Gold! Few words can inspire as much excitement. Diamonds, silver, platinum, festively colored paper currency—they all have their appeal, but gold has a certain magic to it. For millennia, the precious metal has been an object of desire in many cultures all over the globe, from the Aztecs and Incas to the Egyptian pharaohs and Chinese emperors. And today, gold is in the news as much as ever. Just about anyone can quote with approximation the current price of an ounce of gold, and one can scarcely scan an issue of the Wall Street Journal or the Financial Times without seeing notice of one or another gold mining or refining stocks. Mutual funds have been formed to hold gold shares, and millions of people across the world have tucked away gold in bullion form, often as “coins” struck in our own generation, including the South African krugerrand, the Canadian maple leaf, and our own “gold eagle.”
Fig. 1. The GOLD exhibit at the American Museum of Natural History (Denis Finnin).
Fig. 2. Display case from the AMNH exhibit featuring coins from the ANS (Denis Finnin).
Fig. 3. Display case from the AMNH exhibit featuring coins from the ANS and gold from the S.S. Central America (Denis Finnin).
The GOLD Exhibit
The American Museum of Natural History, in New York City, recently held an exhibit titled GOLD (Figs. 1-3, 15). Several galleries were set aside to showcase what may well be the finest exhibit of gold ever assembled in one place. The tour began with gold in its raw form as nuggets or ore, continued on to illustrate wrought examples from ancient tombs and treasure caches, then to coins and ingots (including a remarkable display of treasure from the S.S. Central America), and finally to gold ingots, Fort Knox style. The ANS contributed to the exhibit by loaning examples of struck pieces from ancient times through the twentieth century, including popular varieties and types.
The present article has a narrower focus: an overview of gold coins in the United States from the inception of mintage through the 1830s, the beginning of the era that blossomed into a panorama including branch mints, the California Gold Rush, and more.
Before the Mint
By 1792, gold coins were a familiar sight in American commerce, especially in the larger cities. Banks were few and far between, but exchanges and counting houses acted as depots for coins. Paper money was virtually nonexistent, as continental currency had depreciated in value to nearly the vanishing point, and any new federal issue would surely be have been viewed with disfavor.
Gold coins seen in the channels of trade were dominated by Spanish-American issues denominated in escudos (Fig. 4), or about $2, with the eight-escudo or doubloon being valued at $16. These were from mints in South and Central America, predominantly Mexico. Gold issues of France, England, and other European countries were also plentiful. These were typically traded at values based upon their actual gold content, which varied from country to country as well as over a period of time. Newspapers carried lists of “prices current,” giving values for commodities as well as silver and gold coins.
Fig. 4. Mexico: Mexico City. AV 8 escudos, 1729. (HSA 1001.1.25712) 35 mm.
Although some gold coins were privately minted in 1786 and 1787 in the United States, by Ephraim Brasher in New York City (Fig. 5) and by Standish Barry in Baltimore, there was no federal coinage until 1795. After that time it took many years until there were enough United States gold coins to satisfy the needs of commerce. In the meantime, selected foreign silver and gold coins remained legal tender until the Act of February 21, 1857, provided for their discontinuation in two years (that deadline was later extended by six months).
Fig. 5. United States: New York, AR doubloon pattern, 1787. Counterstamped with the initials of Ephraim Brasher. Breen 981.5. (ANS 1969.62.1, ex Norweb coll.) 30 mm.
The Establishment of the Federal Mint
The Mint Act of April 2, 1792, provided for the establishment of a federal mint, discussion of which had occupied much time and interest during the preceding decade. Standards were specified as to coinage denominations, weights, and finenesses (degrees of purity). The decimal system was adopted, the basic unit being the dollar. Gold and silver coins were made legal tender without limit. Copper coins were intended as a convenience and had no status as legal tender. Gold and silver coins were to be valued at the metallic ratio of 1 to 15; that is, one ounce of pure gold at the Mint was to be fully equivalent to fifteen ounces of pure silver, and vice versa.
