Goldberg Coins and Collectibles

Sale 60

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Lot 2852

1834 $5 Capped Head. Plain 4. NGC graded MS-65. A magnificent example of this major U.S. rarity! Boldly struck throughout except for a touch of softness on some of the outer obverse stars as is consistant with all known examples. Less than 40 known in all grades with far fewer auction appearances than the Crosslet 4 variety which in the past, was considered the rarer of the two varieties for the year. Fully lustrous with rich golden-orange mint color. An incredible example of this rare coin.

By 1834, and actually long before, the authorities realized that gold coinage production could not continue as before. The gold content actually exceeded the face value of the coins the U.S. was minting! Congress passed new legislation lowering the weight of all our gold coinage, promoting renewed circulation. The Act of June 28, 1834, which was to take effect on August 1, specified a new weight of 129 grains of standard gold for the half eagle (versus 135 grains for the old tenor coins). The same Act specified that half eagles coined previously were to be receivable at the rate of 94.8 cents per pennyweight, or $5.095 each, close to the actual market value at the time. (At the same time, the Bechtler family, producers of private gold coinage in the Carolinas, adjusted the weight of their own coinage to meet the Federal standard.)

Few examples of the 1834 Capped Head half eagle survive today, and seldom are they found in grades finer than MS63, however this piece is the single finest example that has been seen by both services. It is a very sharply struck, save for several of the star centrils, with fully brilliant, Prooflike surfaces and a light cameo cameo contrast. The surfaces have bright greenish-gold color displaying only a few tiny blemishes. Searching for pedigrees can sometimes be a difficult task, especially when the coin is nice enough to have few visible pedigree markers. A few degrees of clockwise die rotation is also noted. We have handled only a few other high-grade 1834 Capped Head half eagles in the past dozen years, and this example is clearly the finest we have ever offered and the finest known to the grading services Pop 1; none finer at either services thus a candidate for finest known! (PCGS # 8160) .

Historic note: Arno Safran, writing in the November 15, 1993 issues of Coin World describes the problem with keeping the five dollar gold pieces in circulation, and their subsequent rarity:

"Half eagles bearing the Scot-modified Capped Head design (1813-29) and the further modified, smaller-size pieces by Kneass (1829-34) are the scarcest types for this denomination. Most of the mintages were either melted by the government or left the country soon after being released into circulation because miscalculations by Treasury officials regarding the ratio between gold and silver were skewed in favor of the yellow metal."

From 1829 to 1834, explains distinguished author Neil Carothers in his seminal book Fractional Money, published in 1930, the question of currency reform was constantly agitated. Forty years after the establishment of the mint the coinage system was a discreditable failure. There were three elements in the problem, the circulation of bank notes issued by a host of state banks of every degree of financial integrity, the disappearance of gold as the result of an adverse coinage ratio [15 to 1], and the continued circulation of a non-decimal foreign silver coinage [chiefly Spanish and Mexican] of degenerate condition. The bank note question and the problem of gold coinage were, perhaps, of the more fundamental importance, but the problem of the fractional currency was more immediately pressing and more intimately bound up with the customs and daily life of the people.

In June 1834 a coinage bill became law that altered the situation and did nothing to solve the problem of a shortage of small silver coins. This bill's effect lasted the greater part of two decades; until, that is, the gold discoveries of the California gold rush upset the gold to silver balance once more. The essential provision of the bill of 1834 reduced the weight of the standard gold dollar from 24.75 grains of fine metal to 23.2 grain. In effect, this changed the coinage ratio from 15 to 1 to 16.002 to 1. From a legal standpoint the law was a debasement of the currency by approximately 3 percent. From the standpoint of the fractional coinage it was an egregious blunder. By giving gold a higher value as coin than it could command in the arts Congress had deliberately provided for the cessation of silver coinage. It had virtually adopted the gold standard without any provision for a small change currency!
Estimated Value $150,000-UP.

Realized $132,250

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