Using Numismatic Provenance as Buyer Protection
by Gerry Fortin, LSCC #1054

Assembling an advanced collection of Liberty Seated coinage requires substantial patience, considerable searching, financial resources andof course, plain old luck. Many of the quality coins in today's market that are naturally original with eye appeal are presently graded andencased in Third Party Grading (TPG) service holders. Certified Acceptance Corporation (CAC) provides an incremental evaluation layer for coins inexisting TPG holders. The numismatic market has matured during the last 15 or so years with substantial improvements in buyer protection.

Coin doctoring, enhancements or restoration remains an ongoing issue in our hobby. The "doctors" are individuals who are motivated by greed. These individuals possess expertise in modifying the surface characteristic of copper, silver and gold coins towards securing higher TPG certified grades. In some cases, the doctors will restore coins previously designated as cleaned or impaired by the TPGs in the hopes of receiving normal certification upon resubmission. In all cases, the doctors seek quick financial gains by securing a grade improvement and therefore sales potential at a higher level than their purchase prices. These coins are typically sold to unsuspecting dealers or consigned to the auction houses.

The TPGs are constantly challenged with doctored coin submissions that may be discretely included in larger submission lots. Since the grading service offer a buyback guarantee for their certified opinions, then vigilance for flagging and rejecting doctored coins is ongoing. A dark side of our hobby involves this constant gamesmanship between the coin doctors and the grading services. There are cases where the restorations or surface modifications are so well performed, that coins will be certified.

A recent case involving a five figure Liberty Seated coin minted at Carson City purchased by an LSCC member crystallized this issue for me. I was contacted, as LSCC President, for advice and help towards resolving a situation where a previously NCS certified coin as cleaned was professionally restored and certified by one of the leading TPG services. Personal inspection of the coin validate the capabilities of the coin doctor to remove all traces of the prior cleaning resulting in surfaces that appeared to be strictly original and attractive.

Even with my own 25 years of collecting, and now dealing in Liberty Seated coinage, the workmanship would have fooled me 10 out of 10 times. This event brought about the realization that collectors must do more than simply trust the TPG certifications when spending substantial sums on key date Liberty Seated coins. The TPG services are not to be faulted in any way during this article as the TPG service encapsulating the doctored Carson City did honor their buyback guarantee. This is positive news for collectors and our hobby.

The used car market has always been an area of caution as mechanical problems can be hidden and not appear until after the purchase warranty period expires. CARFAX.com and its massive database for recording individual ownership, servicing and accident repair records has dramatically improved the used car buying process. Armed with a car's ownership and repair history, buyers are in a much better position to make educated decisions concerning potential risks for subsequent failures and repair costs. No one wants to buy a "lemon" right?

The CARFAX methodology would be a useful tool in the numismatic hobby to lower buyer risks for doctored coins. This type of information system is not available today though the online auction records of major auction houses do provide substantial information for coins sold in the last 20 years. As an alternative, buyers of key date coins that come with high price tags should carefully research the provenance of the targeted coin. Wikipedia defined "provenance" as the chronology of the ownership, custody or location of a historical object. The primary purpose of tracing the provenance of an object or entity is normally to provide contextual and circumstantial evidence for its original production or discovery, by establishing, as far as practicable, its later history, especially the sequences of its formal ownership, custody and places of storage.

When spending five or six figures on an important numismatic property, I would recommend that buyers ask questions as to the pedigree and TPG certification for that property. Understanding the prior ownership sequence would lower risk and bring peace of mind concerning future resale value. The lack of ownership records raises a flag that caution may be warranted and that it might be a good idea to do some careful due diligence before purchasing the coin. Coins that reside in old TPG holders, for example, PCGS rattler and old green label holders can be immediate vetted in terms of their preservation state during the last 25 years or so. The same is true for coin encapsulated by NGC in early "fatty" holders and for ANACS graded coins in their small white holders. High priced coins in recent 2014 or 2015 generation PCGS or NGC holders are candidates for a provenance investigation before purchase since the coins have been recently graded.

In summary, as with any collectible, buyer knowledge and due diligence are paramount for making wise purchase decisions. Purchasing coins by using logical evaluation rather than emotions is advised. The development of a CARFAX equivalent numismatic database for key date coins would be a well founded initiative towards assembling buyer protection information. Researching pedigrees and ownership sequence is time consuming and beyond the capabilities of many dealers and certainly buyers. I don't see for profit companies in the numismatic industry investing in a provenance database and hope to be proven incorrect. Non profit organizations, with the vested interests of their sponsors or membership, could take on a project of this magnitude.

The number of five and six figure key date coins when certain design series and denominations is limited when compared to the entire numismatic market. Mapping the provenance of a small subset of coins with photographs and ownership records would be a substantial step forward for buyer protection while placing pressure on the coin doctors to terminate their operations or shift their focus elsewhere. Reducing the number of important coins being tampered with by making it difficult to reap profits would be the overriding goal coupled with buyer protection.

I recognize that this brief essay may be viewed as being controversial by some in the numismatic industry. My intentions are genuine as a life long collector and as an individual that has a fond appreciation for historical artifacts. During our lifetimes, I believe that we are only curators and have the responsibility to care for our coins in a manner that preserves their integrity for future generations.

For more information on the Liberty Seated Collectors Club, see:
www.lsccweb.org