Silver and gold coins were to contain virtually full intrinsic or meltdown value equal to their face value. The ratio calculation proved to be incorrect in terms of market conditions; the ratio of silver was fractionally higher than the fifteen set, and gold coins became “cheap” in terms of silver, causing many gold coins to be melted or exported.
For gold coins of the denominations of quarter eagle ($2.50), half eagle ($5), and eagle ($10), the fineness was set at 11/12ths, representing eleven parts of pure gold to one part of alloy. The one part of alloy was to consist of no more than half in silver, although there was no requirement that there be any silver at all. Silver was a natural “impurity” in gold, and native gold usually contained some percentage of it.
Later, as technology improved, it became a simple matter to extract most of the silver, such extraction in itself becoming a profitable enterprise. Copper was added to lend strength to the alloy and to reduce loss by abrasion and circulation. The alloy, whether all copper or up to half in silver, was not considered when computing the intrinsic value of the coins. The 11/12ths pure gold was equal to 22 carats in the gold and jewelry trade (24 carats being absolute purity), in the decimal system, 916.66+ pure, conveniently stated as 917/1000 fine.
For the gold denominations, requirements were as follows:
- $2.50 quarter eagle: Standard total weight of coin: 67½ grains troy. Weight of pure gold in coin: 61 7/8 grains troy.
- $5 half eagle: Standard total weight of coin: 135 grains troy. Weight of pure gold in coin: 123¾ grains troy.
- $10 eagle: Standard total weight of coin: 270 grains troy. Weight of pure gold in coin: 247½ grains troy.
A legal variation in the total weight of gold and silver coin was allowed to the extent of one part for each 144 parts; this variation could be above or below the weight of pure gold in the coin. For the $10 gold coin, this amounted to a 1.72 troy grains margin. These statutory specifications remained in effect until the Act of June 28, 1834.
The cornerstone for the Philadelphia Mint was laid on July 31, 1792, this being the second structure erected by the United States government (the first was a lighthouse) (Fig. 6). At the time, this was the seat of the federal government, which did not move to the Federal City, later known as Washington City, until 1800. David Rittenhouse (Fig. 7), appointed as director of the Mint earlier in the year, was on hand, and some accounts suggest that George Washington was there as well. Information concerning the president and the early Mint is mostly anecdotal, such as the scenario of Washington taking great interest in the facility and visiting it regularly. Facts are scarce.
Fig. 6. Illustration of the Philadelphia Mint as it is believed to have appeared in 1792 (painting by Edwin Lamasure, 1914).
Fig. 7. David Rittenhouse, well known as a scientist and philosopher, was named by President Washington to be the first director of the Mint (engraving by James B. Longacre, 1835).
Beginning in September, equipment was moved in, and, soon, pattern coins were struck, including the impressive copper issues by Robert Birch and the elegant 1792 quarter dollar by Joseph Wright, with a Liberty Head on one side and an eagle on a globe on the other. Beginning in 1793, copper half cents and cents were made, and in 1794 the production of silver coins commenced on a limited basis, as the largest press on hand could not satisfactorily strike dollar-size coins.
While copper coins were struck for the Mint’s own account, and profits from the coinage helped pay expenses, a different arrangement was in effect for silver and gold. Depositors of these precious metals could specifically request the denominations they desired to receive. This had dramatic effects on the types produced. When new equipment became available in the summer of 1795, and silver dollars could be struck properly, depositors’ requests for lower silver denominations fell off sharply, creating low-mintage coins that would become numismatic rarities.
The First Gold Coinage
No gold coins were struck at the Mint until the summer of 1795. The absence of coinage in this metal was due to surety requirements: the chief coiner and assayer were required to post personal bonds in the amount of $10,000 each, which was far beyond their financial ability. By 1795, the bonds had been reduced in amount considerably, the chief coiner and assayer had fulfilled them, and gold coinage commenced.
