Hendricksons build empire founded on silver
- Published: Apr 14, 2015, 9 AM
In this fourth installment of a series looking at the numismatic careers of 14 professional numismatists, each in the hobby 40 or more years, Coin World details the experiences of father-and-son team Leon and David Hendrickson from SilverTowne and of Colonial numismatics specialist Anthony Terranova.
The first three installments appeared in the April Monthly issue (April 6) and Weekly issue of April 13, and online.
Leon and David Hendrickson
Farmer. Roller-skating rink proprietor. Rural-mail carrier. High school basketball referee. Restaurant co-owner. Professional numismatist.
SilverTowne founder Leon Hendrickson has entered numerous professions during his working career, many of them at the same time. None of the careers has been as satisfying, rewarding and lucrative to him as that of a professional numismatist, he says.
And the seed that started that numismatic career all began with a cigar box in that Winchester, Ind., restaurant, The Rainbow, that Leon and his wife, Hamie, co-owned with her parents.
Leon credits his brother-in-law, Dick Rhoades, with sparking his interests in coin collecting.
Dick, already a coin collector, periodically worked at The Rainbow. During his shifts, Dick would examine the change customers would pay their bills with, looking for coins to add to his collection. Coins from the restaurant’s candy machine would also be inspected. Select coins were put into a cigar box next to the restaurant’s cash register, or on plates on the counter.
Leon, with his entrepreneurial prowess, quickly picked up on being able to turn around and sell, for more than face value, coins received in payment. He found that customers often purchased the special coins with change they received from their restaurant bills. The coin business began to pick up. Coins were put in display cases, replacing the cigar box and plates.
At the age of 9, David kept busy combing through countless quantities of coins, although Leon did not push his son’s interest in numismatics. In 1958, the father-and-son team attended their first coin show together in Muncie, Ind. It would be the first of many.
Around that time, when Leon and David were on one of their numismatic adventures together in southern Ohio, they purchased a 1909-S Lincoln, V.D.B. cent for $100, David recently recalled.
“And I can remember on the way home, Dad said, ‘do not tell your mother we did this, she will think we need to be institutionalized,” David said. “And we never told her. She found out years later, but it always makes me laugh.”
Eventually, the Hendricksons’ coin business was so good that the new enterprise, the Winchester Coin Shop, took over the space on the second floor, above The Rainbow.
A new home was erected on property from the Hendrickson family farm upon which Leon grew up. In 1964, the basement of that ranch-style home would house the expanding coin business, by then renamed SilverTowne. That year, Leon entered the coin business full-time.
The basement was renovated to full size; in the original home construction, the basement had covered only half the area under the home’s main floor.
By the time of the passage of the Coinage Act of 1965, SilverTowne was among the largest buyers and sellers of silver coins in the Midwest. The 1964 90 percent silver dimes, quarter dollars and half dollars, struck for general circulation well past the end of their calendar year date, were the last of their kind.
The mid-1960s also witnessed the rush for redemption of silver certificates, while the paper notes still could be redeemed for their face value in silver bars or silver dollars.
The 100-ounce, 500-ounce and 1,000-ounce bars that some redeemers received were composed of .999 fine silver. The Treasury Department had millions of 900 fine silver dollars stored in its vaults.
SilverTowne recruited as many trusted personnel as possible to scour every bank within a 500-mile radius in search of silver certificates. Well over 1 million were retrieved.
Regular van runs were made to Washington, D.C., to redeem the certificates for silver bars or silver dollars.
David, meanwhile, was selling coins to his peers while attending Huntington University in Indiana, and even recruited fellow students to buy and sell coins and secure silver certificates.
SilverTowne’s business expanded at such a rapid pace that the local bank had to open two additional branches with vaults to primarily handle the coin firm’s business and that of its customers.
David found the coin business exciting, but it had its obstacles.
“I started young, so it was very hard to get recognition on the work I was doing,” David said. “It was a positive and negative when they would say, ‘oh, you’re Leon’s son.’
“But it opened a lot of doors that I might not have been presented.
