The California Gold Rush led to the mintage of the $20 Double Eagle gold coin
When a fellow named Samuel Brannan ran up and down the streets of San Francisco shouting “Gold! Gold on the American River!”, little did he know that he would set off the greatest gold rush of the 19th century. However, he certainly did not complain, as he owned the only hardware store stocked with picks, shovels and pans between San Francisco and the newly discovered goldfields.
As gold’s mystical allure has attracted mankind for thousands of years, word of untold riches in the hills and rivers of California set off a frenzy. Men in their hundreds, then thousands and finally in their tens of thousands were arriving in California in any way they could, as this precious metal was once again calling out and stirring men’s craving for quick wealth. The migration of people was so large that San Francisco, which in 1846 was a small settlement of no more than 500 residents, grew into a booming town of about 35,000 by 1852. By 1855, it is estimated that more than 300,000 people from all walks of life, ethnicity and age had arrived in California.
There was certainly gold to be found. It was not unusual for prospectors who had arrived at the outset of the gold rush to find gold worth ten, fifteen and twenty thousand dollars within days, just by using primitive mining tools such as pans and picks. In fact, gold was so abundant that it started to inflate prices of goods and services on the entire West Coast. This was not surprising, as it is estimated that even by 1853, only five years into the Gold Rush, some 373 tons of gold had been found in California’s rivers and streams (worth $15.6 billion at September 2014 prices).
As the gold from Californian began to reach the mints, it quickly became clear that the then legal tender gold coinage, the Quarter Eagle $2.50, the Half Eagle $5 and the Eagle $10, were not sufficient for the amount of gold that was arriving. It was against this backdrop that legislation for the creation of the Double Eagle or the $20 piece was passed by Congress on 3 March 1849. Subsequently, the $20 Double Eagle, containing exactly twice the amount of gold as the $10 Eagle, was issued for the first time in 1850.
$20 Double Eagles stimulated US economic activity
From 1850 to 1933, $20 Double Eagles were minted continuously, as the new, rich gold mines of California were ceaselessly supplying this precious metal to the market. In fact, the increase in the gold supply was the largest and fastest the United States had ever seen. The infused money (gold) had an immense financial impact, serving as an economic multiplier – setting off a chain of reactions, all of which accelerated economic growth.
Food, clothing, hardware supplies, luxuries, and heavy machinery such as steamboats for river traffic, just to name a few items, came into great demand on the West Coast. When a good or a service was in short supply, ambitious migrants hastened to provide it. For example, manufacturing industry sprang to life to produce mining machinery, such as rock-crushers, mining trolleys and drills, steam engines, and dredging machines. To build these machines, lots of iron was needed and so an iron industry was created in northern California. A dozen foundries across the state developed to melt and cast the iron, powder factories were founded, and the lumber industry expanded as wood came into great demand as building material for houses and mines. By 1870, several thousand workers were manufacturing mining equipment in the area surrounding San Francisco.
To feed all the newcomers, the agricultural and food processing industries thrived. Wheat fields with accompanying flour mills, cattle ranches and slaughterhouses, vineyards and wineries became highly profitable businesses. In fact, in 1847, California had no commercial flour mills, but by 1865 more than two hundred flour mills were operating, supplying not only the local market, but exporting significant quantities to Asia, Great Britain, and parts of Europe.
The volume of trade and commerce in all sectors surged. The need for transportation increased and consequently roads, railroads and ports were constructed. Banks and financial institutions were set up to provide financing; in short, the American West boomed. As gold in the form of $20 Double Eagles flowed through the rest of the US economy, it stimulated demand and investments, leading to the establishment of thousands of businesses throughout the country. The $20 Double Eagles would contribute not only to the economy of the United States, since they had a significant impact on global trade as well.
The value of the $20 Double Eagle and world trade
Compared with other gold coins of that time, $20 Double Eagles were massive – containing nearly a full ounce of gold. In fact, they were the world’s most valuable legal tender gold coin, a commanding position retained well into the 20th century. Their large weight and corresponding value clearly had a number of advantages: they were cheaper to produce and easier to transport, and were also favoured as gold reserves by governments and financial institutions.
That being said, $20 worth of gold back then was a lot of money. For example, at the turn of the 19th century the average daily salary for a carpenter was $2.30, whilst a manufacturer in the wool industry received $1.42 a day. As a consequence of their high value, the $20 Double Eagle was precluded from being used for daily transactions; instead, it was primarily used for international commerce and as backing for US dollar certificates (which would be considered today as paper dollars).
