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A dollar becomes $1.2 million
For the second time in a week, a rare coin fetches a seven-digit sales price.
August 12, 2003: 4:49 PM EDT
By Gordon T. Anderson, CNN/Money Contributing Writer

NEW YORK (CNN/Money) - An 1804 silver dollar was auctioned off last night in Baltimore for a price, including fees, of more than $1.2 million.

The sale marks the second time in three days that a rare coin was sold for a seven-digit figure. Combined with the discovery this week of a long-lost nickel valued in the millions, last night's sale provides further evidence that the market for coin collecting is strengthening.

"The market is very, very hot right now," says Jim Halperin, of Heritage Rare Coins in Dallas, the world's largest dealer.

According to Halperin, the 1804 dollar is "one of the most famous coins in the world," with only 16 known to be in existence. (Bowers and Merena, the firm that ran the auction, promotes the silver dollar as the "King of American Coins.")

On Monday, a 1913 Liberty nickel -- one of five ever made -- was sold for an estimated $3 million, in a private transaction between two dealers, Dwight Manley of Beverly Hills and New Hampshire's Edward Lee.

That news was followed by Wednesday's announcement that the fifth 1913 Liberty, which had been missing for more than four decades, had been found. That piece is estimated to be worth at least $2 million.

It's difficult to say for certain how many coins have sold for more than $1 million before. Paul Montgomery, president of Bowers and Merena, said that about 10 have fetched such a price. Halperin, however, says the true figure is "probably in the dozens."

In any event, coin dealers agree that a seven-figure sale is unusual.

"I can't remember when we've had two sales of such prominent coins this close together," says Halperin, whose firm was not involved in either transaction. "This is quite an event."

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High profile transactions are renewing interest in coin collecting, particularly for the most expensive pieces. The attendant publicity of a high-priced sale draws interest from those who can afford to make similar purchases. Some experts theorize that for affluent collectors, coins represent something of a value investment.

"Until recently, coin prices hadn't risen nearly as far as, say, artwork," according to Manley. The dealer claims that on a relative value basis, at least, "coins have a long way to go compared to a Picasso."

History of the 1804 dollar

The auction last night took place at the "World's Fair of Money," the annual convention of the American Numismatic Association.

The piece sold has an interesting, and a bit confusing, provenance. The series of coins actually minted in the year 1804 are lost to history; the coin that sold was made, or struck, more than fifty years later, between 1858 and 1872. (Dated plates were not always changed to mark new years in the 19th century.)

Theories abound as to what happened to the first run of coins. One notion is that the money, intended as payment to France for the Louisiana Purchase, sank on a trans-Atlantic sail. Another holds that Barbary Coast pirates took it.

Both theories are probably fanciful. It's more likely that the value of the silver in the coins exceeded the face value of a dollar, so the Mint just melted them back down rather than put them into circulation at a loss.

Today, there are 16 known silver dollars bearing the 1804 date, minted at least three different times from 1834 to the early 1870s. Seven of them are in museums, while the rest are in private hands.

Past owners of one or another specimen have included the King of Siam (of "The King and I" fame). That one was eventually sold by the heirs of Anna Leonowens, the tutor immortalized by Rodgers and Hammerstein.

Bowers and Merena sold still another specimen in 1997 for $1.8 million, which was at that point a record price for a coin sold at auction.

The current record price for an auctioned coin is $7.6 million, reached in July 2002 when Sotheby's sold a 1933 $20 "Double Eagle" piece to an unidentified bidder.  Top of page

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