By Ben Marks (Copyright Collectors Weekly 2009)

A.C. Dwyer, an avid coin collector, talked with us recently about the history of U.S. $20 double eagle gold coins, especially those struck during the California Gold Rush. Dwyer discusses the types of double eagles that were minted, the most interesting and rarest varieties, and why he’s so enthralled with coins that have been found at shipwreck sites. Dwyer can be contacted via his website, acdwyer.com.

The double eagle is really a result of the California Gold Rush. Prior to the California Gold Rush, the biggest gold discoveries were relatively small strikes in Georgia and North Carolina. That led to new U.S. Mints in Dahlonega and Charlotte, and they struck smaller denomination gold. But in California, the amount of gold being found was so spectacular that in the beginning, people didn’t even believe it.

When gold was first discovered in California, there wasn’t this immediate stampede that everybody thinks of. Instead there was a lot of skepticism, and the newspapers of the day were basically bashing the reports of the gold. It wasn’t until President Polk gave his last State of the Union speech in December of 1848 that he confirmed that the extraordinary stories of gold in California were true. And that’s what really kicked off the exodus to California.

Shortly after California became a state in 1849, there was a clamor for a mint in San Francisco. Until it opened in 1854, all the gold from the California Gold Rush—the vast majority of it, anyway—went by side-wheel steamer down to Central America, where it would travel overland through Panama or Nicaragua to the Gulf before being shipped to the mint in Philadelphia. Some of it would even go all the way around the horn of South America and back up the other side. But with a mint in San Francisco, they didn’t have to ship the gold anywhere.

You have to understand that the United States became a very wealthy country almost overnight. At the time of the California Gold Rush, the majority of coins that were in circulation were probably foreign coins that were legal tender alongside our own coins. Like the Mexican reale. Probably the most popular silver coin was the Mexican pillar dollar. Thanks to the Gold Rush, by 1857 we did away with all that foreign coinage—it was no longer legal tender here.

You have to understand that the United States became a very wealthy country almost overnight.

If you were going to be paying other countries in gold, you needed an efficient means of accomplishing this. At the time, the $10 eagle was our largest coin, so the double eagle made it much easier to do these large transactions. As a result, the double eagle probably didn’t circulate much, especially on the east coast since it was just going from bank to bank, or from U.S. to Europe to pay debts.

In fact, a lot of the gold eagles being collected today, especially a lot of the uncirculated coins, have come from Europe. They were repatriated as they became popular over here. Collectors would go over there and find them in foreign banks and ship them back. One of the coins I have in my collection has what’s known as vault grime on it. It’s kind of a dirty coin. I don’t know for sure that it came from Europe, but I’m pretty confident that it’s probably one of the coins from Europe because they typically have this vault grime on them.

On the west coast, the coins tended to circulate a little bit more. Partly this was due to the high inflation caused by the Gold Rush. In some places, you might have to pay $50 for a steak dinner, the same price you might today 150 years later. So the gold tended to circulate more out west.

Collectors Weekly: Why was the coin called a double eagle?

Dwyer: The word “double” describes its value, $20, which was double the $10 eagle. The half eagle was worth $5 and the quarter eagle was worth $2.50.

Collectors Weekly: Where were double eagles minted?

Dwyer: Well, in the beginning, 1850, it was in Philadelphia and New Orleans. So you can get an 1850 double eagle from both of those mints. Then, in 1854, the San Francisco Mint began striking coins. Shortly after the Civil War started, the New Orleans Mint went over to the Confederate side, and it didn’t reopen until 1879, when a small number of New Orleans double eagles were struck.

Collectors Weekly: What were the different types of double eagles?

Dwyer: There were two major types. One was the Liberty Head double eagle, and the other was the Saint-Gaudens. The Liberty Head was designed by James Longacre and was minted until 1907. The sculptor Augustus Saint-Gaudens designed the coin that followed, from 1907 to 1933.

