Coins are known to be one of the first ‘collectibles’ of the world. While the exact origin of coin collecting is not known, the hobby is said to have prevailed even before the 3rd century BC. While investment has been one of the main objectives behind coin hoarding, it is the art-work that has turned many art-lovers into coin-collecting-aficionados. With the birth of numismatics, new dimensions to the “King of Hobbies” opened up. And today, coin collection is said to be one of the most popular and widespread passions. This write-up aims to include various aspects and information about coin collecting, that can be of use to a collector.
Table of Contents:
- Coin Collection – More Than Just a Hobby
- History of Coin Collecting
- Important Milestones
- Metallurgical Composition of Coins
- Anatomy of a Coin
- How are Coins Made?
- Coin Grading
- How to get Started?
- Ways of Collecting Coins
- Precautions to be Taken When Buying Coins
- Caring for Coins
- Storing and Displaying Coins
- Coin Collecting Software
- Collecting United States Mint Coins
- The Boy Scout Coin Collecting Merit Badge
- Facts about Coins
There can be varied motives behind accumulating coins. There are essentially 3 kinds of collectors:
Hobbyists – A vast majority of coin-collectors around the world, are hobbyists. Among them, there are those, who collect coins just for the fun of it, and those, who are quite serious about this hobby. Some of them collect all kinds of coins while others gather coins only of a particular type. Generally, what starts off as fun, might slowly grow into a passion with specific tastes. People collect coins based on a particular era, a particular year of minting, originating country, print or subject on the coins and even metallurgical composition. However, there are several coin collectors, who’s objectives are beyond mere hobby.
Numismatists – Numismatists study coins. Hence their interest in coin-collecting is academics-oriented. Coins of a particular period reflect a wealth of information of that period, like, the way of living, the mind-set of the people, their language, their idea of precious metals and more. Ancient coins are considered as mirrors of history. Studying them can thus reveal historical facts.
Investors – Many of the collectors have an investing-motive behind coin collection. They buy rare coins, especially ones made of precious metals. If the prices of the coins go up, they sell them. Sometimes ancient and rare coins, despite being made of ordinary metal, are priced high too. Investors, thus need to have an in-depth knowledge about coins, their prices, the market, grading and more.
Coin collection is said to have existed since the time they were first minted. Long ago, coin collecting was done with the motive of storing wealth. It is reportedly much later, that coin gathering became a form of art collection. Certain reliable historic records mention that coins were accumulated for their artistic value from as early as the 4th/3rd century B.C. However, only the kings and the wealthy people of those times, are known to have indulged in this hobby.
Even during the Renaissance of the 14th-17th centuries, coin collection was popular only among the privileged class. Hence, it came to be known as the “hobby of kings”. Modern coin collecting is said to have taken birth during the 14th century. In the 15th and 16th centuries, artists are said to have been employed for replicating some of the ancient valuable coins, so that they could be used as collectibles. However, this replication also led to duplication. Hence, there arose a need to study coins, to recognize the authentic and the fake ones. During the 17th and 18th centuries, coin collection took a scholarly bendand numismatics came into being. Slowly the middle class people
starting showing interest in coin collection.
It was not until the 19th century that this hobby became popular and widespread. Markets for trading coins started emerging and so did regulatory bodies and associations. Publishing of periodicals had also started during these times. Coins made of precious metals and ancient coins assumed the form of investment during the 20th century. Even to this day, gold, silver and platinum coins are traded as bullions all over the world.
1st Century BC – Roman Emperor, Caesar Augustus, collected old, exotic coins, which he gifted to friends and courtiers. This has been related in the De Vita Caesarum, a work by Suetonius, a Roman historian.
1294 – A manuscript dating to this period cites the collection of coins in an Italian monastery. This has been quoted by French numismatist, Ernest Babelon, in his work ‘Traité des monnaies Grecques et Romaines’ in 1901.
1514 – The first book on coins, De Asse et Partibus, by Guillaume Budé was published.
April 2, 1792 – The Congress created the United States Mint.
