One per year US gold set (1834-1878)

Set Description
Collecting gold coins that were minted between the years 1834 and 1878 is both interesting and challenging for a number of reasons. As discussed below, the era between 1834 and 1878 is filled with fascinating historical events that directly impacted the quantities of gold coins that were minted, the denominations of the coins, and where those coins were stuck. While this era excludes the beautiful “old gold” coins that where minted in 1834 and prior years, it does include a number of very rare coins that are still relatively affordable. The main reason why there are so few surviving “old gold” coins is related to the rising gold price on the world markets during the 1820s and early 1830s. This led to the melting of American gold coins for their bullion content or their export to foreign countries. In order to rectify this problem, the United States Congress passed the Act of June 24, 1834, which reduced the authorized weight of American gold coins.

The gold coins that were issued after August 1, 1834 (Classic Head gold coins) were of lighter weight and therefore worth less in bullion value than their face value, so they remained in circulation instead of being melted or exported. Classic Head gold coins were produced in the quarter-eagle ($2.50) and half-eagle ($5) denominations between the years 1834-1839, and 1834-1838, respectively. Prior to the 1820s, there were no significant known sources of native gold in the United States. Therefore, the “old gold” coins were all produced at the Philadelphia mint using gold that was primarily obtained from melted foreign coins and jewelry, and bullion that was imported from Central and South America. However, in the 1820s, gold was discovered in North Carolina, which eventually led to the establishment of two new “gold only” branch mints in Dahlonega, Georgia, and Charlotte, North Carolina in 1838 to produce coins from the gold bullion found in those areas. An additional branch mint was also opened in New Orleans, Louisiana in 1839.

Later, Coronet-type (Liberty) gold coins were produced in the quarter-eagle, half-eagle, and eagle ($10) denominations between the years 1840-1907, 1839-1908, and 1838-1907, respectively. On November 13, 1861, in the midst of the Civil War, a Pennsylvania preacher named Rev. Watkinson wrote a letter to Salmon P. Chase, Secretary of the Treasury under President Lincoln. In this letter he expressed his concern that "recognition of the Almighty God" had been overlooked on the nation's coinage. He believed that proudly declaring such recognition "would relieve us from the ignominy of heathenism" and "place us openly under the Divine protection that we have personally claimed." His actions led to the addition of the motto “In God We Trust” to the half eagles and eagles in 1866 after the end of the civil war. Therefore, the half-eagle and eagle denominations can be further classified as “no motto” and “with motto” varieties for the years prior to and after the transition year 1866, respectively.
A new discovery of gold at Sutter's Mill, California in January 1848 led to further changes in the production of American gold coins. The vast quantities of gold being extracted in California were shipped to the Eastern markets where it was not only used to mint quarter eagles, half eagles, and eagles, but it was also used to produce three new denominations of gold coinage: gold dollars, three-dollar gold pieces, and double eagles ($20). The gold dollars were produced between the years 1849-1889, three-dollar gold pieces were minted from 1854-1889, and double-eagles ($20) appeared from 1850-1907. An additional branch mint was opened in 1854 in San Francisco, California to locally utilize the California gold. Because of its proximity to the mined gold, the San Francisco mint became the largest producer of the large and heavy double eagles. The large amount of gold that was mined in California meant that there was a record quantity of gold coinage struck in the 1850s.

Things changed dramatically after the start of the Civil War in 1861. In the South, 1861 was the last year that gold coins were minted at either the Dahlonega or Charlotte branch mints. It is estimated that approximately half of the coins that were minted in this terminal year at these two mints were struck when these facilities were under the control of the Confederate States of America. Neither the Dahlonega nor the Charlotte branch mint ever reopened for minting U.S. gold coins. Another southern mint that closed in 1861 was the New Orleans mint. However, unlike the Dahlonega and Charlotte branch mints, the New Orleans mint reopened in 1879 and continued its service as a U.S. branch mint until 1909. Because of their minimal gold reserves, the Confederacy had to issue paper currency (notes) that weren’t backed by gold or silver, but were only backed by good faith in the stability of the Confederate States of America. During the war, up to $60.00 in Confederate notes had to be exchanged to receive $1.00 in gold coinage. After the Confederacy was defeated, the Confederate notes became worthless.

The Civil War also had a large effect on the mintage and use of gold coins in the Union States. The Union Government’s attempts to finance the war with borrowed money led to the hoarding of gold and resulted in the disappearance of gold coins in circulation. This led to the Legal Tender Act of 1862, which authorized the Federal government to issue a paper currency that was not backed by either gold or silver for the first time. The notes that were printed with green ink became known as “greenbacks.” However, as was the case with the Confederate notes, the value of the Union paper notes was uncertain and fluctuated as a function of how well the Union forces were doing throughout the course of the war. A low exchange rate of $2.59 in Federal notes for $1.00 in gold was reached at one point during the war. Since in 1862 the U.S. Government no longer paid out gold coins, there was a large reduction in the number of gold coins that were struck at the Philadelphia mint after 1861. The situation was very different in the West. Gold coins continued to circulate on the West coast, and the mintage of gold coins at the San Francisco branch mint surpassed the mintages that were seen at the main Philadelphia mint after 1861.

Following the end of the Civil War in 1865, the U.S. government was left with massive debts that were accumulated from the borrowing that it used to fund the war. The U.S. economy really didn’t fully recover until approximately 1878. These years (1865-1878) are often referred to as the Civil war Reconstruction Era. At the end of 1864, the New York market price for gold was $42.03 per fine ounce, whereas the U.S. official price was only $20.67 per ounce. As the U.S. economy slowly improved during the Reconstruction Era, the New York market price for gold also slowly reverted to the U.S. official price of $20.67 per ounce, which reached $20.84 by the end of 1878. As the greenback slowly approached equity with the gold dollar, legislation was enacted stating that the greenback would be freely convertible into gold starting January 1, 1879. This helped to reestablish the faith of the American people in the federal currency, so larger denomination gold coins were no longer used much in local commerce. However, after experiencing the depreciation of Union federal notes during the Civil War, and being left with worthless confederate notes after the war, foreign merchants and bankers still required payment in gold. This led to greatly increased mintages of the larger denomination gold coins (i.e., $5 and greater) after 1877. So whereas gold coinage was widely used for commercial transactions prior to the Civil War, gold coins were mainly used for international transactions after 1877.

The discovery of silver in what is now the state of Nevada in approximately 1858 also played an important role in the history of gold coinage during this era. This discovery, which turned out to be one of the richest deposits of silver ore ever found, was called the Comstock Lode. Along with the vast quantities of silver, they also found lesser amounts of gold. The silver and gold from the mines were initially transported by wagons to the San Francisco mint where it was used to produce silver and gold coins. In order to avoid the problems associated with shipping the precious metals the long distance to California, legislation was passed on March 3, 1863 to establish a new branch mint in the Nevada Territory. Unfortunately, the ongoing Civil War and lack of sufficient funding delayed the opening of the new branch mint at Carson City, Nevada until 1870. This mint had a fair short life since gold and silver coins were only produced from 1870 to 1893, when the mint was converted to an assay office.

Set Goals
This set will eventually consist of 1 US gold coin per year from 1834-1878.