You may think this sounds a little trite, or over the top… but we have come to the conclusion that more than a few Mexican coin collectors are very shortsighted.
Lately we’ve been hearing a lot of whining from Mexican coin collectors. Almost all of the complaining is a variation of the same theme, “Mexican coin prices are going up way too much!” From our point of view we argue that Mexican coin prices have been depressed for much too long.
Historically, before World War II, highly touted Mexican and US coins of the same rarity and grade were on par with each other price-wise. Once the war was over and the American GIs returned home all of that changed.
America was on the move. During the war the United States had undergone tremendous growth in all areas of commerce. For defensive reasons, during the war many industries had moved operations away from the eastern seaboard. After hostilities ceased those industries began converting from the manufacturing of war supplies to consumer products. That was done in order to fulfill a pent up desire for automobiles, kitchen appliances, pots and pans, and even clothes. As a result, many Americans moved from the farms and towns they grew up in to where the jobs were. It was a repeat with a slightly different twist of the World War I saying of “How are you going to keep them down on the farm after they’ve seen Paree?”
Local coin clubs had played a major part in the growth of the US coin-collecting hobby during the early part of the 20th century. However, during the war many clubs lost members and that trend continued as the population began moving away from their old hometowns. Coin dealers countered that loss by holding mail bid auctions. Some individual dealers, such as Max Mehl among others, already on the mail bid sales bandwagon, experienced substantial sales growth and price increases as new collectors were attracted to the hobby.
Many Ex-GIs were interested not only in US, but also foreign coins. They had been exposed to other parts of the world and they returned home with a better appreciation of “things foreign” because of where they had been stationed. Many returned with pocket change from those foreign lands, so their attraction to these coins was understandable.
New and old coin publications flourished. New coin clubs started, weekend coin shows rose in popularity and with them came new public auctions. It seemed that almost every small town in America had at least one coin dealer. Yes, the 1950s and 1960s were a great time for the US coin-collecting hobby, especially with the upswing in coin prices. Almost overnight there was competition for good material. A vibrant market had arisen for collector coins, both US and foreign. However, the growth in the US coin market far exceeded the foreign coin market.
The Mexican Mo 1732 FM Pillar Dollar versus the US 1804 Dollar: Historically the Mo 1732 FM 8 Reales normally sold for about $900 and the US 1804 Dollar for about $750 to $1,000.
The Mexican Mo 1823 JM Hookneck 8 Escudo versus the US 1907 Saint-Gaudens High Relief $20 Gold Piece: The Hookneck 8 Escudo generally sold for $80 to $150 while the Saint-Gaudens for $100 to $200 in similar grades.
After World War II, a new and important trend began in US numismatics. A few collectors, and even a couple of forward thinking coin dealers, realized there was a desire for more information regarding coins. As more and more collectors entered the market the demand for knowledge grew proportionately. Not only did the new collectors ask for up-to-date pricing data, they also wanted to know the history and background of specific coins and/or series of coins. Thus, there was a flurry of activity resulting in a surge of informative articles and books aimed at specific areas of coin collecting. Those efforts did much to satisfy the new collector thirst. Several numismatists began doing basic research; a couple even visited the extensive US National Archives and thus began the “Golden Age” of US numismatic publications.
Several old US numismatic periodicals flourished, but others, which did not adapt to the changing collector base, went by-the-way-side making way for new ones. During the late 1950s and early 1960s the US also experienced an increased interest in collecting foreign coins. In 1965, as a result of that interest, J. Oliver Amos, introduced the magazine World Coins and soon that digest sized monthly became “the standard” periodic publication for foreign coin and paper money collectors in the United States.
One coin dealer, Wayte Raymond who had been in the mail bid auction business since 1908 under his own name (and since 1932 with James G. Macallister and Walter S. Scott under the name J.C. Morgenthau) saw a great opportunity to cash in on the desire for new coin reference books. While a noted cataloger, Raymond didn’t consider himself to be a great writer and so he employed outside talent just as Max Mehl did early in his career. During that time Wayte expanded his series of familiar brown coin boards, which he began producing in the 1930s. Raymond also bankrolled many trips to the US National Archives by budding numismatic researchers.
