Experts challenged in

Uncle Sam and the Langbord family were busy in United States District Court, Philadelphia, Dec. 11 and 12 when competing motions for partial summary judgment were filed over the 10 – 1933 $20 gold pieces sent to the U.S. Mint for authentication, safekeeping and validation by Joan Langbord, the daughter of the late Israel Switt.

The coins were seized and the family is trying to get the rarities back.

In over 500 pages of paperwork, the government attacked the expert opinion of Q. David Bowers, who is the Langbord’s witness, and their counsel in turn claimed that David Tripp, the government’s expert, wasn’t qualified to opine on his life’s work experience.

Switt is the jeweler and gold dealer of the 1930s, whose pedigree is imprinted on every known 1933 double eagle that exited the mint. Langbord and her adult sons claim to have found 10 double eagles in a safety deposit box shortly after the Treasury Department and a private owner realized $7.59 million in the 2002 auctioning of the King Farouk specimen.

About two dozen 1933 double eagles are known to have existed; the government has seized nine of them, and up until the Farouk specimen was offered with Stephen Fenton, who got caught up in an FBI sting operation with the Farouk coin, none had successfully remained very long in the hands of any collectors.

The Mint always claimed that none of the coins was ever placed into circulation, and in the 1940s, vigorously sought to go after the 1933 $20 whenever the coin went public. L.G. Barnard had one seized in the mid 1940s; James A. Stack (no relation to the well-known coin firm had one seized in the early 1950s.

Both cases were litigated by collectors unsuccessfully, the Barnard case in Tennessee, the Stack case in the same U.S. District Court in New York where the government sued Fenton and coin dealer Jay Parrino after a sting operation brought criminal charges (later dismissed), seizure of the coin and a halt to a $1.5 million private sale.

In the late 1930s and early 1940s, a number of specimens were traded on the sly, often at relatively high prices. The beginning of the end came when one example of the 1933 $20, appeared as lot 1681 in the Col. John W. Flanagan sale sold by Stack’s March 25, 1944.

Flanagan had purchased the coin for his collection for $2,200. At around the same time, L.G. Barnard purchased a specimen from J.F. Bell. Stack’s publicized the sale, calling it “Excessively rare and in great demand.”

The Flanagan coin was seized by the Secret Service. At the time of its proposed sale, Stack’s claimed in the auction catalog to know of 8-10 pieces that had been sold privately.
Israel Switt, who had a place on Jewelers Row in Philadelphia, was in every single chain of each of the seized specimens. In her book, Double Eagle (2006), Allison Frankel suggests that all paths lead back and died in 1985.

A flashback about the one 1933 $20 that is presently unchallenged. Col. Gamal Abdul Nasser overthrew Egypt’s King Farouk in 1952 and sentenced him to exile. (He died in Italy in 1965 at 45).

Nasser’s government seized all of the king’s assets, and ordered that they be sold for the benefit of the people of Egypt. Included in the items seized: about 8,500 coins (comprising 2,798 lots).
One lot offered a complete set of double eagles, 1850-1933. John Jay Pittman, later a president of the American Numismatic Association, went to Egypt for the sale.

According to Polly Pittman, his daughter, the 1933 coin was removed from the lot at Pittman’s suggestion because of the problematic history that was apparent by 1954 – the government had, after all seized nine coins from private collectors and destroyed them. Pittman wanted to buy some of the coins, but not the problems associated with the 1933 $20.

Looking more in-depth at the current claims, Mrs. Langbord and her two adult sons argue that the government in essence stole 10 uncirculated 1933 $20 gold pieces from them. The government denies the charges. The Langbords filed suit Dec. 5, 2006, in United States District Court for the Eastern District of Pennsylvania, demanding the return of the coins or, in the alternative, unspecified damages.

In the 31-page complaint, and two-page summons, the Langbord family sets up its claim: it sent the several double eagles to the Mint to authenticate, only to have the feds declare them genuine and then announce that since they were government property, they would be retained, not returned.

In 2003, the suit alleges, Mrs. Langbord, now 78 years old, the daughter of Switt discovered the coins in a safety deposit box that had belonged to her parents. Langbord, acting through her lawyer, voluntarily notified the Mint of the extraordinary discovery and asked that it be authenticated.