Within these, there are sub-groups that people tend to collect. Most Liberty Head collectors prefer doubles eagles through 1866 without the In God We trust motto on them. After the Civil War there was a lot of religious sentiment in the country, so the motto was added. The 1864 two-cent piece was the first coin to actually have the motto on it. Double eagles followed two years later, along with some other coins.

In 1877, the Liberty Head changed again when the description of the denomination on the back of the coin was changed from “Twenty D.” to “Twenty Dollars” fully spelled out. There were other little differences on the reverse, things like the shape of the shield, but most people pretty much identify double eagles by motto versus no motto, Twenty D. versus Twenty Dollars.

I actually prefer the Liberty Head. I actually think it’s the better coin. The other one is considered by many to be the most beautiful coin we have, and I agree that it is very artistic. But to me it looks like a beautiful piece of metal rather than something I would think of as a circulating coin.

I also gravitate to the history around the early double eagles. You have the California Gold Rush, which was the whole reason for them to come into being in the first place. And you can be pretty sure that any early double eagle with an S, for San Francisco, mintmark on it is made out of California Gold Rush gold. To me, that’s exciting stuff.

There are also great rarities in the early Liberty Heads because the mintages were just so low. But it’s not just about supply—demand also plays a role. I’m not a dealer, I’ve never been a dealer, and I have no plans to become a dealer. But if you were to talk to a dealer about these, they’ll focus on the rarity and the mintage figures. The dealer will look at mintage numbers and conclude that compared to other coins, the Philadelphia double eagles from, say, 1858 are undervalued, and so you should buy them.

It’s been that way for years, and for years these same coins have always been the best value, but not if you want to sell them. That’s where demand comes in. There’s a premium on the mint. People want New Orleans gold coins. They want San Francisco gold coins. There are collectors that specialize in just New Orleans gold or focus on the mints. But you don’t hear people focusing on the Philadelphia Mint. It doesn’t have the demand that the other mints have and it never will, in my mind.

Carson City, Nevada also had a mint—the 1870 Carson City double eagle is very rare because so few of them came out. But even if you compare coins with the same rarity and mintage numbers, Carson City gold coins are always going to command a premium over Philadelphia gold coins because people want that old Gold Rush gold.

Collectors Weekly: Do minting variations make double eagles more collectible?

Dwyer: Not really. For example, there are a lot of die variations on Liberty Head double eagles, but they don’t currently command any premiums. Double eagles are not like Lincoln pennies, which are collected by millions of people.

Take the 1955 Lincoln penny with the double-die obverse: Well, some Liberty Head double eagles have that, too, but people just don’t collect double eagles for that reason because it’s too expensive. That’s not to say it won’t change in the future, but right now, variations like that don’t get much attention.

People pay attention to die variations when there are millions of collectors in the picture. As the number of double-eagle collectors grows—and I think the growth is reflected in the prices—they’re going to start differentiating by that sort of stuff.

One of the examples that I find most interesting is the misspelling of “Liberty” on the master hub, which affected every coin minted from 1850 to 1858. It was spelled “LLberty.” To correct it, an “I” was punched over the second “L” but you still see the remnants of the L below it, even without magnification.

That extra L was probably just caused by some guy who made a mistake. He punched the first L then punched the second. Then, somewhere along the line, somebody caught it. With overdates, I believe sometimes that was just caused by reusing the die. Let’s take the 1853-over-2 double eagle overdate as an example. They may have had an 1852 die but they needed 1853 coin, so they just took a 3 punch, positioned it over the 2, and repunched it.

That double eagle does command a premium, but for me, personally, I would hesitate. If I was collecting just by date, including overdates, and I had to pick a coin to leave out, that would probably be the coin that I would pick because there’s an argument as to whether or not that’s really a 2 under there or not. I’ve looked at it under magnification—personally I think the 2 is there. But what if somebody comes along one day and proves that it’s not a 2. Will the premium go away? That’s why I hesitate.

Collectors Weekly: What are some of the other causes of die variations?

