Gold $1 started strong then faded

This article was originally printed in Numismatic News.
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The U.S. dollar hasn’t been technically backed by gold in any form since 1971 and the ability of Americans to spend gold dollars was outlawed in 1933.

However, it was even further back in time than that when the gold dollar as a coin ceased to exist. That was back in 1889, when the 40-year life of the denomination formally came to an end.

It was a tiny coin when it was created in 1849, just 13 millimeters. The dime is 17.9mm. It’s diameter was increased to 15mm in 1854 to help make it more convenient, though the weight was not changed.

The gold dollar was without question a product of the gold discovery in California. The abundance of the precious metal inspired Congress to create new $1 and $20 coins to help employ it usefully in circulation. A gold $3 was added in 1854. What a change of fortune for a nation that had always struggled to mint enough $2.50, $5 and $10 gold coins was.

Interestingly enough, however, the bulk of the gold dollars produced by the United States came not from near the new gold fields at the San Francisco or other branch mints, but rather the main facility in Philadelphia, 3,000 miles to the east.

In fact, San Francisco in the heart of the region where the gold was discovered and the other branch mints including Dahlonega and Charlotte which were also in the heart of gold discovery areas only had limited and usually sporadic mintage of gold dollars, leaving it to Philadelphia to do all the heavy lifting in terms of new gold dollar’s production. That fact makes Philadelphia gold dollars a perfect group to study as they truly tell the story of the denomination and its four decades of life.

There is no doubt that the gold dollar, although the denomination had been used as part of the privately produced gold coins produced by the Bechtlers in the South, was a somewhat novel idea. Prior to the California Gold Rush the only dollars of the United States were silver and even they were not used with much regularity.

The discovery of gold on Jan. 24, 1848, on the American River in California changed everything, resulting in the passage of the Coinage Act of March 3, 1849, authorizing both the gold dollar and the gold double eagle. Neither denomination had really been considered before and the double eagle without adequate supplies of gold was probably not practical, but with the vast wealth of gold in California suddenly almost anything was possible when it came to gold coins.

It was not easy to create a design for something as small as a gold dollar, but the first attempt, which was a Liberty head, will probably look familiar as a little sister to the other Liberty heads on larger gold coins. It proved to be something of a work in progress as the first 1849 gold dollars would come with either an open or a closed wreath on the reverse.

In fact, there is a case to be made that the 1849 has two different types with the changes in the wreath, but relatively few collect them as two types and whether open or closed there is relatively little difference in price for the 1849 except in MS-60 where the open wreath is more expensive at $650 while the closed wreath is $260 in the same grade.

What should be noted is that the 1849 with a solid mintage of 688,567 is available not only in large numbers but also the quality is high. The coins were frequently well struck and often saved as souvenirs, giving you a real opportunity to obtain historic coins in high grades for a reasonable price.

The first gold dollars known as Type 1 would last until 1854. Whether it is an 1849 with an open or closed wreath or one of the following dates, the coins produced at Philadelphia are available. The 1851, 1852 and 1853 all had mintages of at least two million pieces and that gives a good indication of the public use of the gold dollar at the time.

It would take until 1871 before any silver dollar would reach even the 1 million mark for a mintage. The most available of the early gold dollar dates is the 4,076,051 mintage 1853, which currently lists for $260 in MS-60 and that is supported by the fact that Professional Coin Grading Service had graded over 2,500 examples in Mint State. The 1851 and 1852 are the same price.

Realistically the numbers are so high they can give the impression that all gold dollars are common. In reality they are not as a gold dollar was a lot of money at the time. There were not that many collecting gold dollars simply because of the cost. As it turned out, with the bulk of the nation's collectors being in the Philadelphia area, the saving was good especially in the case of some dates, but do not make the mistake of assuming that because a few dates are available that all will be equally available.

While the mintages suggest that the gold dollar was popular, there was a problem in that the small 13mm diameter made them easy to lose and difficult to use so the diameter was changed in 1854 with the introduction of a 15mm version. Liberty was changed with the addition of a headdress decorated with ostrich plumes. Precisely how they came up with the ostrich plumes is something that was never explained and perhaps we did not want to know.

