by David Enders Tripp
From June 21 through July 3, the United States Mint exhibited at the Federal Reserve Bank of New York the 1933 Double Eagle; this fabled coin, for a week joined the remarkable numismatic treasures included in the American Numismatic Society’s Drachmas, Doubloons & Dollars display which opened January 16th to widespread acclaim.
But the history surrounding the 1933 Double Eagle has been largely misunderstood, and its legal status misinterpreted. This has been as a result of the relative inaccessibility of the relevant documentation and the repetition of more than 50 years of oral tradition, often taking on the aspects of an “urban myth” as the story was embellished or simply poorly reported. Only recently, as a result of a unique settlement in which the United States Government will allow private ownership of a single example, has the veil been lifted with the details finally coming into focus.
The five years of litigation concerning the example displayed at the Fed were in fact a boon for numismatists and historians alike, for the process of discovery brought to light a wealth of documentation which turned the traditional, oft-repeated, legend on its head. In fact prior to the recent legal actions, there was no story to tell: the 1933 Double Eagle was simply a coin which had somehow been blacklisted by the United States Government; it could not be legally owned-full stop. The “story” was more about its legal status, pro and con, than about its actual history.
It is a history which is rich in detail; populated by fascinating characters and accented by ironic twists and turns of fate which made a mundane twenty-dollar gold piece into one of the single most enigmatic and fascinating coins ever made.
A Brief History of the 1933 Double Eagle
In March 1933 the United States economy teetered precariously on the edge total collapse; the Great Depression had a stranglehold on America—it was a crisis of confidence which affected both the pocketbook and the psyche of the common man. It was onto this stage which Franklin Delano Roosevelt stepped, indeed it was this malaise which paved his road to the White House.
Gold has long been regarded by man as the one constant; the immutable magic metal that has been consistently valued for millennia. In 1933 that allure held, and there was little confidence in any currency but gold. Withdrawals from banks were acute, hoarding was rampant, while massive quantities were being bought by foreign governments and shipped abroad.
In one of his first acts as president, FDR on March 6, 1933 issued Presidential Proclamation 2039. It declared a Bank holiday, and effectively began to wean the United States off the gold standard. Hoarding of gold was forbidden, banks were prohibited from paying out gold, and the Secretary of the Treasury instructed Mint Director Robert J. Grant to send word to all the United States Mints that: “During the continuance of such bank holiday unless otherwise directed you are requested to instruct all mints and assay offices to pay out gold in any form only under license issued by the Secretary of the Treasury.”
Three days later, on March 9th, the Banking Holiday was extended at the pleasure of the president, while Congress met and ratified his actions. The ban on hoarding was taken seriously by the law abiding public and virtually overnight long lines formed as citizens turned their gold back to the government.
It was during this maelstrom of political activity that the first 1933 Double Eagles were struck—March 15, 1933; on that day 25,000 were delivered to the Cashier of the Mint from the Coiner. Over the next two months, as Presidential Proclamation followed Executive Order further refining the ban on gold ownership, an additional 420,500 Double Eagles were struck. None, however, could be paid out as no license to do so was ever issued by the Secretary of the Treasury—they were coins in name only.
A handful did leave the Mint legally however. On the date of each of the ten deliveries to the Cashier, two coins were sent to the Bureau of the Mint in Washington, D.C. for testing; all twenty of these coins were destroyed in the process. As well, in February 1934, 446 examples were submitted to the Annual Assay Commission; nine coins were selected for testing, and they too were destroyed—the remaining 437 were returned to the Cashier of the Philadelphia Mint. Finally on October 9, 1934 two specimens were sent to the Smithsonian Institution for inclusion in the National Coin Collection.
The remaining coins were all officially accounted for as being stored at the Mint in Philadelphia—the records are remarkably specific—until early February 1937 when the melting of the entire mintage began.
Ten days later in mid-February 1937, the first 1933 Double Eagles began to appear in the numismatic marketplace—it can be no coincidence.
Over the next two years an unknown quantity of 1933 Double Eagles entered into commerce—all very quietly, all emanating from the same source. No alarms were raised, as the government was under the impression that the entire, unissued, mintage had been accounted for—destroyed or deposited in the Smithsonian. In 1941, one example was advertised in The Numismatist, but it went unnoticed in official quarters. It was not until 1944, that a string of events—closely timed—catapulted the 1933 Double Eagle onto a “Most Wanted” list, and into the mainstream of numismatic consciousness.
