denver Mint and the San Francisco Assay Office - but the denomination was only included in special sets for those years.
The San Francisco facility produced 3,356,738 1987-S Proof sets, but the number of sets with the coins still residing in their government-issued and sealed plastic holders is likely considerably lower than that.
While the Proof versions of the circulating coin denominations were also included with the Proof 1987-S Constitution silver dollar in the 435,495 Prestige Proof sets sold for that year, it's unlikely many of those sets were broken apart.
The two circulation-quality Kennedy half dollars were available in the 1987 Uncirculated Mint set, of which the U.S. Mint reported distributing 2,890,758.
An undetermined number of those sets were likely broken apart to claim the half dollars.
The half dollars were also available inside the two individual Souvenir Mint sets, each set representing half of the coins in an Uncirculated Mint set and only available at the facility where the coins were produced.
Kennedy half dollars are not the only denomination sometimes found only in a collector set.
The 1973 Uncirculated Mint set was the only place to acquire the 1973 Eisenhower dollar, struck at the Philadelphia Mint, and the 1973-D Eisenhower dollar, made at the Denver Mint.
In 1973, Eisenhower dollars were not produced at either production facility for circulation.
Some 2 million of the sets were released, but not all survive intact today, and more will likely be broken up, further reducing the number of intact sets.
Breaking up
Paul Sims from the Richmond, Va., coin company that bears his name, estimates his firm breaks up a combined total of 150,000 to 160,000 Proof and Uncirculated Mint sets of all kinds annually, representing roughly 3 million sets over the past 20 years.
That combined figure reflects 4 to 6 percent of the Proof set production in any given year over the past 20 years, Sims said.
Of the total number of sets broken apart, Sims estimates that Uncirculated Mint sets account for no more than 15 percent.
"The reasons for breaking up the sets differs from set to set," Sims said. "It could be for the Sacagawea dollar, the Kennedy half dollar, the Eisenhower dollar or even the Lincoln cent."
The "death rate" for Proof sets is usually the highest within the first five years of release, but the demand for individual coins requires a steady consumption rate of approximately 2 percent of the remaining total after that, Sims said.
The rate at which sets are broken apart in any given year after the initial set release can increase or decrease depending on collector interest and dealer inventory of single coins from the sets that have previously been broken apart, Sims said.
"It's an ongoing process that lacks big spikes," Sims said.
Older sets are not exempt from being broken apart, depending on collector demand, Sims said.
Jim Reardon, chief buyer for Littleton Coin Co. in Littleton, N.H., said the firm breaks up tens of thousands of Uncirculated Mint sets and Proof sets annually to satisfy the needs of its customers wanting single coins or rolls of a particular issue and denomination.
The firm also buys multiples of individuals coins removed from sets by other dealers and collectors, he said.
Earlier year sets have also been broken up when demand has warranted it, Reardon said.
Reardon said he's not sure how many sets the firm has broken up over the past five decades, "but it's a huge number. Many of these issues as sets will be a rarity some-day."
Littleton President David Sundman said the figure is high enough that the company had to install equipment to mechanically separate the coins from their holders and eliminate the occurrence of repetitive-strain injuries to employees from the manual opening of the Proof sets.
Steve E. Taylor, from Taylor Coin & Currency, and who goes by the user name "taylor_coin" on eBay, said he only sells modern Proof coins by the roll, not as singles, because of the lower price for individual coins versus roll quantities.
"With the advent of the current Statehood quarter collecting era, the emphasis and demand for modern Proof coins as singles and rolls has increased significantly," Taylor said.
"Further, additional design changes in the modern circulating coinage, such as the four-coin Westward Journey Nickel series of 2004 and 2005, has continued to fuel this increased dealer and collector demand for Proof rolls and, presumably, Proof singles as well."
Taylor believes those who buy the lots he offers fall into three categories - dealers, speculators and eBay resellers, with 95 percent falling into the latter category.
The biggest overall demand Taylor has found is for the Proof 2004-S and 2005-S Jefferson 5-cent coins from the Westward Journey Nickel Series; the Proof 2004-S Sacagawea dollar, which has the lowest Proof mintage for the design and denomination; and the Proof 2004-S Texas quarter dollar.
Sales of 2004 coin sets totaled 1,804,396 of the 11-coin 2004-S Silver Proof sets and 1,187,673 of the 11-coin regular 2004-S Proof sets, for a total of 2,992,069 sets.
The demand for the Proof 2004-S Sacagawea dollar is beginning to supplant the demand for the Proof 2001-S issue, which is still selling for $80 per coin or more, Taylor said.
Taylor said sets of other dates are being broken up for the individual pieces they contain.
"For the past three to four months, we have been relatively successful selling 80 to 120 Proof sets each week through breakup/roll-selling," Taylor said. "The majority of these sales have been through eBay, although we do have occasional off-eBay sales of mass-roll quantities to special customers with specific needs for particular denominations.
"When this occurs, we then sell the remaining denominations through the normal eBay channels as additional listings.
"In 2005, we estimate that we broke up approximately 3,000 Proof sets for sale as Proof rolls.
"This quantity is significantly higher than in 2004, due to the increased interest in the various denominations, such as the Proof Peace Medal and Keelboat nickels, the Silver Proof Texas quarter and the low mintage 2004-S Proof Sacagawea [dollar].
"The Westward Journey nickels, the Texas quarter and the Sacagawea dollar are the primary high-dollar motivating factor for our seller's interest in breaking up the Proof sets.
"However, from a buyer's perspective, the denominations that receive the greatest bidder/buyer interest and bid activity are the Proof Lincoln cent, the Silver Proof Roosevelt dime, and the Silver Proof Kennedy half dollar," Taylor said.
Sims believes the market is riding the crest of a hot collector market and expects the velocity of the breakup of sets to continue.
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.
