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The Pre-1933 Classic United States Gold Coins

The pre-1933 gold coinage of the United States was struck to serve as a circulating medium of exchange. Popular for both their history and their precious metal content, all pre-1933 U.S. gold issues are much scarcer than the number of coins originally struck might suggest. Throughout the 19th and early 20th centuries, many classic United States gold coins were melted by the federal government, foreign governments and speculators, usually due to rising gold prices or economic hardships. Two of the more eagerly sought types are:

Liberty Double Eagles: Double Eagles, or Twenty-Dollar gold pieces, are large-size coins containing nearly an ounce of gold. The Liberty type, designed by James Barton Longacre, was first produced in 1850 at the onset of the California Gold Rush and continued in production through 1907. Many later-date issues from the 1880s, 1890s, and early 1900s are closely linked in value to the prevailing spot price of gold and are popular acquisitions.

Saint-Gaudens Double Eagles: The successor to the Liberty Double Eagle is the Saint-Gaudens Double Eagle, which was struck from 1907-1933. Widely regarded as the most beautiful coin ever struck at the United States Mint, the "Saint" is immensely popular with both collectors and investors. Many examples are common enough to trade as bullion-related coins, although the series also includes many noteworthy rarities that are well established in the numismatic market.

The Connection Between the U.S. Rare Coin Market and European Banks

During the time immediately after the issuance of the Gold Recall Act, the availability of pre-1933 United States gold coins was limited to those pieces with established collectible value that had been exempt from the recall.

Most such pieces were known only to dedicated collectors or those few Americans with an interest in using coins to diversify their holdings in tangible assets. By the 1950s, as more people began to develop an interest in classic United States coins, dealers and collectors started to realize the rarity, real or perceived, of gold coins created by Gold Recall Act.

Many individual gold coin issues, such as the 1933 Indian Eagle and the 1927-D Saint-Gaudens Double Eagle, had indeed become instant rarities as the Gold Recall Act led to the destruction of virtually all known examples. For most Double Eagles struck during the late 19th and early 20th centuries, however, the rarity was only perceived. For there was one supply of United States gold coins that was not affected by the Gold Recall Act--the millions of examples that had been shipped overseas as part of international transactions.

The holders of those coins, most of which were European governments and banks, had little interest in exchanging Double Eagles with their high precious metal content for United States paper money. This preference for precious metal over paper currency on the part of European governments and banks allowed millions of Double Eagles (and other United States gold coins) to escape the Gold Recall Act and survive until the circumstances arose under which they could be brought back to the United States.

The first flurry of interest in repatriating United States gold coins from Europe came during the early 1970s when the spot gold price finally reached a level at which it became profitable for dealers to begin importing these coins.

The process has been ongoing since then and accounts for the vast majority of classic United States gold coins dated from the 1880s through the early 1930s that are available in today's market. The number of such pieces that has been repatriated, in fact, is sufficiently large to make the most common date issues from that era ideal vessels for those with an interest in investing in gold bullion in coin form.

To the average American today, coins are a form of money to be spent in the course of everyday life to buy items from a loaf of bread to a diamond ring. Indeed, the vast majority of coins produced by the modern United States Mint are intended for general circulation the cents, nickels, dimes, and quarters that rattle around in people's pockets or are tossed into cookie jars.

During the late 19th and early 20th centuries, however, the United States Mint was also busy making scores of coins that were never intended to pass through the pockets of the average American. Rather, these coins were produced solely for the use of the federal government, foreign governments, banks and a few other wealthy and powerful institutions. These coins are large-size gold coins that, during the years in which they were struck, represented a tremendous sum of money. Several of these coins were worth more than the yearly income for the average American laborer.

Providing Security, Value, and Liquidity in Today's Rare Coin Market

We are an Authorized Dealer for both Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC), and not only sell coins that have been certified by these firms, but also assist in having coins submitted to these enterprises for certification.

Founded in 1986 and 1987, the PCGS and NGC revolutionized the U.S. rare coin market. Quite simply, they solved the related problems of how to determine a coin's level of preservation as accurately and precisely as possible, and also to use that level of protection to assign a particular grade for that coin that would be universally recognized throughout the market.

PCGS and NGC adopted the 1-70 numeric grading scale that was developed decades ago by Dr. William Sheldon for grading large cents. At the bottom of the grading scale, a coin assigned a numeric grade of "1" is barely identifiable, while at the apex of the scale a coin graded as "70" is technically perfect. Groups of numeric grades are also associated with traditional descriptive terms, so our "1" would be referred to as a Poor-1 and our "70" is fully described as MS-(Mint State) 70.

The actual grading process at PCGS and NGC is conducted by teams of professional rare coin experts with years of experience in grading and otherwise evaluating rare coins. The use of consensus grading ensures that the process is as accurate as possible. And as independent services that are not affiliated with any dealers, auction houses or collectors, PCGS and NGC can assign grades based solely upon an individual coin's merits in the absence of ulterior motives such as profit and financial gain. The fact that the coin's owner is kept confidential from the graders further ensures the objectivity of the grading process at PCGS and NGC.

