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An historical analogy that shows why doctored coins are an accepted part of the numismatic trade.
IGWT
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The great economic expansion of this country in the early to mid-nineteenth century was based largely on notes issued by state-chartered banks. The banks promised to redeem their notes with specie having intrinsic value; but, of course, the banks held just a fraction of the value of its notes in reserve. The banks' promises to pay were, for all practical purposes, conditioned on no one seeking to enforce them. When you think about it, there's very little difference between an empty promise behind a real note and and a note that is bogus itself. In fact, the common view at the time was that it was better to have a counterfeit note on a good bank than a legitimate note on a bad bank.
What's particularly interesting (and relevant to the issue of doctored coins) is that counterfeiting was an accepted part of the economy. The supply of "real money" was inadequte, and counterfeit notes actually fueled the economic development of this period. Think of it as money created by private fiat instead of by government fiat. It was useful. It was necessary. Counterfeit notes circulated widely (some historians estimate that as much as 50% of the 10,000 different kinds of paper in circulation were counterfeit).
That situation is closely analogous to the perceived problem of doctored coins. There simply are not enough good coins to satisfy demand and to sustain the vitality and growth of the numismatic market. The coin doctors are like the bank note counterfeiters whose work fills a demand that would otherwise go unsatisfied. And the vast majority of collectors go along because we like attractive coins more than ugly coins, just like it's better to have a counterfeit note on a good bank than a legitimate note on a bad bank. It's no wonder that there's some ambivalence about doctored coins among people who earn their living in the numismatic trade.
What's particularly interesting (and relevant to the issue of doctored coins) is that counterfeiting was an accepted part of the economy. The supply of "real money" was inadequte, and counterfeit notes actually fueled the economic development of this period. Think of it as money created by private fiat instead of by government fiat. It was useful. It was necessary. Counterfeit notes circulated widely (some historians estimate that as much as 50% of the 10,000 different kinds of paper in circulation were counterfeit).
That situation is closely analogous to the perceived problem of doctored coins. There simply are not enough good coins to satisfy demand and to sustain the vitality and growth of the numismatic market. The coin doctors are like the bank note counterfeiters whose work fills a demand that would otherwise go unsatisfied. And the vast majority of collectors go along because we like attractive coins more than ugly coins, just like it's better to have a counterfeit note on a good bank than a legitimate note on a bad bank. It's no wonder that there's some ambivalence about doctored coins among people who earn their living in the numismatic trade.
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are a necessary evil. They create artifical wealth, yes, but it is phoney....and temporary. The more toned coins they create, the less demand will exist.
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so now tell me...
how much is my full roll of 1877 indian head cents (all in ms-67 & higher) *(from the franklin mint)* worth now?
Man ..I really needed this windfall!!!....I can't wait!....I'm as giddy as a school girl!
As all such things are cyclical, I would guess that as we grow ever closer to recession, and discretionary income for most Americans becomes less, numismatics will be one of the first victims. This very strong coin market cannot last forever. People will begin making choices between paying their mortages, buying gas, or heating their homes, and luxuries like coins. When that happens, fewer people will be buying coins, and the supply will eventually equal and then outstrip demand. At that time, the supply of nice, original, un-messed-with coins will, at least temporarily, obviate the need to doctor more coins.
Of course, when all of this happens, and demand lowers, prices will fall proportionately, thereby reducing the supply of quality coins on the market. No one wants to sell into a down market unless forced to by some personal tragedy. That has always been the Catch-22 - when prices are lower, so that coins are more affordable, there is less to choose from on the open market as people elect to hold on to their coins until prices are higher.
One of the constants in all of this is the demand for nice, original coins. I do not think that doctored coins will ever become widely acceptable, at least not by knowledgable collectors.
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Exactly. Genuine notes were discounted due in part to all the bad notes in circulation (the risk that a good note was bad was one of the discount factors). Similarly, doctored coins dilute the value of original coins, which is what (as I understand it) provided some impetus for the formation of CAC. Some folks are tired of "bad" coins bringing down the value of "good" coins. So, to continue the analogy, CAC is like the Second Bank of the United States . . . otherwise known as Biddle's Bank. See, the analogy works all the way around, and now I might actually make front-page news!
Edited to correct typo and to point out that Biddle's Bank lost its charter . . . take from that what you will.
<< <i>-- " . . . as a matter of fact, some bills were automatically discounted counterfiet or not." --
Exactly. Genuine notes were discounted due in part to all the bad notes in circulation (the risk that a good note was bad was one of the discount factors). Similarly, doctored coins dilute the value of original coins, which is what (as I understand it) provided some impetus for the formation of CAC. Some folks are tired of "bad" coins bringing down the value of "good" coins. >>
That's an extremely good analogy now that it's come full circle.
Leo
The more qualities observed in a coin, the more desirable that coin becomes!
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Unmet demand for a collector item and the subsequent increase in price through market competition is a positive (unless you are the empty-handed collector); deflation through a money supply insufficient to support a growing economy is a broad-based negative.
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<< <i> Similarly, doctored coins dilute the value of original coins, >>
I don' think that is necessarily true, ie, the prices paid for nice origional material. if one can recognize them anyway
the right of the people to keep and bear arms shall not be infringed
Join the NRA and protect YOUR right to keep and bear arms
To protest against all hunting of game is a sign of softness of head, not soundness of heart. Theodore Roosevelt
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BTW, it's in the afternoon here.