Mint officials took possession, and then spent about nine months resolving jurisdictional issues with the Secret Service and examining the coins before concluding that they were genuine.
Like a case of deja vu – some would say a bad “penny” – the cast of characters that litigated the Farouk 1933 double eagle case over a period of six years is back again. Leading the seizure charge is the U.S. Mint general counsel Daniel Shaver; representing the Langbord family that claims ownership, is Barry Berke, who also represented Stephen Fenton during their multi-year battle with the Feds over the ownership of the King Farouk specimen of the 1933 Saint.

When the coins went in to the U.S. Mint for authentication with a lawyer’s letter asking for assistance; it took Dr. George Hunter, the Mint’s technological guru, months to examine them, but on Aug. 11, 2005, he reached his conclusion and the Mint reached theirs: the coins were genuine, but would not be returned. The claim: they are illegal to own.

Presently, the coins are at Fort Knox, Ky., where they are in the secure gold depositary facility.

In 1974, Hugo Ranta, then assistant general counsel of the Treasury Department, was asked by me in an interview if he believed that the government’s theory behind the 1933 $20 extended to these other coins, and that the government could seize them. He answered in the affirmative. His theory was that every coin had to be “monetized” or legally issued by the Mint.

When I put the question to Aubrey Bebee, who owned he 1913 Liberty Head nickel, and told him that the government thought it could seize the coinage, he said, “Let them just try!” Berke cites the 1913 nickel in his 2006 court papers.

It turns out that Ranta wrote a Dec. 23, 1953, memo to a Treasury official in which he termed it “politically inadvisable” to ask for the return of the 1933 $20 from Egypt. It was legally inadvisable, as well.

In early February 1937, the government papers suggest, Israel Switt acquired an unknown quantity of 1933 double eagles through purchase. By Feb. 15, 1937, Switt sold he first one to Philadelphia coin dealer James Macallister.

There are many intervening events, but one key one is March 30, 1944, when Secret Service Agents Harry Strang and George Drescher interview Israel Switt, who admits that at one time, he had possession of nine 1933 double eagles. The agents report that Switt told them that he had sold five to James Macallister; two to Ira Reed; two to Abe Kosoff – then all well-known dealers.
Switt professed no recollection of his source for the coins; but admitted he had been to the Philadelphia Mint frequently in capacity as a “gold dealer.” The fight begun in 2006 may well be whether or not the coins may be lawfully owned now – not, as the Mint claims, when they were first acquired.

A starting point in that analysis may well be the Coinage Act of 1965 which retroactively made the Trade dollar a legal tender and, in section 102, declared all United States coins, regardless of when coined or issued, were a legal tender. That includes the 1933 double eagle.

Treasury Department document number 3057, the annual report of the Director of the Mint for 1933, mentions double eagles in several places. On Page 6, the chart labeled “domestic coinage” recites that 445,500 [“total pieces”] were “executed” during fiscal year 1933. They are also included in “total coinage” for “pieces” as well as “value,”

In Treasury document 3066, the 1934 Mint report, Page 15, reports the results of the Assay Commission, which reports on “results of their examination of the 1933: which “reported the following results of their examination of the 1933 coinage:” “gold coin” includes both the double eagle and the eagle – a $10 and $20 gold piece.

In other words, the Mint treated both gold coins the same – as a legal tender.

The essence of legal tender is its ability to pass as currency without challenge, without examination as to date, mintmark, errors or otherwise – i.e., it has the generic composition of money that is fungible, and completely replaceable, one for the other.

The coinage of the United States is not a promise to pay (as is currency); rather, it simply is money. Congress took this precise position in 1982 when it revised the U.S. Code to make title 31 (coin and currency) positive law. H. Rep. No. 97-651, 97th Cong., 2nd sess. 148 (1982) (31 USC §5103) makes this clear.

All of this technical stuff becomes important when the government’s brief to the court is read; at its core is the rather startling notion that the 33.1mm diameter lump of gold metal, bearing statutory inscriptions, the design of Augustus Saint-Gaudens, a stated value of $20, and a claim that it is not a monetary instrument within the meaning of title 31 of the U.S. Code, section 5312(a)(3) – when those very words are defined as meaning “United States coins and currency.”

The government’s brief sets forth its position in its opening paragraph: “The government ... contends that the 1933 double eagles were not issued as coinage of the United States or otherwise released by the United States Mint through an authorized channel and therefore they remain the property of the United States – and are not the property of” Langbord.

