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Ni28

The 1966 silver 50c pattern coin (and other rarities we might be missing out on)

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Ni28

The current prices fetched by the glamour coins, e.g the Burgers ponde, put them out of reach of collectors with modest incomes. It is my perception that these coins could be acquired at more affordable prices soon after the Boer War. Another interesting example of valuing a coin too low can be found in the May 1954 newsletter of The South African Numismatic Society describing the Farouk sale. Regarding the Single “9” it was written: “A further 1898 pond countered-marked “9” under the bust, and “M” engraved on the bust. (This piece is obviously a forgery. Editor)”. Lucky buyer who realized it was not a forgery!

 

Perhaps we are now in a similar situation and are not recognizing the true value of some of the more recent rarities. This new book ‘History of the Nickel Coins of South Africa’ describes a 1966 silver 50c pattern coin. It is listed in Hern as A67 at a price of R35 000. This coin was never considered as a true pattern but rather as a curiosity. This was a reasonable observation as why would they be minting a silver 50c coin after the introduction of the nickel series? As described in the book, however, a note from the Director of the Mint at the time, Koos Groenewald, had now surfaced together with one of these coins describing the reason for their minting (NGC slab number is 3478502-002 to view a photograph of a coin on their website if you do not have the book). It now appears that this coin can be considered as a true pattern. It was struck to compare with the proof nickel 50c coin: “in connection with certain coinage difficulties experienced in the 50c nickel due to deep conkal effect”. The book also describes other unrecorded patterns such as a uniface 1970 50c COA and a uniface 1968 50c C.R. Swart. How much are these coins worth and are we significantly underestimating the value of the patterns and other rare coins of the 2nd Decimal Series (1965 50c Eng, 1965 R1 Afr, 1965 1c Afr)? Regarding the patterns, I have for example personally never seen the ‘low’ 10c offered for sale.

 

I mainly focused on 2nd decimal coins in this post because of the book, but the principle also applies to other recent coins, e.g. the pattern of the current R5 coin that had been offered for sale here on BoB previously. I see surprisingly few takers for these scarce coins. Will these coins be the highly sought after ones in 50 years’ time and the grandkids wondering why grandpa never acquired them at the dirt cheap price of say R35 000 for a 1966 silver 50c coin?

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jwither

My answer to your question is no. I do not believe the examples you used are improperly ignored or underpriced.

 

First, what is so significant about these examples that more than a few would ever want them? Simply because a coin is rare does not imply that a coin should sell for a lot more or that many collectors will want it. As a pattern, most of them are rare, so it is not even that significant from this standpoint.

 

Second, I do not believe that R35000 for that one coin you mentioned is really that cheap even today and this is assuming that this is the actual value which is an assumption I do not make. I have commented on the accuracy of the Hern Guide (and others such as the US "Red Book") many times here. There is little interest in RSA except in isolation, so before any plausible claim can be made for a coin like this one, I believe that interest in the series will need to increase substantially first. I see no prospect of that whatsoever in the foreseeable future. What I am describing to you here, it is the same reason why I believe the 1960's proofs with the English or Afrikaans legends are also overpriced.

 

Third, for the comporables you used, the 1898 "Single 9" pond is what I describe as a "celebrity" coin. It's scarcity does not account for its price. There are many other unique or near unique coins (in absolute terms) and many or even most of them sell for relatively nominal prices. To give you an example, on June 3, 2006 Heritage auctioned a Bolivia 1884-A (Paris mint) NGC PR-65 10 Centavos for $550. Two specimens are known. The logical reason for this price is that most do not want it, regardless of its scarcity.

 

Fourth, you also need to consider how collectors generally actually approach collecting. This has been the primary underlying theme in most of my posts on this forum and also why I believe most "investors' who lost money recently did so. If someone is trying to buy coins for profit, you need to understand the collector to understand the market. Most collectors are "set collectors" of one type of another, not all of them but most. They primarily collect circulation strikes, second proofs and patterns trail as a distant third. There are very few pattern collectors even in the United States which is why most of them sell for much less than the others even when the scarcity is equal or much greater. There aren't that many collectors who just randomly buy coins because of their scarcity. Also like proofs, because they did not circulate, there is nothing significant about these coins in the highest grades. I believe that any "low" grade pattern (as in below a 65) should be penalized financially.

 

The combination of what I am describing means that there is going to be a lot of competition for the collectors money. Personally, I would rather buy any number of other SA coins that these, like the low mintage KGV proofs or even scarcer AU-58 KGV or KGVI circulation strikes.