“All of the older coin dealers were great mentors, they really seemed to take an interest in me.”
“At every coin show I tried to sit with my peers, who were usually much older and had been doing this a long time. I would listen to them talk and their stories. I found out what skills were needed, what was important and why it was interesting.”
The 1970s brought more silver dollars from Treasury vaults, with the General Services Administration sales.
“When the Treasury Department started selling Silver Dollars in Washington at face value, Dad and I went down and purchased eight bags,” David said. “We were flying TWA and couldn’t go through the bags, we just had to take them with us. This was when you walked on to the plane from the tarmac up the steps. I had four bags of silver dollars and Dad had the other four. I weighed about 135 pounds and the bags weighed 280 pounds, I told Dad, ‘I can’t do it.’ He said ‘you will,’ and I did.”
By the late 1970s, the Hendrickson’s knew they had to expand again. In 1980, construction began on what has become known as the “Mighty Fortress”; it was completed in 1982. It’s situated a stone’s throw from Leon’s home where the basement once served as the coin shop.
All of the Hendricksons’ success was threatened in 1973 when two would-be robbers made a late-night visit to the basement coin shop, with the intention of killing the Hendricksons and robbing the premises. One of the thugs was fatally wounded by Hamie Hendrickson.
A complete accounting of the harrowing experience can be found in Jan Chalfant’s chronicling of SilverTowne’s history in Rare Coins, Rare People.
The 1970s brought two major coin deals involving the acquisition and disposition of silver dollars — buying and selling portions of the LaVere Redfield hoard of more than 400,000 silver dollars, and brokering with Ed Milas from Rare Coin Company of America (RARCOA) the hoard of 1,500 1,000-coin bags of Morgan silver dollars from the cash-strapped Continental Illinois Bank of Chicago.
The steady increase in the spot price of silver from 1979 to 1980, when it reached nearly $50 an ounce, resulted in SilverTowne trucking to the smelters many 55-gallon drums of silver coins and anything else silver that customers had redeemed for cash.
The Hendricksons have also enjoyed other milestones.
In 1985, Leon paid $500,000 to George Vogt from Colonial Coins in Houston to acquire the James V. Dexter specimen of Class I 1804 Draped Bust dollar. The coin, recognizable by a small D punched into the cloud below the O in OF on the reverse, is currently part of the D. Brent Pogue Collection and is scheduled for auction.
Leon often carried the 1804 dollar to coin shows and would show the coin to anyone who asked to see it. Hamie sewed Leon a special cloth pouch in which he could carry the coin, pinned inside his undergarments.
Leon put the Dexter 1804 dollar up for sale in RARCOA’s session from Auction ‘89, where the coin realized $990,000, including the 10 percent buyer’s fee.
In the 1990s, David Hendrickson got SilverTowne on the cable-television map with Shop at Home. A deal was also signed with Numismatic Guaranty Corp. to grade and encapsulate every coin that SilverTowne would promote on the buy-at-home outlet.
That cable television premise was expanded in ensuing years with Coin Vault, which remains vibrant today.
In August 2014, David built upon SilverTowne’s entrepreneurial prowess, being on the front lines of frenzied marketing in the first day sales for the Proof 1964–2014-W Kennedy gold half dollar at the American Numismatic Association World’s Fair of Money and three other U.S. Mint sales outlets.
The SilverTowne name also extends to the SilverTowne Mint, a full-service private mint for striking medals and bars in precious and base metals; and to SilverTowne Farms, a Simmental cattle operation.
Leon and David are both lifetime members of the American Numismatic Association and members of numerous other numismatic organizations. Both are also members of the Professional Numismatists Guild, Leon having joined in 1970 and David in 1983.
Leon has also served as PNG president.
Leon was recognized by the ANA in 1990 with its Medal of Merit, in 2003 with the ANA Presidential Award and in 2008 as the ANA Numismatist of the Year.
PNG presented Leon with its Lifetime Achievement Award in 2003.
Growing up in the 1950s, Tony Terranova became well acclimated to the coins his father tossed into a cigar box next to the cash register at the family bakery.
