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Gold $3 never fit in American coinage

 The gold $3 struck at the mint in Dahlonega in 1854 has long been known as a very rare coin. (Image courtesty Stack’s Bowers)

The gold $3 struck at the mint in Dahlonega in 1854 has long been known as a very rare coin. (Image courtesty Stack’s Bowers)

With an increasing supply of gold in the United States during the 1830s, President Andrew Jackson sought ways to put more gold and silver coins into the hands of the average citizen. In April 1836, as part of this agenda, a report was made to the House of Representatives suggesting additional gold coins, to be valued at one, two, and three dollars.

As a result of this report, Treasury Secretary Levi Woodbury, acting on behalf of the President, asked Mint Director Robert M. Patterson to have prepared a one dollar gold coin for a start. Such patterns were made but Dr. Patterson persuaded the government that only third-rate countries struck such small gold coins and the idea died.

For some years after 1836 little was heard of new denominations for the gold coinage but the California Gold Rush of 1848 caused many changes to be made in the monetary system. There was perhaps none stranger than the $3 gold piece introduced in 1854.

The massive gold coinage following the Gold Rush of 1848-1849 caused silver coins to be undervalued, and as in the 1960s when silver rose in price, speculators bought up all of them that they could find. This outflow of silver to Europe in the early 1850s created great harm throughout the country and complaints regarding the shortage of silver coins were soon made to Congress from virtually every quarter. In 1851, Congress took the plunge by introducing a debased silver three-cent piece, the trime.

Seeing that the trime stayed in circulation, Congress turned its attention to the rest of the silver coinage and also reduced the weight of the dime, quarter and half dollar. The subsidiary silver coinage law, passed on Feb. 21, 1853, contained a joker little noticed at the time: Section 7 decreed a $3 gold coin.

It appears that the official reasoning for this odd denomination was the three-cent postal rate adopted in 1851. This rationale is nonsense and fooled very few people, then or now. It is difficult to believe that any citizen would go to the trouble to obtain a $3 gold piece (well over a day’s pay) just to buy 100 postage stamps. Even three cents was a significant sum in those days and virtually no one, outside of perhaps a few businesses, had any use for more than a small number of stamps on hand.

The real reason appears to be nothing more than a desire of the gold interests to have a new gold coin and therefore create another destination for their bullion. The more gold coins that were used in the marketplaces, the more gold that could be profitably mined.

 Chief Engraver James B. Longacre designed the gold $3.

Chief Engraver James B. Longacre designed the gold $3.

Chief Engraver James B. Longacre was given the job of designing the new coin. He had a virtually free hand, though within certain prescribed limits: the obverse had to bear a head of Liberty and the reverse a wreath enclosing the denomination. Within a short time he had produced several sketches.

Mint officials and Treasury Secretary James Guthrie made the final choice and Longacre was directed to prepare the necessary hubs and dies. There is general agreement at present, and probably in 1854 as well, that the chief engraver had produced a very good design.

It is of course true that this new Liberty head, with feathered tiara, was merely a revised version of that which had already appeared on the $20 gold piece (double eagle) but nevertheless the effect is outstanding. It has been dubbed the “Indian Princess” design with good reason. The reverse bears a composite wreath composed of corn, wheat, cotton and tobacco enclosing the date and denomination.

 In 1855, the word DOLLARS on the reverse was made larger. (Stack’s Bowers image)

In 1855, the word DOLLARS on the reverse was made larger. (Stack’s Bowers image)

Longacre normally worked rather slowly and the winter of 1853-1854 was to be no exception. It was not until April 1854 that the first dies were ready and at the end of the month the first trial strikes were made, to be followed by a small number of proof coins early in May.

Mint technicians made the decision to go for a relatively broad planchet. When compared to the quarter eagle ($2.50 gold) the $3 gold is much wider and thinner than would be expected. (The expanded diameter found on the $3 gold coin was perhaps the direct inspiration for a similar change to the gold dollar in the latter part of 1854.)

Regular coinage for the $3 gold piece began on May 8, 1854, and continued strongly for some weeks. By early in June most of the year’s coinage had been struck, but there was a small mintage of about 20,000 pieces in November. Overall, the 1854 Philadelphia issue is the third most common $3 gold coin and is valued in the monthly price guide appearing in Numismatic News at $1,000 in XF-40. (The largest mintage was in 1854, but many were later melted or exported during the Civil War.)

