Conditional Rarity and the 1896-S Morgan Dollar
By Charles Morgan
What does the future hold for the Ike dollar?
I don’t know.
I don’t think anyone does, to tell you the truth. There are those who think the series is underpriced and there are those who think the coins should be cheaper.
There are those who think that the coins that get high prices are easy enough to obtain until they try to go about the business of making the coins themselves (I can personally attest to major dealers complaining that their submissions weren’t chock full of top pop MS-67 clads!)
There are also those who think that anyone willing to pay such high prices (no matter what they are) for a conditionally rare modern coin are nuts. Many of these dealers are in the business of selling said conditionally rare modern material, but you wouldn’t know it because they don’t want you to.
With apologies to Abraham Lincoln, all the people can’t all be wrong all of the time, right?
The numismatic market has been rife with folly ever since it began.
Spend a few weeks digging through old books and periodicals and you’ll see. It won’t take long for you to see patterns start to develop. This historical perspective, to the inquisitive observer, should shed light on the direction of the Ike dollar series, because the fact is what is going on with the Ike dollar has happened before.
And it happened with the Morgan dollar.
Simply put, the entire logical underpinning as to why top population and high-end Ike dollars are worth what they are worth in the numismatic market is found in the Morgan dollar series. If it is wrong for Ikes, then it is especially wrong for Morgans.
The next three sentences you can take to the bank:
The Morgan dollar was available in mint-sewn bags in tremendous quantities the likes of which the Ike dollar will never experience.
There were more Morgan dollars in Mint State 100 years from the date of their production than there will be Ike dollars in Mint State in the same period of time.
There are conditionally-rare circulation strike Ike dollars that will sell for over $100,000 at auction and most of us will live long enough to see it.
How do I know this? Quite simply, it’s all happened before.
Collectible Coin vs. Rarity
Here’s a controversial question. Name a Morgan dollar that’s actually rare. If this was a conversation, I’d wait patiently and listen for the familiar dates and issues to be named: the 1895, of course, the rare Carson City or New Orleans mint pieces, some Premium San Franciscos. The 1921-P (just kidding). But the fact is, none of these coins are actually rare.
They are just hard to obtain because there is so much demand for them. Back in the early 20th century, that wasn’t the case. Eliasberg paid a couple bucks for his 1895. You can’t sniff that coin now for less than five figures on most days. The bottom line is, the Morgan dollar is a collector series, not a rare coin series. And it’s status as a collector series has been carefully cultivated over the years by groups of smart marketers and innovative dealers.
The numismatic life of the series can be charted this way:
Ignored -> Marketed -> Collected
It doesn’t take much effort to see that the Morgan dollar is the most heavily promoted U.S. coin in the hobby.
It was available in unimaginable numbers until it wasn’t.
Coins that were considered rare at the turn of the century into the 1920s were only rare because the government hadn’t released them.
Coins that were considered common throughout the fifties became rare once people realized there were no bags to release.
For other issues, a lack of fundamental numismatic knowledge defined the way we collect them.
Take for instance, the 1895 Philly-strike dollar. The reason the 1895 is considered the King of the Morgan dollars is due to disinformation. It was believed for a long time that 12,000 circulation strikes were struck and that the proofs were the only remnant of the entire mintage. It turns out, there never were 12,000 circulation strikes. The 1895 proof has a mintage of 880 coins, which is not even in the top five lowest mintages for proofs in the series.
But the coin is in the pantheon of all time great 19th century issues because of the fact that coin dealers and researchers got their facts wrong.
So let’s get back to our series and the notion of the Conditionally Rare coin.
There are those who purport that the modern coin collector market is nothing without the artificial value of the conditional rarity. Why spend $15K on an Ike that a coin dealer has in a flip for $2.50. It’s a logical question. It needs to be asked. It’s relevant. It’s also based on the premise that this situation is exclusive to modern coins.
The fact is, it’s not.
Every coin that is not genuinely rare has premium pricing for conditional rarities. The big coin in the Morgan dollar series that does this is the 1896-S. That issue has 62 in MS-65, 2 in MS-66, and 1 in MS-67. It’s fairly common in MS-64 and below.
What Ike does this coin remind you of?
You should be thinking 1972 Type 2.
The Morgan dollar is a classic coin in the sense that it was made in the 19th century. But as a collectible it’s a product of the modern marketplace. It is the quintessential modern coin: massively available, relentlessly promoted, and in some cases… in some grades… genuinely rare.
All it took for the Morgan dollars was for collectors to take notice.
This will also happen with Ikes. More Ike collectors are coming. I promise.