Q. David Bowers
The Commemorative Market
1966-1970
Following the trend of late 1965, prices of commemorative and other coins dropped during 1966 and 1967. Many dealers closed up shop, and numerous collectors and investors sold out and took their losses (or their profits if they had bought their coins in the very early 1960s or before).
Not much went on in the commemorative market in the late 1960s, and by the end of the period some prices were lower than they had been in 1965, and some were higher. During this five-year interval the commemorative market was stable. There was relatively little investment interest, for it is virtually an iron-clad rule that investors like to pay high prices, not low ones, and they prefer to buy when a market is rising or at the top. A team of wild horses cannot drag the typical investor to the market to buy commemoratives or other coins when the market is in a slump. Accordingly, most advantageous purchases were made by collectors, who continued to be the underlying strength of the market. By December 1970 the price structure of commemoratives was gaining in strength, but still there were many coins that cost no more than they had five years earlier in December 1965.
The Commemorative Market
1971-1975
In the early 1970s there was a renewed interest in commemoratives and other coins as an investment. All was set for another boom. In particular, prices of gold coins rose sharply, only to peak in 1973 and then fall back in a slump which was to last through about 1976.
The market was kinder to commemorative coins, and throughout the five-year period from January 1971 to December 1975, prices rose sharply. By the end of the span many issues had multiplied in price. As prices escalated, the market became very competitive. At the same time a number of new firms entered the market with aggressive, high-pressure merchandising and telemarketing techniques. Investment journals, airline magazines, and other periodicals reaching wealthy readers were crammed with advertisements by newly formed rare coin companies with important-sounding names. Many different adjectives were applied to coins in an effort to promote sales volume. "Choice" and "gem" -terms which had been used occasionally in numismatics earlier to signify particularly "nice" coins-were often seen, as was a proliferation of other designations such as "super gem," "wonder coin," etc., none of which had any consistent meaning. One seller's "gem" could upon close inspection be another's "slider" (a term for a coin showing friction on the higher parts).
The decade of the 1970s also saw the application of numerical grading to commemoratives. As noted earlier, in 1949 Dr. William H. Sheldon had developed a numerical system of grading in connection with a formula to determine the market prices of large cents. By the 1970s Sheldon's market pricing system had been discarded as a failure, but his grading numbers from 1 (or Basal State) to 70 (MS-70, a theoretically perfect coin) lived on. As the use of numbers in grading lent an air of precision to a highly subjective area and as investors (in particular) liked the assurance that a coin in Extremely Fine-40, or About Uncirculated-50, or Mint State-60, etc., seemed to be precisely or scientifically graded, the Sheldon system was extended over a period of time by dealers and collectors to include nearly all other series. Now we had Morgan silver dollars, for example, bearing grades such as MS-60 and MS-65, a use which Dr. Sheldon neither intended nor envisioned when he dreamed up the numbers in 1949.
During the 1970s a number of intermediate Mint State grades were created to supplement Sheldon's three numbers: MS-60, MS-65, and MS-70. Innovative sellers added MS-63 and MS-67, then MS-61, MS-62, etc., until all numbers had been used from MS-60 to MS-70, a total of 11 grades in all. (These additional numbers were created and used by certain dealers. The American Numismatic Association, which published grading standards in 1977, used only the basic MS-60, MS-65, and MS-70 categories, until the 1980s, when the ANA also utilized 11 numbers.) As if that were not enough, some added + or - marks to the numbers to create grades such as MS-65+, or even MS-65++! At the same time there arose a new breed of person in the rare coin field. Taking his place right alongside of the numismatic investment advisor (a category now comprising hundreds of individuals) was the grading expert. Such an expert was said to be extremely brilliant and to know more about grading than anyone else, or nearly anyone else (except other grading experts), and was said to be able to sweep through a convention and snatch bargains from old-fashioned dealers and collectors who presumably didn't know (or didn't care about) the difference between MS-62 and MS-63. Investment advisors and grading experts were lionized as they pointed the way to untold riches. Collectors were left by the wayside. No one wrote much about them.
The Commemorative Market
1976-1980
The market built its strength in 1976. By 1977 a new boom in coin investment was underway full speed ahead. Apart from seemingly endless debates on grading terminology and practices and a growing awareness of sophisticated counterfeits (including commemoratives) on the market, it was an era of good feeling for everyone. Collectors and investors saw their holdings increase in value, and most dealers were doing a land-office business.
In 1977 the American Numismatic Association produced a book, Official Grading Standards for U.S. Coins, edited by Kenneth E. Bressett, with an introduction by the present writer, largely utilizing information collected by long-time dealer Abe Kosoff. In the Uncirculated range the divisions of MS-60, MS-65, and MS-70 were given. Subsequently, the ANA Board of Governors voted to include the intermediate grades ofMS-63 and MS-67 as well and by the third edition of the book to include all 11 numbers from MS-60 to MS-70 inclusive. Before this very little had appeared in print concerning the grading of commemorative coins, and even the ANA book did not have very much. "AU or BU," a series of articles published in The Numismatist in the 1960s, had identified points of wear on commemoratives, and this format was followed by the ANA guide and later by The Comprehensive Encyclopedia of U.S. Silver & Gold Commemorative Coins (1981). (To the present time (in the 1990s) no one has ever written a book giving detailed formulas for determining the grades of worn commemorative coins or specifically detailing criteria (except for the first points of wear) for grading commemoratives today in the categories of MS-60, MS-61, etc. Instead, such grading is done by "experience." However, Ray Mercer has provided much valuable information on the general subject of grading in The Commemorative Trail and his work, A Buyer's Guide to the Grading and Minting Characteristics 0/United States Commemorative Coins.)