By Tom DeLorey on Tuesday, August 11, 2009
Filed Under: Featured, History, US Coins

The U.S. Treasury’s high-handed seizure of a 1933 St. Gaudens Double Eagle from a British dealer lured to America under false pretenses by a Secret Service Agent posing as a buyer for the coin is outrageous to me, and should be highly disturbing to you, the collector. The arrest of this dealer, Stephen Fenton, and of his American agent, Jay Parrino, on charges of allegedly possessing stolen U.S. government property is frightening to all of us.

Popular legend has long held that no 1933 Double Eagles were ever “officially” released by the U.S. Treasury, and that somehow this made them illegal to possess (other than the two specimens “officially” given by the Treasury to the National Numismatic Collection at the Smithsonian Institution). This is despite the fact that several 1933 $20s were publicly advertised and sold in the numismatic market between 1933 and 1944, at which point the Treasury suddenly and arbitrarily decided that they could not be sold after all, and began seizing them and destroying them!

Although most common gold coins were required to be surrendered to the U.S. Treasury at face value by the Gold Surrender Act of 1933 and the Gold Reserve Act of 1934, the laws specifically exempted “gold coins having a recognized special value to collectors of rare and unusual coins” from the requirement, and the 1933 Double Eagle certainly qualified as a rare and unusual coin. These laws were ultimately nullified by Public Law 93-373, which made all forms of gold legal for Americans to own again and was signed into law by President Gerald Ford on August 14, 1974, and again by Executive Order 11825, promulgated by Ford on December 31, 1974.

This would appear to make the 1933 $20s legal to own now, a point arguably subject to debate and interpretation when the Treasury began seizing them in 1944. However, the Treasury now claims, without substantiation, that the 1933 $20s are actually stolen government property, a charge significantly not raised by the Treasury when two earlier victims of government seizure in the late 1940s and early 1950s sued the government for the return of their property.

Those lawsuits were conducted at a time when the Gold Surrender Act was in effect to support the Treasury’s otherwise weak position. In both cases the litigants abandoned their efforts in the face of the endless legal fees incurred in challenging Uncle Sam’s deep pockets. However, neither litigant was ever faced with the threat of criminal prosecution.
 
The government bases its current charges, unsupported by any police report involving the theft of property that I am aware of, on the premise that the Treasury has no record of the coins ever having been issued. However, the allegation that there is no official record of them having been issued does not constitute evidence that the coins were “stolen” in some manner, as there are literally thousands of U.S. coins in existence today that the U.S. Mint has no record of ever even striking, much less issuing.

The largest class of these are the Proof gold and silver coins dated before 1858, and the Proof copper, bronze and copper-nickel coins before 1878. These coins were basically treated as medals for the Mint’s accounting purposes, which were mainly concerned with keeping track of the metals used in them, and they were not included in the Mint Reports for the coins issued in a given year. Look at the Mint Report for Half Cents dated 1840 to 1848, and 1852. According to the U.S. Mint Report these coins were never struck and never issued. Should they be seized? Nonsense!

The same Mint Report also claims that no regular issue Half Dollars were struck at the Philadelphia Mint in 1815, and likewise that no $2.50 gold pieces were struck at the New Orleans Mint in 1845, yet both coins certainly exist! Should the U.S. Treasury therefore seize the coins, or should it calmly accept the assumption which the hobby makes that these coins were struck in early 1816 and early 1846 respectively from leftover dies, and that the U.S. Treasury’s records are understandably either wrong or incomplete? (We will ignore the coins which the Mint Report says were issued but were in fact never actually struck, such as the 1797 Quarter Dollars and the 1805 Silver Dollars which the hobby now knows to have been earlier-dated coins either struck or issued in those years. The Treasury would certainly have no interest in seizing coins which do not exist. We hope.)

Thus there is significant historical precedent to establish that the U.S. Treasury’s records are sometimes wrong and sometimes incomplete, and no reason to believe that they might not be wrong or incomplete in the case of the 1933 Double Eagle. The Mint might have released a few coins without telling the Treasury, or the Treasury might have released a few without telling the Mint. Also, there seems to be no record of how many of the 29 1933 Double Eagles reserved for the 1934 Assay Commission were actually assayed by that commission, and what happened to any unmelted coins.