1836 – The Royal Numismatic Society was founded.
1858 – The American Numismatic Society (ANS) was established.
1866 – The American Journal of Numismatics was published by ANS.
1891 – The American Numismatic Association was established.
1945-46 – A project was launched by Germany, just after World War II to register every coin found in the country.
1950 – The Royal Canadian Numismatic Association was formed.
August 15-18, 1962 – The first numismatics convention was conducted by the Royal Canadian Numismatic Association and the American Numismatic Association, at Detroit, Michigan. The attendees numbered to 40,000.
1970 – UNESCO passed a resolution that coins and other such articles which are more than 100 years old must be treated as cultural property, and hence control must be exercised in importing, exporting or trading them.
1980-90 – Towards the late 1980s and early 1990s, ancient coin collection investment funds started to trade in the New York Stock Exchange.
There are various elements that have been used for making coins. Some of them are: Copper, Zinc, Nickel, Gold, Silver, Aluminium, Iron, Lead, Magnesium, Manganese, Palladium, Platinum, Tin and Tungsten. However, coins are generally made of alloys, or a mixture of these elements.
Current circulating US coins compositions:–
Pennies (one cent coins) are made from copper plated zinc.
Quarters are made from nickel plated copper.
Dollars were initially made of silver and gold. Silver Dollars were being made since the 18th century. They are still minted, but are mostly uncirculated. Gold Dollars were popular during the 19th century. During the latter part of the 20th century, copper and nickel compositions were used for making Dollars. Since 2000, manganese and brass compositions have been used. Half Dollars are also made from copper and nickel.
Collectors coins and bullions are made from gold and silver. These metals are usually mixed with a definite proportion of some other metals, and are not used in their pure forms.
Note: During World War II (1943), pennies were made from zinc plated steel, since copper was extensively being used for making shell casings for the war.
Certain metals are strictly NOT used in coin making. This is because they are highly reactive or unstable, or very expensive to separate from their naturally occurring states, or highly brittle or soft. Some of these metals are: Lithium, Sodium, Potassium, Rubidium, Caesium, Beryllium, Calcium, Barium, Cadmium, Boron, Scandium, Lanthanum, Gallium, and Arsenic.
Knowing the proper terms for parts of a coin will gain you a lot of respect with coin dealers and other collectors. The obverse is the “heads” side of the coin and the reverse is the “tails” side. The legend is the inscription on the reverse of the coin; the rim is the raised circle near the edge of the coin; and the motto is the inscription on the obverse of the coin. (The motto on US coins is “In God We Trust.”)
Other common parts of a coin include the date, the year the coin was minted and the mint mark (the letter designation under the date on a US coin that denotes where the coin was made). Coins made of multiple metals, such as the US quarter, are called clad coins and you can see the layers on the side of the coin. Coins with ridges on the sides are said to have reeded edges.
The metals used in coin making are heated in a furnace so that the mixture becomes molten. This is then poured into a mould and allowed to cool. The mould is usually cuboidal in shape. The solidified metal bar, called ingot, is then passed through a roller several times, till it is pressed into a strip, called coil, having the thickness of the final coin. The strip is then passed into a blanking press, where small circular discs are punched through it. These discs are called blanks. The punched strip is cut into pieces and sent for recycling.
The blanks are softened by heating in an annealing furnace. They are then washed and dried, so that any leftover grease and dirt is removed. The clean blanks go through a riddler, which separates the imperfect blanks from the lot. The imperfect ones are sent back for recycling. The good ones are passed through the upsetting mill, which raises the rim along the edges of the blanks.
The blanks are now ready for the coining press, where the designs are struck onto them, one at a time. There are 2 dies involved in the striking. One for the design on the obverse side and one for the reverse side. The blanks thus become coins.
The coins are inspected manually. They are then counted using an automated counter, packed, sealed and sent off for storage or to the 12 Federal Reserve Banks. From here, the coins are shipped to the local banks.