They cite a 1947 case involving L.G. Barnard in Tennessee: “The government’s position is supported both factually and legally by United States v. Barnard, 72 F. Supp. 531 (W.D. Tenn. 1947), where the court considered another challenge to the ownership of a 1933 double eagle. That court concluded that the “decisive question’ to be decided was whether the 1933 double eagle had been ‘issued as money or currency of the United States, or whether the status of the same was that of a chattel, or an article of virtu.’”

The next sentence begins – the Mint claims: “And because the United States cannot be deprived of its property interests except through an act of Congress, and because employees of the government “who have no authority at all to dispose of Government property cannot by their conduct cause the Government to lose its valuable rights by their acquiescence, laches, or failure to act,” unless plaintiffs can prove that the 1933 double eagles were taken from the United States Mint under lawful authority, they belong to the United States.”

The flaw in the government’s theory today is that in 1947, as in 1934, private gold ownership was illegal. That changed on Dec. 31, 1974, when all of the language used in the Barnard opinion became history. The second flaw is that the Coinage Act of 1965 retroactively gave full legal-tender status to prior coinage issues of the Mint, of which the 1933 double eagle was one.
At trial, the government brief declares, the Langbords “intend to offer the testimony of coin dealer Q. David Bowers. They proceed to challenge his right to be declared an expert – forget his opinion – despite a listing of 49 separate titles in the Library of Congress catalog bearing his name.

“Bowers does not have an opinion about how the 1933 double eagles actually were taken from the United States Mint,” the government declares. “Rather, he offers unsupported speculation about how 1933 double eagles could have theoretically left the United States Mint.”

From this, the Mint moved “to exclude Bowers’ testimony on the grounds that his opinions, as expressed in his report ... are inadmissible because they are: (a) not relevant to any issue in this case because they do not address how the 1933 double eagles actually were taken from the United States Mint; (b) mere speculation that will not assist the trier of fact decide any issue relevant to this action; and [C] not based upon a reliable research methodology or reliable data or information.”

Bowers both prepared a report (in February 2008) and had his deposition taken (in October 2008) with hundreds of pages devoted to the government trying to pierce his arguments. To assist the court, the government created “Exhibit B” which summarizes what they claim are Bowers views in nine succinct paragraphs.

Summary of opinion of Q. David Bowers

1. “[I]t is abundantly clear that anyone interested in obtaining a 1933 $20 (or a 1933 $10) could have done so upon application either at the Philadelphia Mint or the Treasury Department.”
2. 1933 double eagles were available at face value directly from the cashier at the United States Mint or the Department of the Treasury.
3. “[N]umismatists in touch with the Philadelphia Mint, upon learning that 1933 $20 pieces had been minted, would have initially sought to obtain them at an early time, i.e., in March and April 1933.”
4. In 1933, there were several Treasury or Mint officials with an interest in rare coins “each of whom would have had access to the 1933 $20.”
5. Former Secretary of the Treasury Woodin “would, as a matter of course, have been able to provide one or more 1933 $20 pieces to anyone interested, simply by exchanging it for another $20,” and that it was “quite possible that Woodin could have obtained such a piece, and subsequently distributed that coin to a collector, friend or dignitary.”
6. “It is reasonable to assume that anytime in the 1930s when 1933 $20 coins were being stored at the Philadelphia Mint, the chief engraver, the superintendent, the cashier, and any other official or employee could have obtained [a 1933 double eagle] simply by exchanging another $20 for it.”
7. “That no records exist indicating that the 1933 double eagle was released is irrelevant, as there were many instances in which coins have been released, sometimes just a few, other times in quantity, and no records of release were kept.”
8. Mint records are not reliable.
9. “[A] visitor to the Philadelphia Mint in 1933 and for some time afterward would have been able to obtain a 1933 $20 for face value, simply by exchanging another $20 gold piece for it.”

Old scores settle hard, and those with the watchdog of gold coins and bullion, the Office of Domestic Gold and Silver Operations, is an important component. This is the office that ultimately licensed King Farouk’s coin for export and regularly licensed coins for import. Its head, was Dr. Leland Howard, who is skewered by Bowers, in his recent (2004) A Guidebook of Double Eagle Gold Coins.

Bowers calls Howard. “A curmudgeon, and probably a grafter... [who] played the simultaneous roles of pooh-bah, stuffed shirt, high muckety-muck and dictator to anyone who wanted to import gold coins.” He clearly found that Doc Howard had a vested interest in the mess surrounding the 1933 double eagle controversy.