Dwyer: Well, the dates could have been punched into the dies separately, and they might have had different size dates for different coins. In some cases the same punches could have been used on silver dollars that were used on double eagles. So there could have been situations in which somebody grabbed a date punch that wasn’t supposed to be on a double eagle but used it anyway, and this act created a variety that subsequently got collected.

It really comes down to The Official Red Book by R.S. Yeoman. If the variety gets listed in the Red Book, it immediately starts commanding a premium because all of a sudden anyone who’s putting together a complete set now has to have one. They’re missing it from their set. And when the variety gets listed under registry sets on PCGS (Professional Coin Grading Service) and NGC (Numismatic Guaranty Corporation), it helps perpetuate the demand.

The thing is, right now none of the double date coins are under a registry set or in the Red Book, so therefore they don’t command a premium. But if that ever changes… People do pay premiums for double dates when they are listed, so there’s a lot of hidden value out there.

Collectors Weekly: What about the platinum-sandwich coins?

Dwyer: Those were counterfeited double eagles shortly after the Civil War. At the time, the mint director had actually made a recommendation to discontinue the double eagle because it was so easy to counterfeit. Counterfeiters would simply cut the coin in half, separating the obverse from the reverse. They’d hollow it out, fill it in with platinum, and basically glue it back together. The work was done well enough to pass them off as valid double eagles. Even the weight was similar. Today it would be looked upon as a very crude attempt at counterfeiting, but in its day, it was considered quite good. Today, you’d probably like to have one of those if you could find one. I’d love to have one, but I’m sure those are all long gone.

Collectors Weekly: What are some of the major gold double eagle rarities?

Dwyer: Basically you’re talking about the first Liberty Heads from 1850 to 1866. If you’re going to collect Liberty Head double eagles, those are the most popular. They’re in a very good historical time period. There are great rarities, but at the same time, recent shipwreck finds have made lots of beautiful coins available and more affordable.

Within these coins, there used to be a tier of rarity from, say, $10,000 to $100,000 each, for coins like the 1855-O, 1859-O, and 1860-O, all from New Orleans. But since at least 2002 or 2003, the values on that tier have just skyrocketed. And so, even people who were willing to spend a little more are being priced out of the market. For any type of rarity, it’s strictly a high-roller game.

The next two great rarities are the 1854-O and 1856-O New Orleans double eagles. Maybe only 20 to 30 of each exist. They’re out of the reach of just about everybody now. Even one with a hole in it is going to cost you more than a hundred-thousand dollars. A nice one? You’re getting into half a million or more.

Even pricier is the 1861 Philadelphia Paquet, of which only two are known and now command prices in the millions. The San Francisco Paquets used to be at the under-$100,000 level, although some examples would go higher because the coin had a unique design to it. That came about in 1861, when Anthony Paquet was asked to redesign the reverse of the Liberty Head. One of the things he did was to make the letters taller and skinnier. But when they minted a bunch of these in Philadelphia, they determined that the dies weren’t going to be able to last, that they were going to have problems with die breaks, so they canceled the redesign and melted just about all of their coins.

In San Francisco, they had already started minting, and by the time word got out to cancel the coin, about 12,000 Paquet double eagles had already been released into the circulation. So in this case, the San Francisco coin is really the only option for collectors who can afford one. In truth, none of the Paquet coins should exist at all.

Another rare one is the 1866-S no motto, although it’s not as rare as the Paquet. There are probably 200 or so of those. Like the Paquet, the 1866-S no motto shouldn’t exist. As the year began, coins were going to be struck without the In God We Trust motto on them. Then the decision was made to add the motto. The Philadelphia and New Orleans mints got the word in time, but once again, by the time orders reached San Francisco, they had already minted a bunch of no-motto coins and released them.

Collectors Weekly: What happened to the New Orleans Mint during the Civil War?

