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Gold gives $20 type set high value

Imagine the United States having so much gold it didn’t know what to do with it. That, with a little forgivable exaggeration, was the situation back when the California Gold Rush was in full swing and the legendary ’49ers were taking great riches from the streams and river beds of that soon-to-be-state.

There was nothing quite like the Gold Rush. Thousands all over the United States stopped whatever they were doing, sold their possessions and headed West in hopes of making a quick fortune.

The harbor in San Francisco was a forest of masts as ships abandoned by their crews sat at anchor.

Congress was called upon to utilize more gold in American coinage, thereby putting California’s output into convenient forms. The $1 gold coin began in 1849 and the gold U.S. $20 was just a step behind.

Neither denomination was envisioned in 1792 when Congress adopted its blueprint for American coinage.

Had it not been for the discovery of gold in large amounts in California there almost certainly would never have been a double eagle. Modern type collectors benefit from this 19th century mining bonanza.

At the time of that gold discovery in 1848, the largest gold coin of the United States was the $10, or eagle as it was called. Even it was not in circulation in the numbers that might be expected in a rapidly growing nation like the United States.

The branch mints in Charlotte, N.C., and Dahlonega, Ga., were dedicated to making only gold coins from 1838 on yet they never saw a need for a $10 and certainly no double eagle. The $10 gold coins that had been produced since mintages were resumed in the late 1830s after having been suspended back in 1804 primarily sat in vaults as reserves as for much of the nation a $10 gold coin was a lot of money.

The discovery of gold in California changed everything. First, there was no mint in the area, so that meant much of the gold was being shipped east to Philadelphia, New Orleans and even the Charlotte and Dahlonega facilities. The immediate proposal was to approve a gold dollar, which actually had been produced privately by the Bechtler family mint in the South for years, and a gold double eagle. It was probably not a case where anyone felt that double eagles were badly needed in circulation, but using up gold was a priority so the two denominations were approved readily, although other proposals for gold $25, $50 and $100 coins were not approved.

The Mint was quicker in producing $1 gold coins than the $20s. There only is an 1849 double eagle in the Smithsonian Institution, but for collecting purposes the first type of double eagles was produced from 1850-1866 using the James B. Longacre Coronet Head design somewhat similar to the gold dollar while the reverse had an eagle flanked by scrolls with stars and rays above.

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Availability of gold double eagles is determined by a variety of factors. For the double eagles of this first type, there are no coins saved at the time of issue by collectors. Actually, there may be a couple, but the simple fact is that with its high denomination the gold double eagle was not collected by date and mint basically for all of the 1800s.

In the 1890s Augustus Heaton observed that he knew of no collectors of $5, $10 and $20 gold coins by date and mint. In the early 1900s Q. David Bowers has been able to point to perhaps half a dozen collectors, but realistically other than a couple wealthy collectors, if you really want to see any numbers of double eagle collectors you have to look well into the 1900s long after the final double eagle was produced. As a result, there are very few coins in Mint State that can really be thought to have come from collectors during the period when double eagles were first produced.

The situation applied to both Mint State and circulated coins so the question becomes how did any numbers survive to the present day? The fact is there were a variety of factors centering around the distribution patterns at the time.

In the 1850s and early 1860s there were large mintages, including the 2,976,453 total of the 1861. Moreover, gold coins at the time circulated everywhere. In the East they were not used widely, but they were available, while they were common in commerce in the West. Now commerce at the level of $20 gold pieces was not housewives paying for goods with them in the general store. They were used by banks to settle balances between themselves. They were used to make large payments one business to another.

Also, because the United States was a net importer of goods, the gold $20 was sent abroad to pay for the country’s many purchases.
It is worth noting that significant numbers were exported largely to London, which was the world gold center for trading at the time, but the rest of Europe and South America received these coins as well.

Things changed on Dec. 28, 1861, when many Eastern banks stopped paying out gold at par and that meant that for all practical purposes there were no gold coins in circulation at face value until 1878 in the East. That made collecting or saving examples just that much more difficult.

There have been two major sources of the first type. There have been treasure salvaged coins in Mint State emerging from wrecks such as the Yankee Blade, which had the 1854-S; the 1856-S and especially the 1857-S from the S.S. Central America; and the 1864-S and 1865-S were found on the S.S. Brother Jonathan.

