Why are early gold coins (pre-1840) so plentiful?

RYK

Inspired by a conversation between Blade (Tom) and myself...

Today, I purchased a beautiful 1803 $5 NGC-55. Blade just recently purchased a stunning 1799 $10 NGC-61. We have reviewed the certified population numbers for each coin, and these would indicate that there are at least 550 of the $5 and 800 of the $10 extant. When you consider that the coins are 200+ years old and that two generations later, about the same number of 1858-O $20's were struck and there are about 200 extant, and later in 1865, there were ten times as many Philadelphia $20's struck, but only 600-800 extant. I can go on and on with examples, especially with branch mint examples from the southern mints.

Obviously, more than age goes into the survivorship percentages for a certain issue. But why are these early gold coins so plentiful?

Gratuitous image of my new coin (from Doug Winter):

Blade

TTT - Thanks RYK. I am real curious about this also. $10 was a big chunk of change in 1799. What, a full day's wages was maybe 50c? It's surprising to think 800 would be in the Pops for PCGS and NGC. I am sure some are dups, but there are also other unslabbed and problem coins in ANACS holders out there. But I have always heard that early gold was shipped to Europe and heavily melted since the gold bullion value was greater than the denomination. I assume banks would engage in this practice so only collectors or horders would save the coins. Can there really be 1,000 1799 $10 Eagles extant?

ohbaby

Not hard to imagine, assuming that was a large sum back then and probably did not circulate much. Sort of like a $100 or $500 bill today.

RYK

I emailed Doug Winter this link this evening, and this was his response:

Early gold coins were primarily storehouses of value that large depositors
of gold at the Mint (i.e. banks) had produced for themselves and then kept
on hand. They did not circulate as extensively as post-1834 issues (the
beginning of the era in which enough gold had been found that its value
changed relative to silver) and the original mintage figures were, with the
exception of quarter eagles, surprisingly high. Due to a combination of
these factors, many early gold coins (especially those struck 1800-1812) are
more common than generally believed. The 1815-1833 issues were extensively
melted as soon as gold bullion shot up in 1834 and these coins became worth
more than face value.

I also have a personal hunch that these "old gold" coins were hoarded at one
time and were probably considered old and unusual enough that, by the early
20th century, they were never considered candidates to be melted unlike
Liberty Head issues from the 1840's and 1850's.

Go Mavs!

Doug Winter
Douglas Winter Numismatics
www.raregoldcoins.com

RYK

And, I expect the "Go Mavs!" to have nothing to do with early gold coins, but instead an enthusiastic show of DW's support for his local NBA franchise.

coinlieutenant

Interesting thread that could use some more thought...

Placid

If they are so plentiful why are they so expensive? I can't afford a turban head unless its so worn out you can't tell what it is anymore.

MrEureka

later in 1865, there were ten times as many Philadelphia $20's struck, but only 600-800 extant.

That may prove to be a mighty bad example.

MrEureka

these "old gold" coins were .... probably considered old and unusual enough that, by the early
20th century, they were never considered candidates to be melted unlike Liberty Head issues from the 1840's and 1850's

That part sounds dead on to me.

cointagious

Much early gold survived the 1830's melt because they weren't here to be melted. They had been used as payment in foreign trade and were banked in Europe. Many of these have just been finding their way back to the States since the prohibitions on gold ownership were lifted in the 1970's. There are still quantities being repatriated to this day. I believe NGE has, or used to have, a European office to do just that.

mrearlygold

Nobody doesn't like early gold. And the interest from new people is growing.

Most have been resubmitted more than once. A number of them have made trips to the doctors office too. Hence pop reports are out of whack with reality.

Rgrds
TP

Rittenhouse

<< <i>Much early gold survived the 1830's melt because they weren't here to be melted. They had been used as payment in foreign trade and were banked in Europe. >>



BINGO! Someone who actually reads! This is well covered in Carothers, "Fractional Money". A 1930 book arising out of a doctoral thesis, reprinted by Bowers & Merena in 1988. Quotes many gov't and commercial historical records.

RYK

A number of them have made trips to the doctors office too.

My only example, pictured above, is my favorite coin in my collection and is original as original can be. I call it the "Mother's Day Half Eagle." More on that later...

DaveG

My understanding is that, relatively speaking, so few US gold coins were minted before 1834 that when one was encountered, it was put aside as a curiosity rather than used in commerce. In addition, because of the mis-valuation of gold compared to silver, I have read that gold essentially did not circulate in the US prior to the 1834 revision of gold coinage. (The 1834 law undervalued gold in terms of silver, so gold coins saw increasing usage in commerce. Which also explains why the 1834-1861 coins aren't around, or, when they are available, are in heavily circulated condition.)

This would also account for the high percentage of AU and better early US gold coins. (When was the last time you saw a VF or XF pre-1834 US gold coin offered for sale?)

As far as the pops, I, too, would take them with a big boulder of salt, as I expect that most of these coins have been resubmitted many, many times.