Once the San Francisco Mint was established in 1854, Double Eagles were regularly shipped to Europe, Asia and South America in exchange for goods. In this way, millions of $20 Double Eagles ended up in foreign bank vaults, becoming part of their gold reserves. In the aftermath of WWI, a considerable amount of Double Eagles were also sent to war-torn Europe as financial loans for its re-construction. The $20 Double Eagle became a trusted coin that served the global community for almost a century, becoming the most widespread US coin of all time. This trust – leading to its steadfast popularity – was based on the fact that, even though modifications were made to its design, the dimension, size, and metal constitution remained unchanged for more than eight decades.
The $20 Double Eagle design
During the eight decades of its issuance, the $20 Double Eagle coin carried two different designs. Those minted from 1850 to 1907 were embellished with the bust of Lady Liberty and the Great Seal of the United States, whilst the second, markedly different design, artfully conceived by the American sculptor Augustus Saint-Gaudens, appeared from 1907 to 1933.
Liberty Head – 1850 to 1907
The chronicle of the Double Eagles’ design begins with Robert Scot, the first Chief Engraver of the United States Mint. A silversmith by trade, he was known as a great banknote engraver and his work was held in high esteem by leading figures, such as Thomas Jefferson. Scot was responsible for the creation of the original design of the Lady Liberty bust and the Great Seal that appeared for the first time in 1795 on the $5 Liberty Cap Half Eagle gold coin. This design was later modified and applied to the new $20 Liberty Head Double Eagle in 1850.
Until 1907, the framework of this design stayed the same; however, minor tweaks were made that included the way “twenty dollars” was written and the addition of the motto “IN GOD WE TRUST” in 1866. Originally, the design did not carry any reference to God, but following America’s Civil War, it was argued that divine help was needed to heal the scars of this conflict. Therefore, the US Treasury began experimenting with different religious mottos that included “OUR COUNTRY, OUR GOD”, “GOD, OUR TRUST”, and finally IN GOD WE TRUST.
Saint-Gaudens – 1907 to 1933
The $20 Saint-Gaudens Double Eagle is a fascinating gold coin which, besides being widely considered as the most beautiful gold coin of the United States, is also cherished for having an intriguing and unique history. The legacy of the $20 Saint-Gaudens coin began at a dinner party at which President Theodor Roosevelt discussed with Augustus St. Gaudens, an eminent sculptor of the time and close friend of the President, the idea to beautify the existing circulating gold coinage of the country. Roosevelt – a character with an exuberant personality – deeply admired the aesthetic high-relief coins of ancient Greece. His fondness for such coins was so great that he was determined to introduce US coinage with a similar design. Augustus, who shared this view, was consequently hired by the President to create a series of designs based on those classical models.
Having worked for one year on a proposal for the new design, the famed sculptor’s health worsened and he was forced to relinquish the work to his assistant, Henry Hering, who eventually finalised the aesthetic masterpiece. Once ready, Roosevelt received the final coin-sized model of St. Gaudens’s work which, besides having a visual appearance completely different from the old Liberty Head design, contained no religious motto or date in Arabic numerals, since Roman numerals were used instead. Roosevelt was aware that the latter changes would be criticised by the US Congress; however, he was so delighted with the new model that in a letter to Hering he wrote, “I have instructed the Director of the Mint that these dies are to be reproduced just as quickly as possible and just as they are. It is simply splendid. I suppose I shall be impeached for it by Congress, but I shall regard that as a very cheap payment!”
The design for the newly proposed $20 Double Eagle included the figure of Lady Liberty holding a flaming torch and olive branch, whilst marching resolutely forward with her drapery and hair freely flowing in the breeze. Her majestic posture was bolstered by the rays of the sun, expressed as lines in the background. The reverse of the coin contained a majestic eagle in mid-flight, seen from the side, backed by the rays of the sun.
Both Roosevelt and St. Gaudens wanted to see this design struck in high-relief, but the Mint Engraver Barber objected, stating, “There are no presses anywhere, in mints or in use among silversmiths, which can bring up your proposed relief at a single stroke.” Clearly irritated with the Mint’s response, Roosevelt forcefully intervened, giving a clear order to the US Mint: “Begin the new issue even if it takes you all day to strike one piece!” The Mint obliged, and in 1907 it produced the first $20 gold coin carrying the Saint-Gaudens design. Although the coin was gorgeous, being exceptionally rich in detail and having a resplendent shine, the 172 ton mint press that was set at maximum strength had to give the coin 9 blows before all the details became fully expressed. The President eventually realised the impracticality of producing coins in high-relief, especially since continuous production demands only one strike per piece.
