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In the days when gold coins actually circulated would heavily worn examples be discounted?
291fifth
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Has anyone ever read anything about the actual usage of US gold coins that would indicate that well worn specimens would have been accepted for less than face value?
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I've read about this with sovereigns, but I don't know that I have for US coinage.
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I've read they could be turned in for new coins at the mint.
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When they circulated, wasn't it pretty much the same as today? That is, if I put a brand new $5 bill on the counter or a ragtag one, the store still takes the $5. If someone plucked their half eagle down to pay for their purchase, the store took it.
I am sure that banks handed them out the same way. I am also sure that astute collectors would ask their bank for brand new coins. Or it they were a coin for a gift, someone might ask for a new one. Otherwise, no one would have really cared or thought about it.
I believe face value was more than melt....wasn't it??
Maybe it depends on the exact era. Our earliest gold coins didn't even have denominations on them. They were gold, and gold was money, and there was no difference. There are plenty of accounts of people "sweating" the coins in a bag or filing the rims to get a little free gold on the side. My understanding is that practices like these prompted the development of reeding.
Apart from that, modern "Junk" silver either trades by actual weight, or by a lowered conversion factor from face value to account for wear - usually 0.715 or even lower (as-struck would be 0.7234, dollars excepted). So, it's still happening.
This was the age of hard money, not the 21 st century.
I once heard or read, that gold was mostly held by banks, and rarely used by the public. I have no idea if that is true or not.
I understand there was circulated gold in the west for a while... though it was not common pocket change....And it certainly did not command the value it does today.... Cheers, RickO
I believe in the West I.e. California it circulated freely in both financial arenas and private hands or transactions.
In 1873 there was some sort of effort made by the Mint to re fresh the worn down gold coins in circulation on the Pacific coast through melting abraided coins and then re coining them.
Even though merchants could dispose of or re-cycle if you will, the coin at the Mint. They were reluctant to do so.
The problem was the cost to the holder in submitting the coins that were
worn down by circulation .
Surprisingly to merchants it was not the loss in re coinage but the loss of time , inconvenience and delay that concerned them the most. Time was of more value to them than money.
That’s what the SF Mint Superintendent wrote in 1873.
The following is an excerpt from the article on 1873-S Standard Silver Dollars which Dan Owens and I published in The Numismatist in 2019:
"For What It Is Worth, the United States Mint as an organization was plagued with chaos
for most of 1873. In San Francisco, preparations were being made to move operations from the cramped First Mint into a new Mint building, now known as The Granite Lady, whose cornerstone had been laid down in 1870. (That cornerstone is thought to contain three or four different 1870-S coins not mentioned in the Mint Reports, but I digress.) The move was completed in 1874.
At the Philadelphia Mint, literally millions of older gold coins that had lost weight in circulation over the decades were being re-coined under a provision of the omnibus Civil Appropriation Act of June 10, 1872. One provision of this Act allowed the Treasury Department to reimburse itself for accumulated lost gold value plus labor costs up to the sum of $150,000, and the Mint was trying very hard to use up the entire appropriation. (There is an old government adage regarding appropriations: Use it or lose it!)"
Apparently the Nation's gold supply had gotten a bit shabby during and after the Civil War, and much older, worn-out gold coinage was melted down and recoined. Mint correspondence shows multiple shipments of $1,000,000 face in gold from the New York Assay Office to Philadelphia. The correspondence did not include the yield from any such shipment, but if, hypothetically, that $1,000,000 face yielded only $992,000 in new coinage, the appropriation would make up the difference and the NYAO would get back $1,000,000 in new coin. Presumably the Sub-Treasuries did the same thing through Philadelphia, while Western banks did the same via the S.F. Mint.
I do not know this for a fact, but I suspect that prior to this recoinage the NYAO and the Sub-Treasuries had segregated light-weight coins by holding them in their vaults as part of their reserves and circulating full-weight coins. That would certainly explain why the NYAO had so much lightweight coinage to send in.
At the retail level, I imaging that if my great-great-grandfather had tendered a well-worn 1835 Half Eagle at Joe's Pool Hall and Saloon in beautiful downtown Boston in 1872, Joe would have taken it at its face value, no questions asked.
TD
Back then coins were not legal tender, they were government assayed lumps of metal. The intrinsic value equaled the face value.
That is also why they receded the edge of coins: so you couldn't shave metal and spend them at face value.
Discounting was a tricky business for a typical merchant. This was even more problematic during the colonial period (all circulating gold back then was foreign). See the attached file.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
This thread had some interesting info
https://forums.collectors.com/discussion/1000439/counterstamped-gold-coins-anyone-else-see-these-before
Wasn’t there a thread a while back about them being stamped with an L for lightweight?
Probably not.
Actually the intrinsic value exceeded the face value on several occasions, which resulted in mass meltings (e.g. fat head half eagles and early 1850’s silver coinage). Adjustments in gold and silver content were made from time to time in the 19th century to make it so that the intrinsic value of the gold and silver coinage was less than face value in order to prevent meltings.
Absolutely. Believe they were heavily discounted worn coins that Izzy Switt traded for, in '33 ! It stands to reason.
