Coin Rarities & Related Topics: News and Analysis regarding scarce coins, coin markets, and the coin collecting community, #310
A CoinWeek Column by Greg Reynolds….
Among the most fascinating of all American gold pieces are the fractional pieces struck in California starting in the 1850s. The California gold rush stimulated production of gold coins, tokens and ingots that were used as mediums of exchange because there was not an adequate supply of U.S. (federal) coins in California during the era. The focus here is on privately struck 25-cent, 50-cent, and one-dollar pieces, all in gold, during the 1850s. These are mysterious, distinctive and exciting.
Although it is debatable whether a one dollar gold denomination should be called a “fractional,” pieces of these three denominations are traditionally termed “California Fractionals,” which is fair enough. With the possibly exception of mysterious and somewhat controversial Pacific Company pieces, which apparently were struck in 1849 and are probably patterns, the smallest denomination of mainstream Pioneer gold issues, from assay firms and/or private mints, is $5.
Although the San Francisco Branch of the U.S. Mint began producing coins in 1854, it was not producing coins in sufficient quantities until 1857 or so. From 1849 to around 1856, gold coins were minted in quantity for circulation by other entities in Northern California. The mainstream pioneer gold coins of California from 1849 to 1856 were of $5, $10, $20 and $50 denominations. These were struck by private assaying firms, though the role of the official U.S. Assayer in production of some coins is important.
During the 1850s and 1860s, few people in the American West used paper money and personal checks were not usually accepted. The West was then much less economically advanced than the East, and the California Gold Rush spurred a rapid increase in economic activity in a very short period of time.
Large quantities of raw gold were being mined and there was an intense demand for coinage to meet the needs of daily commerce. According to history.com, “with gold fever reaching epidemic proportions around the world, more than 60,000 people from around the globe came to California in 1849 alone.” Before 1848, the population of California was less than 10,000.
Information about some of the major pioneer gold coins of the California Gold rush may be found in my two part series on the auction of “The Riverboat Collection” in 2014. Earlier in U.S. history, pioneer gold coins emerged during the era of the Southern Gold Rush. I analyze Templeton Reid coins dated 1830 and related history in another discussion. (Words in blue may be clicked to access pertinent references, which provide background information.) There is not a need, however, to collect or even understand mainstream pioneer gold coins in order to collect California Fractionals.
These are typically collected by design type or by ‘major type.’ A very small number of people collect them by die pairings. Generally, coins, tokens and medals are each struck with a pair of steel dies, which are used to impart design elements on both sides, the obverse and the reverse. For anyone who is interested in die pairings and/or historical details, there is a standard reference, California Pioneer Fractional Gold (New Hampshire: Bowers & Merena, 2003, “A New Second Edition”). This reference is commonly called “the BG book.” The “New Second Edition” was by a team of experts lead by Bob Leonard. Ron Gillio oversaw the project.
Curious collectors may wish to buy a few California Fractionals before searching for this book. It really makes sense to assemble a basic type set before considering die pairings and die states. Furthermore, the historical details are fascinating to people who are interested in the California Gold Rush or in the history of private coinage in general. It is not necessary, nevertheless, to extensively study historical details in order to effectively collect coins.
The California Fractionals that were minted after 1857 probably did not circulate as ‘money,’ at least not often. These so called ‘second period’ issues are even more mysterious than the ‘first period’ issues of 1852 to 1857. Interested collectors of coins, narrowly defined, should focus upon ‘first period’ (1852-57) issues for a few years and learn much about the subject matter before even considering ‘second period’ issues.
First Period Fractionals Are True Coins
Although the Federal Branch Mint in San Francisco began producing U.S. One-Dollar Gold pieces in 1854. It seems that none were struck at this official San Francisco Mint in 1855. Mintages of U.S. One Dollar Gold pieces from 1856 to 1859 ranged from just 10,000 to around 25,000 per year, rather small quantities in a society where gold coins were used in almost all transactions amounting to more than $5 and in many smaller transactions.
Logic, historical realities and circumstantial evidence together demonstrate that California Fractionals circulated as ‘real money’ during the 1850s. It is not necessary for every single local resident to accept a round piece of metal, with a believable denomination, as a coin in order for it to be a coin. I hypothesize that thousands of people did regard these as coins.
Many first period California Fractionals are worn and have turned up among true coins in various holdings, including in the wreckage of the S.S. Central America. There is much documentation of these pieces reaching bullion and foreign exchange dealers in major cities in the East. These dealers traded in a wide variety of coins, from around the world. In some guides and lists for bullion dealers, currency traders and bankers, California Fractionals were listed as coins along with items that were indisputably coins.
