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TOPIC: Gold Coin Hoards Tell Interesting Stories

Gold Coin Hoards Tell Interesting Stories 27 May 2013 22:18 #546

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Gold Coin Hoards Tell Interesting Stories
Paul M. Green, Numismatic News

Gold is always exciting. Of course finding gold or gold coins in any form is even more exciting especially if you do the finding. Because the dollar amounts associated with gold are always high, gold coin hoards and discoveries are tough ones to really document.

The stories are frequently far better than the reality and many times when hoards are reported it is already too late as something has happened to the coins in that they have been turned into banks or sold or melted. It makes tracking down real gold coin hoards a very difficult process. That process is not only difficult, but also incomplete as many times someone finding gold tells no one.

Throughout U.S. history, however, there have been many gold hoards and finds including some valuable individual coins. The problem, however, remains one of being able to actually document the coins involved as only if that is done can we really determine the impact of the discoveries on the market today.

Typical of the problems found in tracing actual gold hoards and discoveries is the story recounted by Q. David Bowers in his book American Coin Treasures and Hoards of a 1908 discovery of a Kellogg & Co. $20 gold coin that unexpectedly was discovered not in the San Francisco area but rather Nebraska.

Finding a $20 from Kellogg & Co. in Nebraska has to lead to a good story - and it did. This involved a couple of men named Abernathy and Bennett who apparently had returned from California allegedly with a sack containing $1,160 in face value of $20 Kellogg & Co. gold pieces. Their home, however, was attacked in 1867 by Pawnee Indians who killed them and burned the house. That, attack at least is documented.

Years later two boys swimming in the area reportedly discovered a $20 gold coin from Kellogg & Co. and additional searching turned up two more examples. Allegedly a sack was later found containing $1,100 in Kellogg $20 coins and reportedly were turned into a bank in Geneva, Neb. What reports there are are short on details and leave us with a nearly impossible task when it comes to actually tracing the coins.

The problem, or at least one of the problems is that while certainly elusive today, the whole thing has a ring of truth as $20 Kellogg & Co. gold pieces were in fact numerous at the time as the Kellogg & Co., which began to produce coins on Feb. 9, 1854, was actually a very heavy producer of gold coins in the mid-1850s and their coins were universally accepted. If anyone had left San Francisco with a bag of privately produced gold coins, the odds were excellent that those coins would have been from Kellogg & Co..

In fact, Kellogg & Co. issues as well as other privately produced California gold coins do figure in reports of other gold hoards and discoveries but again the lack of details and facts concerning the coins make the reports hard if not impossible to document.

One discovery of gold coins that has been well documented took place in a cellar at a house at 132 S. Eden St. in East Baltimore, Md. A couple of boys playing in that cellar found a cache of gold coins. There is a little uncertainty as the boys turned the coins into the police, but allegedly held out a few with the published reports saying that the total was 3,558 coins with a face value of $11,425.50. All were dated before 1857, with the matter eventually going to court, which ordered that the coins be sold.

Because there was a financial panic in 1857 and privately issued paper money was questioned, it is not a stretch that the hoard's original owner was protecting himself from a bank failure. Something must have happened to the owner before he could reclaim his coins.

The gold coin auction was held on May 2, 1935, at the Lord Baltimore Hotel with the 438 lots resulting in winning bids of $19,558.75.

Thanks to the sale we have some idea of precisely what coins were included in the hoard. It included all denominations except a $3, which while issued in time to have been included, were apparently not in circulation in large numbers.

The hoard included a variety of branch mint issues, such as an 1839-D quarter eagle, which was the first Dahlonega, Ga., quarter eagle as well as an 1838-C, which was the first Charlotte, N.C., half eagle.

The most expensive coin in the sale was an 1856-O double eagle. The 1856-O called "very fine," which seemed to be the grade given most coins in the sale, realized $105, which was certainly a bargain as the 1856-O with a mintage of 2,250 lists for $97,500 in VF-20 today with the best estimates being that there may be between 20 and 25 examples known.

An 1849-O $10. which had a mintage of 23,900. surprisingly reached $45 as the 1849-O while a good date is not a significant rarity at $783 in VF-20 today.

