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From the December 2003 issue of ACCent, the newsletter of the Anchorage Coin Club:
By
Mike Nourse
As coin collectors, we are all aware of the success of
the state quarter program in terms of getting people to look at their change.
Supposedly, 100 million people are 'collecting' state quarters, though I suspect
that the folks that arrived at that number are using a very loose definition of
the word collecting. I personally doubt that any more than 10 million people,
mostly kids, are actually making any serious effort to collect all of the state
quarters in a map or other inexpensive holder.
However, let's err on the side of caution and assume
that my number is too high as well, by a factor of two, and the actual number of
people that are somewhat seriously pursuing a collection of state quarters is
only 5 million, or merely one out of every 55 people in the United States. That
is still a HUGE number, folks! Go grab your Redbook, and I know that yours is
within arms reach right now, and take a look at the mintage figures for a
variety of series. You will notice that there are an awful lot of coins listed
in that book that have a mintage of under 5 million pieces. We also know that
mintage is only half of the story, as what is really important now is how many
of those old coins have survived loss and meltings to survive to this day.
What we, as collectors of coins that are no longer in
circulation, are interested in is how many of those millions of people will join
us in the pursuit of older coins in order to form a collection. It seems logical
that many of those potential new collectors may first consider the possibility
of continuing their Washington quarter sets going back in time. The first thing
they will likely discover is that the composition of our quarters changed from
silver to copper nickel clad in 1965, and that quarters may be found in
circulation all the way back to that date. It will be quite a challenge to fill
in all of those holes in the 1965 to date Whitman folder. Eventually, it is
likely that a few of the clad dates will evade our new collector despite their
best efforts to fill all those spaces. That is when our new collector may be
drawn to a local coin shop or internet coin dealer, and be directly exposed to
those old silver coins that will never be found in circulation.
Once the silver coins are discovered, the curious
collector will probably soon discover that Washington quarters were first minted
in 1932, and more importantly, it is possible to build a complete set in average
circulated condition without having to pawn the TV set. It is a very short jump
from this level of awareness to the point where this beginner will first hear
about the two key date coins of the series, the 1932-D and 1932-S Washington
quarters.
Now that we have set the scene, with our new collector
discovering that a set of Washingtons can be built with a modest budget, and
that the keys are the mint marked issues of 1932, imagine this same scenario
playing out in the minds of all of the 5 million potential new collectors that
we were introduced to a few paragraphs up. While most of the collectors of state
quarters are youngsters with minimal income, these kids are probably building
their set with the assistance of an adult who will hopefully also have some
interest in building the full set. What is the problem that will unfold if this
happens? Anyone? Anyone? The problem is that the 1932-D quarter only had a
mintage of 436,800 pieces while the 1932-S had only 408,000 pieces produced.
With mintages like that, it is unlikely that any more than 350,000 of each are
still in existence now that over 80 years have passed since they were struck. So
you see, the dilemma arises that there are not nearly enough 1932-D's and -S's
to go around if lots of people suddenly decide to start forming complete
Washington quarter collections.
What do we know about these two key date quarters?
Well, we do know that they were minted in 1932, which coincidentally happens to
have been about the worst year of the depression that hit the world early in
that decade. We also know that a quarter dollar in 1932 had about as much
spending power as a five dollar bill does today. While that only goes to show
that one quarter was probably not any big deal, but the prospects of putting a
set of them together would require a sizeable monetary output, and that a ten
dollar face value roll of 40 coins would be a burden of some size if your
financial situation was less than ideal, as was the case for many people at that
time, coin collectors or not.
If people were not saving quarters, then it stands to
reason that they were spending them. This conclusion is backed up today by the
relative abundance of these two coins in well worn condition compared to the
rather thin supply of high grade specimens. This is a very different case from
the situation which occurred in San Francisco the previous year in which the
1931-S cents were snapped up right from the banks when it was determined that
the mintage would be unusually low. In contrast, those cents (with a mintage
that is double that of the two key quarters) are abundant in Uncirculated
condition and virtually unobtainable in Good through Fine condition. This
difference becomes apparent when one studies the pricing structure of these two
coins. The 1931-S cent increases in value only slightly each time one moves up a
notch in the condition scale from Good through MS-63, while the two key quarters
make fairly significant jumps in value as you go up from one grade to the next.
So, are these two key dates undervalued? Nobody knows
for sure, but the evidence seems to point in that direction. They apparently
were undervalued back in 1999 when the state quarter program got started. In
most circulated conditions, particularly the low grade conditions, prices have
about doubled on these two coins since that time. We will just have to wait and
see if they will double once more during the second half of the state quarter
program. It is now approaching the point where almost any 1932-D or 1932-S
quarter that has no damage or is not worn to oblivion sells for $75 and up. This
may dampen the enthusiasm for people to consider putting a full set together,
which will reduce the growth in demand for these two dates, causing their prices
to stabilize. Alternately, when the end of the state quarter series is within
sight, that may be the catalyst for a new surge in demand for Washington
quarters, particularly if a completely new design is launched at that time.
Under that scenario, prices of these two keys should be expected to surge due to
the limited supply available.
In any case, key date coins in all series have
performed exceptionally well over the last few years as new collectors have
increased the number of people that wish to own these coins combined with a
steady or slowly declining supply. If you have a Redbook from ten years or so,
you can compare prices with your current edition to see how key dates such as
these two quarters, 1916-D dimes, 1909-S VDB cents, and others have done in that
time. Large profits have been made by the folks who are holding these coins!
Good luck on completing your set of Washington quarters
if you have already started one, and consider starting a set of the silver
Washingtons in Circulated or Uncirculated condition before too many other people
start theirs and drive prices up.