Why are U.S. Early Gold from the 1820s and early ‘30s So Rare?
Since I have opened up my collecting horizons to British coins, I have gotten some new insights into why of the monetary problems existed in America. For example, the American colonists complained that England would not provide them with coins that they could use in the domestic economy. Oddly enough, there was a huge coin shortage in England also because their system was badly in need of reform.
One of the other problems that the United States had was that so much of its gold coinage was exported and melted from 1795 to August 1834. This problem became acute in the 1820s and ‘30s when virtually entire mintages of U.S. gold coins were exported and destroyed. One of the reasons was the gold content of coins that I call “5 dollar-ish” in size.
The U.S. half eagle or $5 gold coin contained .2829 ounces of gold. The British guinea, which was worth 21 shillings, contained .2646 ounces of gold. This provided an incentive to export the American coin abroad. Yet, a fair number of early U.S. gold coins, minted from 1795 until 18-teens remained in the U.S. Some of these coins were undoubtedly saved by wealthy Americans.
A 1795 U.S. half eagle
A 1798 "spade guinea"
Starting in 1817, the British reformed their coinage. Part of that reform reduced the weight of the guinea sized coin .2546 to .2354 ounces of gold. The new coin was called the sovereign which had a value of 20 shillings. Since the weight of the U.S. coin remained at .2829 of an ounce, the incentive to export and melt it became even greater.
An 1817 British Gold Sovereign
The result was that the flow of U.S. gold coins out of the country became a flood. Coins like this 1834 "old tenor gold" $5 became rarities despite that fact that over 50 thousand pieces were minted.
In 1834, Congress finally addressed the problem as part of President Andrew Jackson's "hard money" monetary reform. The weight of the $5 gold coin was reduced to ,2651 of an ounce of gold which was much closer to the weight of the British gold piece. Therefore for flow of gold out of the United States receded to normal levels, and much more of the "Classic Head" gold coin mintage survived.