An 1841 $5 was sold for $26, although it reportedly had a scratch at the date and an 1847-O $5, which had a mintage of 12,500 and which lists for $2,200 today in VF-20, managed a price of $22.

In the case of the hoard prices, a couple things must be remembered. There was uncertainty at the time as to the legality of owning gold coins. The law was fairly clear, but people were not clear as to what the law said and that could have hurt prices realized. Also hurting prices was the simple fact that at the time there were very few collectors of any gold coins by date and mint.

Ironically, the cellar was a gift that just kept giving as the same month as the auction the boys visited the cellar again and this time reportedly found an additional $8,000 in face value. Some of this ended up in another auction, but one where no records exist as to the dates involved.

The Civil War almost certainly played a significant role in creating a number of gold hoards. You have to go back and consider the times. Heading toward the Civil War there had been many bad experiences with so-called "broken bank" notes.

People did not trust bank notes nor the banks that issued them. They also did not trust in the future whether they lived north or south of the Mason-Dixon line. Under such circumstances, you get hoarding, especially when the first shots are fired and that only gets worse as you see the Union Army march smartly to the battlefield only to run from that same field in a disorganized rout.

Such an outcome as occurred at the Battle of Bull Run in 1861 can definitely hurt your confidence in the future and that makes not only small hoards likely but also large ones. Gold coins were in many minds the best hedge against that uncertain future.

In most cases once the war was over and things returned to something close to normal, the hoards of whatever size surfaced and were used. It was, however, not unlike the small hoards of ancient times where many people would bury coins in the ground for safekeeping as there were no banks, or the numerous hoards in Central America where coins are hidden in a wall or foundation.

These methods are fine if the person creating the hoard remembers where a hoard was hidden or lives long enough to come back and claim his treasure. Naturally, in a few cases, that does not happen. In the case of Civil War-era hoards from shortly after the Baltimore hoard at least a couple have been discovered that probably were hoards of a very troubled time.

A 1969 hoard reported by Bowers in his book from near the small Illinois town of Prairie Town appears to have all the earmarks of a Civil War-era hoard as the silver coins in the hoard were dated 1851 to 1861 while the gold coins were from 1834 to 1861.

According to Bowers, the hoard included, "At least five choice 1861 $20 pieces were in the group, one gem example of which sold for at least $11,000 in 1979 at the American Numismatic Association Convention in St. Louis."

The group was diverse with a partial inventory showing 40 $5 gold pieces, including and 1838-C and 1839-D along with seven gold eagles, including the 1856, 1856-S, 1858-S and 1860 as well as a dozen gold pieces and nine quarter eagles. The dates are interesting and so is the fact that the number of half eagles is far more than all the other denominations combined. That tends to support what many have suspected, which is that at least around 1861 the half eagle was the denomination most often seen in circulation.

An earlier hoard that also made its way to an American Numismatic Association auction, but this time in February of 1974, was discovered in 1973 on a farm in Mississippi. That would have been right in the path of Union forces on their way to Vicksburg, which fell July 4, 1863. It was supposedly one of three different caches buried by the owner at the time. There were supposed to be two of gold coins and one of other valuables, but so far as we know only one of gold coins has ever been discovered.

The hoard again was heavy in $5 gold coins including issues from the Southern mints with the exception of Dahlonega. The Charlotte issues included an 1846, 1849 and 1860, which all have to be considered tough. In the case of New Orleans there were a couple examples of the 1844-O $5 as well as an 1847-O $10 and an 1854-O large date variety.

One double eagle, which was an 1859-O called brilliant uncirculated has a mintage of just 9,100. The 1859-O realized $7,250 at the time as perhaps the finest known with the only real problem being "usual bagmarks," but even so it was seen as better than some of the examples found in famous collections.

One of the interesting things we learn from gold hoards and even reports of gold hoards is where certain coins appear. It is not always where we might expect. The private gold issues produced in California primarily before 1855 are a good example. The expectation would be that privately produced issues would not travel very far, probably spending their entire time in and around the streets of San Francisco. As a result, a report from the 1855 period of someone finding 20 double eagles in the lining of a trunk in San Francisco with some probably being from the Kellogg & Co. or the Moffat & Co. operations is not all that surprising.

