Is this Phase 4, a new coin collecting age?
It is, as ever, an exciting time to be a coin collector. With so many different coins available from change and the remarkable simplicity of being able to buy any type of coin from anywhere in the world all from the comfort of your own toilet! But the new age isn’t without its pit falls. It’s probably wise to ignore most of what is printed in the papers and to keep a canny footing over the long term.
Originally the only people that could afford to collect coins were the extremely wealthy. Coin collecting used to be known as the ‘hobby of Kings’ and that was for very good reason. To everyone else, coins were a daily necessity and were there solely to be spent – if you were lucky enough to have any at all! There is evidence that coins were even collected in ancient times. This high level collecting peaked in about the 14th century but didn’t really change all that much, over many centuries.
Phase 2, coin collecting becomes industrialised:
In the 17th century coin collecting gradually became more academic and the first numismatists (the name given to people who study coins in great detail, attributing them to geographical areas or to particular rulers, noting changes to dies, concerning themselves with the manufacturing process etc etc) published books on the subject. At around the time of the industrial revolution in the late 18th century entrepreneurs established factories, mills and other private enterprises to harness the power of the new steam engine. Trains carried people around the country quicker than ever before and some become very rich through their own enterprise, not through inheritance, which had previously been almost the sole propagator of wealth. There was a large increase in people with disposable income, very similar to what is happening in China and other developing countries today. Some of these new 18th century indy-rev middle class folk were interested in coins and started to collect them for pleasure. The extra demand for coins didn’t go unnoticed and some makers of coins (e.g. Matthew Boulton and James Watt at their Soho mint, who at the time were involved in making regional copper coins and later officially tasked with making coins of the realm) started making fancy coins, sometimes in fancy metals, specifically to sell to fancy businessmen!
This practise of selling coins carried on to some extent during the 19th century. The Royal Mint themselves didn’t get involved with such vulgar activities as selling coins for profit! They preferred to concentrate on making very high quality coins for the benefit of the public, i.e. for general circulation, as that was their job. During the Victorian period there was generally increased interest in classical history and numerous new books on ancient coinage and the previous coinage of the British Isles were published.
Probably in no small part due to the massive enthusiasm surrounding the forthcoming golden jubilee of Queen Victoria in 1887, the Royal Mint made and circulated completely redesigned (same size, but new designs) gold and silver coins and an all-new but short lived Double Florin denomination, all featuring a special Jubilee bust of the Queen. 1887 Proof sets to mark the event were made and sold in relatively high numbers.
Into the 20th century and slowly but surely the gap of time between proof coins/sets and other commemorative coins started to close and the fledgling commercialisation of new coin sales developed. Proof sets for coronation years were made and retailed, then a set to mark a new coinage (essentially new designs on the silver coins in 1927). Special crowns were made and sold annually during the late 1920s to mid 1930s. The middle of the 20th century was marked just for the sake of it with a special proof set of coins and the 1951 Festival of Britain was commemorated with a crown and proof set made in high numbers and sold (among other places) at the actual Festival of Britain.
Phase 3, further commercialisation:
The 1960s were generally a buoyant and exciting time, class barriers were eroding, there were technological advancements, there hadn’t been war on a large scale for a generation and there was much hope in the air. In the UK something very big indeed was about to go down with the coinage! Instead of the ancient Roman based pounds, shillings and pence (£SD/LSD, or Libra, Solidus, Denarius), the UK was about to go decimal. The switchover date was set for 1971. A few of the old coins would remain legal tender after 1971, but it meant inevitable demise for some, including the large popular penny, which had been basically the same since 1860. There was a huge increased interest in coins at this time, not just in the UK but also in the world, where national mints started mass-producing annual year sets and commemorative coins to sell to the public on a scale that had never been seen previously. There were newspaper stories aplenty about ‘rare’ and ‘valuable’ coins that could be found in change. This was when the little ‘Check Your Change’ booklets appeared (the forerunner of this website/book/app) in order to set out the real facts about the value of coins found in change. Lots of people hoarded the coins that were thought of as special, which has to some degree had the exact opposite outcome to what was hoped – because so many people saved the coins that were thought of as special at the time, they are in some cases, probably more common now than the other coins that people ignored during the last days of the pounds, shillings and old pence!
Phase 4, the internet speculators and mass hysteria:
A new generation of mainly younger people – a lot of them on lower incomes – find many designs of coins they find in change interesting, which sparks a genuine interest in coins. Some are influenced by tabloid ‘get rich quick’ stories that always claim a particular coin, that was invariably found in circulation had been ‘sold’ by someone somewhere for a high amount. Combine with the capability that everyone now has to buy and sell to potentially millions of people and we find ourselves in the middle of another boom driven mainly by those that would previously have had nothing much to do with coins!