This design type became know as Type 2 and it was short-lived, lasting only through 1855. The mintages of the two Philadelphia dates, which were 902,736 for the 1854 and 758,269 for the 1855, were by far the largest of the type and that keeps them in demand as type coins. Any Type 2 gold dollar is better, but the 1854 and 1855 are the least expensive at $225 in F-12 and $2,350 in MS-60. Mint State examples are a problem for a couple reasons. The first is that there simply are not many. Remember the 2,500 examples of the 1853 in Mint State and compare that to the around 1,000 of the 1854 and slightly fewer for the 1855 and you can see the problem especially with much more demand from type collectors. In addition, the Type 2 had a striking problem as the head was actually in high relief, so the metal could not flow well in both directions. That means almost any example will have a lightly struck “85” in the 1854 or 1855 dates, but other areas would be lightly struck as well oftentimes with clash marks from die damage.

The striking problems brought a quick end to the Type 2 gold dollars with the design being altered in 1856, featuring a larger and shallower head although the ostrich feathers remained. The new Type 3 gold dollars would last until the last gold dollar was produced in 1889.

The gold dollar would in some respects be a victim of its time. The Civil War saw massive coin hoarding by a fearful public, which me
ant no gold or silver coins were circulating and that produced a significant reduction in gold dollar mintages after 1862. Apparently there was hope the denomination could return to its earlier popularity, following the end of the Civil War in 1865, but that did not happen. People in the eastern part of the country once the war was over were basically content with bank notes, while in the western part of the nation silver took over as a priority in terms of production at the mints and use at least in denominations like one dollar.

The gold dollars from 1856 through 1889 are an interesting group as despite sometimes very low mintages, they are usually available and in almost any grade you might desire. That said, with significantly lower mintages, they cannot in every case be expected to be as available as some of the earlier dates. The dates from the 1850s saw mintages remain fairly solid, with the 1856 being over 1 million, although divided between an upright and a slanted “5” with the upright “5” being the tougher in Mint State. The 1857 mintage was also solid at nearly 775,000, so it too is available with an MS-60 priced at just under $310. What is worth noting is that the number seen at PCGS in Mint State is far below the earlier highs with less than 250 examples reported, roughly 10 percent of the total of the 1853, although the MS-60 price of the 1857 is just $50 more than the 1853.

The 1858 saw a much more serious mintage decline, although it was not a decline because of the Civil War. The mintage total of just 117,995 was not sparked by any particular reason other than the general economic downturn that began in 1857. Ironically, despite the lower total, the 1858 is at available date prices in F-12 around $125, but its MS-60 price is $310 ,which is certainly higher than an available date and the PCGS numbers show why as it has been seen just about 65 times in Mint State.

The 1859 Philadelphia issue showed a small rebound in mintage totals with a production of 168,244, but that total is still far from the totals of the earlier part of the decade. The 1859 returns to the more available pattern in pricing as well and the number seen in Mint State by PCGS returns to over 100 examples.

The 1860 is another matter as its mintage of just 36,514 was the lowest Philadelphia total up to that time. The 1860 ranks as slightly better with a $125 price in F-12 and a $310 price in Mint State-60 where it has been seen just over 50 times.

The 1861 and 1862 would be the last higher mintage gold dollars with the 1861 over 500,000 and the 1862 over 1 million pieces. They would consequently be available and in all grades as the Mint State totals are high, with the 1862 showing well over 1,100 examples graded in Mint State.

The contrast between the 1862 and the 1863, could not be more striking. The bottom simply dropped out of Philadelphia gold dollar mintages thanks to the pressures of the Civil War, the suspension of specie payments and the public hoarding of virtually everything including not only gold and silver but even of copper-nickel cents. Where the 1862 had a mintage of 1,361,355, the 1863 mintage was just 6,200. We see the impact in prices and numbers known as the 1863 lists for $370 in F-12 and that is probably very cheap as few collect gold dollars, while in MS-60 it is $3,900 as opposed to $310 for the 1862. Of course where PCGS has seen over 1,100 examples of the 1862 in Mint State it reports just 20 of the 1863, suggesting that the 1863 is probably a very good deal at the current prices.