Around May of the same year, Director Rittenhouse assigned engraver Robert Scot to produce half-eagle dies. Work began apace. Rittenhouse resigned, leaving the Mint at the end of June, and was replaced by Henry William DeSaussure, who ordered that gold coin production should begin. On July 31, 744 half eagles were delivered, followed by subsequent amounts through September totaling 8,707 pieces for the year (Fig. 8). Enough dies were made in 1795 that a supply was left over, with at least one being used as late as 1798. The $10 eagle gold coinage followed soon thereafter (Fig. 9). The first such piece struck at the Philadelphia Mint was presented by Director DeSaussure to President George Washington. By year’s end 5,583 eagles had been struck. In 1796, the first $2.50 gold coins or quarter eagles were made. This completed the sequence of denominations. It was not until 1849 that the list was expanded by adding the $1 and $20 values.
Fig. 8. United States: Philadelphia Mint. AV 5 dollars, 1795. Breen 6413. (ANS 1980.109.2106, bequest of A. J. Fecht) 25 mm.
Fig. 9. United States: Philadelphia Mint. AV 10 dollars, 1795. Breen 6830. (ANS 1980.109.2106, bequest of A. J. Fecht) 32 mm.
From that point, the production of gold denominations followed the requests of depositors. Generally, larger denominations were preferred, as they were easier to count. As a result, quarter-eagle mintages tended to be low.
Gold Coins in Commerce
By 1804, it was realized that while some $10 coins were being used domestically, they had an even more important use in the export trade, especially to Europe. This was an era in which paper money was distrusted and gold was the standard for most foreign transactions (in the China and East Indies trade, silver coins were used almost exclusively). Continued coinage of eagles would simply be a service to exporters and do little for inland commerce, the Treasury Department reasoned. On the other hand, perhaps the $5 would be less useful in foreign trade and would be retained in the states, helping to achieve a significant quantity of United States coins in everyday trade, gradually reducing reliance on foreign issues. Accordingly, no $10 coins were made after 1804 (Fig. 10).
Fig. 10. United States: Philadelphia Mint. AV 10 dollars, 1804. Breen 6847. (ANS 1908.93.238, gift of the American Museum of Natural History: The John Pierpont Morgan, Sr., Collection) 32 mm.
In the meantime, Spanish-American gold coins remained dominant in circulation, as the total mintages of federal coins had been very small in comparison. Prices were reckoned in dollars, with merchants and banks using charts to determine the equivalent values of gold coins offered. As eagles were no longer being made, depositors of gold bullion ordered half eagles. In ensuing years, these were struck in record numbers. Most were used in the export trade, with the result that they were scarce in domestic circulation.
By this time, banks in New York City, Philadelphia, Boston, and several other cities had commenced issuing paper money. Such production was largely unregulated, as the federal government had no control and the states had yet to establish banking commissions (which took place in a significant way beginning in the late 1830s). Such currency usually traded at face value, provided that the issuing bank was of good reputation. To determine this, newspaper listings were consulted by merchants, banks, and tradesmen, as were publications that came to be known as banknote reporters and counterfeit detectors.
In 1810, for example, such consultation would reveal that notes of the Bank of New York, the Bank of Maryland, and the Providence Bank, to mention just three “good” institutions, were worth par, but that bills from the Farmers Exchange Bank of Gloucester, Rhode Island, and of the Hillsborough Bank of Amherst, New Hampshire were worthless. Notes of sound banks often traded a small discount in areas distant from the issuing bank. Thus a bill from New York or Boston would be received at slightly less than face value in, say, Charleston. Bills of the Bank of the United States (established in 1791) traded at par almost everywhere, but counterfeits were a menace.
Gold coins maintained their value and were desired, but were not always available, as most had been shipped overseas. From time to time they either disappeared from the marketplace entirely or were available only at a premium. The War of 1812, which ended with the Battle of New Orleans in January 1815 (unaware that peace had been declared at a European convention the previous December), induced monetary chaos, and in many locations only paper bills were available at par. Gold and silver coins were nowhere to be seen. Niles’ Weekly Register, The National Intelligencer, and other contemporary newspapers with circulation throughout the states often reported that monetary conditions in Baltimore, for example, were quite different from those in New York City, and neither resembled the situation in Boston.