There may also have been some uncertainty on the Mint’s part as to whether the embargo on gold was permanent or temporary. Though Roosevelt had issued the Gold Surrender Act, officially Executive Order #6260, on March 6, 1933, prohibiting the further release of gold coins struck by the country’s mints, the Philadelphia Mint continued to strike 1933 Double Eagles until April 5th of that year, and by some accounts struck them as late as May. There was no reason to strike the coins if the Mint did not believe that it might perhaps someday be allowed to issue them.

Thus there were, for a period of several weeks, genuine 1933 Double Eagles in the Philadelphia Mint where, under the Mint’s normal business practice (for the day) of courteously accommodating the public in general and coin collectors in particular, they theoretically could have been legally exchanged for another $20 gold piece or any $20 face value in gold.

As an example of this progressive attitude, Q. David Bowers tells in “Silver Dollars & Trade Dollars of the United States” how the Secretary of the Treasury in 1928 had the Philadelphia Mint make a 1928-P Peace Dollar, which had not yet been officially released, available to a powerful New York political organization which wished to include one in a cornerstone being laid in that year. I personally have seen a cover letter on San Francisco Mint letterhead from 1928 or 1929 telling a collector that the five different S-Mint dollars (all the way back to the 1921-S Morgan!) that he had requested and paid for were enclosed, and offering to supply other coins from their inventory.

The same could have happened to the 1933 Double Eagle, just as it did to other coins. When I was Senior Authenticator at the American Numismatic Association in Colorado Springs, I once had the pleasure of meeting with a family who was visiting our museum who had a coin which they wanted looked at. The coin was a 1921 Double Eagle, which is a very rare date despite a mintage of 528,500 pieces, as virtually all of the mintage was held by the Treasury as backing for Gold Certificates and later melted in 1933.

The grandmother in the family explained that her uncle, who was the Superintendent of the Philadelphia Mint at the time she was born in 1921, had given her the coin as a present upon her birth, and that it had been in her family ever since. (Alas, the family had cleaned it several times over the years!) She mentioned a name which I later verified in the “Coin World Almanac” as one of the two men who served as Superintendent in 1921, but I do not recall now which one it was.

Breen estimated that only 15 to 18 1921 Double Eagles exist today, and it is quite possible that all of these were courtesy releases just like that innocent grey-haired lady’s. Nevertheless, the date is considered to have been officially issued, and that makes them legal in the eyes of the Treasury.

If somebody of influence, or at least of means, had gone to the Philadelphia Mint during that window of opportunity in 1933 and requested a 1933 Double Eagle, there was no reason at that time why that request would not have been honored. There might also not have been a record of such an insignificant transaction, just as today you would not make a diary entry of the fact that you had given a friend two $10 bills for a $20.

Finally, we must remember that the Secretary of the Treasury from March 5 to December 31, 1933, was none other than the noted numismatist William Hartford Woodin, one-time owner of the two unique 1877 “Half Union” $50 pattern coins in gold. Woodin had been pressured into returning them to the Treasury in 1910, and was given the Mint’s fabulous 118-year accumulation of odds and ends, mostly patterns, in return for them. This hoard became the basis for the book “United States Pattern, Trial, and Experimental Pieces,” co-authored with Edgar H. Adams in 1913.

Woodin was a friend and financial supporter of FDR from his New York political days, and an enthusiastic proponent of his New Deal. As Secretary of the Treasury he helped shaped the wording of the various gold surrender acts, and may have been instrumental in providing for the exemption of numismatic coins from them. Whether or not he also helped preserve a few of the 1933 Double Eagles for posterity we will never know.

Woodin grew ill in the Fall of 1933 with respiratory problems, and offered his resignation on Oct. 31. FDR refused the resignation, but after a prolonged leave of absence in the Southwest failed to improve his condition, Woodin resigned again on Dec. 13, effective Dec. 31. He died on May 3, 1934, and his collection was disposed of privately.

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There are many other items that the U.S. Treasury and/or the U.S. Mint consider or have considered to be unlawful for the average American citizen to own. The most mysterious is probably the 1964-D Peace Dollar, of which some 316,000 pieces were struck at the Denver Mint in 1965 but never “officially” released.