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Ni28

Thank you Ernesto

 

Your comments are very insightful and appreciated. The pricing of coins in general and the popularity of certain rare coins versus their less favoured (perhaps equally rare) cousins have always intrigued me. I suppose the hobby is there to be enjoyed and it will always ebb and flow. As seasoned collectors I suppose all we can do is to be excited about the hobby and create awareness and interest with the younger generation. If all of us do it, it can only go from strength to strength.

 

In the meantime, if someone out there has the odd 1966 silver 50c pattern lying around, would you please contact me…

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Ni28

The discussions on the other thread regarding the popularity of the 1931 coins made me think of the following story. It took me days to find it in my library, so here it is for those not familiar with it. As it fits better with the theme of this particular tread (scarce coins not really in demand at particular times), I decided to rather post it here. Sam Lieberman wrote this as part of a very interesting article on the 1931 short proof set in Journal No. 2 of The Association of South African Numismatic Societies. To quote him:

 

“Dr Froelich was one of the few subscribers of the mint at that time (1931), and as usual bought his one set of proof coins. When the mint could not sell all the sets, they approached Dr Froelich to buy the last 11 unsold sets at 13/6. Dr Froelich offered the mint 12/6 to clear the lot, and it is believed that after negotiations the sets were sold to him at 13/- per set.

 

Dr Froelich kept these 12 sets until his death in 1970. Mr MacDay handled the coins for the Froelich Estate. The auction that followed was one of the most comprehensive auctions of coins ever held in South Africa. Only one set of the 1931’s was put up for auction and sold at R1 650.00. All the other sets were then sold at that price to different bidders.”

So an interesting story. In 1931, very few people were interested in the sets that were destined to become amongst South Africa’s most sought after coins (probably as few people had discretionary money in the Great Depression). Anyway, it still makes me wonder which of the recent rarities, which nobody currently wants, will be the highly sought after coins in a few decades.

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Cold Sea

Hi Ni28,

 

I often wonder whether modern pattern coins are still being manufactured, or whether modern patterns are merely “computer aided designs”, attached to an e-mail.

 

The 1989 Two Rand Leopard is the interesting one for me. Hern states that the mint has 8 pieces in their vaults, but according to a source 15 were made.

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Ni28

Yes, I think you a right. The days of Mints producing large numbers of pattern coins are probably over. By 1970, Frank Mitchell was able to acquire 33 patterns associated with the introduction of the Second Decimal Series. In comparison, the third decimal series resulted in precious few patterns being produced. This is one of the reasons why the recent R5 pattern (page 105, Hern 2013) intrigues me. Was this one of the last patterns that is going to be produced? One was recently offered for sale by one of the dealers and I can kick myself that I did not buy it at the price then asked.

 

That leopard R2 coin surely is another interesting and beautiful example and some coins must be out there. I have heard rumours of some of these “being bought at a flea market in Pretoria”, but I have never seen one offered for sale. It also appears to be a rather pricey coin from that sale referred to in Hern.

 

The only other pattern of the third decimal series (except for those common types in the envelopes) I am aware of is the year 2000 Mandela R5 patterns on display at Coin World. I think he looks the other way on these coins if I remember correctly. Imagine the headlines if one of these ever hit the market!

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jwither
Anyway, it still makes me wonder which of the recent rarities, which nobody currently wants, will be the highly sought after coins in a few decades.

 

If you want to try to guess the answer to this question, understand how collectors behave and what motivates them.

 

As I mentioned in a recent post here, I am having an ongoing debate with a long time contributor on the NGC Message Boards. Don't know what else will be posted but the comments we have exchanged indicate that he does not understand collectors or even how people generally perceive coins at all. He is very knowledgeable about coins generally and modern coins (as in 20th century base metal coins) especially but has a hugely inflated opinion of the appeal of both these coins to collectors and of coins to non-collectors generally. Its no wonder he has been mostly wrong in his views for 40+ years.

 

I would be interested in finding the catalogue you reference. I am looking for any catalogs of extensive Union collections in particular. The only one I have been able to find is Spink's sale #130 from 1999. There is also the Spink's Remick sale from December 2006 but I already know what was in it, though I would still like a copy of the catalogue.

 

My main interest is to see what other scarcer coins might be available that are not accounted for in the census today. I think of Remick's collection as the best Union one prior to Bakewell's and I presume that many of the same coins are in both collections. I most interested in identifying any prior sales of 1931 circulation strike silver. The story you told on the 1931 proof set is interesting, but that set is really not that hard to buy.

 

In terms of the prices of SA rarities, one of the problems is that there are just too many of them. In a series of posts here under the topic "A comparison of the market characteristics between the United States and South Africa", I attempted to show why I believe that this actually impedes the value of many South Africa coins. (The same applies to any other market with the same profile such as Mexico.) If you have the time, take a read through it and I would be interesting in discussing any feedback you have on it.

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