During the 1850s, there was a severe shortage of coins in California and people wanted gold, much more so than in the Eastern United States where paper money and checks played substantial roles in commerce. In California, most sellers just laughed when a buyer sought to pay for goods or services with paper money or a check.
Also, during a ‘gold rush,’ gold was more of a common denominator than silver. Certainly, the notion of a 25¢ gold piece then made more sense to people in California than it would have to people in New York or Pennsylvania.
California Fractionals contained less gold per dollar than U.S. gold coins or mainstream pioneer gold coins. Even so, it follows logically that a large number of merchants would have gladly accepted them at face value. San Francisco was a major port. Coins from around the world were used by traders, merchants, shippers and others involved in import/export operations. It was not practical to assay ever single coin that was worth between ten cents and a U.S. dollar. By the mid 1850s, California Fractionals were widely recognized, consistently at least 87% gold and made by known jewelers not temporary businesses. The benefits of accepting them at face value would have outweighed the risks.
Each trader or consumer could reasonably expect hundreds of others in Northern California, certainly including the group of jewelers who minted them, to accept California Fractionals at face value. In economic theory, the value of a unit of money is primarily determined by the expectations of people regarding how others will accept such a unit. We all predict that others will accept particular forms of money or financial instruments.
When I receive a $1 federal reserve note, a paper money standard, in change now, I do not plan on keeping it for the rest of my life. I accept it because I expect others to accept it as being worth one U.S. dollar. Of course, people in California during the 1850s would have preferred to receive payments in coins for which face values precisely matched bullion values. They were realistic, however, as they knew that it costs money to produce coins and that it takes time to effect transactions.
For example, in every instance that an item was sold for $7, a seller in San Francisco could not have reasonably expected to receive precisely $7 in gold as determined by the market price of gold. Further, when a $7 sale was effected in California, the seller could not have reasonably expected to typically receive 70% of the amount of gold that was contained in a U.S. $10 gold coin (eagle).
People became accustomed to functioning with gold coins that were not then ideal for business purposes. They conducted business as best they could with the coins that were available, however imperfect. The notion of accepting California Fractionals at face value was usually more appealing than being paid in gold dust, jewelry, heavily worn Chinese coins, Indian coins, or various leftovers from the faded Spanish Empire. The process of analyzing and evaluating other gold or silver items was costly in terms of time, assay labors and aggravation.
There was a severe shortage of U.S. coins in California and U.S. coins there commanded a premium over face value. People had to pay extra for the privilege of using U.S. coins in transactions, which was an additional reason as to why many of them would have accepted California Fractional gold pieces at or near face value. One reason why U.S. coins commanded a premium is that U.S. customs duties had to be paid in U.S. coins. Evidently, customs officials would not accept pioneer gold coins, Chinese coins, or the coins of the faded Spanish Empire, which had been standard monetary units for centuries.
It is pertinent that California Fractionals of the first period feature a Liberty Head design that is similar to the Liberty Head on U.S. One Dollar gold coins of the first type. A very similar head of Liberty is the most visible design element on U.S. $20 gold coins (double eagles) that were minted from 1850 to 1907. The presence of such a Liberty Head design element conclusively demonstrates that the minters of California Fractionals were not being artistically creative; they were producing gold pieces that they anticipated would be accepted as true coins, not merely curiosities or souvenirs. If they were just producing souvenirs, tokens or medals, they could have created much more imaginative and entertaining designs and/or mentioned the names of private firms on the gold pieces. It is indisputable that a serious intention was to produce true coins, not just medals or souvenirs.
In addition to the Liberty head element, other design elements on California Fractional are very similar to design elements found on U.S. coins of the time period. The stars, wreaths and eagles are all artistically and organizationally similar to analogous design elements on U.S. gold coins. It is especially important that U.S. One Dollar Gold coins have the numerals of the year (‘the date’) on the reverse (back) in the center and California Fractionals typically do as well.
Also, substantial quantities of California Fractionals were minted from 1852 to 1854. The fact that they continued to be minted with the same designs after 1854 suggests that people must have been accepting them as coins. If they were not intended as coins and not accepted as such, the minters could have and probably would have changed the designs to make them more distinctive or interesting.
