American Gold

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By the early twentieth century more gold was being produced than ever before. It had been discovered in Alaska and the Yukon in the 1890s, and hundreds of enterprises there and in the States maintained a steady flow of bullion to the government. As a result, great quantities of ten- and twenty-dollar gold coins were produced. But by now the public was accustomed to paper money and no longer demanded “hard money.” Even the small quarter eagle was rarely seen outside of banks.

Nonetheless, this was when American gold coins reached their artistic peak. President Theodore Roosevelt considered all the nation’s coins “artistically of atrocious hideousness,” and in 1905 he asked his friend Augustus Saint-Gaudens, the world-renowned sculptor, to redesign them. Saint-Gaudens died in 1907 before getting to any of the smaller coins, but his eagle and double eagle, which first appeared that year, are generally considered the most beautiful of all American coins. Roosevelt asked for—and got—“figures in high relief, like the figures on the old Greek coins”; as a result, each double eagle as originally designed had to be stamped several times before the deeply sculpted Liberty figure emerged correctly. The design was twice modified—first to a lesser, but still high, relief, of which 11,250 were minted and released, and then to a flat relief, which was used exclusively after the first year. Roosevelt also instructed Saint-Gaudens to omit the words “In God We Trust” from the coins—the President considered their use there “irreverence which comes dangerously close to sacrilege.” Congress reinstated the motto in 1908, the second year of issue. The coins were minted until 1933. During the same period, new quarter and half eagles, with an Indian-head design by the Boston artist BeIa Lyon Pratt, were also issued.

Teddy Roosevelt ordered the words In God We Trust” omitted; Congress put them back a year later.

In 1933 the great age of American gold coins abruptly ended. In the midst of the Depression, with Americans hoarding or exporting any gold they could get hold of, President Franklin Delano Roosevelt proclaimed that all privately held gold coins were to be returned to the government, with the exception of any specimens “having a recognized special value to collectors of rare and unusual coins.” The gold standard was abandoned, and gold-coin production ceased. Many gold coins were turned in, and the vast majority already in government hands were melted down. In later years American citizens would again be permitted to own gold coins, as they are now, but by then hundreds of millions of dollars’ worth had become gold bars at Fort Knox. Foreign banks that held onto their U.S. gold are responsible for most of the coins that have survived.

The story is not over, however; the American gold coin is making a come-back of sorts. On Tuesday, September 13, 1983, in a special ceremony at the United States Bullion Depository at West Point, the Treasury Secretary, Donald Regan, pushed a button to strike the first United States gold coin in fifty years—a special piece marked $10, dated 1984, to commemorate the Olympic Games at Los Angeles. The coin is priced at over three hundred and fifty dollars but contains less than two hundred dollars’ worth of gold and is meant purely as a collector’s item. Yet it just might set the stage for renewed U.S. coinage in gold. Even if it does, though, any future coins that are not just for collectors will surely have to trade for their bullion content—as do Krugerrands, for instance—not for a fixed dollar amount. The day of the circulating gold twenty-dollar piece is almost certainly gone forever.

Even on the level of international payments among nations, gold is no longer a standard, and has not been since 1971, when the Federal Reserve announced that it would cease to give foreign countries gold for dollars. Gold, formerly the fundament on which money stood, is now often perceived as just the opposite—a safe ground for retreat from money. Its appeal as such was demonstrated in 1979 when, after the freezing of Iranian assets in America and the Soviet invasion of Afghanistan, its price more than doubled, from four hundred to eight hundred and fifty dollars an ounce. John Maynard Keynes called gold “this barbarous relic,” but though it is gone from our money, it will not likely soon be gone from our finances.