Why are U.S. Early Gold from the 1820s and early ‘30s So Rare?

Since I have opened up my collecting horizons to British coins, I have gotten some new insights into why of the monetary problems existed in America. For example, the American colonists complained that England would not provide them with coins that they could use in the domestic economy. Oddly enough, there was a huge coin shortage in England also because their system was badly in need of reform.

One of the other problems that the United States had was that so much of its gold coinage was exported and melted from 1795 to August 1834. This problem became acute in the 1820s and ‘30s when virtually entire mintages of U.S. gold coins were exported and destroyed. One of the reasons was the gold content of coins that I call “5 dollar-ish” in size.

The U.S. half eagle or $5 gold coin contained .2829 ounces of gold. The British guinea, which was worth 21 shillings, contained .2646 ounces of gold. This provided an incentive to export the American coin abroad. Yet, a fair number of early U.S. gold coins, minted from 1795 until 18-teens remained in the U.S. Some of these coins were undoubtedly saved by wealthy Americans.

A 1795 U.S. $5 Gold Piece



A 1798 British "Spade Guinea"



Starting in 1817, the British reformed their coinage. Part of that reform reduced the weight of the guinea sized coin .2546 to .2354 ounces of gold. The new coin was called the sovereign which had a value of 20 shillings. Since the weight of the U.S. coin remained at .2829 of an ounce, the incentive to export and melt it became even greater.

An 1817 British gold sovereign



The result was that the flow of U.S. gold coins out of the country became a flood. Coins like this 1834 "old tenor gold" $5 became rarities despite that fact that over 50 thousand pieces were melted.

An 1834 "Old tenor gold" $5 piece



In 1834, Congress finally addressed the problem as part of President Andrew Jackson's "hard money" monetary reform. The weight of the $5 gold coin was reduced to ,2651 of an ounce of gold which was much closer to the weight of the British gold piece. Therefore for flow of gold out of the United States receded to normal levels, and much more of the "Classic Head" gold coin mintage survived.

An 1834 "Classic Head" $5 gold

 

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Nuggets of numismatic history like this make my day, thanks for another great article. Bravo!

 

This is a very informative article. Thank you for broadening my knowledge. I like that the example of a Classic Head half eagle is a crosslet 4.

 

Thank you for noticing. I paid way too much for that coin because it's over graded. It used to be in an AU holder, where it belonged, but a crack-out artist got lucky and got it into an MS-61 holder. The trouble is the darn variety is quite scarce, and I needed to fill the hole with a coin that went with the rest of my AU to MS-63 set. The only MS-63 I have is an 1838-D which I was lucky enough to win in an auction.

 

Which do you think is the rarer of the two, the crosslet 4 or the 1838-D?

 

Thanks, enjoyed the read with the enhancement of those photos.

 

As always, thanks for the write-up and information.

 

Imteresting read . . .

 

It's not clear what the incentive for exporting them was. Was the guinea exchanged on par with the $5, netting them ~.02 ounces, or were the British just grabbing any gold they could get, or what?

 

Overall, the 1834 crosslet 4 is rarer. From the aspect of preservation, the 1838-D is rarer because only one or two others have graded MS-63.

According to PCGS Coin Facts, there are 125, 1834 Crosslet 4 $5 gold coins and 275, 1838-D half eagles. The Coin Facts estimates are often on the low side in my opinion, but are accurate in a relative sense.

 

I think that the gold content and the price the British had to pay for the U.S. gold pieces were the determining factors. The “old tenor gold coins” that were minted prior to August 1834 are all rare because of the melting. The lighter Classic Head gold pieces are much more common. According to the experts, the U.S. did not get a lot of the old gold coins that it converted into the new pieces. The old pieces were exported.

 

There wasn't much gold production in the U.S the first few decades of our existence.

When gold was found in California in the 1840's, gold production took off. That was the impetus behind the creation of the Double Eagle -- we needed a larger coin to efficiently mint and use the gold being mined.

Mintages were much lower in the years and decades before....because gold production, trade, and capital flows were also much less than they would be from 1880-1933.

 

The mintages took off a few years earlier due to the gold strikes in S Carolina and Georgia.

 

I posted this in the other thread, but it's relevant here too...

https://nnp.wustl.edu/library/publisherdetail/51

https://nnp.wustl.edu/library/book/518368

 

Thanks, that explains it, if I'm interpreting it correctly. They could obtain an ounce of gold for 15 ounces of silver, take it to Europe or the West Indies, get a "considerably higher" amount of silver for it, then go back to the US for more and pocket the difference. Seems like an untenable situation.

 

Truth... every attempt to legislate a gold:silver ratio has failed.

US coins were adjusted in 1853/1854 and again in 1873.

The California gold rush distorted the ratios. After that played out the Comstock lode of silver screwed them up again.

 

Yeah. Classic example is the 1822 $5. 17,796 minted. 3 exist