People who frequent jewelry stores are often seeking items with elaborate or elegant designs, not the practical designs of circulating coins. If California Fractionals fell primarily into the category of jewelry or were medals, they would have intentionally been made to capture the attention of people seeking gifts, collectibles or fashion accessories. Women generally do not wish for fashions to remain exactly the same year after year. The logical case that first period California Fractionals are true coins is convincing.
Admittedly, the octagonal shapes are a little mystifying. The August Humbert and U.S. Assay Office $50 pieces of the early 1850s are also octagonal in shape. From 1851 to 1853, these were minted in large quantities. In 1850, Augustus Humbert was appointed U.S. Assayer for the region.
Most affluent individuals and people involved with medium sized businesses in Northern California were probably familiar with $50 Octagonals. As neat coins that were needed for large transactions and as a store of wealth, $50 gold pieces struck with federal approval were popular and highly desired. So, in regard to coins in the early 1850s, an octagonal shape would have had a positive connotation in the minds of traders, merchants, bankers, and affluent consumers in Northern California.
Consumers who were not enthusiastic about the octagonal pieces could always tend towards round California Fractionals, as each denomination came in both shapes. As to why the minters remained the background, they were jewelers or jewelry store owners with French names, many of which would not have been easily pronounced by most U.S. citizens. If the these jeweler-minters were just seeking to promote themselves or expand their own jewelry businesses, they would have included their own respective names, slogans or corporate names on the California Fractionals.
Why was there was not competition in the production of California Fractionals by Moffat, Baldwin, Kellogg or any of the other major assay firms that privately minted pioneer gold coins?
These ‘French’ jeweler-minters probably colluded, agreed to accept the issues of their competitors at face value, and established a standard for local gold coins of 25¢, 50¢ and $1 denominations. Prospective or potential competitors probably figured that the costs of minting competing coins would have outweighed the likely benefits.
Markets regarding small denomination gold coins honed in on an equilibrium that was characterized by slightly underweight California Fractional gold pieces of 25¢, 50 and $1 denominations, which resembled U.S. coins and were considerably consistent in appearance with each other.
An Easy Type Set
It is not difficult to form a general type set that is missing one coin. A Gold $1 Round could cost thousands. Representatives of the other five types range in price from less than $100 to $1000 or so, for decent pieces. Non-gradable pieces tend to be much less expensive than PCGS or NGC graded coins.
Enthusiasts may challenge the simplicity of such a type set. It is true that there are Indian Head types of all three denominations that are dated “1852.” The artistic, structural characteristics, and fabric of these indicate, however, that they are likely to have been minted in the 1870s, along with other ‘Indian Head’ pieces of the same respective design types. There were political and legal reasons as to why false dates were placed on some ‘second period’ issues. Moreover, producers of some or all ‘second period’ pieces were distributing them as souvenirs or promotional pieces. Those dated “1852” would have appealed to many tourists who desired relics of the California Gold Rush.
There are “1853” Gold 50¢ Round pieces that feature a design on the obverse that is based upon the official seal of California, which was adopted in 1849, though California formally became a State on Sept. 9, 1850. There are supposed patterns of other coin denominations of questionably authenticity or legitimacy with similar designs. Moreover, it is unlikely that a private mint would use such an official emblem for real coins, without government involvement in some way.
The first appearance in 1878 of a documented representative of the “1853“ Seal of California 50¢ type was not accompanied by evidence that any were minted in 1853. It was consigned as part of a collection that was mostly built after 1871. For various reasons, I hypothesize that this issue was not minted in 1853 or even before 1860, and I am not alone. There are researchers, however, who consider it to be a legitimate part of the ‘first period’ of California Fractionals and an issue that is required for a type set. Regarding the “1853“ Seal of California 50¢ pieces, collectors are encouraged to consult experts and make their own decisions after thinking carefully.
The Gold 50¢ and $1 varieties with eagle reverses could be classified as additional design types. These, though, are rare and relatively expensive. I suggest completing a six piece type set, which does not distinguish among reverse designs, before thinking about more advanced projects.
In my view, all the first period issues feature a Liberty Head obverse design. Almost all of the prices cited herein are for California Fractionals that were minted from 1852 to 1854.
I have not seen these specific coins and I am not necessarily agreeing with the grades assigned by PCGS or NGC. While most collectors should not expect or even attempt to become expert graders, it is a good idea to learn a little about grading and to ask questions of experts.
