Prevailing economic conditions and the lack of federally issued currency in regions of the United States where gold was discovered beginning in the late 1820s led to the issuance of private gold coins to fill the void.
Until late in the Civil War, such private gold coins were legal as long as they carried the amount of gold claimed on each piece. These private or pioneer gold pieces trace their genesis to the first Gold Rush to occur in the United States. Some may be surprised to know that first rush occurred from 1828 through the 1840s in areas of Southern Appalachia, primarily Georgia and North Carolina.
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EVEN WITH repairs to damage associated with use in a piece of jewelry, this August Bechtler gold dollar is still a desirable specimen. The coin, certified by ANACS as "AU Details, Net VF30", sold in 2002 for just less than $1,500.
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The need for private coinage when there wasn't widespread distribution of federal coinage was repeated with the discovery of gold in California in 1848 and the resultant production of private issues there; and in other regions of gold discoveries, including Utah and Colorado.
Gold mined in California was also carried outside the state to private mints established in nearby states or territories, with the metal used to strike coins that were to be returned to the area.
Most of the firms making pioneer gold issues focused on denominations from $1 through $50.
Depending on the rarity of these issues, a collector can expect to spend thousands of dollars acquiring even the most worn examples, especially for the higher-denominated gold pieces.
However, the need for minor denominations spawned the production in California of fractional gold pieces, also referred to as small-denomination gold, denominated in values of 25 cents, 50 cents and $1 for small transactions. Some small-denomination gold pieces can be obtained for a few hundred dollars each depending on condition and variety.
Budget limitations will obviously guide how a collector approaches pioneer gold coins.
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THE FIRST private gold coins were the issues from Templeton Reid, who produced the first of his issues in July 1830 in Milledgeville, Ga. This Professional Coin Grading Service About Uncirculated 55 $2.50 gold piece sold in 1999 for $62,100.
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Collectors interested in the gold rushes and the coins that resulted from those periods of 19th-century history might consider assembling a set of representative pieces from the various regions in which gold coins were made, acquiring pieces by denomination or issuer, or in the case of small-denomination gold, by denomination or variety.
One should not blindly enter into collecting pioneer gold coins, or any coins, for that matter, without first immersing oneself in knowledge that will help in the pursuit of this segment of the numismatic hobby.
Private Gold Coins and Patterns of the United States is a 1981 reference by Donald Kagin, a coin dealer in California who is considered by many within the hobby to be the premier authority on such issues.
Dan Owens penned the 2000 work, California Coiners and Assayers, another essential work about the topic.
Several books about fractional gold coins are considered essential if that segment of the hobby is more to your liking, including California Fractional Gold by David Doering and California Pioneer Fractional Gold: Historic Gold Rush Small Change 1852-1856 and Suppressed Jewelers' Issues 1859-1882 by Walter Breen, with the collaboration of Ronald J. Gillio (pieces are assigned Breen-Gillio, or BG, catalog numbers).
A number of numismatic dealers specialize in pioneer gold pieces; some advertise in the pages of Coin World.
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CONSIDERED BY MANY collectors to be the first of the California private gold coins, the Norris, Gregg & Norris $5 coins would be a welcome addition to a pioneer gold collection. A Fine specimen is valued at $3,600. The PCGS About Uncirculated 53 specimen shown was sold July 30 by Heritage for $17,250.
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Getting started
Pioneer coinage was produced out of necessity because of a shortage of regular government-issued coinage in a specific region. In the Western United States, sufficient coinage became so scarce that the gold that many pioneers had gone there to acquire was used as money in uncoined form (nuggets, dust).
When the first U.S. gold rush arose in the Carolinas and Georgia, it resulted in private gold coins that circulated primarily in the 1830s. With the discovery of gold in California in 1848, and later in Utah and Colorado, a number of private mints were established in those regions that issued gold coins from about 1849 through 1860.
Because of the extreme rarity of many of the earliest pioneer gold pieces as well as the larger denomination examples from the California Gold Rush, many collectors may consider the option of selecting a single example from each region as a representative type set. Another option is settling for coins that may have some problems that will lower the overall value, but allow for purchase without breaking your budget.
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THE CLARK, GRUBER & CO. was a well-known private minting firm in Denver and a forerunner of the Denver Mint. Collectors on a tight budget might consider acquisition of a Fine example of the 1860 $2.50 or $5 issues for less than $2,000. The example shown, graded MS-60 by Numismatic Guaranty Corporation of America, sold in September for $10,350.
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Nearly $50 million worth of pioneer gold coins, exclusive of the smaller-diameter small-denomination gold pieces, were issued between 1830 and 1861, with most eventually melted, accounting for their current scarcity.
