Counterfeit Gold Coins Filled With Platinum: Hollow Gold

The production of counterfeit gold and silver coins is almost as old as coinage itself.

The usual method involves making something that looks like an authentic coin but using cheaper metal. Success for the criminal was measured by the quantity of fakes they could exchange for legal currency without getting caught^[1]. One specialty was making fake silver coins from cheap substitutes, such as tin, that looked like ordinary worn coins. These allowed the use of cast or low-quality false dies without raising too much suspicion about design quality.

Another common counterfeiting approach came into use with the introduction of copper-nickel three-cent and five-cent coins in the latter 1860s. In this fraud, criminals exploited the difference in raw material cost and face value for legal coins. This was the seigniorage (or profit) the United States Mint made when they used one cent of copper-nickel to make a coin with a five-cent face value. Normal U.S. alloy was 75% copper and 25% nickel, but anyone could buy common “maillechort” or “nickel silver” from scrap metal dealers or jewelers for a few cents per pound^[2]. This was readily melted, rolled into strips, and cut into blanks ready to be impressed with false dies. Authentic nickels and three-cent pieces were used to make counterfeit dies, and the struck pieces of scrap were easily passed to workers who used them for purchases and train fares.

In 19th-century America and parts of Europe, a more sophisticated and deceptive method came into use along with the large influx of new gold from California and Australia. This used a real coin, such as a $10 eagle or a $20 double eagle, and preserved the faces and most of the edge in original condition. The counterfeiter did not attempt to copy the coin; rather, gold was removed from inside. Visually, the coin appeared genuine, but in reality it had been hollowed out, the gold removed, and the cavity filled with a cheap heavy metal such as platinum^[3].

Today, we consider platinum a precious metal widely used in electronics and as a catalyst for certain chemical reactions^[4]. But for much of the last 150 years, it has been a specialty metal prized for its limited chemical reactivity and high melting temperature in laboratory and assaying equipment. The chart below plots the market value of platinum versus gold from about 1880 to 1980.

Pure platinum, at 21.45 grams per cubic centimeter, was noticeably denser than pure gold’s 19.3 g/cc, but native platinum contained impurities (including palladium) that reduced its density enough to make it a good replacement for gold in counterfeiting^[5].

The Discovery of a New Way of Making Counterfeit Gold Coins

At the beginning of the Civil War in 1860, the Treasury Department and the Mint became aware of a new method of adulterating gold coins with platinum (called “platina” in contemporary letters). Previously, the most common replacement method was to drill small holes through the edge of a coin and replace the gold with a plug of platinum. The damaged edge was repaired and gilded with a bit of gold leaf to hide the work. But the new process was capable of removing as much as half the gold in a $10 Eagle and very difficult to detect.

Here’s what Dr. John Torrey, Assayer at the New York Assay Office, had to say in July 1860:

I procured for you to-day, a fine specimen of a ten-dollar gold coin. It has the proper weight and size, but it is no doubt filled up with platina [i.e. platinum]. It was probably made by sawing through a genuine eagle, and then turning out on a lathe, or filing away, a considerable part of the gold. A disc of platina was then introduced, and a narrow hoop of gold used to fill the saw-cut. The whole was then united with silver solder, and the milling renovated. I have reason to believe there are many of these coins in circulation. We have some ounces of platina taken out of a lot of them, brought to our office. You will have difficulty in finding the seams in the piece I send you. Scarcely a bank in our city would hesitate to take it. I paid five dollars for this piece, which is about its intrinsic value.

Now, how shall we detect these debased pieces? The coinage is genuine, the weight and size correct. I am able to tell them (except when the seams are manifest) only in one way, i.e., by plunging then under nitric acid. This almost immediately acts on the silver solder, producing bubbles of nitrous gas, and a green discoloration around the joint; finally separating the parts completely. A few minutes or even seconds immersion in the nitric acid is generally sufficient to detect the fraud. This method can of course be applied to a considerable number of pieces at once [meaning, ‘at one time’], and the bad ones picked out; the gold ones not being injured by the operation.^[6]

According to Torrey, the counterfeiter carefully sliced a normal $10 eagle in half through the edge. Each part was mounted in turn on a small lathe and gold removed from the center without disturbing the edge or penetrating the coin’s faces. Next, a small disc of platinum was inserted in place of the gold. This must have been a precise fit so that when restored, the coin was solid. The two halves were then soldered together with the existing reeds aligned. A piece of gold wire was pushed into the visible saw cut and the reeds restored. This latter step was likely done with a small gear rather than a file so that all the reeds looked normal across the coin’s thickness. Torrey noted that he “…paid $5 for this piece, which is about its intrinsic value” for the adulterated eagle. If this were representative of other gold coins adulterated this way, the counterfeiter was removing about half the face value from every coin.