Timing is Everything
On February 23, 1944, the legendary numismatic entrepreneur B. Max Mehl, sold a 1933 Double Eagle to King Farouk of Egypt for an unknown sum. Two days later a representative from the Egyptian Royal Legation brought the coin to the Treasury in Washington, D.C. to apply for an Export License. This was in strict adherence with the Gold Reserve Act of 1934; as King Farouk was such a passionate collector of coins it was probably not the first time his representatives had gone through this procedure.
The coin was physically sent to the Smithsonian, with a request from Mint Director Nellie Tayloe Ross to ascertain that the coin met with the criteria that “…it was of recognized special value to collectors…immediately prior to December 28, 1933 [and]…immediately prior to the issuance of the Executive order of April 5, 1933.” The coin was shown to Smithsonian Curator of History, Theodore Belote who, on the spot, confirmed that it met the requirements for a License to be issued.
Accordingly on February 29, 1944, Export License TGL-11-170 was issued. The coin was picked up from the Treasury on March 11th and ultimately made its way into the remarkable collection housed by the Egyptian King in Koubbeh Palace, Cairo.
A mere week later, March 18, 1944, in response to an inquiry from the Coin and Stamp writer for the New York Herald Tribune, Acting Mint Director Leland Howard sent a telegram to the Superintendent of the Philadelphia Mint asking if any 1933 Double Eagles were ever paid out. He asked for an immediate response as he had been told of an upcoming auction in New York.
The reply he received, that none had been paid out, started a chain reaction that has spanned more than a half century. On March 22, 1944, he informed the Head of the United States Secret Service of the illegal nature of the coin and two days later Special Agents arrived at the offices of Stack’s in New York, where they seized the 1933 Double Eagle which had been due to be sold the next day as part of the Colonel James Flanagan auction. It was only the first seizure. By the end of March 25th , the Secret Service already had three in hand. And the investigation widened.
In Washington, D.C., during the next week, the mistaken issuance of the Export License to King Farouk was discovered. Leland Howard, on March 30th wrote to the Chief of the Secret Service that Belote did not have the information as to whether or not the coins had been issued. Moreover, as the Smithsonian had two examples, “Mr. Belote may have been under the impression that they had been paid out…”
The U.S. Mint records were very detailed. This 1931 $20 piece was sent to the ANS.
And so, within a five week period, a 1933 Double Eagle was “legally” exported; the illegal nature of the coins’ existence was subsequently discovered; examples were seized, the mistakenly issued Export License was acknowledged and moves were begun to correct the error.
Treasury Secretary Woodin’s memo to the Mint Director, banning pay out of gold without specific license.
The Secret Service investigation, launched on March 22, 1944, not only began the seizures, but also meticulously traced the origin of the coins. The road led back to the Mint. The former Head Cashier was the only man who had access to the coins. He was also a man who had been fired from the Mint and served a year in prison in 1940 for exactly the same sort of embezzlement of uncurrent silver coins (a crime which under the original Mint Act of April 2, 1792 would have been punishable by death [Section 19]).
There was also a common thread outside the Mint. The admitted source of every known example was a jeweler and “old gold” dealer in Philadelphia. Although the Secret Service wished to prosecute, the statue of limitations had run out and the alleged malefactors were never tried. The coins however, remained stolen property, and were relentlessly pursued. By mid-1945 all but one of the known examples was in Government custody. Another, previously unknown, was voluntarily surrendered in 1952 (by Louis Eliasberg), leaving only the tenth coin outstanding—the Farouk coin in Egypt.
Sporadic attempts were made to recover the coin, but a World War, a tense situation in the Middle East, and an important ally took precedence over the return of a single coin. When, in 1952, Farouk was overthrown by a group of colonels led by Gamal Abdal Nasser, the Treasury again made an attempt to recover its property. This time the State Department acted on their behalf, and succeeded insofar as getting the coin withdrawn from the Sotheby’s auction of Farouk’s coin astonishing collection. But State failed to effect the return of the coin—it disappeared and into history it faded.
Forty-two years later a 1933 Double Eagle, was seized from an English coin dealer attempting to sell it in New York City by Secret Service agents. In the ensuing five-year legal battle over the coin, sworn depositions identified it as the one once belonging to King Farouk. It was this legal battle that opened the vaults of history and which has revealed a hitherto unknown chapter in American numismatics—all about an ordinary coin with an extraordinary story.