DR. DONALD KAGIN'S

10 Favorite Gold Coins

Appeared in COINage Magizine, April 2018

Scott Travers is one of the best promoters of numismatics and has written scores of books and articles and given dozens of lectures educating thousands of collectors on all aspects of numismatics. So when he called me 12 days before deadline and said, “Dr. Kagin [even after 35 years he still calls me this] I need to fill some pages for Coinage Magazine for a special feature edition on gold coins. You’ve owned or auctioned some of the greatest pieces ever, so why don’t you write about your ten favorite?” Anyone who knows Scott would understand why I couldn’t say no.

Over my 60 years of collecting, cataloging and dealing in numismatics, I have been blessed with handling so many cool pieces that it’s hard to narrow my favorites down to just ten coins, so I set a few criteria for each coin. First, they had to be gold, they had to be historically important and thereby tell a fascinating story, they either had to be aesthetically beautiful works of art or otherwise rally cool, and I had to have owned them at least once. With two slight fudges, here is my list.

THE FIRST U.S. “BITCOIN”: THE UNIQUE 1783 PLAIN OBVERSE “QUINT”

This is my first fudge as this is a silver half-dollar size coin, but Scott calls it “the new gold” and it is a golden opportunity that I couldn’t resist including due to the current frenzy about bitcoins. Plus this may be the most historical and important coin in the world—and my favorite.

In August, Kagin’s Inc. announced that our senior numismatist, David McCarthy, after 4 ½ years of researching diaries, papers, correspondence and email chains (well, maybe not the latter), had identified what is now recognized as our nation’s first coin. It had long been considered one of the first coins struck in Philadelphia for a proposed national coinage, called the “Nova Constellatios” struck in 1783 in Philadelphia. Congress had called upon our nation’s first Superintendent of Finance and financier of the Revolutionary War, Robert Morris, to establish our new coinage system. The first coin was struck by coiner Benjamin Dudley without the legend, “Nova Constellatio”, and as Morris wrote in his diary, “Mr. Dudley … delivered me a Piece of Silver Coin being the first that has been struck as an American Coin”.

While this “discovery” is sensational in its own right by establishing our nation’s first coin, what most people do not realize is that it is also the first decimal coin issued in the Western World and our nation’s first Bit Coin.

Part of Superintendent Morris’s genius was that he, along with fellow Founding Fathers Alexander Hamilton and Thomas Jefferson, was the principal architect of a new U.S. Monetary system based on a decimal structure unheard of outside of Russia.

Morris determined that the highest common divisor among the polyglot of money commonly encountered throughout the former colonies was a quarter grain of silver that he called a Unit. His plan envisioned a silver 1,000-unit Mark, a 100-unit Bit, and a 500-unit Quint or 5-Bit Coin. Thus the first bitcoin struck by our new fledgling government was this first decimal 500-unit 5-Bit Quint coin.

Later Morris suggested that the basic dollar size 1000-unit coin be called by the more popular term “Dollar”. Jefferson and Hamilton agreed and over the next 150 years this decimal based dollar would supplant all other monetary systems. Today virtually every major financial transaction in the world is carried out using money--either physical, digital or cryptocurrency-- that derived from the original 1000 unit/10-Bit system. And this bit coin you can actually hold in your hand!

THE FIRST GOLD COIN: THE GOLD STATER OF THE KINGDOM OF LYDIA

Sardis, the beautiful capital of the Kingdom of Lydia, is located on the Aegean coast of today’s Anatolia region of Turkey. During the 7th century B.C. it was one of the wealthiest Mediterranean trading centers. King Gyges c.680-645 B.C. is credited with inventing the first coinage in the Western World from deposits of a natural alloy of gold and silver called electrum obtained from the nearby Pactolus River. These coins revolutionized commerce throughout the region and eventually the civilized world.

Gyges’ great-great grandson, Croesus c.561-546 B.C.—also known by the legendary moniker, King Midas—reformed the coinage by refining the precious metal and issuing individual silver and gold coins. The largest denomination was a stater. Square images of the forefront of a crouching lion—the badge or symbol of his ruling Mermnad dynasty--confronting a bull were punched on one side thereby making them the first official gold coinage.

THE FIRST U.S. GOLD COIN – THE UNIQUE PUNCH-ON-BREAST 1787 BRASHER DOUBLOON

Until the identification of the Quint above as the first American coin, many scholars including my father, Art Kagin and Q. David Bowers considered this gold piece the single most important coin in American numismatics. Many still do.

Ephraim Brasher was a New York goldsmith and next-door neighbor to eventual President George Washington. His extraordinary abilities were recognized by Washington’s Secretary of Treasury, Alexander Hamilton, who hired him in 1795 to conduct assays on behalf of the first United States Mint at Philadelphia.

