US Coins

Why are populations for some coin rarities rising

The population of MS-66 1912-S Liberty 5-cent pieces has increased in recent years, and prices have dropped accordingly. This PCGS MS-66 example brought $3,525 at Heritage’s January 2017 FUN auction. Images courtesy of Heritage Auctions.

Original images courtesy of Heritage Auctions

The heads of the two leading third-party grading services (Professional Coin Grading Service and Numismatic Guaranty Corp.) traded words in an unusual public debate of sorts as they compete for market dominance.

On Jan. 17, NGC chairman Mark Salzberg published a letter on NGC’s website titled, “Salzberg Advises: Research PCGS Populations and Prices.” The letter addressed the NGC announcement at the end of 2016 that PCGS-certified coins would not be eligible for new inclusion in sets on the NGC Registry.

Salzberg wrote, “Over the last five years or so, I have noticed a perplexing trend at PCGS. There has been a dramatic increase in the grades assigned by PCGS for a wide range of coin types and, consequently, I believe this has caused an extraordinary reduction in the value of many PCGS-certified coins.”

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Salzberg pointed to the 1912-S Liberty Head 5-cent piece, where the PCGS population in MS-66 has increased from eight in January 2012 to more than 50 today. Of course, when the population of a scarce coin moves up substantially, the prices are bound to fall.

Salzberg cited the sale of a PCGS MS-66 example in January 2012 for $37,375 compared with a sale of a comparably graded example at Heritage’s 2017 Florida United Numismatists show for $3,525. Salzberg noted, “This is a staggering loss of $33,850 (or 91%) of the coin’s value in five years,” before concluding, “How is it possible that eight 1912-S Liberty Nickels were graded PCGS MS 66 in the company’s first 25 years and 44 other examples were graded PCGS MS 66 in the last five years?”

PCGS President Don Willis responded two days later on the PCGS U.S. Coin Forum, writing, “We set the standard for third party grading 30 years ago. Every other grading service has attempted to copy that standard and has been playing a game of catch up for all those years.”

Addressing the population increase of some coins, Willis wrote, “We confess to being the most popular grading service. We process many more Vintage coins than NGC,” noting that populations rarely decrease as “there are always hidden collections, accumulations or hoards that come out.”

Willis pointed out that several original rolls of high-quality examples of 1912-S Liberty 5-cent coins have come to market in the past several years. He said, “These rolls were handled by some of the most knowledgeable dealers in the business. We are proud of the fact that these individuals, who have great insight in the coin market, chose PCGS to grade their coins.”

Salzberg, however, concluded, “An informed buyer is a smart buyer,” and advised collectors to research how a coin’s population and price have changed over time, before buying. The back-and-forth behind these two grading leaders is unusual as it provides a bit of transparency to these normally opaque matters that impact nearly all coin collectors.

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