A report from Jupiter, Fla., however, is a different matter. Its size was $7,250 face value in gold coins. Sadly, we have numbers by denomination of coins in the hoard but not dates and that is what makes the presence of six $50 gold coins so interesting.

Allegedly, the hoard was assembled in the early 1930s before the Gold Recall Order of 1933 and that means the $50 coins could possibly be Panama-Pacific $50 commemoratives.

At the same time those coins were sold for more than their face value and hoarders did not generally pay extra for low mintages and numismatic value. The question, which unfortunately we probably never will be able to answer is whether the $50 gold coins reported were the Panama-Pacific $50 or Territorial issues from California in the 1850s.

In fact, it could be either as we have reports of both ending up in places where they would not be expected.

In the case of the Panama-Pacific 1915-S commemorative, there is a recent report from Panama of a single example that had been purchased at the time by one of the supervisors of the work on the original canal that the commemoratives were celebrating.

Such a report makes sense and sadly it also makes sense that the report ends with the fact that the family of the original buyer took the coin to a jeweler and sold it for its gold value. This means it was melted.

That sounds incredible, but it is actually a very common outcome in the region when gold coins are found. There are a lot of U.S. gold coins in Central America but there are not a lot of coin collectors, dealers or information. Jewelers are it. And we all know what their purpose is - to make and sell jewelry.

Especially in a rural area the only way to sell a gold coin is to find a collector or dealer or take it to a jewelry shop and that has happened repeatedly. What potentially better or even great coins have been lost in the process is unknown but the numbers of U.S. gold coins melted is high and even today that total is growing.

Reports of $50 gold coins are not limited to the Panama-Pacific commemorative, or to Central America. In the Edgar Adams 1912 work on Private Gold Coinage there is a report of a shipment of $200,000 or 4,000 private $50 slugs from the Gold Rush days in California from New York to Liverpool on the steamer Asia in 1853. To that report can be added another one in the Bowers book of a $50 sold for face value by a financial institution in France in 1906.

While not proven, it would not be at all surprising. In fact, the vast majority of Mint State gold coins especially dated after 1880 and in lower Mint State grades can be traced directly to France, Switzerland and other European bank vaults.

The story of the European hoards was simply that in international dealing the use of gold coins was common. The United States with an enormous supply of gold coins was active in dealings and as a result millions of U.S. gold coins were shipped to Europe where they did not circulate but rather simply sat in vaults.

The higher denominations were the most heavily exported by the United States but virtually every denomination was included. As the coins were out of the country when the gold Recall Order of 1933 was issued, it had no impact on these coins.

Moreover, by sitting in vaults these coins had not circulated. In the case of most dates prior to 1880, the coins shipped were already circulated as there were virtually no supplies of Mint State examples to send but the dates after 1880 were frequently Mint State.

Of course, all that travel did not help especially in the case of things like Indian Head quarter and half eagles as well as Indian Head eagles, which are all well known for picking up marks in very obvious spots but that said, there were still Mint State examples.

American dealers began bringing home these gold coins in the late 1940s and early 1950s with the process continuing for decades. Along the way some previously rare dates such as the 1924-S and 1926-S Saint-Gaudens double eagles were found. The numbers were not large but considering the fact that they were seen as possibly tougher than the 1933 even a couple hundred made a very real difference in supplies.

It should be noted that while the hoards of Europe were the most important source of more recent dates they were not the only as a number of Americans hoarded gold coins just prior to the issuing of the Gold Recall Order of 1933.

One group of 154 coins accumulated in the early 1930s has been well documented and there are others. Those hoards while sometimes having a few earlier dates were usually largely later date issues probably obtained at banks.

It should be remembered that prior to 1933, it was just your private financial business to hoard gold coins. Keeping this secret was solely a security issue. After the gold recall order, hoarding gold coins was considered illegal, lessening the possibility that a hoarder would even tell family members.

There were certainly other hoards as well including some from the 1880s where speculation in low mintage $1 gold pieces and $3 gold pieces seems to have been popular. In fact, over the years it is probably possible to suggest that the number and nature of gold hoards has been as diverse as the coins themselves. It makes the study of gold hoards a very interesting activity and one which is never ending as each day brings the possibility of another surprise to enjoy and study.
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