Dwyer: Well, to me the 1861-O is one of the most fascinating of the 1850-1866 double eagles. It was actually minted by three different authorities. The first was the Union. Next came the state of Louisiana when it seceded from the Union but before it had joined the Confederacy. They hadn’t turned it over yet, although eventually they did.

This is where the shipwrecks come in, particularly the S.S. Republic shipwreck. When the S.S. Republic sank in 1865, it had almost every double eagle from 1850 on board. The only one missing was the 1856-O, which just goes to show you that the rarity was true. Also on that shipwreck was one 1854-O, which is the second rarest double eagle from that period, an 1860-O, and an 1861-O. But that 1861 New Orleans coin, even though it’s not as rare as the others, is a fascinating coin because you don’t really know who minted it. It could be a Confederate coin.

There were only 17,000 or so 1861-O coins minted. On some of the coins, you can see where the date has been reworked. Some people say, “Well, that must be a Confederate coin because they were fixing the date.” Every now and then you’ll see somebody trying to sell one of those at a premium under the theory that it’s a Confederate coin, but in my view, you should not pay a premium for this coin because nobody has ever been able to prove which ones are confederate and which ones aren’t. So, if you can afford an 1861-O, the last thing you want to do is add a premium onto the cost based on its possible link to the Confederacy, which could be proven wrong later.

Collectors Weekly: Why are the rare double eagles so prized by coin collectors?

Dwyer: Right now there are a lot of new collectors who are trying to put together sets, whether by mint, date, or mint. Many of these are wealthier people who have been told to diversify some of their portfolio. Rare coins have done well versus the stock market, especially in the last year. The advice these people get is to go after the rarest, most expensive coins because those are the ones that never sell for less, or at least that’s what the brokers say. This is obviously not always true but it is probably true if there are only four or five examples of a particular coin available—if the supply is that small, you don’t need very many rich people who want them to keep the price up. That’s why I think you’re seeing some of these enormous values today, where coins that were expected to go for a hundred thousand sell for half a million, and everyone is surprised.

When I was a kid, I would have never considered a double eagle for my collection. Even back then, they cost hundreds of dollars. There was no way I was going to get one. As I got older, double eagles started to get more within my price range. But it requires you to be at a certain level financially, and there’s risk involved, as with anything. The biggest risk for me is my lack of diversification. I collect 1850 to 1866 double eagles by date and mint. But if double eagles ever fell out of favor or if demand ever dropped far enough, the prices would sink like crazy. That may never happen, but things do go in and out of favor.

Most collectors only see the big, expensive, rare double eagles at auction. What they don’t see is how many times those coins have traded in private behind the scenes. So, you may look at the auction and say, “Man, this 1856-O double eagle has only sold at auction once or twice in the past five years.” On the other hand, that same coin may have traded hands two to three times in the past year. With the big rarities, some people just want to be able to say they owned one for a while. They buy it and then they sell it two years later—sometimes you see the thing come up six months later.

Collectors Weekly: Can you tell us more about the shipwrecks and gold coins on the S.S. Central America?

Dwyer: It was common to ship coins in great quantities all around the country. The S.S. Brother Jonathan and the S.S. Central America were transporting mostly newly minted San Francisco gold. The gold from the San Francisco mint had made it down the Pacific coast, across Central America, and into the Gulf side. When the S.S. Central America sank in 1857, it was on its way to New York—a hurricane sank her.

At the time, the country was in a financial crisis, not unlike what we’re in right now. Banks were failing and things like that. People started hoarding their gold and silver. In Europe, countries were demanding payment in gold, so there was lots of gold being shipped here and there. Banks in New York were running out of gold, so the gold on the S.S. Central America was terribly important. When the ship sank, the financial crisis began to spin out of control. It didn’t cause the financial crisis, but it sure poured fuel on the fire.

A lot of historians believe that this financial crisis was a big reason for the Civil War starting as early as it did. The Civil War happened for all sorts of reasons, but it may have occurred later if it had not been for the sinking of the S.S. Central America and the financial crisis that followed.

