The pioneer gold issues in the United States are an interesting series born of private enterprise and pioneer necessity. Most were produced privately and legally, since the Constitution prohibited states but not individuals from striking gold coins. “Pioneer” is a better adjective to describe the gold coins than “private gold” and “territorial gold.” Some of the coins in California were struck by the U.S. Assayer, and thus are of federal issue and are not true private issues; some of the gold coins were struck in states, not U.S. territories, thus “territorial” is incorrect for many of the issues. “Pioneer” describes the spirit in which the coins were struck: as necessity issues, brought about by the inability of the federal government to provide sufficient quantities of coinage in areas of the country newly opened to settlement.
The region in which they were made can best classify the pioneer gold coins: the southern Appalachians, the western Rockies (including Utah, which was much larger as a territory than as a state) and Colorado. The scarcity of these coins is primarily due to their often having an intrinsic value less than the face value. The coins were often unaccepted and eventually were melted.
The first significant gold mines in the United States were in the mountainous backwoods of North Carolina and Georgia. Transporting the gold overland to the Philadelphia Mint was slow and dangerous, whereas shipping it around Cape Hatteras was fast but expensive and not without risk. As the miners wished to have the convenience of coined gold without the expense of shipping the raw gold to the Philadelphia Mint, two private mints were established in 1830 and 1831.
Templeton Reid at Gainesville, Ga., opened the first mint. Probably because he had no competition, he charged a high fee for processing the bullion into coins. A large quantity of gold was handled during this first and only year, but most of it was eventually melted down as were regular U.S. gold coins, due to the prevailing price ratio of gold to silver. He was forced out of business amid charges that he had debased the coins.
The following year the Bechtler family opened a second mint, at Rutherfordton in southwestern North Carolina. For years the company produced coins equal in value to regular U.S. gold, although little of it circulated, this time because the bullion value of the gold was greater than the face value of the coins.
This situation improved after 1834 (ultimately the coinage was accepted), and new weight coins were temporarily marked with the date Aug. 1, 1834. The founder of the firm died in 1842, and his son and nephew carried on the business until 1852, but by then their standards of quality had declined and they could no longer compete with the two federal Branch Mints opened in Georgia and North Carolina.
While it was difficult to go from northern Georgia to Philadelphia in 1849, it was virtually impossible to get there from California. The quickest route from San Francisco to Philadelphia or New Orleans was by ship to Mexico or Central America and then overland to a second ship for the voyage north. Although the situation clearly called for a Branch Mint in California, one was not officially opened until 1854. In the meantime more than a dozen companies were engaged at various times in the production of gold coins.
A relic of this shipping route is the SS Central America, lost during an 1857 hurricane in the Atlantic Ocean with as much as 21 tons of California gold. Remains of the wreck were located off the South Carolina coast in 1989. Early in the salvage of the gold treasure carried by the steamship, several discovery pieces of pioneer gold were found. As the full cargo was recovered and cataloged, many chapters of this colorful history of American numismatics were rewritten as researchers gained new insights from studying the many gold ingots recovered.
The most popular pioneer gold coins struck for circulation from California gold were the $5 and $10 issues, as these were needed for use in daily commerce. Later, $20 coins and $50 slugs were made for use in large business dealings, this being an era when the value of a check was dependent not only upon the solvency of the issuer but of the bank as well.
In addition to the questionable coins from the do-it-yourself mints, legal tender coins were struck by either the U.S. Assayer or the U.S. Assay Office. The first of these were octagonal $50 coins (officially called ingots) struck by the firm of Moffat & Co. but bearing both the legend united states of america and the name and title of augustus humbert, united states assayer of gold, california, dated 1851 or 1852. Eagles and double eagles were produced in 1852 before the Moffat & Co. firm dissolved.
The U.S. Assay Office contract was taken over by a new private firm that was called the United States Assay Office of Gold. This semi-official Mint produced eagles, double eagles and $50 ingots until December 1853, at which time its facilities were closed for reorganization as the official San Francisco Mint. Because the new official Mint could not at first produce coins as fast as the old semi-official one, several private companies opened to compete with the new federal Mint through 1854 and 1855.
In addition to the shortage of large denomination coins there was always a shortage of small change for use in retail stores. Several small, anonymous companies therefore produced gold dollars, half dollars and even quarter dollars using a number of different designs. These fractional coins were struck from 1852 to 1882; it has been suggested that the later strikes were never intended for circulation but were merely souvenirs of California. Federal law in 1864 had forbid private coinage of any sort and some manufacturers of these pieces were prosecuted for counterfeiting after the 1864 law went into effect.
A number of eagles and half eagles were struck in Oregon in 1849, despite the objections of the new territorial governor. Presumably his orders eventually prevailed, as the issue was not repeated.
The Mormon government issued $2.50, $5, $10 and $20 coins in 1849, as well as half eagles in 1850 and 1860. This last issue was made of Colorado gold from the Pikes Peak area. Most of the early issues of Mormon gold did not receive widespread acceptance, as they were underweight by as much as 15 percent.
The last period of “legal” pioneer gold coins (i.e., issued before 1864), was the Pikes Peak gold rush of 1860 to 1861. Only three major firms produced coins in these two years, although several unverified patterns are known. It is interesting to note that in 1862 the largest of these companies, Clark, Gruber and Co., sold its equipment to the government, which intended to open a Branch Mint in Denver. The specie hoarding of the Civil War presumably doomed this project, and a Denver Mint did not open until 1906.
Other pioneer gold issues are known for Alaska and the northwestern states, but they were primarily made as souvenirs and did not circulate as coinage.
Just like regular coins, pioneer gold coins were subject to Gresham’s Law. Those that were of full weight and value or better were hoarded and probably melted, while those that were undervalued were spent as soon as possible to avoid getting stuck with the coin.