Puerto Rico Colonial Pattern Coin 1890 10 Centimos Patron NGC PF 62

Doc Brown wins the 1890 Puerto Rico KM PN1 PF 62 BN 3679778-001.

Doc Brown wins the 1890 Puerto Rico KM PN1 PF 62 BN 3679778-001.

Our Colonial Coin Collection

One of the most interesting chapters in the upcoming Advanced Investment U course concerns collectibles as investments. In that section I teach that the two most important parameters in collecting are rarity and condition.

More on Investment U Course HERE:

The three major areas of collecting are fine art, stamps, and coins.

My students know my motto, “I don’t just teach, I also trade.” It was time for me to toe the line.

I had collected coins when I was a child. I started converting my dollar bills to pennies when Mom took us out shopping in the small community of Fall River Mills, California.
Soon I had a small collection of wheat coins. I thumbed through price guides to see if I had found a winner.

I eventually found a wheat penny worth over $100. I was hooked.

I couldn’t afford to collect coins after my father died when everything financially related to my family went FUBAR. I forgot about the subject until I found myself writing the course, part of which deals with coin collecting.

As I wrote the Advanced Investment U Course it became obvious that carefully assembled collections offer the highest returns. It also became evident to me that it takes decades to build a great collection in a specific genre or series.

Hence I decided to concentrate on an area with a vigorous market also interesting to us; Puerto Rico colonial coins. My wife is Puerto Rican.

She has never lived off the island. She is also pro Puerto Rico independence.

Coins from the two years that the island minted represent to Marisol, “what Puerto Rico could have been.” The Brown-Negron Puerto Colonial Coin Collection was born with this first 1890 pattern coin thanks to the help of Nick Bruyer.

A Brief History of Puerto Rico

Puerto Rico enjoys a special position in the Caribbean. It sits exactly at the end of the trade winds flowing up from southern Africa. This was the first provision point for fresh water and food for trade vessels under

Obverse 1890 Puerto Rico KM PN1 PF 62 BN 3679778-001.

Obverse 1890 Puerto Rico KM PN1 PF 62 BN 3679778-001.

sail.
Ships would sail from Europe, down the African coast. They would veer into the open Atlantic and sail North-West from southern Africa up toward America. Puerto Rico was the first stop before heading into Charleston in South Carolina or other American ports.

This made the port of San Juan a strategic point for something even more precious than gold. That was food and water. The “El Morro de San Felipe” fort is a masterpiece of naval engineering reflecting the importance Spain placed on the possession.

The territory of Puerto Rico is the only Spanish possession that never gained independence. By 1860 the majority of Puerto Ricans lived in abject poverty under the Spanish “hacendado” system. Illiteracy hovered above eighty percent allowing an intellectual minority to flourish that still enjoys political power on the island today.

Supporters of Puerto Rican independence were silenced by special laws handed down by presiding Spanish generals. In 1868 the “Grito de Lares” initiated a planned revolt against Spanish oppression by declaring the formation of the Republic of Puerto Rico.

The dream of an independent Puerto Rico has never been realized. The local pro-independence party “Partido Independentista Puertorriqueño” is a vestige of this movement.
All of this was happening in the aftermath of a Spanish crown weakened by war with Napoleon at home. By 1921 Mexico had attained independence from a fiscally weak mother country.

Spain simply hadn’t enough money left to hold the empire together.

Puerto Rican Colonial Coins

The island was the first Spanish colony to print banknotes. The eight-real of 1766 is the first printed in the empire of New Spain. Provincial banknotes and the Puerto Rican peso followed. These were created by

Salvador Meléndez Bruna a governor of Puerto Rico.

Banknote printing stopped in 1815 as foreign coinage replaced local currency. This persisted into the 1860s. Banknotes came back in the 1870s.

The Banco Español de Puerto Rico was inaugurated and began issuing banknotes in 1890. Work began immediately by the Banco Español de Puerto Rico coin designers.

This was the beginning of succession of the possession planned amicably between Spain and Puerto Rico. The island was to have its own coinage.

In 1895 the Puerto Rico Peso, 40 centavo, 20 centavo, 10 centavo, and 5 centavo pieces were born from Spanish Royal decree. Banknotes were printed in 5, 10, 20, 50, 100 and 200 peso values.

Four series were designed but only two made circulation in 1895 and 1896. This coin is the most beautiful of Spanish colonials featuring aspects of Fort San Felipe del Morro on the obverse.

The outline of the face of Alfonso XIII of Spain is on the reverse side of the coin.

