American Gold


THE CIVIL WAR had as sweeping an effect on money as on everything else in national life. To finance it, the Union began printing paper money for the first time. As federal greenbacks proliferated and the Union’s military fortunes wavered, the paper dollar sharply depreciated—this was when the word inflation entered the nation’s vocabulary—and silver and gold began yet again to be hoarded and exported. A serious shortage of large and small change followed, with federal “fractional” notes and postage stamps becoming common in trade. After the war, the greenbacks remained in circulation and eventually regained full value. Thus federal paper money became a permanent part of our system.

In the South, Confederate paper money was issued and, without metal backing, quickly became valueless. But the Confederacy did manage to mint a few gold coins—all stamped “United States of America. ” This happened in 1861. Confederate troops seized the Dahlonega mint, and the gold and dies on hand were used to manufacture one- and five-dollar pieces. The mint had not previously struck any dollars that year, so all surviving 1861-D one-dollar coins are known to be Confederate-made. Today they command up to twenty-three thousand dollars each.

In 1873, silver dollars were discontinued, and gold coins effectively became the sole hard measure of the worth of American money. (Silver “trade dollars” were issued for several years, but only for use overseas.) The silver dollar was reintroduced in 1878, but thanks to an intervening plunge in the price of silver, its value was thenceforth subsidiary. The protests of silver-mining interests over the demise of the bimetallic standard became a major feature of the politics of the next quarter of a century—often the argument was raised that a decline in the value of gold had weakened the American economy and that a return to silver would revive it. In 1896, silver was the focal point of one of the most emotional presidential elections ever. William Jennings Bryan clinched the Democratic nomination with his electrifying pledge: “You shall not crucify mankind upon a cross of gold.” However, the pro-gold Republican, William McKinley, prevailed in the general election. The single gold standard became law with the passage of the Gold Standard Act in 1900.

The last and oddest new denomination of gold coin was proposed in 1879, when the U.S. minister to Austria concocted the idea of a four-dollar piece to serve the needs of international trade—its value would approximate that of certain foreign coins. Despite the fact that it would obviously seem redundant in this country, where pieces worth $2.50, $3, and $5 already were circulated, Congress took up the idea. A new name, the “stella,” was authorized, and two designers came up with faces for the piece, one a traditional Liberty in profile, the other a similar lady with a more stylish coif, her hair up in a braided coil. Samples of both versions were struck and made available to congressmen and well-connected numismatists; the coin was never released into circulation. Fewer than five hundred examples survive. Today they are among the most highly treasured of all U.S. gold coins, worth as much as $115,000 apiece.


During the nineteenth century, ten dollars represented more than a week’s wages for the average American, and one might suspect that few such high-denomination coins would have been issued. Indeed, they were almost always rare in general circulation, yet in 1852, when about five million one-cent and eighteen million three-cent pieces were made, well over two million twenty-dollar double eagles also were turned out. This is partly because large-denomination gold coins were important as bank reserves and for international payments; European manufacturers shipping goods to the United States wanted gold, not paper. Also, gold coins were important as statutory backing for bank notes and thus sat in vaults everywhere. And with the government buying gold from the public whenever bullion was presented, a great deal of California gold was converted into ten-and twenty-dollar pieces.