Mexican Numismatics flourished after the war too. In 1952 a small group of dedicated Mexican coin collectors gathered in Mexico City and formed the Sociedad Numismatica de Mexico. Soon Mexican coin collecting clubs were established cities all over Mexico and in some cities in the US that were close to the Mexican border. They included: Guadalajara, Monterrey, Oaxaca, Puebla, El Paso, Texas and San Diego, California. The San Diego International Coin Club had several members who were very active in Mexican Numismatics. This core group established a new club, the Azteca Numismatic Society that became the premier Mexican coin club in the US for a decade or more. Each and every one of these new clubs published some type of newsletter for its membership.
Dr. Alberto F. Pradeau continued his pioneering Mexican Numismatic research and published a number of works after the war. In 1957 he published Volume I of Historia Numismatica de Mexico de 1823 a 1950: Mexico and Tlalpam, the first in a series of four volumes – including one volume of plates – dealing with the individual Mexican Republican mints. 1959 saw Pradeau publish a little known, but very informative book, Sonora y Sus Casas de Moneda. Few Americans have ever seen this valuable little reference. In 1960 Pradeau published volume two of Historia Numismatica de Mexico de 1823 a 1950: Hermosillo, Alamos, Catorce, Chihuahua, Culiacan and Durango. Finally in 1961 volume three was ready Historia Numismatica de Mexico de 1823 a 1950: Guadalajara, Guadalupe y Calvo, Guanajuato, Oaxaca, San Luis Potosi and Zacatecas. Not content to rest on his laurels, Pradeau published Los Tlacos y Pilones Mexicanos in 1963 and Emperor Maximilian of Mexico: The French Intervention, its History in 1970. The four-volume Historia Numismatica de Mexico de 1823 a 1950 is a “must have” for all advanced Mexican coin collectors even if they have only a rudimentary knowledge of Spanish.
In the early 1950s another great Mexican Numismatist appeared on the scene, Dr. T.V. Buttrey. In 1953 he published his first work, The Coinage of Mexico Since 1905. In 1963 Buttrey published A Guide Book of Mexican Decimal Coins: 1863 to 1963. In 1969 those early efforts culminated in the first edition of what would become one of the “standards” of Mexican Numismatics: A Guide Book of Mexican Coins: 1822 to Date. That work added Real and Escudo coinage making it a handy and portable reference, which could easily be carried, to coin shops and shows. In 1971, beginning with the 2nd edition Buttrey teamed up with Clyde Hubbard and they continued with their work by periodically updating this reference. In 1992 they published the 6th and final edition of that classic Mexican Coin reference. Thus ended one of the “best” tools Mexican coin collectors had up to then.
Other noted collectors and dealers contributed to Mexican Numismatic Literature during the “Age of Enlightenment”. Benjamin Betts, Henry Christensen, Tomas Dasi, Antonio Deana Salmeron, Frank Grove, Hugh Guthrie, Larry Hanks, Richard Long, Miguel Munoz, Jose Leon Robles de la Torre, Frank Sedwick, Erma Stevens, Neil Utberg, and Dr. George Vogt to name a few. Yes indeed, it was a golden age for new material about Mexican Numismatics.
The “Age of Enlightenment” saw new and old coin dealers alike, rush headlong into Mexican Numismatics. All of this new information created a vibrant market for all eras of Mexican coin collecting, from Carlos y Juana through the 20th Century. Richard Long put stamp collecting and sales on the backburner. Richard Ponterio broke away from his partnership with Charles Wyatt to concentrate more effort on Mexican coins. Texans like Pat Pace, Harvey Burins, Toby Qualls, Pat Johnson, Larry Hanks, Dr. George Vogt and a young man by the name of Mike Dunigan filled the breech. Out west Superior Galleries became a leading force in the US public auction arena for Mexican material. Life was good, for both Mexican coin dealers and collectors. However, as with all things, the high times soon passed.
With no new updates of A Guide Book of Mexican Coins: 1822 to Date, and the demise of World Coins magazine and other specialty publications directed at Mexican Numismatics, the hobby went entered the “Dark Age”. Unlike US coin collecting, Mexican Numismatics saw very few new authoritative works simply because there was no one and no publisher willing to produce new material about our hobby.
