THE GILDED AGE
The Gilded Age for the American $20 gold coin or double eagle began in 1849 when this new denomination was created, spawned by the discovery of gold on the American River in January 1848, which expanded to become a worldwide sensation. With the arrival of the Forty-Niners the next year and statehood for California in 1850, the United States extended from sea to shining sea. The unprecedented influx of gold metal to the Philadelphia Mint called for a coin to be made of a value double the size of the $10 gold eagle, which had been first minted in 1795. Patterns were made in 1849 by James B. Longacre, chief engraver at the Mint, and in 1850 the minting of Liberty Head double eagles in quantity took place at facilities in Philadelphia and New Orleans, the latter coins bearing a distinctive “O” mintmark. In 1854 the San Francisco Mint began making double eagles, followed by the Carson City Mint in 1870 and the Denver Mint in 1906.
The Liberty Head double eagles for circulation were produced continuously from 1850 to 1907 after which they were replaced by a design by Augustus Saint-Gaudens. Not long after their introduction, $20 became the denomination of choice for converting gold bullion to coins for use in commerce and export. Double eagles used more than 75% of that metal.
At the same time, the production quantities and distribution of these coins were closely tied to national and international events. The discovery of gold in California was followed by more from Pikes Peak in the Denver area, the fabulous Comstock Lode, the Cripple Creek Gold District, the Klondike, and elsewhere.
Meanwhile, there were many other factors that influenced the minting and distribution of gold coins. In late December 1861, there was great uncertainty as to the outcome of the Civil War. Citizens began hoarding gold coins, and they were no longer seen in circulation in the East and Midwest. Banks, brokers, and others held such coins, but they were available only at a premium in terms of paper money. When the Civil War ended in April 1865 it was thought by many that gold coins would soon return to the channels of commerce. However, distrust of the real value of Legal Tender Notes, which had no backing in either silver or gold, resulted in gold still selling at a premium. Gold coins and paper money did not achieve parity until December 17, 1878. In the meantime on the West Coast, the opposite occurred: Gold coins circulated actively at face value and paper money traded at a deep discount.
Other factors influencing double eagles and other coins included speculation and the “corner” in gold in 1869, economic setbacks in the 1870s, the halcyon years of expansion in the Midwest in the 1880s, the “Silver Question” as to whether silver was preferable to gold, and the panics of 1893 and 1907. Changes in society, including transportation, manufacturing, the development of land, and politics all played a part as well.
Today, in September 2020, “I want to hold gold!” is the rallying cry for countless thousands of people worldwide. As I write these words the price of an ounce of gold is a few cents over $1,943—close to an all-time high.
If you want to hold gold, an ideal way to do it is to buy a common-date Liberty Head or Saint-Gaudens double eagle, available on the present market for only a modest premium over melt value.
Stay safe. See you next week!