A Brief History of the Gold Dollar, Part 2 — Welcome to the CAC Educational Forum

A Brief History of the Gold Dollar, Part 2

edited February 2022 in History
The Type I Gold Dollar, 1849 - 1854
The first large release of gold dollars had the “with L, open wreath” design. All four of the mints, Charlotte, Dahlonega, New Orleans and Philadelphia issued them. The 1849-C open wreath gold dollar is a major rarity with only four, or perhaps five pieces, known. Later in the year, Longacre modified the design by adding a branch to both sides at the top of the wreath, creating the “close wreath” design.

An 1849 "Open Wreath" gold dollar with designer, James Longacre's initial, "L" at the base of bust of Ms. Liberty.



An 1849 "Close Wreath" gold dollar. This coin is scarcer than the price guides would lead you to believe.



An 1849-D gold dollar. This coin is somewhat available in the low Mint State grades because a fair number of them must have been saved. This one is graded MS-62, in part because of the odd Dahlonega Mint strike.




The gold dollar was a popular coin until the beginning of the Civil War because it filled a need in the U.S. economy. Prior to the war, private banks issued virtually all of the paper money that circulated in the U.S. The value of this currency depended upon the financial health and proximity of the bank that issued it. A dollar bill issued by a local bank that had a good reputation might be accepted at 95 cents on the dollar. A shaky bank’s note might be worth 50 cents or less. A broken bank or a note from a bank that was well out of the area might be worth little or nothing.
Some banks didn’t even bother to open after they issued their paper money. They simply defrauded the public, and the owners disappeared. People were never sure what a given paper dollar was worth even though there were “scorecards” like Niles Banknote Reporter which estimated their values. The gold dollar spoke for itself. It was made of gold and that settled the argument over its value.



A one dollar note issued by the Bank of Milford, Delaware. It's history was typical. The bank was chartered on February 4, 1851 with authorized capital of $50,000. The charter was to last for 20 years. It was reported on August 24, 1854 that the bank had failed. On March 2, 1855, the bank's assets went into receivership. This note was worth nothing. Of course today it's a collector's item as a "broken bank note." I own this because I grew up in neighboring town.

The one negative aspect to the gold dollar was its size. The Type I Gold Dollars had a diameter of 13 millimeters. That made the tiny coin hard handle, easy to lose and more prone to counterfeiting because design details were hard to discern on such a small space.
Mint considered a couple of alternatives. The idea of lowering the standard to something less than .900 fine gold was considered but rejected because the resulting coins would look too brassy and would be prone to counterfeiting. More serious consideration was given to striking the coin on a perforated planchet which had a hole in the center. That idea was rejected because the mint did not have the technology to mass produce such a coin. Finally Longacre decided to revise his design.




A "ring dollar." The mint did not have the technology to mass produce these pieces. Photo courtesy Heritage.

The Type II Gold Dollar, 1854 - 1856
For the Type II Gold Dollar, Longacre increased the diameter from 13 to 15 millimeters. The weight and fineness remained the same, but the coin was much thinner. Longacre’s new Ms. Liberty bore a resemblance to the busts of the ancient Egyptian queen, Nefertiti.
Technical problems surfaced as soon as the coin went into production. The relief of Longacre’s bust of Ms. Liberty was too high which resulted in weak strikes, often on both sides of the coin. Frequently the “LL” in “DOLLAR” and the date were weak on the reverse of many coins. On the obverse Ms. Liberty’s hair detail above her brow was often flat.
The Type II Gold Dollar would be in production for only half of 1854, all of 1855 and would only be made at the San Francisco Mint in 1856. Clearly Longacre had to revisit his design for the gold dollar, and his new creation was unveiled in 1856.

1855 Type II Gold Dollar



An 1856-S Type II gold dollar. This odd coin reflected the amount of time it took to ship coin dies from Philadelphia to San Francisco.




