Q. David Bowers
Prices fell, and Cincinnati sets, which had touched $50, plummeted to $15. Other high-flyers crashed into the basement as well. Moreover, even at the new, low prices there were few buyers. Soon certain half dollars were being peddled below their official issue prices. Rev. Elias Rasmussen, Tatham Stamp & Coin Company, B. Max Mehl, Stack's, and others with quantities of commemoratives on hand licked their wounds.
By December 1940 the commemorative market had been in the doldrums for several years, and large unsold quantities of certain earlier issues such as the 1936 York, Albany, and Robinson half dollars (to mention just three) could not find retail buyers at any level. In the early 1940s dealer Abe Kosoff was given the opportunity to buy over 7,000 undistributed Albany half dollars for just $50 over face value for the lot, but he couldn't find a single soul interested.
Collectors were still happily collecting, and Wayte Raymond's "National" line of cardboard holders with celluloid slides was just as popular as ever. The only problem was that the typical numismatist wanted just one Albany-or Norfolk, or New Rochelle, or Delaware, or Roanoke-half dollar, and not a pile of them. While commemoratives were taking their lumps in the marketplace, other numismatic series such as Indian and Lincoln cents, Liberty and Buffalo nickels, Standing Liberty quarters, and Liberty Walking half dollars were rising in value and were now selling for prices far above the levels of 1935 and 1936. Commemorative coins were marching to a different drummer in the market cycle.
In the meantime the market for new commemoratives had completely fizzled. In 1939 Congress put an end to their issuance, reacting to complaints received concerning the abuses of selling commemorative coins for private profit.
The Commemorative Market
1941-1945
Good news: The slump in the commemorative market was over, or would be soon. The market in early 1941 saw an increasing number of new collectors enter the fold, many of them drawn by the "pennyboards, " which the Whitman Publishing Company and others had been selling since the late 1930s and which made it easily possible to assemble a run of dates and mintmarks of Lincoln cents and other series from pocket change. Seeking other areas of interest, many of these new collectors started buying commemoratives.
Market prices were low in 1940, and by early 1941 it seemed evident that they were not going to go lower. In fact, prices had been relatively stable, even if at a low level, for a year or two. Few worried that additional losses were in the forecast. Cautiously at first dealers began adding to their stocks. In Europe and in Asia the seeds of war sprouted, Germany and Japan were on their way to dividing up the globe, and there was a feeling of great concern in the United States. War, which seemed certain to touch our own lives, typically brought monetary inflation and with it a rise in the price of hard goods. Now dealers felt safe in buying a few extra commemoratives for stock or even investing in a few dozen of this issue or that.
Interest in commemoratives began to reawaken. Abe Kosoff, an astute observer of the numismatic scene, later stated that spring 1943 was the end of the old order and the beginning of the new. By then the December 7, 1941 attack on Pearl Harbor by Japan was history, and America was in the middle of the greatest conflict the world had ever known. Rationing was in effect in America, and numerous consumer goods were not available in quantity for any price. Coins, stamps, items wrought in gold, art, and other collectibles seemed to be good buys and a worthwhile place to spend money in a time when those who could afford it could not buy new Fords, Buicks, or Cadillacs, for consumer goods factories were busy turning out parts for tanks, Liberty ships, and airplanes. One former brassiere factory had its hands full making engine covers for B-17 bombers. The Depression of the 1930s, now often spelled with a capital D, was history. Just about everyone who wanted to be was either employed stateside on the home front or was serving overseas in the armed forces. Prosperity was the word of the day, but it was hard to spend money on regular consumer goods.
In coins nothing makes prices rise faster than the feeling that prices will rise. Perhaps more so than in any other area of human endeavor, predictions in the field of investment are often self-fulfilling. If enough people hope, think, expect, and say that commemorative coins will rise in price, then commemoratives will rise in price, and rise in price commemoratives did. In 1943 S.J. Kabealo wrote.! "U.S. Commemoratives: This popular series is growing in demand more than ever before. Many new records have been set on a number of coins in this series in recent sales. This is as it should be, for it is the most interesting of any series in the American coinage, offering a variety of designs that attract all classes. It is one of the richest in American history."
By December 1945 the war had been over for five months, enthusiasm and prosperity were bywords across the land, and there was a general feeling of wellness, even though some worried that the postwar economy might relapse soon. The commemorative market was extremely strong, as were other areas of numismatics, and by the end of 1945 the prices of commemorative coins were not only testing the high levels reached in the market peak of 1936 but in some instances were exceeding them. For example, a 1900 Lafayette silver dollar, which had ascended to $5 in the summer of 1936, was hard to find even at the new high price of $12 in December 1945.
The Commemorative Market in 1946-1950
The coin market raced onward in 1946 and 1947. Excitement was everywhere. For the first time since 1939, new commemorative coins were being made: a 1946 half dollar to celebrate Iowa's centennial of statehood and the start of a tedious series honoring the life of black educator Booker T. Washington (whose personal accomplishments were great but whose memorial coins weren't). However, these new commemoratives had nothing to do with the enthusiasm prevalent in numismatics. Instead the excitement was caused by a combination of many new faces in the rare coin field, rising prices (which always stimulate activity), and a general appreciation and interest for doing pleasurable things in one's spare time. Now that the war was over, there was time for hobbies.
Prices continued to increase until about 1948, when the market paused to catch its breath. After all, it had been climbing ever since early 1943. Another slump occurred. The 1948-1949 years were grim, and prices fell in many areas of numismatics. Dealers and investors had a tough time.
In the meantime interest increased in the subject of coin grading, and many renewed the call that there should be mutually agreed upon rules for all to play by a set of uniform grading standards. The idea was hardly new, and, in fact, it had been proposed in print shortly after the American Numismatic Association was founded in 1891. However, now it was corning to the forefront. In 1949 Dr. William H. Sheldon's market formula system for large cents of the 1793-1814 era was published in a book titled Early American Cents. This innovative idea involved assigning a grade to a coin from Basal State-1 (a coin worn nearly smooth) to Mint State-70 (an absolutely perfect coin). Coins in the Uncirculated range were given designations of MS-60 (minimum Uncirculated), MS-65 (a middle-range Uncirculated coin), and, as noted, MS-70 (a perfect coin). In practice there were no perfect MS-70 large cents in existence, so surviving Uncirculated coins were graded either MS-60 or MS-65.
Sheldon's market formula involved multiplying the numerical grade of a coin, such as MS-60, by the "basal value" of a given coin variety, such as $ 5, to determine its market value, which in this instance would be $5 x 60 or $300. A coin in the same grade but with a different basal value, such as $1, would be worth $1 x 60 or $60. The pricing system for large cents worked well for the next four years, until 1953, by which time Mint State large cents started selling for very high premiums in relation to lower grades such as VF-30 and EF-40, and the Sheldon formula became irrelevant. Perhaps it should have been discarded, but it wasn't. I mention it here, for years later the Sheldon grading system (but not the pricing formula) was extended by other people to include commemorative coins.