The government returns the favor, and attacks Bowers in the brief on a variety of grounds, including his knowledge of the Mint.

“In his Report, speculating about alternative possibilities for how the 1933 double eagles left the Mint, Bowers ignores completely the extensive documentary record in this case detailing the known history of the 1933 double eagles from manufacture to melting,” the government charges.

“While Bowers includes in his Report a few references to the Annual Reports of the Director the Mint, he testified that his opinion is based upon an ‘assumption’ that Mint annual reports ‘didn’t reflect what was really going on” at the Mint.’”

Quoting from his deposition, the Mint’s brief says that “Bowers nevertheless admitted at his deposition that his research and investigation constituted virtually no independent research and that he did not conduct research in various locations where he believed there may have been unearthed documents about the United States Mint’s operations in the 1930s and possibly the 1933 double eagles.”

They pound a number of inconsistencies, and in the end in a three-line conclusion, say that “Q. David Bowers’ opinions are irrelevant speculation unsupported by any reliable documentary evidence. For this reason, as set forth above, the government respectfully requests that the Court exclude his testimony”

Not to be outdone, the Langbords’ attorney, Barry Berke, deposed David Tripp all day this past Oct. 8 and created a 531-page deposition transcript. He then turned in a 322-page “brief” to the court that says “touché”, and then runs through the government’s arguments to show they were full of holes as if they were Swiss cheese. Some examples of the key points:

• Tripp is not qualified to present expert historical testimony.

• Tripp applies an unreliable methodology to reach an opinion.

• Tripp applies no specialized knowledge in analyzing the historical documents in this case.

• His expert testimony would accordingly provide no assistance to the trier of fact.

• Tripp also brings no specialized knowledge to bear when analyzing the Mint’s bookkeeping ledgers.
Berke contrasts the view expressed by Tripp in his book, Illegal Tender – about the 1933 $20 – what Langbord attorneys term “the sensible position that “[n]o one except those who took part in each scene of each act of the drama will ever know for sure what happened.”
This changed, Berke implies, since Tripp’s retention by the government as a testifying expert. Tripp “estimates that he has been paid between $100,000 to $150,000 for his efforts, an amount that constituted his principle source of income during the relevant time period.”
Berke cites at least five reasons why the court should exclude Tripp’s testimony not only from trial, but in consideration of the pending motion.

• By Tripp’s own admission, his report makes “the argument ... that I was hired to do.”

• The implication: the government bought and paid for a pre-ordained conclusion: “that Mint records ‘establish positively that the Langbords’ hoard of 10 1933 double eagles did not leave the Mint through authorized channels.’”

• Tripp “simply is not “qualified as an expert” to opine on the historical question of how the 1933 double eagles at issue here may have left the Mint in the 1930s. He has no training as an historian, has not produced any scholarly historical writings, and does not teach history or historical method.

• Apart from his involvement in writing about 1933 double eagles, he has no background, training or expertise in the specific kinds of matters on which he offers purported expert testimony.

• Tripp repeatedly fails to acknowledge or dismisses without justification substantial evidence that contradicts his unequivocal conclusion that no 1933 double eagles could have left the Mint through authorized channels.
At last, the specifics are revealed to the court. “This substantial countervailing evidence includes a telegram from the Assistant Treasury Secretary and letters written by Mint officials, all of which unequivocally state that it continued to be permissible, even after certain Presidential proclamations in March 1933, to exchange gold coins for an equivalent amount of gold received (such as scrap); as well as unassailable evidence that this practice continued.”

• Berke claims that Tripp’s conceded “cherry-picking” of only that evidence that is “in support of the government’s argument” renders his proposed testimony and conclusions unreliable and therefore inadmissible.

• “By his own admission, he presents a one-sided, advocacy-based review of almost entirely inadmissible documents and Secret Service investigative files.

• Tripp’s opinion concludes that, as a legal matter, a gold-for-gold exchange was illegal because (he states) “the series of Proclamations, regulations and orders that began on March 6, 1933 ... precluded the possibility of any authorized release of 1933 double eagles.” This is a question of law for the court to decide, not a non-expert (not-lawyer).
This complicated matter continues to evoke controversy – probably even after the court decides. No doubt, more paperwork follows.