William T. Gibbs, senior editor, news, joined the Coin World editorial staff in 1976 and serves as chief copy editor for all Coin World publications while directing weekly editorial production aspects. The collector of numismatic items relating to Adm. George Dewey of Spanish-American War fame has served as lead copy editor for all Coin World books since 1985 and is principal author of the cover topic for Coin World's Guide to U.S. Coins, Prices & Value Trends.
A century and a half ago, U.S. Mint officials demanded that owners of five 1804 dollars return them to the Mint. Four of the coins were reportedly returned, with three of them destroyed, a Mint curator claimed. Should collectors today worry about a repeat performance? Probably not, but ...
It's a nightmare scenario for many hobbyists. U.S. Mint officials contact owners of rare 1804 dollars and demand their return, and upon receipt of the coins, destroy most of them.Some observers of recent Mint litigation involving 1933 Saint-Gaudens double eagles and a 1974-D Lincoln cent struck in aluminum warn of such a nightmare scenario. They say that if Mint efforts at confiscating these coins are unchecked, classic rarities produced under less than official circumstances, such as the 1913 Liberty Head 5-cent coin and 1804 Draped Bust dollars, could be next.The fears of a broadened wave of confiscations are likely overblown, but those voicing such concerns can cite historical precedence. The Mint has already confiscated 1804 dollars, and by some accounts, destroyed them — a century and a half ago.For longtime collectors, the back story of the 1804 Draped Bust dollars is a familiar one. No 1804 dollars were struck in 1804. The so-called Originals were struck circa 1834 for use in diplomatic Proof sets to be presented to foreign heads of state like the Sultan of Muscat and the King of Siam. When collectors became aware of the coins' existence, a few favored individuals were able to acquire some of the circa 1834 strikes from the Mint. Years later, at the end of the 1850s, Mint employees began striking new 1804 dollars (Restrikes, as they are sometimes called) using the same obverse die and a different reverse die, and selling them to dealers and collectors — without official authority to do so — to meet new demand for the coins.
These unsanctioned sales were quite the scandal in the numismatic community in the 1860s, and many collectors were outraged that Mint was selling such pieces to a select few. In November 1861, members of the Boston Numismatic Society wrote James Pollock, director of the Mint, calling to his attention the fact that Mint employees had been abusing the system by striking pattern coins and other rarities, and offering them to dealers. Pollock was pretty noncommittal in his response, about whether abuses truly had occurred and whether he would stop them.
Some years later, William E. DuBois, the curator of numismatics of the Mint Cabinet — the Mint's collection of coins that was the basis for today's National Numismatic Collection at the Smithsonian Institution — wrote in the numismatic press that Mint employees had sold five 1804 dollars in the category that modern collectors call Class II. These coins, struck circa 1858, have a plain edge and a different reverse than the 1834 Originals, which have a lettered edge along with a distinctive reverse.
In an apparent effort to clean up the mess some Mint employees had made, Mint officials requested that the owners of the five Class II coins return them, according to DuBois. Four of the coins were returned (no evidence exists of a surviving 16th example, however; just 15 known 1804 dollars survive of all classes), with one retained and three destroyed. Today, the sole Class II coin known rests in the National Numismatic Collection.
The confiscation and destruction of the Class II coins was not the end of the 1804 dollar story, and the Mint's notorious practices were resumed, if they were ever stopped in the first place. Some time after the end of 1850s and early 1860s (no one today knows for sure), additional examples were struck with a lettered edge and the second reverse. These later dollars are the Class III coins. Other great rarities also slipped out the Mint's doors, even into the 21st century.
DuBois' claim that some 1804 dollars were destroyed in the 1860s, if true, could cause owners of 1804 dollars today to worry at least a little about future Mint actions. Today, it is impossible to know whether the Class II 1804 dollars were truly destroyed, or whether they were converted into Class III coins with the addition of edge lettering, and then sold back into the marketplace.
It is unlikely that existing 1804 dollars will be confiscated in the future. However, coins rest in collections today that the government wants to confiscate, and the Treasury Department has an inconsistent history on what it consider legally collectible. Never say never.
Posted in Draped Bust Dollar
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Last week, I previewed an attractive, desirable error coin offered in a recent Heritage auction — a mated pair of 1973-S Washington quarter dollars. I noted that while most error collectors would love to own the coin, some concerns had to be noted.
In the 1970s, Proof coins were struck on planchets that were individually hand fed into the press. After each coin was examined by the press operator, it was then delivered to the packaging facilities to be inserted into the hard plastic cases used for Proof sets in the 1970s. Error coin experts state that it would have been impossible for (1) a coin of this type to have been struck by accident and (2) to have left the San Francisco facility legitimately. By all evidence, these pieces fall into the categories of intentional and assisted error.
So what happened?
It is well known within the error coin community that during the 1970s, employees of the San Francisco facility were deliberately producing error coins using Proof dies, and then selling them into the collector marketplace. Many of the coins were grossly misshapen, like the mated pair described here. Some were struck on unusual planchets or scrap. They were well publicized in the numismatic community.
Eventually, Mint investigators working on a tip from the error coin community discovered that the intentional errors were secreted within the oil pans of fork lifts used at the San Francisco facility. When the fork lifts were shipped to an outside firm for service, a confederate removed them from the oil pans and cleaned them with a degreasing agent. From there, the coins entered the marketplace.
Mint officials shut down the unofficial minting. However, some of the Proof coin errors produced during this time remain in the marketplace, generally unmolested by authorities.
The mated pair of quarter dollars in the Heritage auction brought a winning price of $4,553.13.
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Coin World contributing writer Mike Diamond addressed the concepts of “assisted error” and “intentional error” in his May 12, 2014, “Collectors’ Clearinghouse” column, where he defines the two categories of coins. In short, intentional and assisted errors are given “help” by mint employees. These employees are the spiritual descendants of the 19th century U.S. Mint employees who unofficially produced 1804 dollars, patterns and other rarities for sale to favored collectors and dealers. Such practices continued well into the 20th century, as a lot in a recent auction suggests.
Heritage Auctions’ April 23 to 27 Central States Numismatic Society sale offered a small number of visually appealing, desirable errors. Among them was lot 5200, a mated pair of 1973-S Washington quarter dollars. The Glossary of the Combined Organizations of Numismatic Errors of America defines “mated pair” thusly: “These coins were struck together in the coining chamber. They fit together perfectly.”
Most error collectors would love to own the pair of quarter dollars in the Heritage auction. They are visually striking and would be the centerpiece of anyone’s error collection. However, a thin cloud shades this pair of coins — a shroud no commercial dip can remove. Look at the date and Mint mark. The two coins are Proofs, bearing the S Mint mark of the San Francisco Assay Office, and they are all wrong for this kind of error.
We look at what makes this piece somewhat questionable next week.
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