The low mintages would continue quite literally until 1873. The highest Philadelphia gold dollar mintage of the period would be the 10,500 mintage 1868. Amazingly, the prices for the dates of the period are not that high with an F-12 at $265 in the case of the 1868 and a variety of other dates, with even lower mintages and going up to $370 for the 6,250 mintage 1863. In Mint State-60 the prices tend to be $750 and up with the 1863 at $3,900 being the most expensive while the 1864 to 1869 dates are all being over $1,000. In fact, throughout you are getting great deals as the numbers graded in Mint State are routinely small and were it not for very limited demand the best guess is that these dates would be much more expensive.

In 1873 the gold dollar in terms of mintage seemed to suddenly spring back to life. It was at this time when gold and silver issues were starting to make a comeback and mintages began to improve in the case of virtually all silver and gold coins. The 1873 mintage from Philadelphia was divided between open and closed “3” varieties as officials did not like the initial closed “3” appearance. The closed “3” is clearly the better of the two at a listing of $325 in F-12 and $1,650 in MS-60 while the open “3” and the 198,820 mintage 1874 are at basically available date prices.

The two years of higher mintages were not to last as the 1875 gold dollar mintages was a stunning total of just 420 pieces, making it easily the lowest mintage gold dollar from any facility. Fortunately for collectors today, the 1875 was quickly snapped up in some numbers by collectors around the Philadelphia area so that it is not as tough as its mintage would indicate. That said, the 1875 is still a tough date with a price of $1,650 in F-12 while an MS-60 lists at $10,000. That MS-60 price is interesting as in reality the 1875 is not as tough as the mintage or the price suggests, with PCGS having seen a total of 40 in Mint State. It is also worth remembering that for all of the dates from the 1860s on there were proofs each year and while these mintages were small the survival rates are good adding to supply of nice quality examples available today. It should, however, be noted that unlike the situation with other denominations the proofs are not less expensive than regular Mint State examples as any Proof-65 gold dollar is likely to cost at least $10,000 and some are well above that level.

After 1875, mintages rose but not by much as from 1876 through 1882 there was no mintage of even 10,000 pieces and most were just a few thousand with the low being the 1881 at just 1,636. As it turned out, however, most of these dates are much less expensive than we might assume thanks to hoards from the period.

Looking at the prices of dates of the period in F-12 they are all at relatively small premiums over the cost of an available date, while an MS-60 is usually $725 or less and in a couple cases the cost of an MS-60 is $410. The numbers at the grading services tell the story as these dates were hoarded at the time of issue. We know relatively little about the source of the hoards, but we do know that according to Q. David Bowers numbers of the 1879, 1880 and 1881 began to appear in the market allegedly from a Baltimore bank. The Mint State coins numbering in the hundreds for each of these dates made an enormous difference in terms of supplies as these dates had mintage of 3,000 for the 1879, 1,636 for the 1880 and 7,620 for the 1881.

Looking at the grading service totals, they confirm the presence of significant numbers of these dates in Mint State with the low mintage 1880 for example having a Mint State total at PCGS in excess of 350 pieces, a huge percentage of the total mintage.

The dates that followed did not see high mintages, but in a couple of cases the totals were over 10,000 and in the case of the final gold dollar in 1889 the total was 30,729. Once again, despite the low mintages, the dates are available and once again there were small hoards in a number of cases as there seemed to be some interest on the part of dealers or collectors at the time in assembling small groups of lower mintage dates. The date being most often seen in small hoards from the last years of the gold dollar period was the final 1889.

While the gold dollars from Philadelphia would not generally be considered rare, the long sp
an of production has left us with a couple very tough dates like the 1875. A collector with patience could potentially acquire virtually any Philadelphia gold dollar and at today’s prices virtually all would be a good value. They would make a fascinating collection, reflecting the ups and downs of gold dollars as well as some of the trying times for the nation.