Numismatics: History as Market
by Michael E. Marotta
Most people call it “coin collecting” but numismatics is the art and science that studies the forms and uses of money. This includes stock certificates, bank drafts, military decorations and fine art medals as well as coins, which, after 2500 years, are still the most common form of money. “Coins are history you can hold in your hand,” is a common saying in numismatics.
For a couple hundred dollars, you can own a coin struck by Philip III of Macedon and believe within reason that it might have been given to Aristotle.
The “Owls,” large coins of the Athenian golden age of the 5th century BC, cost more, though usually less than $1000 in Very Fine to Extremely Fine grade. Collectors who otherwise have little interest in ancient coins often want “just one” because of the status that Athens has among educated people. They are not objectively rare. Few coins are. Coins, stock certificates, bank drafts, and other monetary media are always intended to be common.
Despite the headlines made by the 1894 Dime or 1804 Dollar, most coins, even ancients, are surprisingly affordable. Although I no longer collect actively, at one time, I had assembled about 25 ancient coins from the towns and times of famous philosophers, from Thales to Hypatia. Except for the Owl and a tetradrachm of Alexandria in Egypt, none cost more than $200 and most cost less than $100. The political leaders of the American Revolution who signed the Declaration of Independence, the Articles of Confederation and the Constitution, also signed paper money. Many of these are available in middle collector grades, Very Good to Very Fine, for less than $500, sometimes surprising less.
During the late 1700s and early 1800s, the British royal treasury was nearly empty, yet the benefits of capitalism were everywhere. Taverns and merchants issued their own bronze penny and halfpenny tokens. There are thousands of types, most of them celebrating trade, commerce, peace, and prosperity. In America, from about 1834 to about 1844, a series of economic changes brought "hard times" and Hard Times Tokens. These privately minted coins stand out as being pointedly political, for or against Jackson, Van Buren or Daniel Webster. There were even Abolitionist tokens. These all circulated in daily trade. Many are also advertising cards, for instance for Van Nostrand, which then was only a bookstore in New York.
Canadian tokens of the 1840s were part of the social fabric that led to The Rebellions and ultimately to the burning of the Parliament at Montreal. Other Canadian tokens from the Maritime Provinces explicitly honor Trade and Commerce, and state "Pure Copper is Preferable to Paper," and assert, "More Trade, Fewer Taxes." All of these kinds of tokens, in average to better collector grades, are priced between $20 and $50 today.
Stock certificates from the Edison Companies are always in greater demand, and certificates from the mid-1800s cost much more than those from the early 20th century. However, the Erie Railroad, the New York Central, Bethlehem Steel, and the many Edison Electric companies left us legacies that very affordable. You can buy a mixed lot of common early 20th century stock for about $50 per 100.
Of all the legacies of the golden age of American enterprise that compel philosophical capitalists to own them are the gold coins themselves. Government coins always carried some image of Liberty, typically as a young woman. The most common issues are the $5 "half eagle" and the $20 "double eagle." These coins often sell for a modest premium over the spot price of gold. A common $5 half eagle from 1851 in Extremely Fine condition costs less than half has much as a comparable 1909-S VDB Cent. The first coin is gold, of course, and has half the population of the bronze coin that features a dead politician. Also, the gold coin of 1851 lacks the motto “In God We Trust.” And there are private gold coins from California in the same price range.
Numismatics is one of the last unregulated markets. In the USA, there are no government licenses or special regulation. There are few college courses on American campuses. Anyone can claim to be anything. Validation, such as it is, is by ad hoc standards of conduct set within the hobby by private organizations: the American Numismatic Society, the American Numismatic Association, the International Association of Professional Numismatists, and the Professional Numismatists Guild. These groups set standards far above any government laws. For instance an ANA dealer can be banned from membership for selling a single counterfeit item, and ignorance is not an excuse.
On the positive side, the ANA offers seminars on its Colorado Springs campus. They also provide a range of self-study materials and grant a master’s certificate in numismatics. Numismatists are autodidacts.
At semi-annual ANA conventions, about 300 dealers from around the world come to meet several thousand collectors. Those demarcations include a lot of gray areas. Collectors make money buying and selling. Dealers and collectors alike write authoritative books. If you think you have a head on your shoulders for capitalism, you might find numismatics an interesting test of your agoric abilities.
Numismatics shares many attributes with stamp collecting, “philately.” Ayn Rand’s essay, "Why I like Stamp Collecting" appeared in the Minkus Stamp Journal Vol. VI No. 2 for 1971. For Rand, collecting was "a special way of using one's mind." She said that stamp collecting has all the elements of work, "but transposed to a clearly delimited, intensely private world." She rejoiced in "the enormous amount of talent displayed on stamps... one finds real little masterpieces of the art of painting. … In this respect, the stamps of Japan are consistently the best. But my personal favorites are two smaller countries whose stamps are less well known: Ryukyu Islands and Iceland. If this were a competition, I would give first prize, for beauty of design, to two stamps of Iceland that feature stylized drawings of trees.”
Rand enjoyed the postage stamps and what they represented –- words transported between minds across continents – without condemning the foreign trade or human rights policies of the nations that issued them. So, too, are there compelling coins from the Middle Ages, and even feudal China.
Philately and numismatics cross in “postage stamp money” issued in the United States, Russia and Germany. During the War Between the States, when hard money disappeared from commerce, a man named John Gault was granted a patent for inventing a carrier for postage stamps so they could be passed in lieu of coins. Postal money orders, international first class coupons, “giros” and special denominations of coins and notes issued to make postage convenient are other intersections. Just as there are private coins and notes (tokens and scrip), so, too, are there private stamps. Catalogued as “locals” they are actually more rare among Americans than Europeans, oddly enough.
A number of other, perhaps minor, points separate numismatics from philately. Postage stamps were invented in 1839. We do not know when coins were invented – sometime around 625 BC, perhaps. Postage stamps were invented for a specific purpose. We do not know why coins were invented – mostly to pay mercenary soldiers, we think. Like stamp collecting, coin collecting can be a passive enjoyment. Usually, such passive accumulators are not highly regarded by “true” numismatists. In many other ways, numismatic scholarship draws those with active minds, passionate about empirical research and logically consistent explanations of facts.
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