It was anticipated that after the war ended, coins and paper money would be plentiful in circulation, readily exchangeable with each other at face value. This did not happen, and while silver coins became available once again by 1817, gold coins remained scarce. In 1815, only 635 half eagles were minted (Fig. 11), and no gold coins at all were struck in 1816 or 1817.
Fig. 11. United States: Philadelphia Mint. AV 5 dollars, 1815 (photo courtesy of the Harry W. Bass Jr. Foundation) 25 mm.
Coinage of gold resumed in 1818 as deposits were received, and it continued steadily afterward. Nearly all newly minted half eagles were exported, as international trade had resumed with vigor. Overseas merchants desired hard money in the form of gold or silver and did not want paper currency issued by various banks.
The Scarcity of Gold Coins in the 1820s
Beginning in 1821, the value of gold bullion on the international market exceeded the face value of United States gold coins. A depositor of gold at the Mint who requested half eagles in exchange would have to give slightly more than $5 in gold metal for each one. This was not a problem, and, as illogical as it may seem at first glance, the system worked well. Half eagles were made in record numbers in the 1820s but were used nearly entirely for export. At their destination in London, Paris, Hamburg, or other city, they would be valued based on their gold content, with the face value being irrelevant.
It was the practice of foreign countries to melt United States coins as they were received and convert them to their own coinage. Accordingly, half eagles reaching London would be melted down and made into British sovereigns. This arrangement was logical, as in that way the Bank of England as well as other entities owning such sovereigns would know exactly what they were worth at a given time. The alternative would have been to have had a wide variety of American and other coins on hand, all of different values—a confusing situation.
Very few United States half eagles minted in the 1820s escaped the melting pot, despite generous mintages. Today, these are among the rarest of the rare in numismatics. While half eagles were the main denomination for coinage and export, quarter eagles were also made, but in very limited numbers—just a few thousand each year. These were not made for export but were distributed domestically, at a premium to exchange brokers and also in the pay envelopes of certain government officials. Senator Thomas Hart Benton, nicknamed “Old Bullion,” demanded his stipend in gold coins.
In the meantime, coinage of the largest federal silver coins currently being made, the half dollars of the design we know today as the Capped Bust type, reached record numbers. These coins saw duty both in circulation and as bank reserves. Although there were exceptions, at most times and in most areas they were readily exchangeable at par with the notes from sound banks. Half eagles could be obtained, but only by paying a premium for them at a broker or exchange office.
On July 4, 1829, the cornerstone for a new Mint building was laid. Those in attendance were able to acquire souvenir silver half dimes, which Mint personnel had been striking since the wee hours of that morning—the first pieces of this denomination made since 1805.
On the same day, Niles’ Weekly Register included this account:
Plenty of Gold! Since our last notice of the mines in North Carolina, we met with the following in the Raleigh Register: “We are informed that a gold mine has been recently discovered in Davidson County containing a vein of the precious metal, eighty feet in width. This is the largest vein ever heard of either in this or any other country. They generally vary in width from two to five feet.
More gold. The Yorkville Pioneer (South Carolina) of June 6 says:
It is with much pleasure we state, that a company of gentlemen of this district have commenced the gold mining business with every prospect of success. A few days since we were shown a piece of gold, (about six grains,) collected from about two quarts of pulverized rock, which was found in their mines in this district. We do not deem it improper to remark, that a gentleman of this place has discovered a gold mine on his plantation, situated about a mile from this village, which, from every appearance, promises to be very productive.
From various indications throughout our district, as well as the spirit which animates our citizens on the subject, we should not be surprised, if, in a few years, York would become as celebrated for gold mining as Mecklenburgh County, North Carolina. There are still, however, wanting men possessing not only the same capital but the same enterprise of those gentlemen first alluded to, in order that the business may be successfully pursued.
