CoinWeek Staff Reports…..
A Gem Mint Type 1 $20 Liberty Head double eagle that was recovered from the ocean floor as part of the salvage of the Brother Jonathan shipwreck sold for the strong price of $31,836.38 (with Buyer’s Premium) last night at a GreatCollections certified coin auction.
This price was reached after 17 bids and marks a 7% advance on the coin’s 2015 price level.
Considering that most Type Coins are down 20-30% from 2015 price levels (the peak of the last bull market cycle), this is a strong result and speaks to the continued strength of coins connected to famous shipwrecks.
A Historic Coin that is Part of a Larger Story
The 1865-S Liberty Head double eagle was once considered rare in Mint State.
This is not the case anymore, although the coin is conditionally scarce in Gem Mint.
The reason that collectors now have the opportunity to choose from a selection of uncirculated 1865-S $20 gold coins is due, in large part, to the successful sea salvage operations of the Brother Jonathan.
The Brother Jonathan was an important west coast treasure ship that struck an uncharted reef after several days of rough seas. The collision proved catastrophic and the ship sank on July 30, 1865.
The Brother Jonathan was a 220-foot long sidewheel paddleship. Its name was derived from a now largely-forgotten reference of the New England merchant class. It’s final voyage embarked for the Pacific Northwest from the San Francisco Bay just two days before it sank.
On board were 244 passengers and crew, plus hundreds of thousands of dollars of gold coin, much of it set aside as annual treaty payments for area Native American tribes. Nearly all on board perished and the entire cargo was lost at sea for more than a century. A terrific blow-by-blow account of this fateful voyage can be found in Dennis M. Powers fantastic book Treasure Ship: The Legend and Legacy of the S.S. Brother Jonathan (2006).
As a numismatic object class, shipwreck coins are fascinating and unique. This example is no exception.
To understand why you should first know that 19th century US “Treasure Ship” shipwrecks have proven to be an invaluable source of high denomination US gold coins.
Simply put, Mint State $20 gold coins were seldom hoarded by collectors.
The reason why is obvious.
The $20 denomination was sufficiently valuable enough at the time these coins were struck to preclude most people involved the nascent hobby of coin collecting from saving them in any quantity.
Because of this, and the fact that in years that the Mint struck Proof coinage, collectors preferred Proofs over business strikes, the majority of the large format gold coins that survive in Mint State were originally sourced from bank holdings.
Branch Mint issues are even more problematic as collecting coins by branch mint was not popularized until the second decade of the 20th century- long enough for many Mint State issues from Charlotte, Dahlonega, New Orleans, and San Francisco to fall by the wayside.
Most bank-held coins were banged around and abused. Gold, being a soft metal, doesn’t react well to this imposition. Because of this, it is not uncommon to encounter MS62 or MS63 Liberty Head $20 gold coins that are in the Condition Census for that given issue.
Shipwreck coins, on the other hand, provide the possibility of encountering coins in a state of preservation that is quite close to what these coins looked like as struck. There were no Mint State 69 or Mint State 70 $20 gold coins in the general population of 1865-S double eagles (that we know of), but there are at least two dozen in Gem Mint. Holding one of these coins in hand is like being in a time capsule that reveals what these large-format gold coins looked like at the time they were struck.
The example sold by GreatCollections is particularly pleasing.
Its surfaces are alight with swirling luster.
The coin is essentially free of detracting marks.
It’s as close to “as struck” as you can possibly get.
The coin comes in a PCGS Generation 4 holder with the pedigree stated, but it does not come with the limited edition insert that was produced at about the same time- that insert features a black portrait of the Brother Jonathan in the background.
Putting the Price Realized in Context
As we said in the opening of this article, the hammer price of the 1865-S that sold on Sunday was a 7% advance from 2015 pricing levels. We base this number off of an average of two public sales of the issue in MS65 and checking that number against the historical record.
This modest yield is not surprising as it comes to Shipwreck issues tied to the Brother Jonathan, as these coins are fully dispersed and have reached maturity in the marketplace.
This year, by way of contrast, we have seen a new tranche of shipwreck treasure from the SS Central America come to market. These coins and the marketing that comes with it adds some degree of premium to the proceedings. The Brother Jonathan coins benefit greatly from their attachment to the shipwreck and for the quality of the coins, but do not come to market with an active “marketing” premium.
It is safe to say that these coins are now worth what the market bears for them, whether they come with pedigree labels, or graded by PCGS or NGC.
In the case of this particular example, we feel that the coin stands on its own merits. It is attractive, scarce in grade, and part of a highly underrated, but important coin series. Despite the fact that is is possible, albeit extremely difficult to do so, the $20 Liberty Head series is the only U.S. series that has not been completed in Mint State. The length and complexity of this series is the weight that somewhat stifles the numismatic value of the series. But, in cases of coins like this, where the story is obvious and immediate, real gains can be made and premiums are paid accordingly.