Quotations are regularly seen in the Numismatic News Coin Market price guide and elsewhere for specimens down to F-12 condition but it should be noted that few people collect U.S. gold coinage, and especially the $3 piece, in this lower grade unless the coin is an extreme rarity.

Dies were sent to the branch mints, but only New Orleans and Dahlonega saw fit to coin the new denomination. Charlotte did not do so, no doubt realizing that demand would be very slight. Dahlonega struck a mere 1,120 pieces. The 1854-D $3 gold is a classic rarity and one estimate has been made that only around two dozen pieces are known. It is estimated in price guides at about $22,000 in XF-40. It is very rare in uncirculated condition.

New Orleans also coined this denomination in 1854 but the value of $3,000 in XF-40 reported by Numismatic News is fairly reasonable considering the mintage of 24,000. However, even that coinage is relatively large when later years are taken into consideration.

Towards the end of 1854 there were discussions about the reverse, centering on complaints from bankers and some members of the general public that the word DOLLARS on the reverse was much too small and ought to be made larger. Longacre executed this change in late 1854 and the first coinage of the modified reverse design came in February 1855.

The 1855 coinage was down considerably from that of 1854, showing that the novelty had worn off and very few people indeed were interested in using a new coin which did not fit accepted decimal calculations. In fact, with minor exceptions in the 1870s, the Philadelphia Mint rarely struck more than a few thousand such coins in any year after 1859.

For reasons that seem to defy logical explanation, the San Francisco Mint struck a considerable number of $3 gold coins between 1855 and 1860. It may simply be that Mint authorities insisted that depositors accept portions of their bullion return in different denominations. The $3 gold coin was close in value to the quarter eagle ($2.50 gold), making this coin rather pointless in the California economy.

Of the several dates of the $3 gold struck at San Francisco, only the 1856-S, with 34,500 struck, can be called relatively common. Price guides show this piece at $1,325 in XF-40, not all that far above the rare Philadelphia issues of the 1860s. Few people, however, collect this series by date and mintmark.

 Here is an example of the 1860-S $3 gold piece. (Image courtesy of Heritage)

Here is an example of the 1860-S $3 gold piece. (Image courtesy of Heritage)

The 2018 Red Rook reports that San Francisco struck 7,000 $3 gold coins in 1860, but 2,592 of these were lightweight and later (1869) melted. Unfortunately this entry is the result of an error made by a researcher in the early 1960s. What actually happened was that some lightweight $3 gold pieces were found in a California Subtreasury and sent to Philadelphia for melting. (The current Mega Red version of the Red Book, says that the 2,592 melted pieces had been struck in 1860 at Philadelphia but this entry is also wrong.)

With the beginning of the American Civil War in April 1861 gold coins were soon (December 1861) hoarded by an increasingly nervous population. Silver coins went not long afterwards (June 1862) and for most of the war there was little in the way of coins for the public in the Eastern part of the United States. Gold did remain in circulation on the West Coast, however, as that area was not affected by the massive issues of federal paper money.

It was general Philadelphia Mint practice in the 1860s to strike at least a token number of non-proof coins of every denomination each year though this system did fail on occasion. (The 1863 quarter eagle is a case in point.) The $3 gold coin was being used but little in the years immediately preceding the Civil War and there certainly was no use for it in the years after 1865 when no gold coin circulated. Some $3 pieces were released by the Mint to those wishing new coins for Christmas and birthdays, but, because gold had to be exchanged for gold, not all that much left in this manner.

Dies for the $3 gold coin were sent to San Francisco for the 1870 coinage but there is considerable confusion regarding the status of the one or two pieces struck. Officially only one piece was struck – to be placed in the cornerstone of the new Mint building – but the 1911 Woodin sale contained an 1870-S $3 piece along with a note indicating that it was a duplicate.

Some numismatists have questioned whether the cornerstone ever contained the 1870-S $3 gold coin, but almost certainly the proper specimen was put in the correct place. The duplicate piece wound up in the Eliasberg collection and was later sold in a Bowers & Ruddy sale of October 1982 for $625,000.