In the last five years or so, Phase 4 has been dominated by speculators, who buy as many of the currently or potentially ‘hot’ coins that they can lay their hands on, either new or second hand (which in itself drives prices up) in the hope that they will increase in value over the very short to medium term. Some even buy things and advertise them for sale before they have actually received them; potential values can change so quickly these days that there’s simply no time to wait to receive items first! Online listings, where the odd dubious (and likely non-genuine) sale to a mate or someone who has no intention whatsoever of actually paying, cause newspaper and click-bait story writers to go bonkers and report over-sensationalised, usually incorrect or only partly correct ‘facts’ that have in the past been so widely reported that they can actually influence the market so much that the falsehood they orignally reported becomes truth! Those that instigate such stories know exactly what they are doing in that respect.
The Royal Mint, who in recent years have learned to exploit the monopoly they have on the sale of mainland UK coins, as well as other sellers of new coins have responded to the hunger for such coins by issuing a vast number of new designs (todays advanced computers make it comparatively easy to design and produce new coins) to commemorate fairly insignificant things that would previously not even have been considered, and even to issue coins in the name of territories that don’t actually need coins but also earn a little something out of lending their name to a series of made up tokens masquerading as coins. Different types of packaging are now cleverly used to sell exactly the same coin product and many sellers of new coins literally print their own ‘certificate of authenticities’, to add to the perceived appeal of the cheaply made tat they are peddling. Marketing people spend all day thinking up new themes, new unique selling points; like adding colour, gold plated highlights, plastic rings, glow in the dark features, stuck on jewels, putting Super Heroes and cuddly animals onto coins (a lot of new coins seem to be aimed at children), combining the coins with stamps and a whole load of other ideas that have nothing to do with the manufacture of coins in the traditional sense. They invent new words and phrases and bend other terminology like ‘certified’ or ‘slabbed’, borrowed from the older, established coin scene to get people to buy their new coins. There are potentially hundreds of different coins in circulation in the UK at the moment, and the clever marketing people now provide a number of different colourful folders for series of coins so that they can play a part in dictating exactly what you should collect (and sell you the ones that were not made for circulation – on purpose).
Many Phase 4 collectors are obsessed with mintage numbers, and the reason for this, as far as I can tell is that they’ve had it hammered into them over the last few years that mintage numbers are the be all and end all. The media reports on coins with lower than average mintage numbers have actually caused exactly those coins to go up in value, thus seemingly (in the short term) reaffirming the importance of mintage numbers. People don’t actually stop to think about the supply and demand principles behind the value of any commodity and that, especially over the long term the potential number of buyers for something now will probably not remain as high as it is when a coin issue is new – it seems to me that too many people are in it for a quick profit.
Potential coin collectors are told exactly what they should collect by the marketers and the media, who work hand in hand to sell papers (and advertising space online) and to help improve sales of coins and coin related products on certain websites. Most people lack the experience to take it all with a big enough pinch of salt and to see through it all for what it really is – however I’m pleased to say that I have noticed increasingly that lots of people are wising up to the repetitive media stories and no longer believe a word of it, so perhaps there is hope on that respect. I think a lot of people are kept so busy by the bombardment of new coin hype that very few of them ever find the time to explore other numismatic arenas, e.g. pre-decimal British coins, hammered coins, Roman coins, Celtic coins or even foreign coins. There is a steep learning curve if you want to get into coins seriously, and that curve is even steeper for older coins. Facebook and other social media is dominated by collectors of new coins, coins that were in some cases literally made yesterday. Everybody wants the same coins and everybody seems to be collecting the same thing.
Meanwhile in a less stressful part of town… the old-school, usually higher income or retired discerning collector continues to concentrate on building a collection of choice older coins from their chosen field, using their own finely tuned judgement to decide exactly what coin fits their budget, looking out for bargains that they often find, because over the years they have probably learnt more on their chosen period than most coin dealers, so can spot an under-priced rarity at a mere glance. There are no pre-printed folders in which to house their coins (they aren’t even all the same shape or size!), they were never sold in packages with printed snippets of history – they are the actual history!
To potential long term investors: The focus in the media and online in general tends to be on the value of coins. No one wants to read stories about a man who bought some coins 20 years ago and has now discovered they are worth less than what he paid for them (even though in over 99% of cases that is exactly what happens), especially when inflation is taken into account and the actual buying power of the money that was spent on coins at the time. Coin collecting should primarily be about collecting the coins that you like for your own personal pleasure, if buying coins for profit was easy then everyone would be rich by now, and while there are certain coins that have increased in value over the short term, there isn’t really a magic formula for buying coins that will be worth more than what you paid for them in the longer term. Coins that have proved to be good investments tend to be the ones that have stood the test of time and have always been sought after, not just for 5-10 years and without media hype artificially influencing their value. During all of the 4 phases canny collectors have bought the right coins for a reasonable cost and if longer term investing is your thing, the best lessons are the ones learned from those who have done it right in the past. The biggest advantage you can have when buying coins (or anything) for profit is and always has been experience and knowledge.
I’d be interested in hearing your views on all of the above, simply use the comment facility on this page.
CHP, 19th July 2017
The images on this page are, from top to bottom: a drawing of a Charles I 1643 triple unite (obverse), a 1798 Boulton made gilt copper proof farthing (reverse), a Jubilee head 1887 crown (obverse), 1951 penny (reverse) and the coloured silver proof 2016 Peter Rabbit 50p (reverse).