With the no new information and the lack of a public forum coin clubs specializing in Mexican coins began to lose members and some ceased to exist. A substantial number of new and old collectors lost interest in Mexican coins as information sources dried up and prices in many instances actually dropped. Some world coin dealers went so far as to stop handling Mexican coins. Their reasoning was twofold; first they found the intricacies of collecting and grading Colonial and the coins of the Republic too complex to learn unless they were willing to spend a good deal of time and effort doing personal research. The second was that most experienced collectors had already acquired the bulk of the “common” to scarce coins in their specialty areas and the Rare issues they were seeking were so difficult to find that non-specialist dealers often felt that it wasn’t worthwhile to search for such items, especially considering the relative low return on their time and monetary investment. As a result, somewhat understandably, many experienced and specialty collectors hoarded their knowledge. They were hesitant to share what had taken them decades to learn. As a result new collectors were at a distinct disadvantage when trying to build a respectable collection. Those none-specialist world coin dealers often liquidated their stock of Mexican coins – sometimes at prices below wholesale – to the few remaining coin dealers who specialized in Mexican coins.
Due to the lack of up to date information many Mexican collectors and dealers alike began to seek more fertile ground. Some moved solely to US coins. Some moved to other foreign coins. Some collectors just stashed their coins in a safety deposit box and forgot them. Others became so discouraged they sold their coins and dropped out of the Mexican Numismatic world.
The publishers of coin catalogers stopped printing the old and familiar “exclusive” Mexican coin catalogs and lumped Mexican coins into massive mainstream world coin catalogs. Even worse, catalogers no longer went to the effort or expense to update the values in the Mexican section of those giant catalogs. As a result collectors, especially those just entering the hobby, had no idea about the true values of Mexican coins, or what to pay for new acquisitions. The once vibrant Mexican coin market began to stagnate and then disintegrated.
Mexican Numismatics Emerges from The Dark Age
During the Dark Age of Mexican Numismatics the only way new or old authors could disseminate new information was by self-publishing their works. But most collectors and researchers couldn’t afford that option, so for years no new information about Mexican coin surfaced.
Finally in 1986 the Calico brothers of Spain broke new ground and led the way with The Onza Main Book, about the Latin American 8 Escudos. The very next year Frank Sedwick published the 1st edition of The Practical Book of Cobs. Also in 1987 Jamie Varon and the Gerber family published a limited edition of book about the great Pablo Gerber collection, Monedas Mexicanas Coleccion Privada Pablo Gerber Moser. Unfortunately, what began as a promising, yet albeit, shallow well soon went dry.
Aside from the reliable A Guide Book of Mexican Coins: 1822 to Date it took another ten years before researchers/authors tested the waters. Finally in 1997 we saw two new wonderful and authoritative books published. First came, Resplandores by Mike Dunigan and J.B. Parker, covering the Mexican Republic Cap & Ray 8 Reales. That same year Hookneck, which explored all of the Hookneck style coinage was published by Clyde Hubbard and David O’Harrow. In 1999 Frank Gilboy’s, The Milled Columnarios of Central and South America: Spanish American Pillar Coinage 1732 – 1772 sparked a renewed interest in a specific area of Colonial Mexican coins. Unfortunately, five years would pass before the next exclusive Mexican work of any note would be published. In 2004 Richard Long finished many years of research and published Gold Coins of the Early Mexican Republic: 1823-1873.
However, the cumulative effect of those works along with an extensive effort by some to use the Internet to advance Mexican Numismatic knowledge started the hobby toward a new “Mexican Numismatic Renaissance.”
Without new, reliable numismatic literature Mexican coins didn’t keep up with advancing coin prices seen in the US market during the last quarter of the 20th Century.
While other areas of the numismatic field experienced surging prices during the 1980s and 1990s, Mexican coin prices actually fell. Sometimes they spiraled down to levels paid at 1970s public auctions, and sometimes they were even less. The fact that there was so little reliable new information available was a major factor in the depressed market for Mexican coins.
Let’s look at our earlier examples to gauge the difference:
The Mexican Mo 1732 FM Pillar Dollar was now selling for $25,000 or less while the US 1804 Dollar was reaching unheard of highs. First, a half million dollars, next a million, then two million and finally one sold for over $4,000,000 dollars.
