By Harvey G. Stack, Senior Numismatic Consultant
After the Second World War coin collecting surged, stimulated by the sale of Mint sets by the U.S. Mint, the advent of the Guide Book (red book) published by Whitman, new improved coin albums which sold for 25 cents each, deluxe pages and albums by Wayte Raymond and coin columns in major national publications (such as the New York Times, Chicago Tribune, and Los Angeles Times). Even the very popular Life magazine had a multiple page story of the Louis E. Eliasberg collection in full color!
By 1950 the U.S. Mint had re-introduced Proof sets. At the same time many new coin shops sprang up nationwide, from large coin stores to locations in department stores and even “Mom & Pop” entities. Also, new local coin clubs were formed, which sometimes banded together to conduct regional coin shows and conventions, and the American Numismatic Association got thousands of new members.
In order to be of service to the growing coin business, each year dealers bought Mint State rolls of coins in all denominations, in order to help customers fill albums with coins of Philadelphia, Denver, and San Francisco that were currently being struck. Many were not found in regular circulation, except in the areas that each of these mints served. These collections grew, stimulated by the need to fill the “holes” in albums.
In addition to the regular mint issues for circulation, new commemorative half dollars were minted. In 1946 the Iowa half dollar was issued, as were PDS sets of the 1946 Booker T. Washington commemoratives, and then later years as well. All the above helped stimulate the now growing coin business.
At the same time, many old time collections were being offered for sale, either by private treaty or at auction. Some of the memorable names included Col. E.H.R. Green, Col. Flannigan, J.T. Bell, Atwater, Jerome Kern, Grinell, Dunham, F.C.C. Boyd, “H.R. Lee” (Eliasberg) and many others.
The hoarding of Uncirculated rolls became a new obsession in the marketplace. Many thought that holding quantities would eventually yield big profits. Promoters and scam artists touted the value of holding rolls, using arguments that were as foolish as their recommendations. Their goal was to create pyramid schemes to loot the buyers.
I remember at a trade show when an “investor-collector” walked by my display bourse table and looked it over. He asked: “Mr. Stack, where are your rolls?” I said, “We do not deal with rolls,” to which he responded, “Don’t you know what is rare?” He then tried to explain the logic that led him to that reply. He explained: “Take the 1950-D nickel. Only 2.6 million were struck! That means that there are only 65,000 rolls, and that means there are only 650 bags, and “you know Mr. Stack, that anything that there are only 650 of is RARE!” I was shocked! I stopped our conversation there rather than pursue that foolish logic!
However, when someone is new in the field a promoter or scam artist can easily influence him or her. To illustrate how people can respond foolishly to the promoters’ promises, I continue to tell you about the 1950-D five cents. As we were trying in 1950 to obtain examples of all the minor coinage from our various sources, we were unable to locate the 1950-D five cents. It wasn’t available anywhere for about two months after it was issued. Suddenly in the early spring we heard that $2 rolls of 1950-D nickels were being offered in the marketplace, first at $50 a roll, then $60, $70, $80, and finally $100 per roll! The unknowing public jumped in and hundreds if not thousands of rolls were bought for $100 or more per roll.
Then the inevitable occurred. In the marketplace the price started to drop like a stone! In one week they were being offered at $10 per roll! What the uneducated didn’t know was that over 2.6 million were struck, but by some distribution quirk, most of the Denver Mint nickels of 1950 were sent to the Cleveland Federal Reserve. There they were kept in vaults until there was a need by the member banks for five-cent pieces. Once the bags were released the market was flooded and down came the price! The speculative investor market took a price beating! Buyers should have realized that the 1950-D nickels went somewhere and that they should be careful before they bought.
One of the great scams that occurred in the roll investment era was the sale of “sealed rolls” in “original bank wraps.” One could look at the ends of a roll and often determine the date and the mintmark. But the scam artist preached: “If you open it or break the seal, the value of the roll will drop immediately.”
What had occurred was one of the greatest frauds perpetrated on the coin collecting public. Advertised “sealed rolls” didn’t always mean an original mint sealed roll. The machinery to repackage coins in a bank type roll and seal it was readily available and as long as they remained sealed, no one could tell what was in the roll. We found, as many others did, that rarer coins would be placed at the ends of the roll, but the center would be stuffed with commoner dates, worth only face value. Sometimes the scam artists went one step further in their greed and replaced the center coins with “slugs” or “washers” and resealed the rolls with their own machines.
As losses became evident the market took more care and purchasers started examining their holdings. The demand for “sealed rolls” became quite dead, but it was not until the early 1960s before the promoters lost their market.
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