What's it worth?

Rarity not only factor in value
Published : 05/10/12
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What is more important in determining a coin’s value — rarity or demand? The Economics 101 answer is that a coin’s value is determined by both. A coin’s value is where supply and demand intersect. Except when it’s not.

To many collectors, me included, rarity sets the heart racing, increasing desire beyond all bounds, sense and catalog listing.

Over the years, clever dealers have exploited this desire, emphasizing rarity over demand and pushing prices higher in the process. In the early 1960s, as the values of United States coins, especially the popular Lincoln cent, soared, several dealers started promoting English and Canadian coins. They were exotic in a white-bread market. They were interesting, often coming with a good story. And, most importantly, they had low mintages. They were, by American standards, rare.

The dealers’ job was to increase demand, which they did with full-page ads in hobby publications touting the limitless upside.

Sought after cent

The 1909-S Lincoln, V.D.B. cent was probably the most sought after coin in the world in the early 1960s. It was the key to the hottest series. The 1909-S Lincoln, V.D.B. cent had a mintage of 484,000 and a catalog value in 1961 of $50 in Good condition and $115 in Uncirculated. And it was out of reach, both financially and emotionally, for most collectors.

Fifty dollars for a cent — you gotta be kidding. That amount of money would buy a really nice bicycle then. Also in the 1960s, collectors were streaming into the hobby, drawn in no small part by news stories about rare 1960 Lincoln, Small Date cents that could be found in circulation.

But the English 1950 and 1951 pennies, now they were a bargain. The coins had “low” mintages of 240,000 in 1950 and 120,000 in 1951, were the size of a half dollar and came with a great story with which to hook collectors.

Both coins were struck for use in England’s colonies. Virtually the entire 1951 issue was sent to Bermuda, where, according to dealers’ ads at the time, the humid weather corroded the coins, making nice ones hard to come by.

Even in England, where collecting by date was just becoming popular, wild claims were made about their investment potential.

If a 1909-S Lincoln, V.D.B. cent was worth $50 in Good condition, then it seemed likely that the 1950 penny, a coin with half that mintage, should be worth twice that amount, and the 1951 penny, with a mintage of a quarter that amount, should be worth $200. That was not the case, however.

As I recall, the two English pennies were priced at $5 or $10, about the same price as a circulated Capped Bust half dollar. At those prices, all collectors had to do was buy early, while prices were low, and wait.

Waiting to profit

Fifty years on, the buyers are still waiting to profit. Spink’s Standard Catalogue of British Coins lists the 1950 penny at £6 ($9.60 U.S.) in Very Fine and the 1951 penny at £10 ($16).

The 1909-S Lincoln, V.D.B. cent, in contrast, has appreciated a great deal. Coin Values lists the coin at $750 in Good and $1,900 in Mint State 60 brown.

Demand for the English coins never did develop. When the ads had run their course, buyers were left with rare coins for which there was no demand. Nearly every U.S. collector wanted a 1909-S Lincoln, V.D.B. cent, but hardly any American collectors wanted a 1950 British penny.

I did eventually buy the 1950 and 1951 pennies, years later for 25 cents or so each in a junk box, maybe cast off by an original buyer who got tired of waiting.

Gerald Tebben is editor of the Central States Numismatic Society’s Centinel.

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