A few years earlier in 1787 Brasher had struck gold coins weighing 17 pennyweights (slightly less than a troy ounce) just slightly smaller than U.S. $20 gold pieces struck from 1849-1933. One side featured the Great Seal of the United States of America with the eagle’s breast counterstamped “E.B”, while the other side depicted the Seal of the State of New York above the name “Brasher.” Presumably because the positioning of the counterstamp was not aesthetically pleasing, subsequent issues sported the EB initials on the eagle’s wing.

Until 1991 no one could properly explain why these pieces were made. Based on a 1784 chart issued by the Bank of New York, researcher William Swoger deduced that these pieces were valued at $15 after being regulated to an exact weight to conform to local standards suggesting they circulated as money and therefore were the nation’s first gold coin. This theory was confirmed in letters by Alexander Hamilton uncovered in 2009 by numismatic scholar, David McCarthy.

THE FIRST PRIVATELY ISSUED GOLD COIN IN THE UNITED STATES –THE 1830 $10 TEMPLETON REID

Most people do not realize that our nation’s first gold rush began in 1828 in the Southern Appalachian areas of Georgia and North Carolina and provided most of the gold for our nation’s coinage. The use of gold dust in the area was woefully inaccurate, inconvenient and difficult to use in commercial transactions. So in July, 1830 Templeton Reid, a cotton gin manufacturer in Milledgeville, Georgia (near present day Atlanta) conceived the novel idea of privately coining money from gold dust and thereby opened the door through which more than forty different individuals and companies eventually followed. These privately issued Pioneer or Territorial coins provided their communities with a viable alternative to the inadequate Federal currency.

While the Reid coins were not flamboyant, they were elegant in their simplicity, information they provided, and convenience. From the beginning of his operation, Reid was plagued by unfounded editorial complaints concerning the actual value of his coins since they were slightly smaller than Federal coinage. And there was the question as to their constitutionality. Eventually it was shown that Reid’s coins, while slightly smaller, contained higher quality gold than their Federal counterparts and there was no actual constitutional prohibition against their issuance. But the controversy led to the premature closing of Reid’s Mint within six months after its opening. Consequently few coins were struck and today only four of these $10 pieces are known.

THE MOFFAT & CO. 1849 $16 GOLD INGOT

After working the gold fields in North Carolina and Georgia, assayer and entrepreneur, John Little Moffat, returned to his native New York City. Upon learning of the California gold discovery in late 1848, he formed Moffat & Co. with partners, Joseph Curtis, Philo Perry, and Samuel Ward. They sailed to San Francisco with minting equipment and while not the first (that distinction is held by Norris, Gregg & Norris), they became the most prolific and respected of all California private gold coiners.

In July, 1848, Moffat began melting gold dust and issuing rectangular gold ingots. They first produced bars from $9.43 to $264.00 but settled on just making one ounce ingots valued at $16 each. It is clear that these pieces regularly circulated for money until Moffat switched to minting circular coins. Less than two dozen of these very popular coin ingots exist today.

THE UNIQUE PROOF 1851 $50 UNITED STATES ASSAY OFFICE SLUG

So successful was Moffat & Company that in January 1851, the newly appointed U.S. Assayer, Augustus Humbert, contracted with the private firm to strike coins for the newly established United States Assay Office in San Francisco. The latter was the result of a Congressional compromise between California along with western interests, and the powerful eastern states including Pennsylvania and New York who also wanted their own mint. In fact, a San Francisco Mint was eventually authorized but it wasn’t operational until 1854—some six years after the discovery of gold in California!

No one knows why, but initially the U.S. Mint only allowed the striking of large octagonal 2 ½ ounce $50 gold pieces. The magnificent heraldic eagle design was engraved by sculptor and medalist Charles C. Wright. Humbert, a watchmaker by trade, used dies resembling a watch cover for the reverse.

Not only is this coin our nation’s largest denomination (although higher values were authorized) it is among the most beautifully executed. These slugs widely circulated including being extensively used in gambling casinos.

No other coin epitomizes the California Gold Rush and by extension, the entire series of pioneer gold coinage than these $50 gold “slugs”. They harken back to what arguably was one of the most romantic periods in our nation’s history encompassing the best and the worse of pioneer dreams and adventurism, of entrepreneurs and misfits, thieves, murderers, vigilante “committees”, and the beginning of the Wild West. That is why it’s on the cover of my book, Private Gold Coins and Patterns of the United States.

Probably a few thousand of these coins exist today but only one proof specimen.

THE KING OF PIONEER GOLD COINS—THE 1855 $50 PROOF KELLOGG & COMPANY

While the $50 1851 U.S. Assay Office “slug” symbolizes pioneer gold coinage, many collectors consider this spectacular round 2½ ounce gold piece struck by Kellogg & Co. to be the series most impressive design. Like the Humbert “slug” above, this is a proof specimen likely struck for presentation rather than for circulation and was part of U.S. Assayer, Augustus Humbert’s personal collection. It was later acquired by John Work Garrett and donated to Johns Hopkins University which sold their entire coin collection through Bowers & Merena in 1979-1980.

