1930's Depression Question

aus3000tin

Does anyone know a source or a story in which a coin collector made money due to the Depression?
That is to say, did someone obtain large amounts of coins in the 1930's at a very low price because everyone was selling their assets/collectibles for everyday money?

Links would be great, if they could be provided.

Thanks,

Chris

dlimb2

Yeah, the United States Government...when they confiscated all the peoples gold and silver...and payed them a fraction of its value...

TomB

What you are asking about was a rather common series of events in the 1930s. You can get a first-hand look at the correspondence of such by obtaining the book An Inside View of the Coin Hobby In The 1930s; The Walter P. Nicols File edited by Bowers.

100proof1957

maybe Col Greene ?

TomB

<< <i>Yeah, the United States Government...when they confiscated all the peoples gold and silver...and payed them a fraction of its value... >>


Ummm....you wouldn't have a source for this, would you? After all, silver was still produced for circulation into the 1960s.

aus3000tin

Thanks for the source TomB.

CarlWohlforth

My Grandparents on each side of my family were fortunate enough to have good and steady jobs throughout the depression. They each purchased a nice house w/ land. One bought a summer house in New Hampshire. It was an uninsulated farm house built before the revolutionary war that was sitting on 80 acres of land. That one cost around $2,000. The other side bought a different pre-revolutionary war house in Ridgefield, CT. That one was sitting on 7 acres and cost $10,000. Since the Ridgefield property was near the Danbury train station it was within commuting distance of NYC so ended up being the better investment. However each kept and used the properties until they were in their 90s and did not consider these purchases to be investments.

My Grandma who lived in Ridgefield gave me a few coins. The most valuable one is an old holed gold dollar. I have it prominently displayed on my holey coin hat.

cladking

Overall the hobby not only prospered during the depression but really
came into its own as a mass market. People often had money but were
out of work and had time on their hands so used it to start collections.
Penny boards became popular and men like B Max Mehl made lots of
money selling various coins to the legions of new collectors. Even peo-
ple who didn't have money might be able to afford something like the
1909 to 1932 Lincoln set.

No doubt there were many collectors who were wiped out by financial
reversals brought on by the depression as well.

bidask

At the recent ANA there was a $20 Saint that brought around 1.5 to 1.6 million at auction to a new purchaser. I don't know if it was the 1921 everbody was talking about or another coin, I haven't looked that closely. But I spoke with a dealer who told me he had positioned this coin for a collector shortly after 9/11 at about 23% of what it sold for a few days ago. Just goes to show that buying in bad times can be good.

Conder101

TomB,

On 6/19/34 Congress passed the silver purchase act.

In August 1934 Roosevelt, acting under powers given under the silver purchase act, ordered all silver in the continential US to be delivered to the goverm,ent within 90 days (exceptions: coins, silver held for industrial use, silver below .800 fine, silver held under license, silver owned by a foreign government or central bank, silver mined after 12/21/33.) 109 million oz were received within the 90 days and 4 million more before the order was recinded in 1938 (Public Law 88-36). Dealings in silver were assessed with a 50% surcharge tax. On August 9th 1934 all silver contracts on the New York Commodity Exchange were liquidated and private market dealing in silver was ended. (I hav't been able to determine when it was resumed.)

New York price quotes from 8/43 thru 6/38(?) apparently reflect the government purchase price which was originally $.50/oz (market price at the time was about 43 cents.).

The government purchase caused the world price to rise rapidly reaching 55 cents by Jan 35. In Feb it reached 64 cents on 4/10/35 and the government (Treasury Secretary Morganthau) announced that they meet the world price whatever it might be. That evening they backtracked and set a max of 71 cents. Silver hit 68 cents two days later and then 71 cents on the 24th. On the 24th the government raised the max buy price to 77 cents. On the 25th silver hit 77 cents and 81 cents the next day. At that point the government refused to raise the buy price.

Without the ever increasing artificial Government purchase figures, the world market dropped back down some settling between 67 and 70 cents per oz.

On August 12 they lowered the buy price to 65 cents an oz and held that price thru December 7th. On Dec 9th the government ended their open market silver purchases. By the end of the year the market price was down to 49 cents and by 1/20/36 45 cents. The market then held that price for three years and stayed between 35 and 45 cents through 1946.

The government policy did little more than purchase some 3 billion oz of silver at nearly twice what the market price would have been without their intervention. One other thing it did cause was the abandonment of the silver standard by China in Nov of 1934.

Sources:

Wooden Nickels, or the decline and fall of silver coins by William F Rickenbacker

Gold and Silver - History of Silver Coin World Almanac 1978 edition

Chronology 1934 http://www.indiana.edu/~league/1934.htm

TomB

I understand that, Conder101, I was looking for a reference to the statement that the government "confiscated all the peoples gold and silver...and payed them a fraction of its value..." What you have posted does not answer that statement at all.

Shamika

<< <i>You can get a first-hand look at the correspondence of such by obtaining the book An Inside View of the Coin Hobby In The 1930s; The Walter P. Nicols File edited by Bowers. >>


I endorse this statement. The book is very interesting.

Conder101

It fits the "confiscation" part on the basis that it was a manditory calling in of the metal, but your right, the idea that they were paid a fraction of the value is pure bunk as the prices I quoted prove. The government paid MORE than the going market rate and in fact created an inflated market price that they then paid in excess of.