 This is an 1872 pattern $3 gold piece (Image courtesy of Stack’s Bowers)

This is an 1872 pattern $3 gold piece (Image courtesy of Stack’s Bowers)

In 1872 and 1873 Chief Engraver William Barber executed a series of pattern “Amazonian” gold coins of better than average quality. The $3 pattern appears only for 1872 and very few are known today. No other pattern coins of this denomination were made although off-metal strikes, sometimes classed as patterns, do exist for some dates.

While 1871 and 1872 Philadelphia coinages are the usual low numbers, 1873 was something quite different. There was an official mintage of only 25 proofs during the year, but since an estimated 75 or more pieces of this date are known, questions have naturally been raised about the correctness of the official Mint report.

 Here is a specimen of an 1873 gold $3 coin with an Open 3 in the date. (Stack’s Bowers image)

Here is a specimen of an 1873 gold $3 coin with an Open 3 in the date. (Stack’s Bowers image)

It is known that the 25 reported specimens were struck in February. At some unknown time a new reverse die (with the Open 3 in the date) was prepared and additional strikings made. However, it does not follow that the “restrike” 1873 $3 gold pieces were made in 1874 or later.

Normal practice in the period was to strike a fair number of extra proof coins for possible sale later in the year. Those pieces which were not sold to collectors could have been removed from the coiner’s vault by simply switching them for other $3 gold coins. The oft-seen remark that the 1873 $3 pieces were restruck in later years is therefore not true.

The 1873 $3 gold piece comes with an Open or Closed 3 in the date. This has been seen by some as evidence of restriking but in reality the Open 3 pieces were among those switched, and removed from the Mint, before the end of 1873.

In 1874 more than 40,000 $3 gold coins were struck, making this one of the most common dates, second only to the 1878. The increased mintage was not part of any Treasury program to put gold coins back into circulation but rather simply an odd choice when large numbers of underweight gold coins were being melted and recoined. Some of them did go into the marketplace, however, when gold re-entered daily use in late 1878.

Because the 1874 coins were kept on hand in the Treasury, collectors and others were able to obtain specimens well into the late 1880s. The value in XF-40, as a result, is a relatively low $1,000; most such coins are destined for type sets.

In 1875 and 1876 there were again proof-only strikings of the $3 gold piece. There are also too many 1875 coins in existence, when compared to the Mint report, and the situation is the same as for 1873, with excess proof coins being switched at year’s end for full-weight uncirculated pieces. There were no restrikes of the 1875 after that date and the 1876, also a proof-only issue, seems not to have more coins around than officially struck.

 The 1878 $3 gold coin is considered the most common issue of this denomination. (Image courtesy of Stack’s Bowers)

The 1878 $3 gold coin is considered the most common issue of this denomination. (Image courtesy of Stack’s Bowers)

The 1878 $3 gold piece (more than 80,000 were made) is the last heavy coinage for this denomination and was part of a program to introduce gold to the marketplace. It appears to be the most common date of the series and because of this catalogs tend to exaggerate the condition of the 1878s in order to sell them for a good price. In XF-40 the 1878 is valued at $1,000 and it is doubtful that specimens in a lesser grade would command much numismatic attention.

Although most “love tokens” were coins of small value – especially the dime – there was a certain demand for love tokens made from gold dollars and $3 gold pieces in the 1880s. Shaving off one side of a coin for engraving a message of love, or name of a sweetheart, is one of those fads that come and go in American life.

As a result, quite a few requests were made at the Philadelphia Mint for circulation-issue $3 coins, but there was a general refusal of all such applications. Mint officials suggested that proof coins be purchased instead and, indeed, quite a few were sold in this way to non-collectors.

When specie payments resumed in December 1878, after an absence of 17 years, the $3 coin did not re-enter circulation to any great extent. The 1880s saw the usual proofs for collectors (and the small number of business strikes) but the coin was simply of little use in the marketplace. In September 1890, recognizing that it did not circulate and was of little value to anyone except collectors, Congress abolished the denomination.

 The end of the $3 gold coin denomination came with the last coins struck in 1889. (Stack’s Bowers image)

The end of the $3 gold coin denomination came with the last coins struck in 1889. (Stack’s Bowers image)

After 1889, when the last of the $3 gold coins was struck, only the collector was left to appreciate the beauty and lore of a coin that had circulated but little in this country.

This article was originally printed in Numismatic News. >> Subscribe today.

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