Thursday, August 31, 2006

Mislabeled Certified Coins Could Cost You Thousands of Dollars

One of the first things I realized when I started collecting coins was that I could not grade or authenticate coins myself. I was totally at the mercy of others. So I decided that I would limit any high priced coin purchases to coins graded and certified by either Numismatic Guaranty Corporation (NGC) or Professional Coin Grading Service (PCGS).

I had heard that gold coins were the most counterfeited coins of all. I also heard how one of the newest techniques for altering gold coins was the lasering of hairlines. Apparently this results in the gold melting and smoothing out the hairlines but is detectable because it affects the luster. So if I was to work on creating a $20 Liberty Type 1 Double Eagle set, I would only buy certified coins for my protection. Since many are shipwreck coins, I would be buying certified coins anyway in order to prove the attribution to the shipwreck. I was also buying most of these coins literally from the man who wrote the book on Type 1 Double Eagles (which I had read). So I felt pretty safe in my purchases. I had done my homework.

One of the coins in the Type 1 series is the 1854 Philadelphia. This date and mint has two varieties that are generally collected (if they list it in the Red Book, it gets collected). The two varieties are the Small Date and the Large Date with the Large Date being considerably rarer of the two. Graded AU55 by NGC or PCGS, a small date would run about $1,200, a small date double date about $1,500, a large date about $8,000, and a large date from the S.S. Republic about $9,000.

After I already had aquired a small date and large date for my collection, I was offered a Large Date Double Date from the S.S. Republic for $10,000. This seemed reasonable, especially since no current book or price guide listed a Large Date Double Date. It must be a new variety of the Large Date discovered from the shipwreck. So I bought it. (click photo to enlarge)

It actually is a beautiful coin for the grade and the doubling of the date is clearly visible to the naked eye. At first I was very happy with my purchase because the doubling was so visible. But the longer I looked at it and moved beyond the doubling, I began to think that this did not look at all like my other Large Date which is not from the shipwreck. I pulled out my Walter Breen's Encyclopedia of US Coins and look up 1854 double eagles. The description of the small date double date (Breen 7167) seemed to match this coin perfectly. But I needed to compare the size of the dates to be sure.

So, the first chance I got, I went to the bank and retrieved my small date and other large date so that I could do a comparison of the dates. The following photo shows the dates for the three coins, one on top of the other, to make it easy to compare. The small date is on top, the supposed large date double date in the middle, and the definite large date on bottom. So what do you think? (Click photo to enlarge)

My new $10,000 Large Date Double Date was indeed a $1,500 Small Date Double Date. An $8,500 difference in price! NGC had incorrectly labeled this coin as a new variety that apparently doesn't exist (or is at least still undiscovered). I sent the coin back to the dealer who sold it to me. He immediately agreed it was a small date, apologized that he hadn't caught it (remember, he literally wrote the book on Type 1 Double Eagles!), and refunded my purchase.

So the moral of this story is that everyone needs to be a numismatist, at least as far as their own collections are concerned. Even the professionals can make honest mistakes. If I hadn't caught this error, I could have sat on the coin for 20 years, went to sell it and found out the truth. The dealer and NGC could well be gone by then and I would have no recourse for my purchase. The fact that I not only collect Type 1 Double Eagles, but that I also study them, is the reason I caught the error.

Finally, if someone offers you an 1854 $20 Liberty Type 1 Large Date Double Date, make sure you take a close look at it first. Hopefully, it won't be one graded AU55 from the S.S. Republic (#5055511-007) as that one should be on its way back to NGC to be holdered correctly. But according to the NGC population reports, there is still a XF45 out there somewhere being held by an unsuspecting collector. I hope he or she reads this.


At 8:35 PM, Anonymous Anonymous said...

Mr. Dwyer,

I have a question on Type 1s. Is there an email I can contact you at? Thanks!


At 10:33 PM, Blogger A.C. Dwyer said...

You can email me through my contact page.


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