Until this time, there had been very little gold produced within the boundaries of the United States. Most deposits at the Mint consisted of bullion obtained elsewhere and foreign coins. The discoveries of native ore in North Carolina and finds in Georgia would change that dramatically.
Changes of the 1830s
In 1830, Templeton Reid, a gunsmith and mechanic in Milledgeville, Georgia, commenced the minting of gold coins for his own account, receiving metal from miners. He soon relocated to Gainesville in the same state, to be closer to the source. That summer he struck $2.50, $5, and $10 coins (Fig. 12), and, in the absence of refining and assaying equipment, he reckoned their value by weight. A local individual styling himself as “No Assayer” reported that such pieces when tested fell short of face value by about seven cents—seemingly not a large amount, but it indicated that Reid’s pieces were not fully worth the value stamped on them. They soon fell out of favor, and Reid left the business.
Fig. 12: United States: Georgia. AV 10 dollars, privately minted by Templeton Reid, 1830. 28 mm.
In Rutherfordton, North Carolina, German immigrant Christopher Bechtler and his family set up an assay, refining, and coining business in their home, and commenced to strike coins in $1, $2.50, and $5 denominations (Figs. 13-14). These were of full weight and circulated readily. Bechtler’s profit was made by charging a fee to depositors. Under the direction of his son August, the minting business continued until 1852.
Fig. 13. United States: North Carolina. AV 1 dollar, privately minted by the Bechter family in Rutherfordton, using metal from the region, 1840. Breen 7761. (ANS 1934.146.51, purchase) 16 mm.
Fig. 14. United States: North Carolina. AV 1 dollar, privately minted by the Bechter family in Rutherfordton, using metal from the region, 1842. Breen 7764. (ANS 1864.40.1, gift of F. H. Norton) 16 mm.
The early 1830s saw great prosperity in America, fueled by the building of railroads, speculation in western lands (today’s Midwest), and a robust manufacturing climate. Demand for exports rose, and the production of half eagles averaged over 100,000 pieces per year, with gold from Georgia and North Carolina making up much of the bullion. As it still cost more than face value to make them, they were not seen in domestic circulation.
In January 1833, the second Philadelphia Mint opened for business, in premises that were much larger and with improved equipment. This decade would see vast improvements in die preparation and minting techniques and the introduction of steam power.
The Coinage Act of June 28, 1834, reduced the weight of gold coins, thus enabling them to circulate once again. Implementation of the act was on August 1, 1834. Interestingly, Christopher Bechtler modified his design of the $5 gold coin to reflect the legislation and also modified the weights of the denominations.
As a reflection on the earlier United States gold coinage from 1795 onward, it was estimated by the secretary of the Treasury that by June 1834 there was less than $1 million worth of federal gold coins still in America. (By way of comparison, this is less than the face value of $5 gold coins struck in 1820 alone.) All of the others had been exported or melted.
To later generations, the few surviving gold coins of the 1795-1834 era became numismatic treasures. Today, all are appreciated for their history and rarity. The new book by Harry W. Bass Jr. (posthumously) and John Dannreuther, Early U.S. Gold Coin Varieties, 1795-1834, is the definitive study of the series.
The Act of June 28, 1834, achieved its purpose, and by the autumn of that year, large quantities of reduced-weight quarter eagles and half eagles were in circulation, mostly in banks and not in general commerce. These were of a new design called the Classic Head by numismatists. In 1838, the first three branch mints opened, at New Orleans, Dahlonega (Georgia), and Charlotte (North Carolina). From late 1834 until the Civil War in 1861, gold and silver coins circulated at par in commerce, along with paper money issued by over one thousand banks. By that year, foreign gold and silver coins were no longer legal tender. The American monetary system had reached the objective envisioned by the drafters of the Mint Act of April 2, 1792. It was a long time coming.
Epilogue: This stability ended in early 1862, when the uncertainty of the outcome of the war prompted extensive hoarding, which caused gold and silver coins to disappear entirely from circulation.
Fig. 15. Display case from the American Museum of Natural History exhibit featuring coins from the American Numismatic Society (Dennis Finnin).