Q. David Bowers
By summer 1935 there was great nation-wide interest in coin collecting. Member-ship in the American Numismatic Association stood at an all-time high level. Early in July 1935 the City of Hudson, New York announced that its supply of 10,000 commemorative half dollars had been completely exhausted within a few days of being put on sale. It developed that most went to a dealer who purchased an estimated 7,500 of them. Collectors were angered and disappointed. In November of the same year C. Frank Dunn claimed that special limited editions of 1935 Boone Bi-centennial half dollars made at the Denver and San Francisco mints, with a small "1934" date on the reverse in addition to the regular 1935 date, had been sold out. It was soon learned that Dunn had withheld most from sale, seeking to realize even greater profits on the aftermarket, which he did.
While the Boone story has its seamy side, this and the Hudson affair strengthened the resolution of many collectors that such a thing would not happen to them again. Next time anyone even suggested that a new variety of commemorative would be offered, the typical collector dropped everything and rushed his order, to get in on the ground floor. In the meantime interest in all older varieties of commemoratives from the 1892-1893 Columbian Exposition half dollars onward was increasing on virtually a monthly basis.
While collectors were endeavoring to complete their sets, an increasing hue and cry arose for regulating the spate of meaningless commemorative coins. A comment in the Numismatic Scrapbook, September 1935, is typical. (Part of art article, "The Recent Recommendation on Commemorative COins, as Presented by the Bronx Coin Club," p. 56. The article related that a discussion of the abuses of commemoratlves at a recent club meeting "ceased as quickly as it began, not because resentment had abated, but because there were threats of libel suits and having the privilege of issuing commemorative coins cancelled.")
We cannot understand the attitude of Congress in granting the special privilege of the use of the national coinage for the express purpose of helping to finance some local project. Neither can we understand the purpose and historical significance of some of the local celebrations. The real cause of the president's request that commemorative coinage be discontinued was, no doubt, that the politics of passing bills of such character was quickly getting beyond control. Using these half dollars as bait, an organization wishing to raise money merely had a congressman introduce a bill authorizing an issue of coins and, when passed, had the various mints issue coins bearing some trifling difference from some other half dollar. Thus, in taking advantage of a collector's instinct of keeping his collection complete, the organization was able to dispose of four or five half dollars instead of one .... "
The Commemorative Market in Early 1936
The commemorative market of the first half of 1936 can be best described as frenzied. New issues were announced with regularity, and collectors rushed to buy single pieces for their collections and often extras to put away for investment. Prices of older issues rose. Prices good in January were obsolete by February and hopelessly out of date by March or April. Dealers' stocks were depleted as soon as they were restocked. Everyone wanted to get into the game.
B. Max Mehl had the following to say in a promotional brochure dated January 20, 1936: "While I do not usually suggest that collectors buy coins for investment, I can not resist calling your attention to a matter to which I am sure you will agree: In 1929 a share of stock of the American Telephone Co. would have cost you $310. In 1935 you could have bought it for less than $100. A share of U.S. Steel would have cost you in 1929 $261, in 1935 about $50. BUT-in 1928 if you bought a Hawaiian half dollar at its issue price of $2, you would now have a profit of about 500%. The Grant half dollar with star you could have bought at one time for $1, and today it's selling for $20!-more than 2,000% increase in value! The Panama-Pacific half dollar originally sold for $1, and today it retails for up to $15. AND, getting down to recent history, the 10,000 Hudson half dollars were issued about six months ago, selling for $1 each. Now, just a few months later, they bring up to $8.50 each! Just three or four months ago EI Paso, Texas issued a half dollar commemorating the Old Spanish Trail. 10,000 coins were minted and sold for $2 each. Today they are quoted at $6 each and will soon advance to about $10 or more. (This was puffery for Mehl's own advertisement for Old Spanish Trail half dollars at $4.75 each in the same brochure.)
Prices continued to rise throughout early 1936. In the meantime new issues that came on the market found ready buyers. Many bills were introduced in Congress to provide for the coinage of half dollars to commemorate this anniversary or that, most of which were quite unimportant in terms of national recognition.
Writing in the Numismatic Scrapbook, August 1936, editor Lee F. Hewitt commented: "With 15 new issues out to buy this year I'm afraid some of us will run out of money, and it is possible that some issues may go begging before they sell their twenty or twenty-five thousand pieces." By this time the commemorative market had peaked. At that point an 1893 Isabella quarter had gone from $ 2 to $ 3 in just six months, an increase of50%, whereas numerous other older issues had gone up from 20% to over 100%. The elusive 1928 Hawaiian Sesquicentennial half dollar went from $8 to $12 in the same period. The 1920 Maine half dollar, which could be bought for $2 in December 1935, was $6 by the following June. The much despised 1935 pair of rare Boone half dollars with "small 1934" were now, would you believe, $80 to $90? Then the market ran out of buyers. Prices halted their rise. The game was over.
The Commemorative Market 1936-1940
The market from summer 1936 to the end of 1940 was one of retrenchment. A few latecomers were able to make profits during the last half of the year, in particular, Thomas G. Melish, who created a phony sold-out situation with sets of 1936 Cincinnati half dollars from all three mints (he must have taken lessons from C. Frank Dunn of the Boone Bicentennial Commission).
In autumn 1936 new issues were still corning on the market, and still others had been advertised in the pages of The Numismatist (and to a lesser extent, the Numismatic Scrapbook) promising delivery as soon as the coins were minted and received. However, now the issuing com-missions found that the number of orders arriving in their mailboxes was not sufficient to absorb all of the half dollars on hand or on the way, and thousands of unsold coins piled up.
To spur sales, the issuing commissions took one of three tactics:
(1) Did nothing. Later, unsold coins were returned to the Mint to be melted.
(2) Lowered the price to dealers who were willing to buy large quantities (few were). Later unsold coins were returned to the Mint.
(3) Raised the price and issued pronouncements that the coins were becoming scarce, would be good investments, would be sold out soon, etc. Unsold 1936 Gettysburg and 1935-1936 San Diego half dollars were promoted this way. Later un-sold coins were returned to the mint.