The first coiner to strike gold coins privately under the U.S. Constitution was Georgia jeweler and gunsmith Templeton Reid, who produced the first of his issues in July 1830 in Milledgeville, Ga. Before closing his operation within three months amidst public criticism over the poorly assayed, though properly weighted coins, Reid had struck approximately 1,600 coins in $2.50, $5 and $10 denominations.
All of the Templeton Reid coins are expensive today. A Very Fine example of an 1830 $2.50 gold coin is valued at $50,000 or more. Collectors looking to obtain an example of the issues from the first Gold Rush should consider the releases of German metallurgist Christopher Bechtler, his son, August Bechtler, and nephew Christopher Bechtler Jr., who operated their private mint in Rutherford County, N.C., using locally mined gold from 1830 through 1852. The Bechtlers issued three denominations - $1, $2.50 and $5. They produced their first gold dollar in 1831, 18 years before the United States Mint produced the first federal gold dollar. The Bechtler family struck considerably more gold coins than Reid, and many more issues survive. A number of varieties are readily available to collectors at prices many would find more acceptable than for the Reid coins. Examples of the $1 and $2.50 coins, depending on variety, are valued at less than $2,000 each in VF condition.
The first gold discovered in California was reported by Gen. John A. Sutter in January 1848. The first pioneer coins struck from California gold were not struck in California, but in the Deseret Territory, later to become Utah.
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THE .900 thous. variety of 1853 U.S. Assay Office of Gold $20 gold coin represents another pioneer gold set candidate. In Fine, the variety is valued at $3,500. The PCGS Mint State 65 specimen shown sold for $92,000 in July.
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"Not only were the first western private gold coins issued by the Deseret Assay Office under the auspices of the Mormon Church, but they preceded the private coinage in California by more than five months," according to Heritage Numismatic Auctions' catalog description for a Mormon $10 gold coin in its recent Long Beach Signature Sale. "In addition, unlike other private coining operations, the coins of the Deseret Assay Office were conceived, executed and distributed by a religious community from dust deposited as part of their church's tithes.
"On Sept. 28, 1848, some of the members of the Mormon Battalion who had fought in the War against Mexico returned to the Salt Lake Valley by way of the California gold fields. Several arrived with considerable amounts of gold dust, which, as in California, was at first used in trade. As soon as the church began receiving the dust, [Mormon leader] Brigham Young decided to fashion the metal into coins.
"The first $10 gold pieces were struck in December 1848 before the crucibles broke. Coining resumed in September consisting of $2½, $5 and $20 pieces. Additional $5 coins were issued in 1850 and once again in 1860 from Colorado gold dust. When it was revealed that most of these 'native gold' coins contained as little as 80 percent of their purported value they were discredited, severely discounted and melted."
The $10 Mormon coins are the rarest of the Mormon issues, exceeding $130,000 in Fine condition.
The least expensive of the Mormon issues is the 1849 $5 coin, valued at just more than $6,000 in Fine condition.
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1852 AUGUSTUS HUMBERT, ASSAYER $10 gold piece can be considered by a collector seeking to assemble a representative collection of pioneer gold coins. The specimen shown, graded Very Fine 35 by Professional Coin Grading Service, sold July 30 by Heritage Numismatic Auctions for $6,325.
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From 1849 until a year after the U.S. government opened the San Francisco Branch Mint in 1854, a large number of private issuers, located primarily in San Francisco, struck their own gold coins from native California gold. These issuers were Norris, Gregg & Norris; Moffat & Co., August Humbert's United States Assay Office; United States Assay Office of Gold; J.H. Bowie; Cincinnati Mining & Trading Co.; Massachusetts and California Co.; Miners' Bank; J.S. Ormsby; Pacific Co.; F.D. Kohler, California State Assayer; Dubosq & Co.; Baldwin & Co.; Shultz and Co.; Dunbar & Co.; Wass, Molitor & Co.; and Kellogg and Co.
While the efforts of these private minters met a demand, most Californians were not content with the private gold coiners or even the short-lived State Assay Office, and demanded a United States Branch Mint, which could make legal tender coins.
Throughout 1849 and 1850, several legislative initiatives were introduced in the California Legislature and United States Congress seeking the establishment in California of a Branch Mint of the United States Mint.
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THE 1850 Baldwin & Co. $5 gold coin is another consideration, valued at $5,000 in Fine. The PCGS AU-55 specimen sold in July for $25,300.
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A compromise measure was passed on Sept. 30, 1850, providing for a United States Assay Office to be established in San Francisco. This office had the authority to assay gold and stamp it with an appropriate seal to show its value, and its products would be accepted for all customs duties. Moffat & Co. was given the contract for coining the new issues and Augustus Humbert, a watchmaker in New York, was appointed U.S. assayer.
All other private coiners ceased operation in 1851, but when their operators realized that the U.S. Assay Office was permitted to strike only the cumbersome $50 gold "slugs," Moffat & Co. and other private coiners began to issue their own $10 and $20 coins a year later. Finally, in February 1852 the U.S. Assay Office was authorized to issue lower denominations, which it did until the establishment of the new San Francisco Branch Mint in 1854.