Yes, that's true. That's why gold/silver standard doesn't work when commodity prices are free to fluctuate. But, the main point is that they traded as assayed metal...unlike FRNs
Wow, did not realize that Gold circulated. I always supposed that the value was the reason, even though, the value didn't compare to today's? Once again, for one of the reasons why we never see on the screen in old westerns, Gold coins, only Silver Morgans, on tables that they were gambling on? Hm-m-m? Interesting thread. 😎
"Jesus died for you and for me, Thank you,Jesus"!!!
--- If it should happen I die and leave this world and you want to remember me. Please only remember my opening Sig Line.I've owned quite a few L marked gold coins. That is the best explanation I can think of for the countermark.
There was a case in the US northeast in the 1890s about a municipal trolley system refusing underweight dimes. I cannot find a reference to it - but if memory serves correctly the courts ruled in favour of the passenger/rider that the dime was legal tender even if it was worn down. Gold would have been a more interesting test case because obviously the difference in value is more substantial.
In the 1978-79 mini-series "Centennial" there is a scene in which a Double Eagle is offered to a railroad baggage handler with the full knowledge that he will not be able to make change for the tip. As a result gets no tip.
Back in the days when flight attendants took cash for drinks, I knew a coin dealer who would order a drink and then offer up a $100 bill and claim that he had nothing smaller. I had heard that the flight attendants had to make up shortages out of their own pockets.
After one show I was sitting across the aisle from him when I saw him pull this stunt, and I whipped out my wallet and told the flight attendant "I can break that for you" and I did. Boy was he piffed! After that when attendants were making their preliminary pass through the cabin, I would tell them that if they needed any large bills broken I could help them.
Curiously enough, I have never seen a single one in my years at ANACS or dealing.
Others would actually shave or chisel gold coins for the metal. They would carefully do this off of the edges of the coin. Thus the term, “Chiseler” was coined.
Have any pics? Sounds interesting.
The thread linked a few post up has lots of photos
My dad grew up in the age of circulating gold in Iowa. He said they never saw any because where they lived everyone was dirt poor farmers. Just copper & silver.
Great transactions with oih82w8, JasonGaming, Moose1913.
It's delicious tidbits of history and knowledge like this that keep this hobby thrilling.
My grandmother came to America in the early 1900s and was the fourth eldest with some of her sisters 10-15 years her senior.
There absolutely 1000% was a huge issue with underweight dimes in new england. Grandma and grandpa ferried away tons of slick and wafer thin mercury and barber. I always thought it to be unusual, that for like 20 years, all their dimes were these little worn out discs. I hesitate to even say coins. For some time as a young boy, I thought old dimes were all just that way.
I remember watching a video with her about the depression and there was a man recycling rubber and grabbing these hoses from kids and lightly resting them on scales and basically throwing dimes in their faces like bread crumbs at pigeons. There was a very real problem spending your day finding aluminum from gum wrappers and cans and whatever else, just to go and cash it in, and all the guy had left were the thin dimes so you ate less because you couldn't buy as much food with the paper thin little pieces of silver. She had known to be hyper aware of it from her older sisters having similar problems a few years back, when they were kids (edit: so yeah presumably 1890).
These wafer dimes were preferable to use in transit because they were just so worthless. You'd rather the bus company take the hit than pay your milkman, who then has to make up the difference himself or absorb the cost, and manners mattered a lot more back then too. Pay the guy who mows your lawn with one of them and it could turn from paying a bill to being insulting. Using one could make you "appear more poor".
I've held some that had next to nothing left, wondering how it could ever have been a coin, or acceptable in pocket change.
I'm surprised it goes as far back as 1890 though. I was under the impression it was a brief window before and after the depression. I mean, some of the dime rolls grandpa put together in new England in 1940 some just had next to nothing left and this was a guy who bought gold regularly, so it's not as if they were the only things he could get. Grandma preferred the silver dimes because dimes are also generally lighter, but when she met dad at the grocery store, having the lighter ones was nice so her pockets didn't get too heavy cashing them out. It was best that it wasn't an obvious thing she was doing, but I guess those are luxuries you get when you handle all the money.
Very weird to ever see something about this mentioned ever again, anywhere.
How ironic? I'm watching Jeopardy as I post. They actually have a whole category on the subject of, "GOLD"! Lol.
"Jesus died for you and for me, Thank you,Jesus"!!!
--- If it should happen I die and leave this world and you want to remember me. Please only remember my opening Sig Line.As I have mentioned before, I have my great grandfather's coin purse that had the money in it from when he passed away in 1922. It is amazing how worn out some of the coins from even 1906 were by then. Sometime I will get it out and photograph it and the contents and share here.
by weight this coin is down 1 gram, so 3% overall not much at all really considering how she looks
Actually, the value was probably higher back then in real terms. In the early 19th century, a common worker's wages were only a couple bucks per week. A $20 gold coin would have been probably 2 months wages. Even at $1700 per ounce, I think most people make more than $850 per month these days.
https://libraryguides.missouri.edu/pricesandwages/1820-1829
Would Joe Gold get better business and more opportunities handling money if he consistently had better, tried-and-true, no-funny-business coinage?
Would banks +/- any of it during large transactions?
And yeah coins only lose like a little bit over time, so a little dust here and there from your pocket change is nothing. It's when you handle 25k of those coins in a day and knock a chip off a bunch, seven days a week, for years. All those little bits add up. Even scratching a few flakes a few hundred thousand times adds up significantly, when so little of it buys so much.