12000 1878-S halves were originally minted, a rather low figure to begin with. However, only about 50-60 coins exist today, and they command exorbitant prices. I saw a VG-8 at a show once, selling for about $49000. However, an unusually high amount of coins are graded AU or higher. This would suggest that they were saved by collectors, but in that case there would be more than 50-60 coins around. It is possible that they met a similar fate to the 1876-CC 20¢, most of them being melted?
An old article from 2008 in Numismatic News asked the same question. The idea that many were exported has some traction as well as the lack of collectors at the time. http://www.numismaticnews.net/article/1878-s_seated_liberty_unexpectedly_scarce
If they were exported, I think there may be small caches of them buried in Central America. Maybe it would spawn a lot of treasure hunters there, as one of these caches would easily be worth over a million dollars. I doubt it, but the existence of the Guatemala Hoard of seated halves from the 1860s makes it a possibility. But we can only speculate.
Read here the other day that old halves stayed in banks and were not circulated. Which may account for the high grade. Some of these were probably melted at some time.