But at the age of 13, Terranova learned his first lesson about buying and selling coins.
Among a group of his friends in the schoolyard, one asked to see his pocket change. The friend offered him 15 cents for one of his coins — a 1925-S Indian Head 5-cent coin in Extremely Fine condition.
The offer brought chuckles from the rest of the group, who knew that friend was a coin collector.
The friend pulled out a 1960 or 1961 edition of A Guide Book of United States Coins, commonly called the Red Book, to show the value of Terranova’s EF coin as $2.75.
Terranova said he purchased his own copy of the book, which he kept next to the cash register in the bakery to check values of coins customers used to pay for bakery purchases.
Terranova said he was able to assemble a complete date and Mint mark set of Indian Head 5-cent coins pulled from his bakery-shop finds. Terranova added Winged Liberty Head dimes to his collecting, and also Carson City Mint Morgan dollars because of their numismatic premium.
By the mid-1960s, though, Terranova lost interest in coins. A few years later, Terranova found himself on Wall Street in Manhattan, working at the New York Mercantile Exchange.
A chance encounter with a friend’s coin auction catalog in 1971 reignited Terranova’s numismatic interests. Soon after, Terranova said, he began to regularly attend coin shows, buying, selling and trading coins while still working on Wall Street.
Terranova quickly became acquainted with numismatist Neil Berman, who was able to persuade Terranova to leave his Wall Street job because he could make more money as a coin dealer, and more quickly.
Terranova said he worked for Berman for a short time as he honed his skills, developing a discerning eye for quality and rarity, before branching out on his own.
“I have a good feel for what is rare in what grades and what their value is,” said Terranova, of U.S. coins from copper half cents through gold $20 double eagles.
Terranova also developed an affinity for coins and other numismatic items from early Colonial America.
In addition, Terranova has handled numerous examples of U.S. gold coins struck at the Charlotte and Dahlonega Mints. He also regularly offered date runs of gold $5 half eagles and $10 eagles dated 1795 to 1804, in 2-inch by 2-inch flips, not encapsulated by third-party grading services.
Terranova also handles pioneer gold coins.
Among U.S. large cents, Terranova looks for examples in higher grades and rare varieties.
Terranova has assisted in assembling U.S. copper coin collections for Dan Holmes and R.E. “Ted” Naftzger Jr., and in finding early American copper and silver coins and medals for the Joseph P. Lasser Collection now secured at Colonial Williamsburg in Virginia.
Among the coins Terranova has handled in his professional numismatic career is the unique 1792 Silver Center cent missing the silver plug in the center. In an early Mint experiment to reduce the bulkiness of copper cents, silver plugs were inserted, before striking, into holes in the center of reduced-size copper planchets. When struck together, the intrinsic value of the coin with its silver plug would equal its face value. The piece Terranova has brokered lacks the silver plug.
Terranova and numismatists Sil DeGenova and Stuart Levine discovered the piece in 1993, two years before it was brought to auction for the first time.
The coin sold at auction for only the second time on Jan. 8, 2015, by Heritage Auctions, where it realized $446,500.
Also in 1993, Terranova discovered a second, and rarer, variety of 1870-CC Coronet double eagle — Variety 2-B.
Additionally, Terranova has handled a Very Fine example from the handful of known 1792 Birch cents. The example he handled was placed with Lasser and is part of the collection at Colonial Williamsburg.
In 2002, Terranova discovered and, along with numismatic researcher Michael Hodder, authenticated two white metal 1792 Eagle on Globe quarter dollar patterns that were in the collection of the New York Historical Society.
The discovery brought the number of known Eagle on Globe quarter dollar patterns in white metal to four.
More from CoinWorld.com:
Internet surfing yields Mint State 1796 Draped Bust cent
Know your U.S. coins: Morgan dollar
Federal Government calls in America’s gold
Coin users recommend the Mint make no changes to the copper-nickel clad quarter dollar composition
Federal Judge rules against government in 1974-D aluminum cent case
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