Money, in the form of coins, has been used since the seventh century B.C. The words money and mint are derived from the name of the Roman Goddess Juno Moneta, in whose temple the Romans built a workshop for making coins. From that time, it became common usage to call places where coins were made 'Moneta'.
For some, coin collecting is a hobby, for others a driving passion and for yet more, a rewarding investment avenue. For all of them, coin collecting is a challenging and satisfying pastime, and one in which anyone can be involved, no matter how big or small the budget.
There is something special in being able to hold something which could have traded hands in a Roman marketplace in the time of the Emperors, or have been transported in the pocket of a settler who arrived in Sydney in the early days of the colony.
There was once a time when a coin's value was determined by the quantity and type of precious metal it was made from. More recently, production techniques and the use of base metals have broadened these factors to include:
The Basics of Coin CollectingA huge and continually expanding range of numismatic material is on offer. The novice collector can be easily confused by the variety of items available, and will often rely on the integrity of the seller. Is this a wise move ? Why would buyers or sellers in the numismatic marketplace possess any more scruples than players in any other market ?
The answers are simple. Don't rely on the integrity or advice of a single source and don't make impulsive decisions. The greater the investment, the more you should research an item before making the commitment to purchase or sell it. A huge repository of information and reference material has accumulated over the decades providing intricate details on all aspects of numismatics and numismatic material. There are many dealers, coin clubs and quality publications available, all offering valuable information.
As your knowledge grows, so too will your ability to discriminate between a bargain and a bomb.
The degree of assistance and research required will vary enormously, depending on whether you are strictly a collector, or an invester searching for profit. The collector has a much easier task than the investor, being able to make decisions on criteria other than just profit potential. The collector can, and is often, swayed by the physical and artistic merit of a piece rather than its rarity, precious metal content or future prospects.
In either case, however, the golden rule of coin collecting is 'the book before the coin'. Quality books on the subject will repay their initial outlay many times over. Interestingly, many book editions become valuable items in their own right.
For investors, the mintage figure, a tiny mintmark or distinguishing feature, and past performance in auctions and sales rooms is of critical importance. It is impossible to memorise the details of every item which has investment or collector potential. There are a few basic rules, however, which serve well when buying or selling:
What Makes a Coin Valuable ?At first, it can appear strange for one coin to be practically worthless, while another, of similar appearance, is extremely valuable. Values are assigned to coins via the normal market forces of supply and demand, the lower the supply and the greater the demand, the higher the price will be.
Rarity: On the supply side, if a sufficient quantity of a particular coin is available to ensure that every person who wishes to own one can do so, it is highly unlikely that the item will ever be worth much more than its intrinsic value or issue price. A good example of this can be seen in the proof sets released by the Royal Australian Mint in the early 1980's.
The huge mintages (often well in excess of 100,000 sets) were quickly snapped up and salted away as investments, based on the assumption that they would provide the same solid price gains that were seen in sets of the early seventies. What was not realised at the time was that every collector who wanted a set, obtained one. When the investment sets began to resurface, there was no-one to buy them. The price falls were inevitable.
On the other hand, there are certainly far more collectors than there are pieces available for items such as a 1930 penny or an uncirculated half sovereign. It is simply a matter of supply and demand.
Condition: There are many factors which influence demand, and hence price, for a particular numismatic item. One of the most important, and usually the most contentious, is the condition of the coin. Establishing the correct grading (see the separate article on grading coins) is a prerequisite to an accurate valuation of the piece.
Despite often huge mintage figures, pristine examples of circulating coin types are usually scarce. Obviously, collectors prefer to own better quality, better presented pieces and so demand for them will push their price upwards.
But there is a catch. Don't rely on condition alone as a guide to price. If you do, you will almost certainly get your fingers burnt. Few commemoratives, and no collector coin issues, stay in circulation for long. The result is that almost the entire mintage remains in a high state of preservation and so condition, one of the factors driving prices, plays a much less influential role for these items.