Despite the precise control such operations demanded, this was all easy to accomplish using equipment available in the late 1850s. Weight could be controlled by the thickness of the gold band which covered the cutting and the only visible seam would be between the band and a coin’s normal rim^[7]. With careful machine control, weighing the re-joined coin and edge filling to mint specification, and a small toothed gear to reform the reeds, a good machinist-counterfeiter might make five to 10 fakes per day. Using $10 gold pieces, that would mean revenue of $25 to $50 per day – double if $20 coins were used^[8].

Compare that to the $3 daily wage of a Philadelphia Mint mechanic.

Dr. Torrey’s detection method was very effective but also not something that was convenient or easily done outside an assay office or mint facility. By the time a potentially counterfeit gold coin could be tested with acid, the person passing the fake would likely be long gone, and some merchant or bank was left holding the residue. The most reliable and readily available test was called the “ring test”. A suspect coin was dropped on a marble countertop and a clerk listened for the characteristic high pitch ring of a normal coin. A struck silver or gold coin is a solid body that makes a ringing sound when balanced on a finger and lightly tapped with a fingernail or solid metal rod. A counterfeit, such as we’ve described, is composed of several pieces and not a solid body. When tested by dropping or tapping it will produce a dull “thump” or “thunk” sound completely unlike that of an authentic coin^[9].

Faced with this form of counterfeit gold coins, United States Mint Director James Ross Snowden suggested that “reducing the thickness of our gold coinage is the only mode of preventing the debasement in question.”^[10] Multiple experiments were conducted and several pattern coins on wide, thin planchets were made^[11].

A Possible Solution

A solution eventually emerged from Edward Pratt, the Assistant Treasurer in Boston, in a letter to Treasury Secretary Howell Cobb:

If the Department should determine to employ detectives… it will perhaps be advisable to impart to them the following facts, the accuracy of which can be easily established, viz.: that there are in this country very few purchases of manufactured platina; such being confined almost entirely to dentists and chemists. The Professor of Chemistry at Harvard University informs me that in the course of a year, he uses but about 10 or 12 ounces; and one of the leading dentists if this city tells me that he uses in the same time from six to nine ozs. Much platina is undoubtedly used in the form of crucibles, etc., but it is all manufactured abroad.^[12]

Pratt’s observation was that very little platinum was produced or used in the United States. This would naturally limit the extent to which cutting and filling could be performed. Also, anyone acquiring platinum in larger quantities or who was not in a business known to use the metal, would immediately raise suspicion and come under investigation^[13]. Simply put, filling gold coins with platinum was severely limited by the metal’s limited availability.

In the end, all the alarm, hand wringing, letter writing, and pattern making was for naught. Cut and filled gold coins quietly evaporated from Mint and Treasury thoughts. Letters ended up in musty anonymous file cases and pattern pieces adorned the Mint Cabinet of Coins & Medals, plus a few select private collections.

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Notes

[1] Traditional punishments were permanent: death by one of several gruesome means; amputation with an axe of both hands; forehead branding and the amputation of one hand; and blinding with mercury fumes were among the options.

[2] Also known as German silver, argentan, new silver, nickel brass, albata, or alpaca. Containing no silver, the alloy consists of copper, nickel, zinc and sometimes tin. It is often used in cheap jewelry as a substitute for Sterling or fine silver.

[3] Platinum was a common impurity in California gold along with iridium and osmium.

[4] Platinum was found in placer deposits during the 16th-century Spanish conquest of South America. It was first thought to be a special kind of silver, and was called “platina del Pinto” (“little silver of the River Pinto”) after the Rio Pinto in Colombia. Because it would not melt with furnaces available to the Spanish, they soon considered it a nuisance and contaminant and often discarded it.

[5] Iridium and osmium, both denser than platinum, were also present in native deposits. This forced criminals making counterfeit gold coins to adapt their techniques to accommodate available metal.

[6] RG104 E-1 Box 59. Letter dated July 14, 1860 to Snowden from Eckfeldt and Dubois.

[7] This might have been another reason the mints were concerned about a fin extending beyond the rim, especially on gold coins. The junction of repaired reeding and rim might have closely resembled a natural fin.

[8] Eagles and half eagles were likely preferred since they circulated in large cities. Double eagles were much less commonly seen and would probably have been more closely checked by merchants and banks.

[9] Some authentic coins will not ring properly if they have inclusions in the planchet or have been damaged.

[10] RG104 E-1 Box 60. Letter dated September 29, 1860 to Cobb from Snowden. Repeated in letter dated October 1, 1860 to Snowden from Cobb.

[11] See Roger W. Burdette. “Dr. Barclay’s Experimental Coinage ~ 1832-1876” in Fads, Fakes and Foibles (Seneca Mill Press LLC, 2021).

[12] RG104 E-1 Box 60. Letter dated September 21, 1860 to Cobb from Pratt. Excerpt. 6-7.

[13] Purchasing assay equipment was not an option because the manufactured goods cost more than the same weight of gold, and would also produce suspicion among the Treasury Department’s customs agents.

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