The Type III Gold Dollar, 1856 - 1889
James Longacre had introduced a successful design for the Three Dollar Gold Piece in 1854. He decided to devise a slightly modified version of that work for the gold dollar. It featured an Indian princess on the obverse with headdress for a crown and the same wreath, made of agricultural products, surrounding the date and denomination on the reverse.
The coin was quite attractive, and all of the mints, except Charlotte, were able to strike the design well at least for limited periods of time. Even the Dahlonega Mint was able to strike some well made Type III gold dollars. Years later, President Theodore Roosevelt cited this design as among the most attractive of all U.S. coins. The Charlotte Mint was never able to strike up attractive examples of the larger gold dollars. All the 1855, 1857 and 1859 Charlotte gold dollars are poorly stuck and unattractive.
Annual mintages of the gold dollar continued at a steady pace until the Civil War. At the beginning of the conflict, the North tried to pay for the war in gold. This accounts for the high 1861 mintages of gold coins, including the gold dollar. Soon after the hostilities really began, the Lincoln administration realized that it could not pay for the war with gold and was forced to resort to paper money and bonds. The mintages for gold coins fell dramatically, and most gold coins disappeared from circulation.
During the war, the price of gold in terms of Union currency went up and down depending upon the latest results on the battlefield. The paper money or “greenbacks” were routinely discounted, often heavily so, in terms of gold. After war ended it would take the Federal Government more than a decade to establish parity between the gold coinage and paper money.
There was still a demand for gold coins because some business contracts required payment in gold. Payments for those contracts were almost always made with the high value $10 and $20 gold pieces. Under these circumstances the gold dollar had little practical use. The only post war Gold dollar annual mintages that exceeded 100,000 were in 1873 and ’74 when the mint made a concerted effort to replace the Type I gold dollars with the Type III design. Mint officials stated there should not be two sizes of gold dollars in use.
By the mid 1870s almost all of the demand for gold dollars came from two sources. Jewelers used gold dollars for their artistic creations, and speculators, noting the low mintages, hoarded them as collectors’ items. The annual mintages were often less than 10,000 pieces, although the demand for Proof coins was higher than normal because of the jewelry trade. Many gold dollars from the 1880s are well struck and very attractive. The vast majority of the surviving pieces are Mint State because these coins were seldom used in circulation. Congress acted in 1889 and ended the coinage of the gold dollar along with the Nickel Three Cent Piece, which had also fallen into disuse.

One of the most popular Type III Gold Dollars is the 1880 dated piece. With a mintage of 1,600 and many beautiful examples surviving, it's attractive for many collectors. The estimated number of survivors is over 900.



The gold dollar made a modest comeback in 1903 when the tiny coin became the platform for the Louisiana Purchase commemorative coinage. Those gold dollars featured either the portrait of Thomas Jefferson, who presided over the purchase in 1803 or the recently martyred president, William McKinley. The mint system issued additional commemorative gold dollars up until 1922 on an intermittent basis. These pieces were intended to be collectors’ items or souvenirs and are a separate series from the business strike gold dollars that were minted in the 19th century.




Collecting Gold Dollars Today
Most collectors limit their holdings in gold dollars to the three major type coins. There are many common dates among the Type I and Type III gold dollars. Those coins are always available for collectors. The Type II Gold Dollar is expensive, especially in Mint State, because it was only produced for about two years. Still the coin is frequently available, and some collectors and dealers view it as somewhat over rated.
A date set of gold dollars is a major undertaking. Even a one a year collection, which ignores the mint marked pieces, is a challenge because of the rarity of some dates in 1860s and the 1875 gold dollar which had a mintage of only 400 pieces. Needless to say, a complete set with all of the scarce to rare Charlotte and Dahlonega Mint coins is a major commitment.
Whatever level you might choose to collect, I would urge all collectors to buy only certified gold dollars. Many counterfeits have been made over the years, and it takes some expertise to spot the best of them. These bogus pieces include contemporary pieces that were made to fool 19th century Americans and more modern pieces that have been created to fool collectors.


Would you like to see more coins? Start a discussion!

Comments

  • Thanks for posting Bill... what marvelous history. Any plans on posting something specifically on the $3?
  • edited March 2022
    It could be done. I will have to see what I have written in the past. I have articles from more than 30 years ago.

    The $3 gold was sort a dud from the beginning, and there were only very minor changes to it. I think that the diameter changed very slightly circa 1878. Therefore its history is not as interesting as the $1 gold.

    Tell you what. I'll post an article I have on the 1854 $3 gold pieces.
  • Thanks for taking the time to put this together. Gold dollars are also on my search list. I have a very nice 63CAC PCSG 1849 closed gold $1. Just need a type 2 and type 3.
  • edited March 2022
    If you can swing it, the most beautiful Type III Gold Dollars were issued in the 1880s. The mintages were low, and the dies were fresh and made many nice coins. Jewelers, back in the day, liked to use them in their creations. Here are a couple.

    1880 Gold Dollar, PCGS MS-65.



    1881 Gold Dollar, NGC MS-67



    And yes, this is out of reach for most people, but the most common "old Proof" gold coins were from the this era. PCGS PCGS PR-65, CAM, CAC



    The 1889 was the last year, and is one of the most common dates. This one is undergraded in an Old Green Label PCGS holder as an MS-64.





  • Beautiful examples. I have my eye on 66/67 as the grade so I will be looking in the 1880's for that.
  • The prices are lower now than when I was buying my type coins. That 1881, NGC graded Gold Dollar in MS-67 was the highest grade piece I could find on the floor at a Baltimore show. It was slightly better than the PCGS graded piece and slightly cheaper.

    Of course there are a lot of people who beat up U.S. coins in NGC holders. So buying that coin in the NGC holder was a financial mistake.

    For foreign coins and ancient coins, it's a different story. If you ever get into the ancient coins, and don't trust your grading or authenticity skills, the guys at NGC do an excellent job. I also think that NGC is slightly better than PCGS for world coins.
  • Thanks for sharing ideas and your coins. You gold coin collection is outstanding.
  • I finally found the Type 3 I wanted and bought it today. Low pop at 3900 with only 44 CAC approved across all grades. This is a 66CAC with only 7 higher.

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