A rarity among rarities, Kenneth Smaltz Jr. is one of a few black business owners in the rare-coin market.
CARRIE MASON-DRAFFEN. STAFF WRITER.
May 13, 2005
New customers often do double takes when they meet Kenneth Smaltz Jr., a rare-coin dealer in Garden City. That's because Smaltz himself is a rarity in the industry: He's an African-American who owns a rare-coin business.
"It's always in the back of your mind that when you meet someone of another ethnicity, that they might have second thoughts about me being African-American," said Smaltz, who owns the 8-year-old K. Smaltz Inc.
But Smaltz's self-confidence doesn't allow him to linger on that point too long.
"I know what my expertise is," said Smaltz, 42. "I am good at what I do."
What the Jamaica, Queens, native does is buy and sell rare coins in a $3-billion to $5-billion industry, whose players run the gamut from individual dealers to long-established businesses such as Stack's, a Manhattan company that is the country's oldest rare-coin dealer. The businesses are overwhelmingly white, as are the majority of the customers, who include captains of industry and celebrities.
Although the rare-coin industry has many black salesmen, encountering a black business owner is uncommon, experts said.
At national shows, which dealers rely on significantly for buying and selling, you don't see many African- Americans or many women, except for spouses, said Beth Deisher, editor of CoinWorld, a weekly trade newspaper in Sidney, Ohio.
But, she added, "That is changing."
Smaltz landed in the industry by accident 21 years ago. In 1984 a temporary-employment agency placed the college dropout in the shipping department at MTB Banking Corp., a rare-coin dealer in Manhattan. A senior vice president who later became his mentor told him that if he worked hard, he could move up.
And he did. After 18 months on the job, Smaltz was promoted to salesman. He remained there until 1990, and with the help of his mentor and others was able to find other sales positions around the country, including a job at New World Rarities in Hauppauge in 1997. Later that year he decided to go into business for himself. And here, another mentor played a role, introducing Smaltz to the owner of Eastern Numismatics Inc., a Garden City rare-coin company. Smaltz is now affiliated with it.
In exchange for space at Eastern and access to inventory, among other things, Smaltz gives Eastern a percentage of the profit from his sales, which totaled $1.3 million last year, he said.
"Kenny certainly adds to the bottom line," said Eugene Parrella, Eastern's owner and president. "I am a lot better off with him on this team than without."
Smaltz's haul last year included profit from the sale of the rarest and most expensive coin he has ever sold: an 1895 Morgan silver dollar, bearing the garlanded head of Lady Liberty on the front, which fetched $139,750.
A customer who wanted to complete a set launched Smaltz on a hunt for the coin, named after George Morgan, then chief engraver of the U.S. Mint. Through research, Smaltz determined that only two coins on the highest end of the 1-through-70 rare coin rating scale exist. He worked the dealer network, and after a month, which he said was the longest of his searches, he found a California dealer who had a grade 68 coin, with a shiny, raised image.
Increasing numbers of collectors are entering the rare-coin market, lifting the industry during the past 2 1/2 years to its first boom since 1978, said Donald Kagin, a second-generation dealer in suburban San Francisco who has a doctorate in numismatics, or coin collecting. The membership of the Denver-based American Numismatic Association, of which Kagin is a board member, has shot up to 32,000 from 28,000 in 1998.
Driving this interest, in part, have been some spectacular coin finds on old sunken ships such as the SS Republic, a former Confederate paddle-wheeler that went down in a hurricane off the coast of Georgia in 1865. Two years ago divers retrieved some of the gold and silver coins among the ship's cargo.
But experts said the biggest lure in drawing new collectors has been the state quarters, a program launched by the U.S. Mint in 1999 that now has 140 million participants, officials there said. "Many more in the general population have become aware of coin collecting and are participating," said Deisher, the editor.
Smaltz finds new customers by attending trade shows and by placing ads in newspapers. He favors The Wall Street Journal and Investors' Business Daily because they attract people, like many of his 300 steady customers, who invest in stocks and bonds. (The value of rare coinshas appreciated an average 20 percent a year during the past two years, besting the stock market, Kagin, the dealer, said.) Smaltz's clients also include a lot of history buffs between 50 and 70. And many are doctors.
So one of his primary goals is to introduce rare coins to a much broader market, including African-Americans. "If they knew more about it," he said, "they probably would seriously consider it."
Changes in coinage
- 1909: Penny with silhouette of Lincoln becomes first circulating coin issued with likeness of a real person
- 1965: Dimes no longer made with silver but copper-nickel combination
- 1983: Last year for the real copper penny. Since then, pennies have been made of 95 percent zinc and 5 percent copper, the reverse of the previous alloy.
This article has been reprinted from Newsday (Copyright Newsday Inc., 2005)