The U.S. Treasury’s decades-old supply of Morgan and Peace silver dollars, long held as backing for silver certificates, had been exhausted by a run on the Treasury during the years 1962-64, ignited by the surprising release of several original bags of 1903-O Dollars in October of 1962, which prior to that moment had been worth some $1,500 each in Uncirculated condition.

The supply of Dollars ran out in 1964, just as recently-inaugurated President Lyndon B. Johnson was beginning to exert his power as our first Western President. Silver Dollars had long been popular in the West, and when several of LBJ’s political cronies from the silver-mining states suggested that it would be a good idea for the U.S. Treasury to mint some more silver dollars, LBJ thought it was a good idea too.

LBJ ordered the Mint to get ready to make silver dollars, and to the Mint getting ready means making dies and testing them. Even though no change was contemplated from the Peace dollar design last used in 1935, the dies and hubs used for that coinage had long since been destroyed, and new ones needed to be created and tested for their striking characteristics.

The coins were authorized on August 3, 1964, but for some reason, probably the so-called coin shortage of 1964, production was delayed until May of 1965 when LBJ finally ordered the Mint to strike the coins. An initial test run of 316,076 pieces was struck as a final testing of the dies, but then the Coinage Act of 1965, effective July 23 of that year, forbade the issuance of any new silver dollars.

Bowers cites the noted Denver dealer Dan Brown as saying that the Superintendent of the Denver Mint, Fern Miller, had told him that employees at the Mint had been allowed to buy some of the test coins at face value just after they were struck, but that later the employees had been requested to return them.

I was able to confirm this story while talking with a retired Denver Mint employee who was visiting at ANA headquarters down in Colorado Springs, who verified that the employees had been given the opportunity to buy some of the coins. He told me that a friend of his at the Mint had bought two of the coins on his way out of the door on the first day that they were struck, and that the friend had spent them at a bar in Denver that night, perhaps figuring that he could always get more the next day.

However, that next day all of the people who had bought the coins were threatened with being fired if they did not return them. Several did, but the friend insisted that the coins were gone, and did not lose his job.

Another mysterious issue is the 1974-dated Aluminum Cent, and its cousin the 1974-dated Bronze-Clad Steel Cent. Some 1.5 million of the Aluminum Cents were struck in 1973 as a test of a proposed new alloy for the cent, after which a reported 16 of them were distributed to certain congressional committee members and their staffs. Apparently it was anticipated that all of the 1974 Cents would be done in aluminum, which would have made the trial pieces essentially meaningless.

However, the vending machine and copper-mining lobbies successfully defeated the Aluminum proposal, which presumably led to the Bronze-Clad Steel variation being struck. Ultimately no change was made, and the Treasury later began a quiet campaign to retrieve the Aluminum pieces. Seven were recovered, one was donated to the Smithsonian by its recipient, and eight remain unaccounted for. In the face of much unfavorable national publicity, the Treasury later declared the aluminum pieces to be illegal to possess, but wisely did not threaten members of Congress with criminal prosecution.

Five of the Bronze-Clad Steel striking are reported to exist. When they first became known to the hobby in 1994, the Treasury initially offered an informal opinion that they were legal to possess. However, after they were publicized the Treasury reversed its position and declared them to be illegal to possess and subject to seizure.

Lesser known is the 1977/6 Lincoln cent, which the U.S. Mint’s own Laboratory initially declared to be a genuine error. After it was widely publicized, however, the Mint then changed its mind and declared the piece to be an alteration, seizing the coin despite prior guarantees that it would not do so and refusing to allow it to be examined by outside experts.

(If you think there is a correlation between the publicity a piece receives and the likelihood of it being made subject to seizure, you may be right.)

On the positive side, the Mint, which has had a wide range of policies regarding error coins over the years, has showed signs of growth. At one time it declared virtually all error coins, such as off-metal, off-center and capped die strikes, unlawful to possess on the grounds that they did not contain the authorized compositions and/or inscriptions.

However, in the past quarter century it has become enlightened enough to admit that it is only human, and that honest mistakes do occur which can be lawfully released via mint-sewn bags. It continues to rightfully investigate and seize, where appropriate, deliberate errors smuggled out of the Mint for sale at a profit.