In the case of circulated examples which start at about $1,850 for a VF-20 as opposed to $3,950 for the most available 1861 MS-60, the supply has primarily come from European bank vaults where they were shipped over a century ago and which returned home when American dealers starting around the late 1940s began traveling to Europe in an attempt to find better U.S. gold coins still sitting in the vaults of places like Switzerland and France. As a result of those efforts, examples in VF-20 and XF-40 are relatively available today.

If we ignore the rare Paquet reverse type of 1861, which most collectors are forced to do because the 1861-S started about $20,000 while the Philadelphia shows only two known to exist, the next type of double eagle began in 1866.

This new type had IN GOD WE TRUST added to the reverse. This type would be produced from 1866-1876 at Philadelphia, San Francisco and Carson City, which began production in 1870. Once again we have a situation where there was virtually no saving by the collectors and dealers of the time.

Most Philadelphia coins of the period were exported and melted and the 1867 is thought to be the first Philadelphia double eagle ever found in any numbers in Mint State in overseas hoards. For the collector today, any Mint State example of the second major type of double eagle is difficult  with the least expensive MS-60 being about $2,350 while a VF-20 of an available date might be possible for $1,850.

Starting in 1877 the next type would be introduced with the TWENTY D. denomination changed to “TWENTY DOLLARS” below the eagle on the reverse.

In fact, there were other slight alterations with the head of Liberty being repositioned while the neck truncation is higher. This type had a better chance for circulation as beginning on Dec. 17, 1878,  for the first time since the 1860s gold could circulate at par. The possibility was there but the circulation of double eagles was still primarily west of the Mississippi with California being the center. The bulk of the double eagles in the rest of the country were sitting in banks being used as reserves for paper issues like National Bank Notes.

Today double eagles of the type are readily available with a VF-20 reflecting gold prices probably commanding roughly $1,750 at the moment. In the case of an MS-60 the current listing is $1,850 while an MS-65 in the case of the very common 1903 and a few other readily available dates is $5,500. which is actually quite cheap when you think about the underlying value of the gold in it.

The story behind the availability of the dates is an international one. It must be remembered there were still basically no collectors saving Mint State double eagles as they were released. The total supply saved by collectors and dealers at the time would probably not be enough to cover one day’s trading in the active market today, but there was another huge potential supply.

The surviving supply situation begins improving in earnest with the 1880s issues at which time large numbers of gold coins and especially the highest denomination double eagle were shipped abroad. Realistically it is hard to pin down precisely how much gold was exported to European and other banks, but during the period from the end of May in 1888 to July of 1889 it was reported as over $61 million in gold bars and coins.

In fiscal year 1892, it was almost $38 million and by 1895 the United States quite literally almost ran out of gold as reserves were not adequate to cover the notes outstanding requiring gold backing.

The double eagles as well as large numbers of other denominations ended up in bank vaults in various countries. That was to prove critical to their numismatic future as sitting in bank vaults outside the country when the Gold Recall Order of 1933 was issued saved them. Nevertheless, melting took out well over 30 percent of all the double eagles ever produced.

Starting in the late 1940s and still continuing to a small degree to the present day American dealers began to travel to Europe to cherry-pick the coins in the vaults. Initially Carson City and better dates were purchased and brought home but ultimately there would be large quantities of relatively common dates, but in Mint State.

In most cases the Mint State dates were after 1880, having probably gone literally from the Mint to a ship for export to a bank. The travel and indifferent handling resulted in most being lower Mint State grades, but the fact remains that even today there are literally thousands of Mint State examples of a date like the 1903 and others. While not as great in terms of numbers, it was probably every bit as important to the supply today as the $1,000 bags of silver dollars paid out by the Treasury over the years up to 1964. It is those European supplies that are the backbone of our double eagle supplies today.

Back to our story. The next design in the type set came to us courtesy of President Theodore Roosevelt.

Roosevelt had come to office after the assassination of William McKinley in 1901 and after winning his own four-year term in 1904 he turned his attention to matters of interest to him and one of those matters were the coin designs of the United States, which he did not like. He recruited the most famous artist of the day, Augustus Saint-Gaudens and the two began a project to make new coin designs. Roosevelt wanted artistic coins, coins worthy of civilization and of a splendor similar to the coins of the ancient Greeks.

Of course ancient Greeks didn’t have to contend with modern bankers.