Note: The U.S. Mint buys readymade strips or coils for minting the coins. For the manufacture of cents, the U.S. Mint directly buys blanks from the fabricators. The raw materials (metals) are supplied by the Mint itself.
Coin grading is assigning a grade to a coin to certify its worth. With coin collection being one of the oldest and most popular hobbies globally, there had to be some means of distinguishing between authentic and duplicate coins, and also rating them according to their value. Hence coin grading came into existence. There are essentially 4 types of coin grading. They are:
Grading based on Quality – This kind of grading has evolved from just 2 words (new and used) to an entire system with grades ranging from 1 through 70. Along the course of this evolution, there was a time when grades like Poor, Fair, Almost Good, Good, Very Good, Fine, Very Fine, Extra Fine, Almost Uncirculated and Brilliant Uncirculated were awarded. During the late 1950s, William H. Sheldon published a book titled Penny Whimsy, in which he came up with a scale for grading coins. This scale came to be known as the Sheldon scale. It described coin quality with numbers ranging from 1 to 70. 1 indicated basal state or extremely poor condition and was awarded to bent/scarred/oxidized coins. 70 denoted perfect condition and was awarded to uncirculated or mint state coins.
Grading based on Interest – Coins are rated based on the interest factor as well. This indicates how much the coin or its variety is in demand. The ones in higher demand obviously get better grades.
Grading based on Rarity – There are 3 well known scales for indicating rarity of coins – the Sheldon Rarity Scale, the Universal Rarity Scale and the Scholten scale. In the first one, ranging from R1 to R8, R1 denotes a common coin and R8 denotes a unique one. The second scale runs from URS 1 to URS 20, where URS 1 indicates unique and URS 20 indicates availability in numbers ranging from 250,001 to 500,000. The third scale uses the following notations – C for common, N for normal, S for scarce, R for rare, RR for very rare, RRR for extremely rare and RRRR for utmost rarity.
Grading based on Liquidity – This grading with a scale ranging from 1 to 5, indicates how easily a coin (or its variety) can sell when auctioned, with normal market conditions prevailing. 1 indicates that the coin will sell fast and at a discounted value than the suggested price. 5 indicates that the coin will sell really fast and at hiked-up values.
A few grading services have been set up for awarding grades to rare coins. They charge a fee for doing so. Once a coin is sent to them, they will grade it and usually seal it in a plastic case. The 4 most popular grading services are:
Professional Coin Grading Service (PCGS)
Numismatic Guaranty Corporation (NGC)
American Numismatic Association Certification Service (ANACS)
Investment Grade Coin (IGC)
One important thing to note is that the grades awarded could vary from service to service. Sometimes submitting the same coin to the same service twice can result in two different grades, maybe with a slight difference. However, these 4 services are considered to be credible for grading coins.
Starting coin collecting as a serious hobby, requires background knowledge, which you can get from library books or from certain websites.
Referring to the following books could be useful:
Coin Collecting for Dummies by Guth, Ron
Let’s Collect Coins by Bressett, Kenneth
Hobbyists usually get coins from loose pocket change, or by trading them with friends. The serious coin collectors, get their stock from coin dealers, coin shows and auctions. Initially coin dealing and trading happened on a face-to-face basis. However, with the advent of social networks and online trading, transactions happen virtually, and the coins are then posted to the buyer’s address.
When buying rare coins it is advisable to do the necessary homework on the coins as well as the dealer. Getting to know the price of the coin of interest and its grade can be helpful. Also gathering as much information as possible about distinguishing between authentic and duplicate coins can be highly advantageous. Special care needs to be taken when buying coins online. It is best to buy from trusted and reputable dealers. One can even compare various shops to find the best buy.
Like antiques and collectible books, coin collection can stay as fresh as new if cared for properly. First of all, get in the habit of handling your coins by the edges, never by touching the face of the coin. Avoid touching your coins at all, if you can help it, as skin oils and fingerprints are the number-one threat to your coin’s value. If your coins are in mint set packaging or in plastic capsules, you should keep them sealed inside.