The Mexican Mo 1823 JM Hookneck 8 Escudo wasn’t doing much better when compared to the US 1907 Saint-Gardens High Relief $20 Gold Piece. Hookneck 8 Escudo prices escalated (?) to about $25,000 during the late 20th Century while the Saint-Gaudens was typically selling for at least $250,000 or more.
The coin market in United States received a big, but short shot in the arm when first gold and then silver bullion prices reached record price levels in late 1979 and early 1980. The US coin market went berserk! For a period of some months, almost daily US coin prices bounded to new highs. Something had to be done to keep up with the coin shenanigans, so an over-the-wire tickertape service was started by a couple of savvy dealers who couldn’t afford to wait a week to find out the current buy and sell prices of US coins. Not long after that however, the US coin market imploded. Almost overnight new millionaire coin dealers went broke as loans they had taken out in order to buy new stock came due. Gold bullion prices dropped from a record $850 an once in 1980 to under $600, then to $400 and finally by 1997 it plunged under $300. As gold went so did silver bullion prices; from a record $50 an once in 1980 silver went into free fall to $2.50. Life was no longer good for “the speculators” and “well-heeled investors” in bullion, rare coins or for some “hot shot” coin dealers.
The smarter US coin collectors and real coin dealers reveled in the disaster. Highly inflated coin prices caused by “the speculators and investors” dropped like a rock. The smart collectors and coin dealers, who had maintained a level head during the bull market, were now able to pick and choice once unaffordable coins at bargain prices.
After this boom and bust US coin market cycle the world changed for the survivors. The really smart ones had made some money while the “hot shots” went broke. The smart ones were determined to not let that happen again. The over-the-wire tickertape died a natural death and in its place came the weekly and monthly bid and buy sheets.
But coin-grading standards were still a problem. If dealers were going to buy coins, sight unseen, coin grading had to at least be normalized, if not standardized. Enter the “third party grade for pay” (often called Third Party Graders or simply TPG) services. At first there was one, then two, three, six and finally a whole bunch. Numismatic life was good again.
About that time another interesting trend started in the US coin market. It was the beginning of the MS Wars. US coin collectors were like other Americans, they wanted only the best and those that could afford the best were willing to pay “big bucks” for “The Best”.
Coin dealers started submitting high-grade coins, even common ones, to the grading services trying to achieve the highest possible MS grade for them. Some dealers would even break out coins from slabs and resubmit them multiple times in order to reach the exalted grade of MS65, thought to be the ultimate for years.
The third party grading services weren’t dummies, they realized what was happening, and so they left the old tried and true technical grading standards and started a whole new way of life. The MS Wars escalated to the next notch and “market grading” (some refer to it as grade creep) was introduced. What may have once been a MS60 now became MS63, MS61 coins moved to MS64 or in some instances to MS65 and so on. No longer was MS65 a great grade, a coin needed to be a MS68 or even better to be considered “The Best”.
During that period a plastic recycler could have made a fortune by simply emptying the trashcans of the broken and smashed plastic TPG coin holders behind some coin dealers’ offices.
Once all the really rare US coins in the market place had been graded, it was time to loosen grading standards again. Inflation reared its ugly head. Not only money, but also coin grading inflation became rampant. The difference in a couple of MS points could mean the difference between a thousand dollars and ten thousand dollars, or $10,000 and $100,000. Life was good.
Late 20th Century inflation saw gasoline prices go from $.25 a gallon to $1.25, but already in the 21st Century gasoline prices are hovering around $3.00 a gallon. My first home cost $9,000, my last $250,000. My first new car cost $4,880 my last over $28,000. A loaf of bread went from $.28 to $2.47. Yes, inflation drove up all consumer prices including US and most foreign coins. On the other hand during the same time frame, most retail Mexican coin prices either stayed at the 1970s levels or in some cases even dropped. Life was great for the astute Mexican coin collector, unless of course you wanted to sell your collection.
Fortunately, as with most markets, a void seeks to be filled. More and more US collectors became disenchanted with the prices being asked – and usually achieved – for common coins that were supposedly high grade. Moreover, truly Rare coins – and often those which were not but merely touted as such – required that the collector have an inordinate amount of disposable income if he aspired to complete a series. As a result, some began migrating to other areas and the attraction of Mexican coin became apparent. In fact collectors who went to the trouble to research it found there was there a close relationship between US and Mexican coins. For example, they found that the Mexican 8 Reales had been the basis for the first US silver dollar. Before the US began striking it first coinage US law stipulated that the “silver dollar” had to contain the same amount of silver as did the Mexican 8 Reales and remained so until 1857. After that and until 1918 the Mexican 8 Reales and/or Un Peso actually contained slightly more silver than its US counterpart.