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Many classic U.S. rarities have uncertain origins. Perhaps the most famous of these is the 1913 Liberty Head Five Cents piece, first offered for sale in 1920 by a former employee of the Mint. There are no records of these coins having been struck, and no explanation of how this Mint employee happened to come by them, though they were undoubtedly struck from U.S. Mint dies on U.S. Mint planchets. One of the five pieces is currently unaccounted for, having disappeared following the death of its owner in a car accident.

The 1894-S Dime is a significant rarity, but at least the low official mintage of 24 pieces is listed in the Mint Report. Extensive research by James Johnson and William Burd has established that the Superintendent of the San Francisco Mint had the 24 pieces struck for distribution in eight equal groups to seven of his friends and to his daughter, who sold two of her three pieces to a dealer in 1954, having spent the other one on ice cream in 1894! As the Superintendent passed all of these coins through the official records their legality is beyond question.

Our most famous coin is probably the 1804 Silver Dollar, whose story you should read in the book “The Fantastic 1804 Dollar” by Eric P. Newman and Ken Bressett. First struck in 1834 for inclusion in diplomatic presentation sets, in the mistaken belief that other 1804 Dollars had already been struck in 1804, the coin was later recognized as a numismatic rarity when it was realized that the 1804 strikings had actually been dated 1803 or even earlier.

Already engaged in restriking earlier rarities for sale at a profit, the Mint was preparing in 1858 to make more 1804 Dollars as well when the night watchman, a son of the Chief Coiner, beat them to the punch and made a few of his own. These amateurish, plain-edged productions were sold to various coin dealers, repurchased by the Mint after the scandal of this striking broke, and resold in the 1870s after the edges of the coins had been lettered to resemble the 1834 strikings.

Nobody questions their legality today, and the Smithsonian Institution proudly displays its recently acquired Lindermann Specimen, which was donated to them by Willis DuPont. (I know the coin well, having recovered it in 1981 when it showed up at ANACS after being stolen from DuPont in 1967, and even when it lay in the U.S. Attorney’s vault in Denver as evidence the issue of the coins legality to own was never raised.)

The Proof Trade Dollars of 1884 and 1885 have always existed under a cloud, with many people rashly assuming that these were a private production within the Mint. However, Carl Carlson revealed in Stack’s June, 1988 catalogue of the Sprinkle Collection that the dies and bullion used to make the 1884 pieces were indeed accounted for in the Mint’s records, even if the coins themselves are not listed in the Mint Report. Perhaps someday records will surface regarding the 1885 Trade Dollars as well.

An even greater rarity is the 1873-CC No Arrows Dime, currently believed to be unique, and its near-great sisters the 1873-CC No Arrows Quarters, of which only four are known. All of these began as regular issues in early 1873, but the bulk of the mintages were melted down after Congress authorized a slight increase in the weight standards to make them even multiples of grams rather than grains in the interest of promoting the metric system.

It is believed today that these five coins were rescued from oblivion out of the coins submitted to the 1874 Assay Commission, just as some of the 1933 Double Eagles might have survived the 1934 Assay Commission. As long as the government was reimbursed for the metal, there was no reason why any of them should not have been saved.

Finally, we have the 1870-S Half Dime, Silver Dollar and $3 gold piece. None of these are listed in the Mint Report, yet nine or ten of the Dollars have been known for years. The unique Half Dime was not discovered until 1978, when it was purchased over the counter at a small coin shop here in Cook County as a regular type coin!

The currently-believed unique 1870-S $3 made its first appearance (outside of its supposed resting place in the cornerstone of the San Francisco Mint, which was laid in 1870) in an advertisement in the April, 1907 “The Numismatist” by H. T. VanCamp of New York. It next appeared in the May, 1909 “The Numismatist,” as a reference in a notice entitled “A Monograph of the Five-Dollar Piece and its Varieties in Preparation.”

The notice told about a work being prepared by the $3’s owner, who owned the only known complete collection of $3 gold pieces, namely “the well-known collector of United States gold coins,” Mr. William H. Woodin! Did Woodin also own a complete set of St. Gaudens $20? We may never know.

Originally published in COINage magazine in May, 1996. Reprinted with permission of Harlan J Berk Ltd. Copyright 1997 by Thomas K. DeLorey.

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