Once the relief of the $20 Eagle Saint-Gaudens Double was lowered, the Mint began full-scale production in 1908. Later that same year, the motto “IN GOD WE TRUST” was added because of the public outcry at its omission, and Roman numerals were exchanged for Arabic numbers. These were the last changes to be made, and from that date onwards tens of millions of copies were minted, with most of them ending up in vaults in the US and Europe. However, unfortunate were those coins that ended up in domestic vaults, as they became an easy target for the authorities following President Franklin D. Roosevelt’s gold confiscation order of 1933.
The US gold confiscation and melting of $20 Double Eagles
With the United States in the midst of severe depression, the $20 Double Eagle naturally became the asset of choice. With people seeking to exchange all forms of paper securities, including bank notes, for gold, the financial sector and the Government itself experienced a run on their gold reserves. To prevent this, in 1933 President Franklin D. Roosevelt issued the infamous executive order 6102 that mandated Americans to turn in their gold, receiving paper money in exchange. Gold coins that were stored in private or government vaults at the time of the order were confiscated and subsequently melted down by the US treasury in the coming years – millions of $20 Double Eagles perished this way. The fact that Double Eagles were extensively used in trade was an added benefit, as those coins that were tucked away in overseas vaults could not be seized.
FDR’s gold confiscation did not end the history of this magnificent coin; quite the contrary, it actually led to a bizarre turn of events that actually boosted the popularity of the $20 Saint-Gaudens Double Eagle. In 1933, the US Mint struck 445,555 Double Eagles; however, none were released into circulation but were instead melted down and turned into gold bullion bars that became part of the Fort Knox gold reserves. Out of this batch, the US Mint spared only two $20 Saint-Gaudens Double Eagles, which became part of the US National Numismatic Collection.
According to official records, these two coins were the only surviving legal specimens of that year, but this fact was dismissed in 1944 when several 1933 Double Eagle coins turned up at a coin auction. Evidently, someone had unlawfully removed several of these coins from the Mint a decade earlier, and because these coins were considered stolen property of the US Mint, the US Secret Service began to track them down.
One year into their investigation, they had identified the facilitator of at least ten 1933 Double Eagles: Israel Switt, a Philadelphia jeweller, admitted selling the coins but could not recount how he had acquired them. Whilst nine of these coins were eventually recovered, which ironically forestalled their original destiny, which was the furnace, documents from the Secret Service revealed that Switt had sold the last 1933 Double Eagle to a Texas dealer, who in turn had sold it to King Farouk of Egypt.
The King, an avid coin collector – possessing a collection of more than 8,500 coins – had legally exported the coin from the US before the Secret Service agents managed to locate it. Once this was revealed, he was approached by the US Treasury Department which requested the return of the Double Eagle. However, the coin would stay in King Farouk’s possession, as the onset of WWII would pre-occupy the Treasury Department.
In 1952, Farouk was deposed in a coup, resulting in his possessions, which included the 1933 Double Eagle, being put up for public auction. As soon as the US Government became aware of this action, they once again asked for the return of the coin. The new Egyptian Government agreed to turn over the coin, but this was no more than an empty promise, as the coin “mysteriously” vanished, never to be seen again in Egypt.
Years and then decades passed, as though Farouk’s $20 Saint-Gaudens Double Eagle was forever lost. But, as the story of the $20 Double Eagle was nothing less than extraordinary from the day it was first struck, fate would keep it this way, with Farouk’s Double Eagle remarkably appearing in New York in 1996. That year, Stephen Fenton, chairman of the British Numismatic Trade Association and a coin dealer himself, arrived in the “Big Apple” to meet an American dealer who was interested in buying Farouk’s Saint-Gaudens Double Eagle for $850,000. Fenton, (according to his own testimony) was a regular buyer of coins from Farouk’s collection, and had one day been given the option of acquiring Farouk’s $20 Double Eagle. He allegedly purchased the coin for $210,000 from an Egyptian jeweller that had close ties to the country’s military, the same military that had previously ousted King Farouk.
The deal between Fenton and the American dealer would not go according to plan, as both men were unaware that information about their transaction had been conveyed to the Secret Service by an associate of theirs. They were both arrested and the agents confiscated the $20 Saint-Gaudens Double Eagle. Fenton was quickly released, but the legal battle over the ownership of the 1933 Double Eagle would prove to be protracted – five years to be exact.
And yet, miraculously, Fenton managed to strike a deal with the Justice Department: the coin was to be sold through Sotheby’s, the world renowned auction house, and the proceedings would be split between them. In 2002, Farouk’s $20 Double Eagle was auctioned off to an anonymous buyer for a mindboggling $7,590,020.00, the highest price ever paid for a coin.
The saga of the 1933 $20 Saint-Gaudens Double Eagle did not end that year, as several more would turn up in the following years, each with their own intriguing story to tell – cementing the legacy of the $20 Double Eagle as the United States’ most treasured and sought-after classic gold coin.