Kellogg & Co. issued round gold $50 pieces dated 1855, but these issues were intended for presentation purposes only, and not for circulation.
Most of the private California issues will cost in the thousands of dollars, and even tens or hundreds of thousands of dollars, depending on condition and rarity.
Representative examples to consider for a type set are an 1852 August Humbert, United States Assayer of Gold $10 piece, valued at $1,750 in Fine condition; an 1852 Wass, Molitor & Co., Large Head gold $10 piece, valued at $2,200 in Fine; and an 1849 Norris, Gregg & Norris gold $5 piece, valued at $3,600 in Fine.
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BETWEEN 13 and 18 pieces are known of this variety of 1854 $1 Liberty octagonal dollar, BG-534 (California Pioneer Fractional Gold: Historic Gold Rush Small Change 1852-1856 and Suppressed Jewelers' Issues 1859-1882 by Walter Breen, with the collaboration of Ronald J. Gillio). Because of its rarity, this PCGS AU-50 specimen sold for nearly $7,200 in 2003.
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California was not the only Western region with private mints actively coining native gold. In early 1849, the legislature of the Oregon Territory authorized the creation of a mint in Oregon City to issue gold $5 and $10 coins without alloy.
This mint, known as the Oregon Exchange Co., issued the two denominations of "Beaver" coins, so named for their obverse design. The Beaver gold $5 coin, of which 6,000 were recorded as made, is valued at $16,500 in Fine, while the $10 coin, of which 2,850 were made, is valued at $37,500 in the same grade.
Three firms issued pioneer gold pieces from Colorado in 1860 and 1861 - John Parsons & Co. from Tarryall Mines, J.J. Conway & Co. from Georgia Gulch, Colo., and Clark, Gruber & Co., the latter being the 19th century forerunner of the Denver Mint. The Clark, Gruber & Co. issues are the most obtainable for inclusion in a type set of pioneer gold. From Colorado.
Examples of the 1860 $2.50 and $5 Clark, Gruber & Co. issues are the most affordable, being valued at less than $1,800 in Fine condition.
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THIS SPECIMEN represents the only undated octagonal dollar variety, BG-501, with a known surviving population of between 60 and 75 pieces. At PCGS MS-63, the piece sold for more than $6,600 in 2003. Lower grade specimens of this or other varieties may cost much less.
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The obverse and reverses of the 1860 and 1861 $2.50 and $5 denominations, as well as the 1861 $20 denomination, closely resemble the federally issued Coronet gold coins of the period, save for the inscriptions. Each bears a Coronet Liberty portrait on the obverse and an eagle on the reverse.
The common obverse design for the 1860 $10 and $20 gold coins is regionally distinctive. Each bears an obverse featuring Pike's Peak. Each reverse depicts the same eagle found on the smaller pieces.
Small-denomination gold
Private gold issues were not restricted to denominations of $1 and higher. Some merchants issued California gold pieces denominated in 25-cent, 50-cent and $1 denominations to facilitate small transactions. The numerous issuers of this series produced many design and inscription varieties, with some pieces struck on round planchets and other examples on octagonal planchets. These small-denominational pieces are the most affordable of pioneer gold pieces. Some can be found for a few hundred dollars each, even in Uncirculated condition, depending on variety and availability. However, because of the large number of varieties produced, some are very rare. Collectors of these rarer California small-denomination gold pieces are receptive to acquiring an example with wear or damage if it is the only piece available.
Obverse designs are usually of a Coronet Liberty Head or of an Indian Head with headdress similar to that worn by Liberty on the Indian Head cents, although most of the small-denomination gold pieces were struck before the debut of the Indian Head cent.
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THE MORMON CHURCH struck its 1849 issues using California gold, while the 1860 issues were produced with Colorado gold. Fine examples of the 1849 $5 coins are the least expensive to acquire.
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The earliest fractional gold pieces were issued from 1852 to 1856, with much of the production halted when the San Francisco Mint went into full-blown production in 1854. The reverse designs reflect the denomination, represented by the inscription being spelled out or as a numerical fraction. The pieces did not carry a full value of gold. Early issues contained up to 85 percent of face value in gold, while the quality of gold was gradually decreased (some issues were nothing more than gold-plated). Production of small-denomination California gold pieces continued as late as 1882 from stock dies despite the Coinage Act of April 22, 1864, which made private coinage illegal (the law wasn't fully enforced until 1883).
In an effort to circumvent the law, the makers of some issues produced after 1881 were backdated to the 1850s and 1860s.
Numerous counterfeits exist for small-denomination gold pieces. Because of their small size, crude designs and method of manufacture, certification by a third-party grading service is recommended.
All images courtesy of HeritageCoins.com.
