The Market Acceptability of Rainbow Toned 1945-P PCGS MS67 Jefferson Nickels

Occasionally, the numismatic community sees a group of wildly toned coins enter the marketplace. They are usually very attractive, high grade, and have many indicators that the toning is natural. These coins are graded by the TPG and the toning is deemed market acceptable. However, over time, with the introduction of more coins with the same patterns and color scheme, the acceptability of the toning is called into question at which point the TPG stops grading the coins and deems the toning questionable.

This happened with the Appalachian Hoard of Jefferson Nickels in 2000 which were graded by NGC. The initial group of Appalachian Jeffersons consisted of several rolls of wildly toned premium gem war nickels. However, in the months after the initial dispersement of the coins, another batch with similar toning but more indicators of artificial toning came to light. Some of these coins also made it into NGC slabs but eventually the toning patterns and color schemes were deemed questionable by NGC and the grading of such coins came to a halt. At the same time, this change in market acceptability called the originality of the toning of the original Appalachians into question. PCGS was not immune to this phenomenon as evidenced by the Peacock IKE's which would be deemed questionably toned under today's standards. The point is that the TPG's over time can and will change their opinion about the market acceptability of certain toning patterns and color schemes within a series of coins.

Over the last 3 years, a number of insanely toned 1945-P Jefferson Nickels have showed up in PCGS MS67 slabs and have realized incredible premiums in the marketplace. The premiums were so high in fact that they single handedly inflated the PCGS Price Guide of the issue for which the current population is 36/0 (5/2012). I submit that these coins could very well be the next group of toned coins that lose their market acceptability. First, lets take a look at the specimens that have entered the market over the last few years and the prices that they have realized.

The March 2010 Baltimore Auction Lot #577. 1945-P Jefferson Nickel. MS-67 (PCGS). $3,738




The August 2010 Boston Rarities Sale Lot #325. 1945-P Jefferson Nickel. MS-67 (PCGS). $1,668




The January 2011 Tampa Bay Rarities Sale Lot #328. 1945-P Jefferson Nickel. MS-67 (PCGS). $1,726




2012 April 18-22 US Coins & Platinum Night CSNS Signature Auction- Schaumburg #1169 Lot 3700 1945-P Jefferson Nickel MS67 PCGS $1,380




2012 July 12-15 US Coin Summer FUN Signature Auction - Orlando #1172 Lot ? 1945-P Jefferson Nickel MS67 PCGS $?,???




After viewing these auction results, it is indisputable that these coins are both beautiful and valuable. An untoned PCGS MS67 1945-P Jefferson will usually cost $400-$500 while these coins are routinely driving premiums of 4-5X that amount. Whenever we see that type of monetary incentive, diligence dictates that we place these coins under closer scrutiny. After researching these coins, there are several reasons that I believe that this toning pattern will eventually be deemed questionable by the TPG's.

1) Unique Toning Pattern/Color Scheme: I have been an avid collector of rainbow toned Jefferson Nickels for over 5 years and have seen thousands of rainbow toned Jefferson War Nickels. I have never encountered this toning pattern/color scheme on any Jefferson Nickel. The toning pattern is not consistent with what is typically found on an album toned Jefferson Nickel. It is also completely different from the pink & lime green toning found on the Appalachian Jeffersons. The hues of magenta and cyan found on these coins is much deeper and darker. Given the fact that this pattern/color scheme does not exist on any other date/mm and that there are multiple examples of this date/mm in combination with the inconsistency with respect to typical album toning, we must conclude that the toning on these coins was not created by album storage. That in itself does not condemn the originality of the toning but the fact is that most rainbow toned Jefferson Nickels are target toned examples caused by storage in a coin album. Perhaps these coins are the result of being stored in paper rolls much like the story surrounding the Appalachians.

2) MS67 Only: All of the coins that exhibit this type of toning that have entered the market are all graded MS67 and are of the highest quality. When we consider that there are only 36 coins graded at this level by PCGS, the fact that 5 (or more) of them exhibit the same unique toning pattern/color scheme is very suspicious. It is certainly possible that these are simply the finest examples that came from a roll or two of nickels. But if that were the case, why wouldn't we see some MS65 and MS66 examples with the same toning pattern? They would certainly drive significant premiums equivalent to many multiples of bid and it is not out of the question that they would achieve the price of an untoned MS67. So if these coins came from complete rolls with varying quality, it seems inexplicable that only finest examples would be submitted for grading given the obvious financial incentive to submit all gem grade coins. This really only leaves us with two possible remaining scenarios. Somebody hoarded the finest 1945-P Jefferson Nickels and then stored them in such a fashion that all of them developed fantastic rainbow toning resulting in a 4-5 fold increase in their value. The other scenario is more sinister and IMO more likely, these coins are work of a coin doctor.