When a coin is submitted to PCGS and NGC, the first step undertaken by the graders is to determine its authenticity. Only genuine, authentic coins move on to the next stage of the process, which is the actual determination of the coin's grade.

Once the authenticity and grade of a coin are determined, it is then sealed in an inert plastic holder that not only provides ease of viewing for the coin but, more importantly, serves as a safe long-term holder to protect the coin from damage.

Also housed in the holder (or "slab" as these holders are usually referred to by experts) small paper tags (or "inserts") that identify the coin and provide the grade, a unique bar code for identification purposes and other pertinent information. Once placed into a PCGS or NGC holder, a coin is considered to have been "certified." Once certified, a coin carries with it a universally recognized set of characteristics that will help determine the level at which it will trade in the market.

PCGS and NGC enjoy stellar reputations among both dealers and private collectors/investors and have become the standards for determining value in the rare coin market. Coins certified by these services possess readily identifiable value and, as such, enjoy a level of liquidity that just did not exist in the U.S. rare coin market before the establishment of these two firms. For this reason, LCR Coin recommends that collectors and investors purchase only those coins that have been certified by PCGS and NGC.

At its most basic level, the rare coin market in the United States is governed by the inevitable forces of supply and demand. These are basic concepts that underlie the value of almost all commodities, but to fully understand the value of a collectible United States coin, one must also understand the rarity of that coin and be able to determine its level of preservation. For it is these two factors that uniquely tailor the forces of supply and demand to fit the United States rare coin market.
Rarity had always played a critical role in determining the value of United States coins, even during the 19th century when the numismatic market was in its infancy. The number of coins produced for any given issue, and, even more importantly, the number of examples of that issue that have survived, determine the supply of that issue. That supply, in turn, defines the rarity of a particular issue. It is important to note in this regard that rarity can be absolute or relative.

The level of preservation, condition or, technically speaking, the "grade" of a coin, is the other important factor that determines value in the U.S. rare coin market. This was not always the case, however, for before the late 20th century the grade of a coin was very much subordinate to its rarity in determining value.

There were far fewer grades applied to United States coins in the 1940s and 1950s than today, and specialists often assigned a grade to an individual coin in an arbitrary manner. By the late 1970s/early 1980s, however, the interest in United States coins as both collectibles and investment vehicles had grown to such proportions that rarity alone could no longer define a coin's desirability.

The grade of that coin was now also needed to determine its value accurately. This blending of rarity and grade, in turn, gave birth to an entirely new concept: condition rarity. Through condition rarity, rare coin experts now recognize that there is a grade, or level of preservation, at which virtually all classic United States coins become rare.

This concept of condition rarity is perhaps best illustrated by looking at a single issue in the popular Morgan Silver Dollar series of 1878-1921. The 1892-S, with a mintage of 1.2 million pieces, certainly has the potential to be at least a relative rarity within its respective series for this is a limited mintage by Morgan Dollar standards. Enough worn examples have survived that an 1892-S at the lowest levels of preservation can be obtained for no more than $30-$35. On the other hand, an example of the 1892-S that survived without acquiring any wear from circulation is so rare as to be worth at least $25,000-$30,000, if not considerably more. Clearly, the 1892-S is a leading condition rarity within the Morgan Silver Dollar series.

As grade developed into a critical component of value and as the U.S. rare coin market matured during the latter half of the 20th century, the need arose concurrently to determine a coin's grade in a more precise, accurate and universally accepted manner. This need became even acuter as greater numbers of collectors and investors--many with no prior experience in rare coins--entered the market in the late 1970s and early 1980s. The scale against which coins are graded expanded to include greater subdivision within the core levels of preservation.

But what was needed was a way for the market to assign grades to coins that would be universally accepted by dealers, collectors, investors and other buyers. Using the 1892-S Morgan Silver Dollar as an example once again, the danger of using traditional grading practices in the modern U.S. coin market becomes clear. How does the buyer know that an 1892-S marketed as a "high-grade example" really are a high-grade example? Can they accept the word of the seller as fact? Perhaps more importantly, will potential buyers agree with that grade when the time comes to sell? Obviously with an issue such as the 1892-S Morgan Silver Dollar, the difference in a few grading points could result in a difference in thousands of dollars.

The Coinage Act of April 2, 1792
(1 Stat. 246)
Statute I.