The S.S. Central America was carrying not just double eagles but also hundreds of large gold ingots and bars of gold, and even gold dust. There were unrefined nuggets on that ship. One of the exciting things about the shipwreck’s recovery is that all of a sudden you could actually buy gold nuggets that you could be 100-percent sure came out of the California Gold Rush because they were on a ship that was sending California gold to New York.

The S.S. Republic, which I mentioned earlier, was headed from New York to New Orleans in 1865 right after the end of the war as part of the Reconstruction effort. The ship contained things like school supplies for kids and all sorts of other stuff, as well as gold double eagles, gold eagles, and more than 50,000 silver half dollars.

On the S.S. Central America, there were thousands of mint date 1857-S, 1856-S, and even 1855-S double eagles, just beautiful coins that looked like they did the day they came off the presses. The water was deep enough so that the coins weren’t etched by sand, which is common to shipwrecks closer to shore, where tides and sand can ruin coins. These were pristine, mint-condition coins. All of a sudden, almost any serious collector could now afford to get an uncirculated coin for their collection.

There was also what we call passenger gold. Most passengers carried their coins in purses and on their body. If they were making a long trip, let’s say from California to New York to visit relatives or whatever, they might sew a double eagle into their clothing. One of the coins in my collection is a privately minted eagle made by Moffett & Co., which was a private mint in San Francisco before the San Francisco Mint opened. It’s a worn, circulated coin that probably saw plenty of poker games and things like that. There were a few of these scattered around in the wreck.

Collectors Weekly: How are shipwreck coins verified?

Dwyer: If a shipwreck coin has been put into a holder by PCGS or NGC, then the pedigree is pretty much assured. It didn’t always used to be that way. One of the biggest shipwrecks for double eagles was the S.S. Yankee Blade. This was in the late 1970s. The shipwreck was found, the double eagles were recovered, and then they were secretly released into the collecting population.

The S.S. Yankee Blade went down, I believe, in 1854 in San Francisco. It was racing another ship in the fog toward Mexico when it hit something and sank. The coins were in shallow water, so they were etched by sand. Some people say they shouldn’t even have been graded—that the damage from the shipwreck should’ve excluded them from being graded and put in the holders.

In fact, when you submit a coin to a third-party grading company, if it has been harshly cleaned or if there’s some damage on, maybe a big scratch, the company will send it back to you saying, “Sorry, we couldn’t grade it. It’s damaged.” Some grading services will send it back and say, “Well, if it wasn’t damaged, it’d be this grade,” and they’ll list the damage on the holder. With shipwreck coins, companies like NGC will note the shipwreck effect on coins that are damaged enough that they can’t be graded.

A lot of people, though, say that since all these shipwrecked coins have damage on them, they shouldn’t be put in holders at all. By that logic, there are thousands of mint date coins that shouldn’t exist because they’re all technically damaged. But that is obviously not true since thousands of S.S. Central America coins have been cracked out of their holders and resubmitted in an attempt to get a higher grade, thereby losing their shipwreck pedigree. Still, a lot of collectors like the shipwreck coins, which actually command a premium if you’re trying to buy one in the same grade as one without the shipwreck designation.

The conditions of the wreck are the key. Obviously many of the coins on the S.S. Republic were damaged when the ship broke apart, but many others were intact and stayed sandwiched together, which protected them. Over time a sea crust formed over them, and it turns out that that protected them, too. The same thing happened with the S.S. Brother Jonathan coins. When they were found, there were still a lot of them stacked in their wax paper wrappers and encrusted by sediment. It was like they had been sealed in cement and protected for a hundred years.

It didn’t used to be this way with PCGS or NGC guaranteeing the pedigree. It used to be that when you bought a shipwreck coin, all you’d get with it was a certificate. There was no encapsulation or anything like that—your only assurance that it was from a shipwreck was a piece of paper. Well, how do you know that piece of paper is real? On eBay one time, I actually saw an auction for shipwreck certificates, without the coins. Where’s the guarantee in that?

