Five Facts

Gerald Tebben goes behind the scenes and explores many offbeat trails in bringing to the forefront the long-lost information that makes coins so special in "Coin Lore."

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1/20 of a dollar: Speculation gone mad

Investors realized too late that the market wasn’t deep enough to create demand for 2.6 million Brilliant Uncirculated 1950-D nickels. It still isn't. Low mintage alone does not create value. But examples are genuinely scarce in high grades, and this PCGS MS-66 coin with full steps on Monticello on the reverse sold for $104 at a February 2017 Heritage auction.

Image courtesy of Heritage Auctions.

High grade 1950-D 5-cent pieces are genuinely scarce. This PCGS MS-66 coin with full steps on Monticello on the reverse sold for $104 at a February Heritage auction.

Image courtesy of Heritage Auctions.

The rarestcoin in America might very well be a circulated 1950-D Jefferson 5-cent piece.

In the 1950sand ’60s, coin collecting boomed. Children filled blue Whitman folders withchange from circulation. Mindful of rapidly rising prices, investors boughtcoins by the roll and bag.

When collectorslearned that the Denver Mint produced only 2.6 million nickels in 1950,investors jumped. The 1950-D 5-cent piece was rarer than the series’ key, the1939-D 5-cent piece, which had a mintage of 3.5 million.

In 1962, A Guide Book of United States Coins (theRed Book) gave the coin a value of $5 in Uncirculated condition and placed anasterisk beside it, indicating the value was speculative. The value jumped to$6.50 a year later and kept climbing.

If the 1939-D 5-centpiece was worth $40 in Uncirculated condition, the reasoning went, the rarer1950-D 5-cent piece will be worth more.

The coin washoarded from the start. Researcher and dealer Q. David Bowers has written thata Milwaukee dealer amassed 8,000 rolls (320,000 coins) and that a Texas dealeracquired about 1 million coins, which he sold to investors through ads in Numismatic Scrapbook magazine andwholesaled to dealers for years.

In his 1964book, The Profit March of Your CoinInvestment 1935-1971, author George Haylings called the 1950-D 5-cent piece“The king of all rolls! Number one on the ‘top’ list! Without adoubt the gilt-edged security in the coin investment field. I am predictingthat the price will be $10,000 per roll … in 1971.”

Not even close.

In November1964, Denver dealer Walter Laub was offering the coin through advertisements inThe Numismatist for $925 a roll —$23.12 apiece.

Laub’s pricedropped to $525 a roll in 1966, $450 in 1967 and $310 in 1972.

When I was aboy I knew a jeweler who “invested” in the coin at $700 a roll in the early1960s and never saw his money again. If he ever sold, it was likely at lessthan half his investment.

The coinbecame a dog as investors realized that the market wasn’t deep enough to createdemand for 2.6 million Brilliant Uncirculated nickels. On the bourse floor, thecoin kept dropping. I remember seeing the coin at $10, then $7.50 and finally$5, where it seemed to find a support level. Today, the coin tends to be pricedat $10 to $15, with few takers.

In his Complete Encyclopedia of U.S. and ColonialCoins, Walter Breen, now deceased, wrote about the 1950-D 5-cent piece,“Rarely found circulated. Most of the mintage went in rolls and bags tospeculators.”

That’s why acirculated 1950-D 5-cent piece might just be the rarest coin in America.