Gold Coins in Circulation
TigersFan2
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If I had a time machine, the thing that would fascinate me more than anything would be to go back in time 50, 100, 150 years ago just to hold the circulation coins of the time and look for those key dates. With that said...
Earlier this week I was reading about Morgan Dollars, the controversy and political wrangling to start minting them and their fate in circulation and the Pitman Act. Morgan Dollars did circulate (source I read said in the western U.S. more than the eastern U.S.) and in our hobby we see many examples of low-grade circulated examples of Morgan Dollars to support this.
My question for discussion is this... What was the role of the pre-1933 gold coins in circulation? Did they circulate like the silver coins? Or were they more used to anchor the money supply such that they were mainly held by large banks?
From a cost-of-living perspective, carrying a $10 or $20 gold coin in your pocket would be a lot of money and might not be practical.
From an observation perspective, it seems that virtually all pre-1933 gold coins available for our hobby are either AU, MS or jewelry-damaged examples. It seems very rare to find a gold coin in the lower grades from circulation wear. This suggests that their function wasn't for everyday circulation.
So if I get in my time machine and go back to 1920, can I take $60 face of Morgan Dollars into a bank and get three $20 St. Gaudens?
Earlier this week I was reading about Morgan Dollars, the controversy and political wrangling to start minting them and their fate in circulation and the Pitman Act. Morgan Dollars did circulate (source I read said in the western U.S. more than the eastern U.S.) and in our hobby we see many examples of low-grade circulated examples of Morgan Dollars to support this.
My question for discussion is this... What was the role of the pre-1933 gold coins in circulation? Did they circulate like the silver coins? Or were they more used to anchor the money supply such that they were mainly held by large banks?
From a cost-of-living perspective, carrying a $10 or $20 gold coin in your pocket would be a lot of money and might not be practical.
From an observation perspective, it seems that virtually all pre-1933 gold coins available for our hobby are either AU, MS or jewelry-damaged examples. It seems very rare to find a gold coin in the lower grades from circulation wear. This suggests that their function wasn't for everyday circulation.
So if I get in my time machine and go back to 1920, can I take $60 face of Morgan Dollars into a bank and get three $20 St. Gaudens?
I love the 3 P's: PB&J, PBR and PCGS.
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Gold is about $1100 an ounce today, so I suppose a twenty dollar gold piece was worth about $1100 in today's money back in the 1800's. Although this was a lot of money back then, it was still practical to carry around. Think of what people spend $1100 on today and what that would have translated to back in the 1800's. Today, most people routinely spend $1100 on single transactions. Think of rent payments, mortgage payments, car payments, annual taxes, or even cell phone usage bills. With the exception of the family smart phone bill, most of these payments would have been required in some form back then. Car payments would have translated to a horse. I am trying to think of payments paid by most people rather than only the wealthy.
A gold expert can chime in on other denominations that saw circulation in the 1800's. An easy way to tell is to reference the Redbook in search for condition rarities; coins worth disproportionately more in AU or mint state than circulated counterparts. To my knowledge, there is no 'Barber coinage' of gold coins. As you know, Barber coins are often found in AG3 or even worse, but were struck in nickel and silver.
Regarding gold coins: you have to specify which time period you're talking about. In general, throughout the 19th century gold didn't circulate much, but gold circulated the most in the 1834-1860 period. The Treasury Department deliberately minimized gold circulation stating about 1914, but gold was available. There's an article by QDB in this month's issue of The Numismatist that talks about coin hoards and it includes a story told by Tom DeLorey about buying a bunch of gold coins that had been acquired from banks in the early 1930s.
If you're interested in learning more about the circulation of gold coins in the 19th century, you may be interested in reading Chapter Two of Doug Winter's book on New Orleans gold coins, which is
If you're interested in reading a short article about how gold coins were viewed in the East in 1896, here's a LINK to an article that was published in The E-Sylum, the best publication in numismatics (and it's free).
edited to: fix link
rleans+inauthor:winter&num=10">Link
Check out the Southern Gold Society
with my Grandpa.
I said 'wow it must have been something back in those days, having all those gold coins in circulation!'
He started laughing and said "no one he knew ever had any gold coins!".....it's just a reflection or microcosm of the state of the
working class folks in the Midwest. I'm sure it was different in other areas and economic classes.
True, but they put a lot back into circulation with the series 1922 gold certificates. Perhaps that was not the smartest move.
When she told me that story I was a kid and since she used the word "pieces" when talking about gold I assumed they were little bars not coins.
I wonder why they always called the gold coins "pieces" but silver was called coins.