An immediate point is to provide an impression of the costs of assembling a type set of first period California Fractionals. In my view, those dating from 1852 to 1854 have more historical significance as the San Francisco Mint did not commence operations until 1854 and there were almost certainly thousands of people who did or would have accepted California Fractionals as true coins before the San Francisco Mint had produced U.S. One dollar gold pieces, silver half dollars and silver quarters in substantial quantities.
1) Gold 25¢ Octagonal
On Jan. 18, 2015, the firm of “GreatCollections” sold a PCGS graded MS-63 1853 Gold 25¢ Octagonal for $396. More recently, in September, Heritage sold one with the same certification, for $365.43. Lower grade or non-gradable pieces could be found for less than $225 each.
2) Gold 25¢ Round
Finding an 1853 Gold 25¢ Round at a modest price would be particularly difficult. Very recently, on Dec. 13, the firm of “GreatCollections” sold a PCGS graded MS-62, 1856 Gold 25¢ Octagonal for $256.25.
A few undated issues, including die pairing BG-204, are believed to have been struck in 1853 or thereabouts. In November 2014, Heritage sold a non-gradable, though appealing, representative of the BG-204 variety for $211.50. Experts at NGC determined that it has the ‘details’ of an AU grade coin and has been “scratched.” In the same auction a similar piece, BG-203, which had been holed, sold for just $99.88.
It is generally believed that the undated BG-206 issue was made in 1853 by Joseph Brothers or Frontier, Deviercy & Co. In July 2015, Stack’s-Bowers auctioned a PCGS graded MS-61 representative of this issue for $558.13.
3) Gold 50¢ Octagonal
In 2012, Heritage sold a 1853 Gold 50¢ Octagonal that is NGC graded AU-58 for $253. Some specialists consider the variety with the so called ‘peacock reverse,’ an entertaining variation of an eagle to be a separate design type or subtype. These are considerably more expensive than typical Gold 50¢ Octagonals. In April 2015, Heritage sold an 1853 Gold 50¢ Peacock. That piece is NGC graded as MS-62 and brought $2585.
4) Gold 50¢ Round
It is relatively easy to acquire an 1853 Gold 50¢ Round for a modest price. In Sept. 2014, the Goldbergs auctioned a NGC graded MS-63 1853 Gold 50¢ Round for $470. It is not of a particularly rare die pairing (BG-421).
In August 2014, Heritage auctioned a NGC graded MS-63 1853 Gold 50¢ Round for $258.50. On April 19, 2015, GreatCollections sold a NGC graded AU-58, 1853 Gold 50¢ Round for $210.94. Back in October 2012, this same firm sold a PCGS graded AU-58, 1853 Gold 50¢ Round for $236.50.
AU Capital Management is currently offering, for $390, an 1853 PCGS graded AU-58 Gold 5 0¢ Round that was earlier in the epic collection of Jack Totheroh. The former Kagin-Holabird partnership sold Totheroh’s set not long ago. It is not clear as to which jewelry firm minted this issue.
5) Gold $1 Octagonal
In August 2015, Heritage auctioned an NGC graded AU-58 1853 Gold $1 Octagonal for $458.25. This (die pairing BG-530) was minted by the jeweler Antoine Louis Nouizillet. Many of the survivors are noticeably worn.
On Jan. 18, 2015, GreatCollections sold a PCGS graded AU-50 1853 Gold $1 Octagonal for $455.40. Evidently, it, a representative of die pairing BG-505, was minted by the jewelry company of Frontier, Deviercy & Co. Another of this same die pairing was auctioned by Stack’s-Bowers in July 2015. That PCGS graded EF-45, 1853 Gold $1 Octagonal realized $440.63
6) Gold $1 Round
The key to this basic type set of the first period is a Gold $1 Round. These are rare and expensive.
In March 2011, Stack’s-Bowers auctioned a PCGS graded AU-50, 1854 Gold $1 Round for $21,850. This is of the BG-602 die pairing. The BG-604 is even rarer and it is the only Gold $1 Round of the seven die pairings of the first period that is dated 1853 and the only one to have an eagle design on the reverse.
The 1853 Gold $1 Round (BG-604) is sometimes called ‘the holy grail’ of California Fractionals. One of two known will be offered by Heritage at auction in January 2016. The sale of that piece will probably set an auction record for a California Fractional.
© 2015 Greg Reynolds
Great Article Greg!!
California Pioneer fractional coins are very interesting to study and learn about. Many of these coins are very scarce and rare but don’t carry the price tag that US minted coins. Love the article and the article points out that not all calfracs look the same. There are some reverses that have really cool looks to them.
Great article! You really make this series come alive and make collecting it exciting.