April 2, 1792, Chapter XVI.--An Act establishing a Mint, and regulating the coins of the United States. Mint established Section I. Be it enacted by the Senate and at the seat of House of Representatives of the United States government. of American in Congress assembled, and it is hereby enacted and declared, That a mint for the purpose of a national coinage be, and the same is established, to be situate and carried on at the seat of the government of the United States, for the time being; and that for the well conducting of the business of the said mint, there shall be the following officers and persons, namely, a Director, an Assayer, a Chief Coiner, an Engraver, a Treasurer. Species of Section 9. And be it further enacted, that coins to be there shall be from time to time struck and struck. Coined at the said mint, coins of gold, silver, and copper, of the following denominations, values, and descriptions, viz.

Eagles EAGLES--each to be of the value of ten dollars or units, and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold.

Half Eagles HALF EAGLES--each to be of the value of five dollars, and to contain one hundred and twenty-three grains and six-eighths of a grain of pure, or one hundred and thirty-five grains of standard gold.

Quarter Eagles QUARTER EAGLES--each to be of the value of two dollars and a half dollar, and to contain sixty-one grains and seven-eighths of a grain of pure, or sixty-seven grains and four eighths of a grain of standard gold.

Dollars or Units DOLLARS OR UNITS--each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver.

Half Dollars HALF DOLLARS--each to be of half the value of the dollar or unit, and to contain one hundred and eighty-five grains and ten-sixteenth parts of a grain of pure, or two hundred and eight grains of standard silver.

Quarter Dollars QUARTER DOLLAR--each to be of one-fourth the value of the dollar or unit, and to contain ninety-two grains and thirteen sixteenth parts of a grain of pure, or one hundred and four grains of standard silver.

Dismes DISMES--each to be of the value of one tenth of a dollar or unit, and to contain thirty-seven grains and two-sixteenth parts of a grain of pure, or forty-one grains and three-fifths parts of a grain of standard silver.

Half Dismes HALF DISMES--each to be of the value of one-twentieth of a dollar, and to contain eighteen grains and nine sixteenth parts of a grain of pure, or twenty grains and four fifths parts of a grain of standard silver.

Cents CENTS--each to be of the value of the one-hundredth part of a dollar, and to contain eleven penny-weights of copper.

Half Cents HALF CENTS--each to be of the value of half an Act of May 8, a cent, and to contain five penny-weights and 1792. A half a pennyweight of copper.

Of what devices Section 10. And be it further enacted, That, upon the said coins respectively, there shall be the following devices and legends, namely: Upon one side of each of the said coins there shall be an impression emblematic of liberty, with an inscription of the word Liberty, and the year of the coinage; and upon the reverse of each of the gold and silver coins there shall be the figure or representation of an eagle, with this inscription, "UNITED STATES OF AMERICA" and upon the reverse of each of the copper coins, there shall be an inscription which shall express the denomination of the piece, namely, cent or half cent as the case may require.

Proportional value Section 11. And be it further enacted, That of gold and silver the proportional value of gold and silver in all coins which shall by law be current as money within the United States, shall be fifteen to one, according to quantity in weight, of pure gold or pure silver; that is to say, every fifteen payments, with one pound weight of pure gold, and so in proportion as to any greater or fewer quantities of the respective metals.

Standard for gold Section 12. And be it further enacted, That coins, and alloy the standard for all gold coins of the United how to be regulated States shall be eleven parts fine to one part alloy; and accordingly that eleven parts fine to one part alloy; and accordingly that eleven parts in twelve of the entire weight of each of the said coins shall consist of pure gold, and the remaining one-twelfth part of alloy; and the said alloy shall be composed of silver and copper, in such proportions not exceeding one half silver as shall be found convenient; to be regulated by the director of the mint, for the time being, with the permission of the President of TheUnited States, until further provision shall be made by law.

And to the end that the necessary information may be had in order to the making of such further provision, it Director to report shall be the duty of the director of the practice of mint, at the expiration of a year commencing mint touching the operations of the said mint, to report to alloy of gold Congress the practice thereof during the said coins. year, touching the composition of the alloy of the said gold coins, the reasons for such practice, and the experiments and observations which shall have been made concerning the effects of different proportions of silver and copper in the said alloy.

Standard for silver Section 13. And be it further enacted, that coins--alloy how the standard for all silver coins of the to be regulated. The United States shall be one thousand four hundred and eighty-five parts fine to one hundred and seventy-nine parts alloy; and accordingly that one thousand four hundred and eighty-five parts in one thousand six hundred and sixty-four parts of the entire weight of each of the said coins shall consist of pure silver and the remaining Alloy. One hundred and seventy-nine parts of alloy; which alloy shall be wholly of copper.

Penalty on de-Section 19. And be it further enacted, that basing the coins. if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.
Money of account Section 20. And be if further enacted, That to be expressed in the money of account of the United States dollars, etc. shall be expressed in dollars, or units, dismes or tenths, cents or hundredths, and the mills or thousandths, a disme being the tenth part of a dollar, a cent the hundredth part of a dollar, a mille the thousandth part of a dollar, and that all accounts in the public offices and all proceedings in the courts of the United States shall be kept and had in conformity to this regulation.