My large transaction observation is borne out by the mintages. After the double eagle was introduced in 1850, it became the dominate gold coin. Almost 50% of the gold coins minted from 1795 to 1933 were double eagles. In terms of face value, 76% of the gold in dollars were in the form of double eagles. Those statistics are remarkable given that the other gold pieces had more than a half century head start on the double eagle. Clearly that was the coin of choice for gold users despite the fact that it represented almost a month's wages for many people.
Gold coins were stored in bags, and they were not treated like collectors' items. They rubbed against each other as they were moved from place to place. Only a small number of the higher denominations were saved by collectors, because collectors simply could not afford to set that much money aside to lie idle. For that reason coins like no motto $5 gold pieces, most all 19th century $10 gold pieces and virtually all Type I and II $20 Liberty gold coins, aside from those that have been recovered from shipwrecks, are in circulated condition. Most of those coins were not used every day, but they were getting rubbed. Hence they are seldom in Mint State, but the average grade comes out somewhere around EF or VF-EF. The "nice ones" grade AU by chance.
My mother told me that people did not use gold coins on an every day basis when she was young in the 1920s. She most often saw them at times like Christmas when they were given as gifts. At that time a gift might be a quarter eagle or a half eagle, nothing larger, at least for her family, which what we might call today, upper middle class.
My dad got $75 in gold when he graduated first in his class from a private school. He was also what might be called upper middle class. A rich cousin paid his tuition and invited him to live at his house, which explains how he got to go to a private high school. He lost all of the $75 after he deposited the coins in a local bank that when belly up during the Great Depression.
When the gold surrender order came 1933, my mother said that people thought it was their patriotic duty to turn their coins into the government. There was also a perception that holding the coins was illegal. People did not seem to know about the prevision in the law that let people keep $100 in gold or the ruling about "rare collectors' items." My mother still thought that it was illegal to have gold coins until the early 1960s. She was amazed when she saw gold coins for sale at the coin department in Gimbels Department Store in New York City!
I hope I've shed some light on your question about the role of gold coins in 19th and early 20th century America.
About 60 years ago, I sat in my grandparents living room---my parents and I lived with them---and asked about the family gold coins. I wanted to see them. My grandmother broke into laughter---followed by my parents and grandfather. Her reply was there was never any gold coins in our immediate family. Not that we were poor. But, that we were NOT RICH enough to be able to keep gold coins around.
My wife's mother---when asked---responded that the only gold that she had ever seen was a 5 dollar piece that she had received as a Christmas present from her employer. Naturally, she had NOT kept it but had gone out shopping for NEW shoes.
My one great aunt was supposed to have had some gold----which I was supposed to inherit. When she passed, my grandmother reported that other family members had gotten hold of it---and claimed that it was given as a 50th anniversary gift. Never saw a single coin.
Wishing you all the best. Bob [supertooth]
At any rate he told me a story from the 1920s when he was a clerk. One day a supervisor called group, including Howard, into a room. Upon entering they saw a table piled high with $2.50 gold pieces. Their job was to count them. Can you imagine how much fun it would have been to have gone through that hoard as coin collector? Of course doing that at the time probably would have gotten you fired! Apparently these coins had been paid to the company, which was then known as General Chemical, by a customer.
This was unusual the $2.50 gold was an odd denomination. It was far from the coin of choice because the larger coins were more convenient for business, yet it was too much money for people to use every day. The low mintages bear out this observation.
in the early 1900's and she received two $20 gold pieces every month.
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As a detectorist, I've perhaps thought of this more than some.
Of course I have yet to dig my first gold coin.
It happens, though. A local friend dug two gold coins on our local (SE GA) waterfront, where they almost certainly circulated.
Though both came up on the same site, not terribly far from each other, they were widely separated in time.
One was a 1781 Spanish colonial escudo. The other was a high grade 1907 US $10 Liberty.
I have also owned a well circulated 1899 double eagle (I think it was 1899-S) that was reportedly dug north of here.
And heard of $5 Liberties being found around here twice. (One of these stories was plausible, as I know both the site and the digger. The other is unconfirmed and vague.)
We are of course East Coast, though this being a port city, that probably changed the coin circulation dynamic a bit.
Since this is Georgia, I've naturally wondered about the circulation pattern of Dahlonega coins. It may be that not too many of those made their way down this far south.
'Tis a pity Jekyll Island here is off limits to detecting, because I can practically guarantee you a gold coin or two sleeps beneath the lawns of the Jekyll Island Club, where the Victorian millionaires used to play.
