COIN VALUES

The market value of any coin—the price a dealer can actually receive for it—is determined by supply and demand. Some exotic coins are quite scarce, but their prices remain low because there is no great demand for them. Yet many fairly recent British, Canadian, and American coins, as well as coins from other times and places, are more available, but their prices are relatively high because there are far more numismatists who collect them. As with any collectable, the condition of a coin is a major factor in determining its value.

When deciding on the purchase of expensive coins or notes, collectors must do the same kind of research necessary for any other major investment. The collector must assess the current market value of the item, its current resale value, and its potential appreciation. Above all, the collector must be knowledgeable enough to know if a coin is genuine and properly graded (assessed as to condition) or must have confidence that the dealer does.

Coin catalogs give some idea of the current prices for various coins. However, dealer advertisements in coin magazines and newspapers are usually more up to date. Coin auctions are an important feature of major coin collecting conventions. Catalogs of the items to be sold are issued ahead of time, and lists of the prices that the items sold for can often be obtained afterward. Coin conventions usually have tables where numismatists can consider the offerings of many dealers, and coin shops also often provide a wide selection. Web sites are a good source for information on the value and availability of coins.

MINTING COINS

A major change in the way coins were produced occurred during the 16th century, when heavy machinery was first used to mint coins. Many of these new mints were located in water-driven mills, thus these coins were referred to as milled coins. This technique was a quantum leap over hammering. Not only were milled coins attractive and much more uniform, but continuous small parallel cuts—known as a milled or reeded edge, as on the United States quarter—made it more difficult to shave off slivers of precious metal.

Spanish conquerors discovered huge amounts of gold and silver in the Americas. Turning these metals into coins made it easier to divide and transport them, and the Spaniards established the first mint in the New World in Mexico City in 1535. Spain soon built minting facilities throughout its Spanish-American empire.

The areas of the New World colonized by Britain did not yield nearly the quantities of gold and silver as the Spanish territories, and English-speaking America did not establish its own mints until much later. Although the colonists still used English pence and pounds, they also exchanged French, Dutch, and German money, as well as coins struck in Spanish America.

The United States established its first official mint in Philadelphia, Pennsylvania, in 1792. Regular coinage began the following year, based on a new unit of currency, the dollar. The word dollar was derived from the German thaler, or taler, a large silver coin first issued in Central Europe in the 16th century, and later adapted to daler. The dollar was the world’s first unit of currency divided into decimal subunits, which simplified the use of money. By the end of the 20th century, all developed countries had switched to a decimal system within their units of currency. In addition to the regular denominations in circulation today (cent, 5 cents, 10 cents, 25 cents, 50 cents, and dollar), the U.S. mint has produced half-cent, 2-cent, 3-cent, and 20-cent pieces as well as gold coins ranging from $1 to $20. Canada issued its first coins in 1858, borrowing the "dollar" name for its unit of currency from the United States.