So I won’t touch an uncertified shipwreck coin. I love them, but I won’t pay a premium for a coin that’s not certified. If it’s the same price as one without the shipwreck pedigree and I’m pretty sure it is a shipwreck coin, I might buy it as a shipwreck example. But I won’t pay a premium for a shipwreck if it’s not encapsulated.

Collectors Weekly: Are there any double eagles that were actually illegal to own?

Dwyer: In the 1950s, a 1933 double eagle was put up for auction, confiscated, and then eventually went to auction anyway. Here’s how it happened. In 1933, when Roosevelt became president, one of the first things he did was to make it illegal to own gold—it wasn’t until just a few decades ago that it became legal again to own gold in the United States. The only gold that wasn’t confiscated was gold that was considered to have numismatic value, and that was left very vague. Well, in 1933 the new double eagles were set to come out. Obviously they were not going to have numismatic value because they were slated to be the current circulating coin. So they were all supposed to get melted down. Naturally, some of them didn’t.

One of the biggest coin collectors in the first half of the 20th century was King Farouk of Egypt. After he was deposed in 1953, the new government auctioned off his collection, including one of the 1933 double eagles. When it was listed for auction, the U.S. said, “Hey, that coin is illegal, we want it back.” Egypt and the U.S. were not getting along at the time, so instead of giving it back, they just pulled it from the sale and the coin disappeared. Eventually it reappeared in England, there were lawsuits, and finally the U.S. and the guy who owned it worked out a deal to auction the coin and split the proceeds.

Collectors Weekly: If you could own just one double eagle, which one would it be?

Dwyer: Out of all the rare double eagles—the 1933, the 1856-O, the Paquet—if I had all the money in the world and I could buy any one I wanted, I would actually get one that isn’t even in any of the reference guides. It’s not a great rarity as far as the date and mintmark. But it’s a double eagle that was in the pocket of Confederate Lt. George E. Dixon, who went down in the Civil War in the submarine, the H. L. Hunley. This coin was in Dixon’s pocket.

There had been a legend about this coin for more than a hundred years. According to the story, Dixon had a coin in his pocket that he had carried with him at the Battle of Shiloh. During that battle, the coin took a bullet direct in his pocket—if the bullet had missed the coin, it very likely would’ve killed him. When they found the wreck of the H. L. Hunley a few years ago, they found this same coin in his pocket, bent from where the bullet had hit it, and engraved with the date of the Shiloh battle. So a legend that seemed unbelievable turned out to be true. You couldn’t get it graded because it had been shot with a Civil War musket, but to me, that is the coolest double eagle.

Collectors Weekly: Can you suggest some double eagles for novice collectors who just want the pleasure of owning one?

Dwyer: Yes. The 1861 Philadelphia is the most common double eagle—almost 3 million were minted. The 1854-S is the first double eagle struck in San Francisco, but there’s a bit of a premium on those, so you might have to settle for a lesser grade. But that may be okay: I actually like some of the used, circulated coins because it’s nice to know that it didn’t just sit in a bank vault prior to sinking in a ship—that it was in somebody’s pocket or in a saloon or used for gambling. But if you want a high-grade California Gold Rush coin that’s still affordable, you can go after an 1857-S from the S.S. Central America shipwreck, because in 1857 it was still California gold.

The first time I ever held a double eagle in my hand, the thing I liked the most about it was that it was a nice, big, heavy coin. It’s like the Morgan silver dollar. They’re similar in size and I like those silver dollars because they’re big. It’s why people collect these things versus dimes. The fact that it’s gold makes it that much better, and the fact that there is all this history in these coins—the shipwrecks, the Civil War, the Gold Rush—well, you just can’t write a better story for a coin.

Collectors Weekly: Thank you, A.C., for sharing your knowledge of gold double eagles with us.

(All images in this article courtesy A.C. Dwyer of acdwyer.com)

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