On my mom's side of the family, I had another aunt whose father collected gold dollars. One time, when I was visiting as a kid, that old guy took me into his bed room to view them. They were housed in blue books as I remember----and the book was FULL.
Years later, I asked my aunt what happened to them when he passed? She announced that she NEVER knew that he had had them. I was SHOCKED as she was his only heir that I ever knew about. But, she didn't have them which meant that someone had gotten them without her knowledge--- ahead of her.
Back to my grandmother on my father's side. She told me that when folks died in the South, the family members rushed to their homes and took whatever it was that they wanted. Sort of first come---first serve. I know it to be true as she took me on a bus when that one sister of hers died. When we got to the home, my grandmother got only thousands of old buttons that were in the attic. There was NOTHING else left in the whole house. No gold---just buttons. Bob [supertooth]
No wonder the value of gold certificates in circulation was greater than gold coins, $1,035,000,000 versus $394,000,000 out of $4,779,000,000 total in circulation on 1 March 1927.
Total gold stock including gold coin and bullion in the Treasury and Federal Reserve Banks was $3,721,000,000.
In contrast the 1897 figures were $517,589,688 gold versus $37,285,339 gold certificates out of $1,640,209,519 total money in circulation.
Total gold coin stock was $699,478,536 on 1 Jan 1898 plus $45,559,060 in gold bullion in the Treasury.
Edit: Total gold stock added.
My dad, before he passed away, gave me 2 Gold $5 coins, gifts from his grandparents, for his birth in 1928.
There is a book about the USS Enterprise Aircraft carrier, and a sailing contest in 1941, in San Francisco, shortly before the carrier left for Hawaii. The 1st prize for each of the sailing contests was a $20 gold coin.
Around 1965, at the SS Kresge (?? spelling), I believe a forerunner of K Mart, I was waiting in line to purchase an album. The kid in front of me and cashier were huddled over his payment, a $5 gold coin. The cashier did not know what it was. I popped up with a $5 bill, got the gold coin, and everyone was happy.
Several years ago, Neiman-Marcus had a promotion, with a $50 gold plated coin that could be bought and given as a present. I had bought one for my parents 50th anniversary. Anyway, I was in the parking area where Neiman's was located, and an individual was VERY irate. He had tried to spend one of these, and they would not take it. He was very agitated. I told him I had bought one, and my parents spent it fine. He showed it to me. It was a $50 gold eagle. I told him it was a REAL gold coin, 1 ounce of gold, and worth a lot of money.
He said it was not worth SH%^t to him. I checked in my wallet, and I had a $50 and a couple of $20's and told him it was worth a lot more. He said if I had $50, he would trade me out. I gave him $90, but he would only take the $50. He went back to Neiman's, dropping a trail of F bombs about the hassle. He was buying a gift for someone, and he was ticked off about the whole thing.
<< <i>My dad, before he passed away, gave me 2 1928 Gold $5 coins, gifts from his grandparents, for his birth. >>
It could not have been two 1928 $5 gold pieces because the U.S. did not mint any of those coins in that year. The $5 gold piece was minted in 1929, and that is a tough key date that is worth thousands of dollars.
You might have gotten two 1928 $2.50 coins. Those are quite common as pre-1934 U.S. gold coins go.
<< <i>
'Tis a pity Jekyll Island here is off limits to detecting, because I can practically guarantee you a gold coin or two sleeps beneath the lawns of the Jekyll Island Club, where the Victorian millionaires used to play. >>
man, wouldn't that be cool to detect! wow.
The article references a person who unsuccessfully attempted to pay for a 75 cent pair of slippers with a $20 gold piece. Today's near-equivalent would be attempting to pay for a $19 purchase with a $500 bill (assuming they still circulated). The result would likely be the same - many stores today refuse to accept denominations higher than $20. The issue is not whether the payment is in gold, the issue is whether the offered payment is genuine. If you are in Europe, try paying for a 19-euro purchase with a 500-euro note. I would be interested in hearing about the result.
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Note- she also hoarded about $60 common date circulated Silver $1s. She thought that if the government was going to take away the gold coins, they were going to take away the silver coins at some future date. She ran a dress shop with her sister, so I don't know how she managed to save this sum.
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"Sou Mangueira......."
Anyway, if anyone who doesn't have a copy is interested in reading Chapter Two of Doug Winter's Gold Coins of the New Orleans Mint, there's a copy of most of the book on Google Books. Just use Advanced Search and put "New Orleans" in the title box and "Winter" in the Author box.
Check out the Southern Gold Society