Also, those interested found that almost any series a collector chose to assemble was a true collecting challenge, not just a matter of money. Added to that was the beauty and many different styles of the Real and Escudo coinage of the Early Republic. And of course, as they learned about Mexican coins they discovered that beautiful and truly Rare coins could be acquired for a fraction of their US counterparts.
Added to this attraction was the fact that during the 1990s and the first half of the 21st Century several public auctions caused a stir in the Mexican coin market. Those would include but are not limited to ; the Sotheby Hoard Sales, The Pablo Gerber Collection, The Pittman Collection, the Eliasberg World Gold Collection; and most recently the Samuel Mills Damon Collection which was unknown to the collecting public for more than 80 years. Even though some openly declared that the prices realized – with the exception of the Sotheby Hoard Sales – were an aberration, it was obvious that some were willing to pay much more than “the going rate” for nice and/or rare items.
It seems to us that a combination of factors caused this:
As a result, Mexican Coin collecting has begun to move out of its Dark Age.
We believe that the Mexican Numismatic World is becoming flat. No longer is information controlled/hoarded by a relatively few experts. More and more numismatists, researchers, collectors and dealers alike, are realizing the value of sharing information. One only has to do a cursory study of the phenomenal growth of the US coin market to see what making information available about a series or even a specific coin does to its popularity and thus its market value. As a result, many Mexican Numismatists have come to the conclusion that sharing information makes the market better for all concerned. Information sharing may keep one from buying a rare coin for a price well below its market value, but on the other hand it also assures that one will receive a fair price for such coins when one decides to sell. One frequently overlooked information-sharing medium is the Internet. Those of you who are reading this article are poof of that simple statement. For example, on April 8, 2006 a search on Google for “Mexican Coins” produced in excess of 297,000 website hits.
Now that collectors have a safe and secure way of communicating, more and more are willing to share specific information about their knowledge and individual holdings. This helps all collectors because if they wish to find the true value of a specific coin they no longer have to rely on a single source. As more and more collectors travel the communication (Internet) highway, our world becomes more understandable, and as our ability to communicate increases we no longer have to seek “over the horizon radar” to spot a coin because our world is becoming flat.
Even today, in our humble opinion, “Mis-Information” is still a serious problem facing Mexican Numismatics.
Let us give you a recent example. In the May 1, 2006 issue of Coin World; Smythe, famed for their paper money expertise and US numismatic auctions, had a small space ad (page 71) touting a Mexico City Mo 1877 M 20 Pesos. The coin was graded by NGC as an MS61; and priced at $3,950, which seems a little high. For instance; Richard Long had an example in his July 2004 auction graded NGC MS63 where he estimated its price at $1,400 to $1,600 and Heritage had one graded BUnc in their June 2004 Savannah River Collection Sale that sold for only $1,300. Yes, we know prices have advanced since 2004, but we question that they have gone up that much for a relatively common coin. Another thing that worries us is the statement by Smythe that “only 5 to 6 examples are currently thought to exist.”
There are over 70 recorded sales of this DAM in the FoxLair Mexican Republic Gold Sales Index© making the Mo 1877 M 20 Pesos one of the more common, especially in Mint State, Mexico City 20 Pesos. So where did Smythe get this seemingly erroneous information? Were they not aware of the previous sales records? Was their information based on limited research? Or was their statement an effort to justify the price they were asking for the coin?
We used the above example not as a criticism of Smythe, but as a reminder to keep your eyes and minds open because we believe the World of Mexican Numismatics is truly becoming flat. We are convinced that advancing Mexican coin prices are now part of the Mexican Coin Renaissance. And because of these advancing prices we are seeing more new and unheard of Mexican material reach the numismatic market place, again helping lift prices.
So remember; advancing Mexican coin prices are now a fact of life, even if you don’t like it. And maybe it is now time to sell your ‘old’ collection, while prices are high, and start collecting something new?