3) Questionably toned examples: The downfall of the Appalachian Jeffersons was that the second group of coins appeared to have more indicators of artificial toning than the original group. The first four coins shown above all seem to have natural toning despite how dramatic it may be. However, the last example shows similar toning which has gotten even more outrageous than the first four examples. The presence of vibrant emerald green reminiscent of a Morgan Dollar exists in two different parallel swatches. And while the yellow-magenta-cyan color progression seems to be intact, I can remember no other time that I have seen emerald green yield to russet/orange. Typically, emerald green is followed by a much deeper shade of magenta such as violet. On all of the other examples, the hue of green that borders this russet/orange color is lighter and less vibrant. And while this alone might not condemn the toning, it does make it unlikely that it shared the same toning source as the other examples.

The purpose of this article is to inform collectors of rainbow toned Jefferson Nickels that even though they are graded by PCGS, a very real possibility exist that these coins are artificially toned and that in the future, coins with this toning pattern/color scheme may be deemed questionably toned by the TPG's relegating the already slabbed examples into a state of limbo. Personally, I have a more liberal attitude towards artificial and questionably toned coins and own a number of Appalachian Jefferson Nickels. But for those collectors who are not as tolerant and insist on the stability afforded by natural toning, my advice is to stay away from these outrageously toned 1945-P Jefferson Nickels and the significant monetary premium that accompanies them.

 

Log in or Sign up to hide this ad.

I forgot to mention that I actually bid $1K on the first coin. Here is a link to the thread.

Registry Fever? A 1945-P Jefferson Nickel PCGS MS67

 

At this point, it is just a theory. But I think my analysis shows that there is significant risk involved in buying one of these coins. Most collectors think that if a coin is graded by a TPG that it is NT and very few even understand the concept of "market acceptability". I agree that as long as no new examples show up, nothing will happen. I will be keeping a very close eye on the PCGS population and any new auctions.

 

Out of those you posted, the only one I would have thought graded would be the first one as the others look AT...er Unmarket acceptable. But I'm not employ'd by a TPG'er for that opinion.

Great thread btw!

 

Sounds like the doctor buys them in MS-67 slabs and then does his work to me. If the grade were lower you be able to spot something on the coin that shows it as blast white a few years ago in an auction like Heritage !

 

Nice write up Paul. I am with you on your theory.

As much as I like toned nickels...I wouldn't touch anything toned like those examples. In general, maybe I am too suspicious. When we are talking about these kind of premiums, I think suspicion is a good thing.

 

They are gorgeous coins, and would be quite tempting for a collector of valuable, premium coins. Your article is excellent-- it points out some of the pitfalls of extreme, unusual toning, and it's impact upon the market.

 

To me those pictures do not make them look like 67's. I have seen Paul's pictures with the luster and the colors. I can only assume the luster is there, but to me these coins do not match Paul's for eye appeal. While I don't collect toners like this I do like a nice lusterous Buffalo nickel that has a hint of color in the fields. Good write up Paul.

 

I think this makes some sense. It would be interesting to go try and find all the past auction results for the untoned MS 67 coins, and see if any identifying marks can be found.
Great write-up Lehigh:thumb:

 

Thought I would update this thread since another one just hit the market. That's right, another 1945-P PCGS MS67 Jefferson War Nickel with the same toning pattern is being offered in the upcoming Heritage Signature Sale.

2013 November 1 - 3 US Coin Signature Auction - New York #1191 1945-P 5C MS67 PCGS



The catalog listing states that the coin is from the Geyer collection and it resides in a holder that is several years old. I wonder how many of these are out there? Only time and my diligence will tell.

 

According to PCGS, this specific coin was sold in the Bowers auction here:

http://stacksbowers.com/Auctions/AuctionLot.aspx?LotID=30084

 

You are right, it is the same coin as the first one listed in this thread. It is hard to match them up because the Bowers auctions listings don't include slab shots with serial numbers. So the coin for sale sold for $3,738 in 2010. I wish the seller all the luck in the world. He is gonna need to dig himself out of that hole.

 

Jay has this one for sale on E-Bay. Click photo below for link.

 

Wow yea that is a hole he dug himself in for sure.

 

Whatever the situation, whether it be NT, or an imitation of the original set of toned nickels, it is a pretty incredible looking coin. I honestly don't know much about Jeffersons, so I won't comment about whether or not it is market acceptable, or possibly an imitation, but suffice to say, it is an amazing looking coin. Will it resell for what it was once worth? Doubtful, and there is the pity in the whole situation.

 

BEAUT'S !!... but I would go that high for any of them. I think Lehigh's bids were about right for the sensible toner collector.

 

Nice coin as I do like War Nickels but I would not pay that kind of money for it.
NOTE: I have over paid for some of mine