Desirability: A much harder factor to measure, let alone predict, is a coin's desirability. It can be influenced by the popularity, in the wider community, of the designs or themes depicted on the coin, by the artistic composition of those designs, and even by the amount of publicity received.
A coin many have a low mintage but if there is little demand for it, it is unlikely to have a significant value. The valuation rule is fairly simple, there must be more people with a desire to own a piece than there are numbers available.
Cleaning CoinsThere are many ways of cleaning coins, nearly all of which are unacceptable to coin collectors. It is possible, for example, to bring back a brilliant glow to a low grade Edward VII silver coin. However. the flat worn spots and nicks, combined with the missing mint lustre, make the coin look completely out of place.
Most collectors regard a cleaned coin in much the same way as an antique car collector would regard a vintage car with a brand new motor or an iridescent paint job. Most would prefer to buy the car, dull as it may be, with its original components in place.
Cleaning coins takes away the natural finish the coin received when it was struck. Daily wear also destroys this, but collectors expect it. An even, natural toning has even been known to increase the value of a coin.
If you are holding a coin as an investment there is a simple rule on cleaning it - DON'T ! You will, without exception, devalue the coin.
Obviously, if the coin is yours, you are free to do with it much as you please (subject to currency laws dealing with the status of legal tender mediums of exchange). For a coin kept as a keepsake, or as a cheap filler until you can afford one in collectable condition, cleaning is less of a sin. In this context, the following details may be of assistance.
The first and least harmful treatment should be the use of warm soapy water applied with a gentle rub. Stubborn dirt may need the added persuasion of a cotton bud dipped in olive oil. Dirt wedged in a tight corner may need to be gently coaxed out with the tip of a wooden toothpick.
Never use abrasive cleaners, such as steel wool or gritty liquids, which create a shiny surface by stripping away the top surface of metal on the coin. The first thing to go will, of course, be the designs and legends.
Coins found after years buried in the earth or submerged in the sea are difficult to clean. Professional restorers have had some success by applying hydrochloric acid to these coins, carried out under magnification. The technique is definitely not recommended for the rest of us.
The copper-nickel and bronze metals most commonly used today are very difficult to clean. There are no satisfactory methods of removing the tarnish film which can build up. Experiments of soaking in olive oil, bathing with coca-cola or boiling in a bicarbonate of soda solution have produced some interesting results, none of which have resulted in an increase in the value of the piece.
Storing and Handling CoinsCollector and investment coins should never, if possible, be handled without protective gloves. Gloved or not, the coin should only be picked up by the edges. Our fingers possess thousands of tiny sweat glands which secrete salt. This salt will play havoc on a bright, pristine surface. It is basically impossible to remove a thumb or finger print from an otherwise pristine coin once the salt deposit has reacted with the natural lustre of the coin's surface.
Coins should not be stored together in a bag or container, a proper album or tray system is essential to preserve them in the condition in which they were received. Never store coins affected with verdigris (an oxidation coating that affects copper and bronze) with other coins as it will spread.
Prior to the mid 1970's, many of the materials used to make coin albums contained sulphur and chlorine which reacts with the surface of the coin it is supposed to be protecting. Today, albums are made from paper, cardboard and plastics which are free of such harmful chemicals. It is a good idea to periodically check all coins for signs of tarnish, particularly around the rims. At the first sign, discard the storage medium in favour of a safer alternative.
The most important consideration in storing coins is to keep them separated in compartments soft enough not to damage the coin. Wooden cabinets with wooden, felt-lined trays are a popular storage choice. The type of wood used is extremely important. For example cedar should not be used as it produces gases which, over a period of time, will stain coin surfaces. The same is true for the glues used in the manufacture of plywood. The best results seem to be obtained with solid walnut or mahogany.
Other popular storage choices, from least expensive to most expensive are:
'Rigby's Coin and Banknote Guide' by Greg McDonald - 1983;
'Coin Collecting' brochures issued by the Royal Australian Mint, 1994.