Posted by David W. Lange, NGC Research Director on 4/1/2006
In the coin hobby the term "sleeper" has two widely used meanings. The first and most common refers to a coin whose published value in price guides has not increased for several years and may be ready for an advance. Another kind of sleeper is a coin that sells at auction below its published value, going for less than one would expect in such a competitive environment. To these popular usages I'd like to add a third, and this new meaning forms the basis of this month's column.
To me, another kind of sleeper is a coin that has spent some time in circulation, then been withdrawn by a collector, only to reappear in circulation years later. As an example of this phenomenon I'll cite a recent incident that occurred to me. A few weeks ago I received in change a 1941 Philadelphia Mint nickel grading Very Good or so. While a rare occurrence, it's still not that unusual to find early date Jefferson nickels in circulation. Being made of base metals, there exists no incentive to hoard them for their intrinsic value. Until the Westward Journey® nickels of 2004-2005 debuted there had been no change in the basic design since its inception in 1938. Thus, with the exception of the silver wartime pieces and a few scarcer date/mint combinations, a person searching through many rolls can still assemble a fairly complete collection of this series.
What's unusual about my 1941 nickel is its grade. Had this coin been in continual circulation since its release both sides would be severely worn, with the date barely readable. Instead, it graded a still-collectable Very Good with full rims. As a child collecting coins from circulation in the late 1960s I found many examples of this date and mint in that very grade, which was to be expected of a coin then a quarter century old. But why was this 1941 in such condition some 35 years later? Shouldn't those additional years of circulation put some heavy mileage on it?
The fact of the matter is that this coin had clearly not been in circulation during that entire time, but instead had spent perhaps half of its lifetime sleeping in a coin folder. The collecting of coins from circulation was at its peak during the 1950s and '60s, after which this aspect of the hobby nearly faded into history. Countless thousands of Jefferson nickel sets were assembled in this manner, and eventually many of them find their way to coin dealers. Now the last thing any dealer wants is another set of circulated Jeffersons, but he will buy it as part of a larger deal that includes coins that are of some value to him. Many of these sets are simply tossed onto a pile on the floor to await a sorting process that, for most shop owners, never seems to occur. As a collector of coin folders and albums, I've bought many such sets at slightly above face value just to acquire their collectable container. Typically, I just spend most of the coins it held, as only the silver wartime pieces and the key dates have any value.
As this tale illustrates, a 1941 nickel in Very Good grade is worth only face value, even after 65 years have passed. This fact is true of most Jefferson nickels in worn condition. Over the years many sets have been broken up and spent by both collectors and dealers, so it is not all that unusual to find coins in circulation that appear to have been frozen in time. In one sense that's exactly what happened. My 1941 nickel probably spent all of the 1970s, '80s and '90s sitting idle in a long forgotten coin folder, until someone finally realized there was no further point in saving it.
Sometimes it is the collapse of a coin's value that causes it to re-emerge as a sleeper. Returning to the subject of my childhood coin collecting, it was puzzling to me that certain semi-key nickels such as 1949-S and 1951-S turned up in Extremely Fine or even About Uncirculated condition when the more common 'P' and 'D' mint coins of the same dates were heavily worn. It was only later, when I began reading about the speculative market in Uncirculated rolls that had so dominated the early 1960s hobby, that I was able to put the pieces together. At the height of this feverish speculation people were taking out loans to buy rolls and even bags of Uncirculated coins, counting on the rising market to reap their profit and pay off the loans. When this speculation collapsed in 1964, a lot of these gamblers were compelled to simply deposit their coins in banks to make good on their debts. Thus it was that I encountered lightly worn examples of these low mintage dates for the next few years.
I can't help wondering whether this same scenario may replay itself with some of the speculative coins in today's market. Will collectors who are buying bag quantities of the 50 States® quarters and Westward Journey® nickels at premium prices one day give up on their hoards because they've failed to advance in value? Will we be surprised at the discovery 30 years from now of lightly worn Delaware quarters and Keelboat nickels in our pocket change?
David W. Lange's column, USA Coin Album, appears monthly in Numismatist, the official publication of the American Numismatic Association.