It is not recommended that you clean your coins. Similar to antique furniture, coins develop a patina or luster. Polished coins are actually worth less than un-cleaned coins, in most cases. The exception would be coins that have been dug up or found using a metal detector.
Proper storage and display is key to preserving the value of your coin collection. Coins can be stored in air-tight containers. However, the better way to store and display them is by using mylar (a stable plastic) coin holders, called “flips.” These pockets have two openings – one for the coin and one for a piece of cardboard or paper that describes the coin. Avoid older plastic coin albums made with polyvinyl chloride (PVC) as these will corrode the coins over time. Also avoid holders and albums that do not have a flap or cover, as these can cause coins to fall out of the holder when it is handled.
Of course, proof and mint sets come in their own display packaging and these shouldn’t be tampered with, so as to preserve the set’s value. Similarly, coins that have been graded and sealed should be left in their plastic cases.
Several coin collecting software are available in the market for making coin collection simple and easy. It is quite surprising that there are software to help people when indulging in their hobbies. However, these software can really come in handy for taking care of the entire coin collection process. Some generic features of these applications are:
- A centralized database that keeps a record of a number of coins, both contemporary and ancient. Details such as grading descriptions, market value, the manufacturing mint, country, images and more might as well be provided. This can help coin collectors get exact details of the coins they are interested in.
- Some of the software vendors even encourage their customers to send them details of any coin that is not present in their database. The details will then be verified and added.
- Users can maintain an account for keeping track of the coins they already have.
- Some of these apps are free, while others require paying a fee. One thing to note is that, the free apps might offer a limited set of features, while the paid apps might be full-fledged.
- Most of these software come with a free trial period too.
14. Collecting United States Mint Coins
US Mint Coin Sets of 2011
Numismatic products from the U.S. Mint include proof and uncirculated sets for each year, commemorative coins in honor of events, places, people etc., Eagle proof coins made of platinum, gold and silver, national medals and other special collectibles.
Boy Scouts below 18 years of age, with a hobby of collecting coins, can aspire for the Coin Collecting Merit Badge. However, there are a few criteria that need to be met before applying for the badge. They are:
1. A Boy Scout is expected to have a collection of the 50 States Quarters and should also be able to describe them.
2. He should know details like how coins are made, coin terms and their meanings, information on coin grading, coin storage methods, information about coin collecting publications and information about paper currency.
3. The aspirant should as well build a circulation type set (one each of the currently circulating coins).
4. Apart from these, he should fulfill at least one of the following criteria:
- Make a type set of a particular coin, with one coin per year, since his birth.
- Collect and identify 50 coins from 10 different countries.
- Collect and identify 20 foreign currency notes.
- Collect and identify 15 different medals or tokens.
5. Finally, the Boy Scout should also meet one of these requirements:
- He should be able to draw 5 Colonial-era United States coins
- Visit either a US Mint facility, or a Federal Reserve Bank or the Bureau of Engraving and Printing and give an account of it to the counselor.
- Give a speech on coin collecting before his class or troop.
- Visit a coin dealer or the US Mint website or a coin collecting club and give an account of his experience.
You know that coins can be fascinating and fun, but not everyone understands the appeal of coins. Here are a few fun coin facts about them:
- Legend maintains that Martha Washington, George Washington’s wife, donated her table silver flatware to make the first US coins.
- The inscription, “In God We Trust” was first added to US coins during the Civil War. It wasn’t used on all US coins until 1955.
- The world’s largest mint is located in Philadelphia, which has housed a US mint since 1792. The complex covers more than five acres and welcomes more than 400,000 visitors each year.
- Circulating coins have a lifespan of around 30 years compared to around 18 months for paper money.
- Coins with reeded (or grooved) edges are more difficult to copy.
- In 1943, because copper was needed for the war effort, US pennies were made of zinc and had a silvery appearance.
- A US nickel is made of only 25 percent nickel. The rest is copper.
Courtesy – http://www.vcoins.com
Generic coin collection image
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