John Glover Kellogg came to California from New York in October, 1849 and almost immediately was employed by Moffat & Co. When the latter was contracted by the U.S. Assay Office in 1851, Kellogg became their Cashier. In anticipation of the opening of the branch mint in San Francisco, the Assay Office dissolved in December 1853. Kellogg then formed his own partnership with G. F. Richter, who earlier had worked with him as assayer in the United Sates Assay Office.

Kellogg & Co. first issued $20 gold pieces in 1854 and 1855 and were obviously planning a $50 coin that never was issued in quantity for circulation. The dies were executed by foremost pioneer gold engraver Albert Kuner, who had earlier engraved dies for Moffat & Co. and other Gold Rush coiners. Only 13 specimens are known today.

TREASURE FROM THE S.S. CENTRAL AMERICA—1857 HENRY HENTCH GOLD INGOT EMBEDDED WITH A U.S. HALF DOLLAR

The location of the ill-fated S.S. Central America, which sank in a fierce hurricane in the Atlantic Ocean off North Carolina in September, 1857, was discovered in September, 1986—almost 129 years later to the day. America’s greatest maritime treasure came to light in the form of thousands of $20 gold pieces, hundreds of other gold coins of various denominations and dates, thousands of silver coins and over 500 gold ingots of varying sizes and fineness cast from five different Gold Rush-era assayers including Kellogg & Company.

While technically not a coin, these ingots represents the most valuable numismatic treasure find in history valued today at over $150 million and growing as a new salvage including 45 more ingots are slated to come on the market this year.

I’ve handled scores of these pieces, but this one is as cool as it gets. Of the five firms whose ingots were salvaged from the S.S. Central America, Henry Hentch yielded the fewest with just 33 and none from the recent second salvage. This unique 38.45oz gold ingot of .846 fineness is the only one with a U.S. 50c piece infused in the bar. Additionally, there is clear evidence of a U.S. $20 gold piece (probably 1857-S) that was in turn, fused to, and subsequently removed from the half dollar.

AMERICA’S MOST BEAUTIFUL COIN –THE 1907 $20 PROOF SAINT-GAUDENS ULTRA HIGH RELIEF

One day in 1904 President Theodore Roosevelt, who appreciated art and history visited the coin collection on display at the Smithsonian Institution. After comparing the beautiful coinage of the ancient Greeks to those of the United States, he wrote his Secretary of the Treasury, “I think our coinage is artistically of atrocious hideousness. Would it be possible, without asking permission of Congress to employ a man like [Augustus] Saint-Gaudens to give us a coinage that would have some beauty?”

At the time St. Gaudens was America’s best-known and most honored sculptor. He had done extensive work for the World’s Columbian Exposition in Chicago in 1893 as well as creating a number of artistically acclaimed sculptures and medals. In 1905 Roosevelt defied tradition by bypassing the Mint’s chief engraver and commissioned Saint-Gaudens to redesign all American coinage from the cent to the double eagle with an eye to emulating the high relief Greek coinage.

The first pattern coins struck using Saint-Gauden’s new design were $20 gold pieces made with special care to impress members of Congress and other luminaries. Less than 20 specimens were struck nine times by the coining presses on proof planchets. Subsequently 12,357 pieces were struck three times for circulation and have been designated as “High Reliefs”. Unfortunately they did not stack well for the banks and they cost the Mint more to strike than their $20 denomination. Eventually, the mint settled on one-strike specimens and over the next 26 years several millions were produced for circulation.

Today these Ultra High Relief coins are considered America’s most beautiful coin, with this specimen being the finest graded.

THE $20 1866-S NO MOTTO SADDLE RIDGE COIN—FROM THE GREATEST BURIED TREASURE FIND IN NORTH AMERICA

This is my other fudge as technically I have never owned this coin, but since my company represents the anonymous owners, I feel like I have.

In early 2013, a young couple, now known as “John and Mary,” were taking a walk with their dog on their northern California property when Mary noticed a rusty can partially buried in the ground at the edge of their favorite trail. They were well aware that their property had a colorful history that stretched back to the earliest days of the gold rush, and they were accustomed to finding evidence of its past in the form of old nails, cans and tools buried around their land. John used a nearby stick to unearth the can and when the lid slid off he saw the edge of a single gold coin amid the muddy gravel inside. He was looking at the proverbial “pot of gold”.

Returning to the site over the course of a week, they managed to locate another seven cans—each filled with rare gold coins. In all, 1,427 U.S. gold coins with a face value of $27,980 were uncovered in an area that they nicknamed “Saddle Ridge”—they had just made the greatest find of buried treasure in U.S. history!

They subsequently consigned the coins for marketing and sale to Kagin’s Inc. After my associate David McCarthy conserved each coin they were independently graded by Professional Coin Grading Service. Fourteen specimens became the finest certified for the date and mintmark. The $20 1866-S No Motto MS62 is considered the Finest Known and the highlight of the treasure.