Not a fact, a fad. Twenty years ago, the reverse was true. Everyone wanted bright white, not toned, so dipping
was all the rage.
The next fad will be "original". but that's only an opinion as well.
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It's actually kinda of scary that it makes sense.
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"Sou Mangueira......."
<< <i>Think of it as money created by private fiat instead of by government fiat. It was useful. It was necessary. >>
Hmm... so it is collectors who want pretty coins in their collection that are the problem. Demand creates supply. Interesting.
I will have to agree, if buyers refused to pay premiums for coins that are beautifully toned or blast white, just shooting for an average collection with average appearance, the coin doctors would go away. Who here is up to that calling?
The entrepreneurial spirit was alive and well in the early 1800s, and the slew of notes issued by state-chartered banks created a financial opportunity to broker the notes. The brokering of bank notes – buying at discount and either trading at higher rates or redeeming at far-flung banks – became a thriving business. Handling a vast variety of notes gave brokers the expertise needed to identify counterfeits. A few of the brokers decided to put their specialized knowledge to use by publishing counterfeit detectors. The brokers-turned-publishers weren’t looking to end the chaotic monetary conditions of the time. Far from it. They needed those conditions, and the uncertainty and anxiety that those conditions created, to turn a profit.
So, while Biddle worked to bring the counterfeiters under control, the publishers of counterfeit detectors schemed to make money off their existence.
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The entrepreneurial spirit was alive and well in the early 1800s, and the slew of notes issued by state-chartered banks created a financial opportunity to broker the notes. The brokering of bank notes – buying at discount and either trading at higher rates or redeeming at far-flung banks – became a thriving business. Handling a vast variety of notes gave brokers the expertise needed to identify counterfeits. A few of the brokers decided to put their specialized knowledge to use by publishing counterfeit detectors. The brokers-turned-publishers weren’t looking to end the chaotic monetary conditions of the time. Far from it. They needed those conditions, and the uncertainty and anxiety that those conditions created, to turn a profit.
So, while Biddle worked to bring the counterfeiters under control, the publishers of counterfeit detectors schemed to make money off their existence.
I was sure that I would get TDN's goat with this comparison.
So, while Biddle worked to bring the counterfeiters under control, the publishers of counterfeit detectors schemed to make money off their existence.
<<I was sure that I would get TDN's goat with this comparison.>>
The implication being that TPG's have an incentive NOT to "out" the coin-doctorers when discovered?
was all the rage. The next fad will be "original". but that's only an opinion as well.
This was not a fact in that market that I was in back in 1987-1989.
I was in the market full time for nearly 2 years attending large shows, major auctions, etc. The demand among the better dealers, investors, and collectors was for naturally toned coins. While bright white was accepted, in the type coin arena natural coins were still more highly sought after. It could be true that at your local B&M or local club show white coins prospered over original coins, but it was not true at the large show/auction level where most of the top notch coins traded. I can assure that no one was wholesale dipping originally toned coins in that era - they sold just fine. The few exceptions were when coins were way too dark.
Among experienced collectors of 19th and 18th century material, dipping has never been the rage, and probably never will be.
Inexperienced collectors and newbies probably have a totally different perspective however.
roadrunner
From that perspective, it makes little sense to view coin doctors as creators of supply. They're simply "working the system" to trick buyers into paying higher prices for their coins.
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<< <i>The great economic expansion of this country in the early to mid-nineteenth century was based largely on notes issued by state-chartered banks. The banks promised to redeem their notes with specie having intrinsic value; but, of course, the banks held just a fraction of the value of its notes in reserve. The banks' promises to pay were, for all practical purposes, conditioned on no one seeking to enforce them. When you think about it, there's very little difference between an empty promise behind a real note and and a note that is bogus itself. In fact, the common view at the time was that it was better to have a counterfeit note on a good bank than a legitimate note on a bad bank.
What's particularly interesting (and relevant to the issue of doctored coins) is that counterfeiting was an accepted part of the economy. The supply of "real money" was inadequte, and counterfeit notes actually fueled the economic development of this period. Think of it as money created by private fiat instead of by government fiat. It was useful. It was necessary. Counterfeit notes circulated widely (some historians estimate that as much as 50% of the 10,000 different kinds of paper in circulation were counterfeit).
That situation is closely analogous to the perceived problem of doctored coins. There simply are not enough good coins to satisfy demand and to sustain the vitality and growth of the numismatic market. The coin doctors are like the bank note counterfeiters whose work fills a demand that would otherwise go unsatisfied. And the vast majority of collectors go along because we like attractive coins more than ugly coins, just like it's better to have a counterfeit note on a good bank than a legitimate note on a bad bank. It's no wonder that there's some ambivalence about doctored coins among people who earn their living in the numismatic trade. >>
I find your logic to be as loony as Looney Tunes.
<< <i>The demand was minimal 25-30 years ago.. and cleaning/dipping was recommended for 'ugly' toned coins... it is a fad.. and AT coins will continue as long as the fad (read that demand) continues. Very simple - there is a market, someone (doctors or 'artists' if you will) will satisfy it - and get rich - not artificially, real money rich - doing it. This is not quantum physics folks, simple supply and demand. Stop making it complicated. Cheers, RickO >>
Well put, as usual.
roadrunner