The result of the efforts were Saint-Gaudens double eagles and Indian Head gold eagles. Both designs, however, had problems with the double eagle especially having started out with a relief that was far too high to be used as a modern coin. In fact the first striking attempt saw the die crack after perhaps 22 coins were produced. Clearly the design had to be lowered and during that process the artist died. Work continued resulting in a 1907 coin with the date expressed in Roman numerals. A total of 12,367 of what are called the high relief Saint-Gaudens double eagle were produced. The numbers were not higher because the coins were still impossible to use as regular circulating coins. It took three strikes simply to bring up the design. The coins came with either a partial wire rim or with a flat rim with the wire rim being the more numerous by about a two-to-one margin.

The Roman numeral 1907 with high relief was different from the ultra high relief in that it reached circulation and was almost immediately considered a better date, which was natural based on its mintage. Even though there were very few actual collectors of double eagles at the time, many wanted the high relief Saint-Gaudens double eagle and that saw its price rise to $30, although by the 1920s the novelty was gone and they tended to bring only a dollar or two over their $20 face value.

Some were ultimately turned in and melted in the gold recall, but the supply today is estimated at perhaps 5,000 coins. The demand, however, is very high and that results in a VF-20 price of $7,650 while an MS-60 is $14,000 with an MS-65 at $45,000 making it easily the most expensive double eagle type in most grades although probably the most popular by a wide margin.

The minting problems alone might have sunk the coin eventually as the President would have turned his attention away from the Mint, but it was the fact the high relief coin would not stack properly, slowing down daily banking transactions, that helped turn the weight of opinion against it.

Artistic pretensions are all well and good, but when business suffers, for it, that is simply too much.

The high relief double eagle was not possible to produce at the speed required so the relief had to be lower another time and in the process the Roman numeral date was replaced by a regular date with Arabic numerals that we all use in everyday life.

But even with relief corrected. There was another problem. Something was missing. That was IN GOD WE TRUST  as Roosevelt’s reading of the Scriptures saw him firm in his belief that God should not be associated with money of any government.

For 1907 and some of the lower and now standard relief 1908 production the Saint-Gaudens double eagle would have no motto. The three without the motto were the lower relief 1907 as well as 1908 and 1908-D. The three have relatively similar prices of around $1,750 in VF-20 but in Mint State the 1908 thanks to the Wells Fargo Hoard which involved something over 19,000 examples in Mint State is by far the most available at prices of $$1,800 in MS-60 and $2,525 in MS-65.

In fact, the Wells Fargo Hoard has a well-deserved reputation because of the quality of the coins involved. In his book, A Guide Book of Double Eagle Gold Coins Q. David Bowers has a statement from Ron Gillio who purchased the hoard and in his statement Gillio states that the hoard included over 200 coins in MS-68, over 1,700 in MS-67 and over 6,000 in MS-66 with the rest being MS-65 or below.

With such grades being uncommon for any date, it was truly a remarkable hoard when it comes to the no motto 1908 and because the no motto 1908 is one of only three possible dates of the type, it proved to be an extremely important source of supply for type collectors. The other two dates of the type are available thanks in part to European hoards, but certainly not in the numbers or quality found in the Wells Fargo Hoard.

The uproar over the missing IN GOD WE TRUST saw the motto restored in 1908, creating the final type of Saint-Gaudens double eagle. Interestingly, there was a design change not generally recognized as the coins from 1908 to 1911 have 46 obverse stars  while those from 1912 to 1933 have 48 reflecting the addition of the states of New Mexico and Arizona with the two stars being added beyond the 46th star overlapping the oak leaves.

The type is readily available with a VF-20 being around $1,750 while an MS-60 is $1,800 and up and an MS-65 would begin at about $2,950. This applies to both the 46-star design and the 48-star design.

It is a case where prices can vary widely from date to date as this type was either sent to Europe and stored or melted. There were certainly some in circulation, but realistically these later Saint-Gaudens double eagles generally sat in bank vaults somewhere. The big question was where the bank vaults were located. If they were in the United States, the coins were destroyed as a result of the Gold Recall Order of 1933, but if the vault was in France, Switzerland or some other country, the coin survived and was returned to the United States in later years.

For the collector today the double eagle is perhaps the most impressive of all U.S. coins. At least in circulated grades, all six major types, seven if you are counting stars, are available although the high relief 1907 is more costly than the others. A complete type set is also possible in Mint State but there it becomes much tougher as especially the early Coronet Head types are not routinely available in significant numbers. What approach you chose a double eagle type set is a lot of fun to assemble and even more fun to show off and to explain.

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