It is custom here in Puerto Rico to refer to a dollar bill as a “peso.” Many Puerto Ricans do not know that the island had its own currency before the invasion of the “Gringos ” in 1898.

The Puerto Rico peso was pegged to the Spanish peso at 5 pesetas from 1895 to 1896. After the American invasion the Puerto Rico peso was devaluated to 60 cents per U.S. dollar.

Puerto Rico colonial coins had a higher melt value in silver. Circulation dropped. Puerto Rican colonial coins were forced out of circulation by the Puerto Rican dollar in 1902.

Each Puerto Rican coin had a nickname. Even today natives Puerto Rican’s apply these terms to United States money.

  • Puerto Rican 1 Peso = Peso = Native Puerto Rican Nickname for a dollar
  • Puerto Rican 40 Centavo = None.
  • Puerto Rican 20 Centavo = Peseta = Native Puerto Rican Nickname for a quarter.
  • Puerto Rican 10 Centavo = Chavo = Perrita = Native Puerto Rican Nickname for a dime.
  • Puerto Rican 5 Centavo = Vellon = Ficha = Native Puerto Rican Nickname for a nickel.

Master Numismatist Nick Bruyer

Reverse 1890 Puerto Rico KM PN1 PF 62 BN 3679778-001.

Reverse 1890 Puerto Rico KM PN1 PF 62 BN 3679778-001.

As I wrote the collectibles section of the Advanced Investment U Course it became evident that I needed an expert on my side. I reached out to fellow Oxford Club member Nick Bruyer.

Nick is in semi-retirement after selling his company First Federal Coin. Nick and I discussed how the American public is enamored with the “bright and shinys.” This is a personal joke between us.

The first time we met I walked up to his booth at the Investment U Conference. The table was filled with contemporary double eagles, Chinese Pandas and other bullion coins of low rarity but impeccable quality.

More on the Investment U Conference HERE.

Don’t get me wrong, there is a market for quasi-collectible bullion coins. The editor of coin world has confirmed this to me.

I asked where the good stuff was. Nick knew instantly that I understood coin collecting and we became immediate friends.

Nick explained how people generally buy like magpies. They buy the bright and shiny pieces when they should be buying dullish rarity.

I explained our intentions of building a high quality Puerto Rico Colonial set. Nick agreed to help.

The Cornerstone is this 1890 Puerto Rico Patron

On October 7th of 2013 my friend and master coin collector Nick Bruyer notified me that a very rare Puerto Rico colonial pattern coin was up for action with a very reputable house operated by Sedwick Coins.

Pattern coins are created to evaluate a proposed coin design. These are coins that have not been approved for release. A pattern coin is usually a proof or piedfort of off-metal strike.

Pattern coins were also minted in New Spain to hamper counterfeiting. This particular pattern coin is a proof.

The pattern coin Nick recommended I buy was listed as:

Puerto Rico, copper 10 centimos pattern, 1890, encapsulated NGC PF 62 BN, rare. KM-PN1 Very lustrous and lightly rainbow toned, with faint surface hairlines, popular as the only “in between” issue after the lis countermark and before the 1895-6 Alfonso XIII peso series.

It is estimated (unconfirmed by me) that there are fewer than 30 of these pattern coins in existence.

This particular Puerto Rico 10 cent pattern coin is also termed the “toy” pattern. You’ll see replicas of it listed for as much $52.50 for sale on ebay.com.

I had no idea what the coin was worth. Nick estimated the coin’s value to be somewhere around $3,500.

I punched in my bid at that value. The system informed me that I had not met the reserve.

I increase my bid by $50 intervals until I hit the $3,750 reserve. Nick told me to sit tight.

I was the winning bid on October 30th, 2013. The buyer’s premium amounted to $731.25.

The total cost of the coin was $4,505.25.  Transaction costs amounted to 16.23% of the total auction price.

If it were not for the guidance of a wise dealer such as Nick Bruyer I would not have been successful in acquiring this coin.

-Doc “I Don’t Just Teach, I Actually Do” Brown

Doc Brown

Doc Brown

 

BIO:  Dr. Scott Brown is an avid collector of Puerto Rican Colonial Coins issued between 1895 and 1896.  Scott is also the author of numerous courses on investing.  His Oxford Club bestseller “How to Build Your Million Dollar Portfolio from Scratch” has over four thousand students.  He is an associate professor of finance at the University of Puerto Rico.  Doc Brown publishes in academic journals of finance of prestige such as Financial Management and the Journal of Financial Research.

NOTE:  Go HERE to learn how to insure a coin collection.