The Coins That Make Big Money
http://online.wsj.com/news/articles/SB10000872396390444426404577645602869279074
By: Stefanie Cohen
Heritage Auctions
$2,990,000: Teddy Roosevelt commissioned Augustus Saint-Gaudens to design this 1907 Double Eagle. Currently owned and for sale by Rare Coin Wholesalers
At $5 billion a year, the rare-coin market is so big that when the government lays claim to some marquee pieces in private hands, the decision makes national headlines.
That's what happened last month as a court decision affirming federal rights to 10 gold coins from 1933 infuriated dealers, collectors and auction houses. If the $20 "Double Eagle" coins ever went on the market, they would fetch millions each. One that had passed through the collection of King Farouk of Egypt sold in 2002 at Sotheby's for $7.6 million.
But there are many other coins that aficionados covet and pay huge sums for. American collectors number about one million, says Greg Rohan, president of Heritage Auctions. Major coin auctions are held once a month, and smaller ones each weekend.
The most expensive coins sold at auction are prized for their rarity and beauty, and many have mysteries and tals attached, stretching back centuries.
The 1804 silver dollar. Known as the "King of American Coins," only 15 exist, and one sold for $4.1 million in 1999. Despite the name, some were likely made in the 1830s as part of a set brought to Asian rulers on a trade mission, and others were likely made even later. The King of Siam passed one on to his son, Rama IV. He's thought to have given it to his governess, Anna Leonowens, whose story is told in the musical "The King and I," says Scott A. Travers, author of "The Coin Collector's Survival Manual." This set was purchased by Rare Coin Wholesalers for $8.5 million in 2005.
The 1913 "Liberty Head" nickel. Only five exist, likely made by a rogue Mint employee after the style was discontinued in favor of the buffalo design that year. One, the Olsen coin, played a role in a "Hawaii Five-O" episode called "The $100,000 Nickel" after it sold for that amount in 1972. In 2010, the coin sold for $3.7 million.
American Numismatic Association
$3,737,500: A 1913 Liberty Head nickel, sold at auction in 2010.
Collector George Walton had a 1913 Liberty Head with him when he died in a car crash in 1962 en route to a coin show. Auctioneers told his sister the coin was a fake, but for 40 years the family held on to it—until a coin organization offered a $1 million reward for the nickel, which was thought to be lost. The Walton coin was authenticated, and the family still owns it.
The 1787 Brasher doubloon. Ephraim Brasher, a neighbor of George Washington's, struck coins in New York at the end of the 18th century, before there was a federal Mint. The doubloons, in a Spanish style, were among the first gold coins struck in the U.S. Newspaper magnate William Randolph Hearst owned one that had turned up in a Philadelphia sewer in 1897. A Brasher Doubloon which was owned by Rare Coin Wholesalers sold in a private $7.4 million deal in 2011.
The recession has left coin-collecting a divided market. Coins known as "rarities" held their value and even increased in price when the recession hit, says Heritage's Mr. Rohan, partly because they come up for sale so infrequently. A collector who needs a rarity to complete a set may never get a chance to buy it again, he notes.
In 2011, the top 100 rare coins sold at public auction brought in an average of $204,355 each, or 27% more than in 2010, according to the Numismatic Guaranty Corp. But the price of more ordinary coins—the bulk of the collecting market, valued between $500 and $10,000 each—fell about 20% with the economic downturn, says numismatist and dealer John Albanese.
The 1933 gold coins in the court case were supposed to be melted into gold bars in order to bolster the Depression economy, but a few ended up in the hands of a coin dealer, Israel Switt. The recent court decision pitted the dealer's daughter and grandsons against the government. An attorney said the family plans to appeal the decision.
A version of this article appeared September 15, 2012, on page C14 in the U.S. edition of The Wall Street Journal, with the headline: The Coins That Make Big Money.