stamped across

1933 Double Eagle

The 1933 double eagle (United States 20-dollar gold coin) currently holds the record for highest price paid at auction for a single U.S. coin when it was purchased for US$7.59 million. 445,500 specimens of this Saint-Gaudens Double Eagle were minted in 1933, the last year of production for the Double Eagle, but no specimens ever officially circulated and nearly all were melted down, due to the discontinuance of the domestic gold standard in 1933.

Production of the 1933 Double Eagles

In order to end the 1930s general bank crisis, U.S. president Franklin D. Roosevelt issued Executive Order 6102 in 1933 and the Gold Reserve Act in 1934, which outlawed the circulation and private possession of United States gold coins for general circulation, with an exemption for collector coins. This act declared that gold coins were no longer legal tender in the United States, and people had to turn in their gold coins for other forms of currency. The 1933 gold Double Eagles were struck after this executive order, but because they were no longer legal tender, most of the 1933 gold coins were melted down in late 1934 and some were destroyed in tests. Two of the $20 Double Eagles were presented by the United States Mint to the U.S. National Numismatic Collection, and they were recently on display in the "Money and Medals Hall" on the third floor of the National Museum of American History.

These two coins should have been the only 1933 Double Eagle coins in existence. However, unbeknownst to the Mint, a number of the coins (20 have been recovered so far) were stolen, possibly by the U.S. Mint Cashier, George McCann. At least nine of these coins, which were illegal to possess, found their way via Philadelphia jeweler Israel Switt, into the hands of collectors.

The coins circulated amongst collectors for several years before the Secret Service became aware of their existence. The matter came to the attention of Mint officials when an investigative reporter looked into the history of the coins and contacted the Mint as part of his research, as a result of which an official investigation was begun by the Secret Service in 1944. Seven of the coins were discovered and turned over to federal agents (or seized) within the first year of the investigation, with one coin remaining in public possession until 1952.

The Egyptian Double Eagle

One of the missing Double Eagles was acquired by King Farouk of Egypt, who was a voracious collector of many things, including Imperial Fabergé eggs, antique aspirin bottles, paperweights, postage stamps - and coins. In 1944 Farouk purchased a 1933 Double Eagle, and in strict adherence with the law, his ministers applied to the United States Treasury Department for an export license for the coin. Mistakenly, just days before the Mint theft was discovered, the license was granted. The Treasury Department attempted to work through diplomatic channels to request the return of the coin from Egypt, but World War II delayed their efforts for several years. In 1952 King Farouk was deposed in a coup d'etat, and many of his possessions were made available for public auction (run by Sotheby's) – including the Double Eagle coin. The United States Government requested the return of the coin, and the Egyptian government stated that it would comply with the request. However, at that time the coin disappeared and was not seen again in Egypt.

A Double Eagle surfaced again after over forty years of obscurity, when Stephen Fenton was arrested by US Secret Service agents during a sting operation at the Waldorf-Astoria Hotel in New York, and the British coin dealer was questioned. Although he initially told investigators he bought the coin over the counter at his shop, he later changed his story. Under sworn testimony, he insisted the Double Eagle had come from the collection of King Farouk, though this could not be ascertained. Charges against Fenton were subsequently dropped, and he defended his ownership of the coin in court. The case was settled in 2001 when it was agreed that ownership of the Double Eagle would revert to the United States Government, and the coin could then legally be sold at auction. The United States Treasury issued a document to "issue and monetize" the coin, thereby making it a legal-tender gold coin in the United States.

When the coin was seized, it was transferred to a holding place believed to be safe: the Treasury vaults of the World Trade Center. When the court settlement was reached in July 2001, the coin was transferred to Fort Knox for safekeeping. Less than two months later, the World Trade Center was destroyed in the September 11, 2001 attacks.

On July 30, 2002, the 1933 Double Eagle was sold to an anonymous bidder at a Sotheby's auction held in New York for $6.6 million, plus a 15-percent buyer's premium, and an additional $20 needed to “monetize” the face value of the coin so it would become legal currency, bringing the final sale price to $7,590,020.00, almost twice the previous record for a coin. Half the bid price was to be delivered to the United States Treasury, plus the $20 to monetize the coin, while Stephen Fenton was entitled to the other half. The auction took less than nine minutes.

Discovery of ten more coins

In August 2005, the U.S. Secret Service announced the recovery of ten additional stolen 1933 Double Eagle gold coins from the family of Philadelphia jeweler Israel Switt, the illicit coin dealer identified by the Secret Service as a party to the theft who admitted selling the first nine double eagles recovered a half century earlier. In September 2004, the coins' ostensible owner, Joan S. Langbord, voluntarily surrendered the 10 coins to the United States Secret Service. In July 2005, the coins were authenticated by the United States Mint, working with the Smithsonian Institution, as being genuine 1933 Double Eagles. Currently, the coins are held at Fort Knox under lock and key.

After the announcement that the US Secret Service had recovered the coins and that they had been authenticated, Ms. Langbord publicly claimed that she inherited the coins from her father via legal means, and continues to threaten a federal suit concerning the surrendered coins. To that effect, Langbord has apparently retained the services of the attorney, Barry Berke, who represented Fenton with the only Monetized 1933 Double Eagle.

According to various accounts, Israel Switt had many contacts and friends within the Philadelphia Mint, and reportedly had access to many points of the minting process. It is believed that Switt obtained the stolen 1933 Double Eagles through his personal relationship with Mint Cashier George McCann. One possible theory is that McCann swapped previous year Double Eagles for the 1933 specimens prior to melting, thereby not compromising accounting books and inventory lists.

Some in the numismatic world have advanced an argument that Switt could have legally obtained the 1933 coins when he was exchanging gold bullion for coins. Although the Mint records clearly show that no 1933 Double Eagles were issued, there were allegedly three weeks in March 1933 when new Double Eagles could possibly have been legally obtained. The Mint began striking double eagles on March 15 and Roosevelt's Executive Order to ban them wasn't finalized until April 5. On March 6, 1933, the Secretary of the Treasury ordered the Director of the Mint to pay gold only under license issued by the Secretary, and the United States Mint Cashier's daily statements do not reflect that any 1933 Double Eagles were paid out.

The discovery of these 10 pieces in addition to the two held by the Smithsonian Institution and the one example sold for $7.59 million has cast a serious light on these fabled coins in many ways. With the 10 coins, the population of known 1933 Double Eagles skyrocketed 333% overnight.

The Mint has stated an intention to preserve the coins for display. Until the early 1970s, when President Nixon took the Nation off the silver standard and President Ford signed legislation that again made it legal for the public to own gold bullion, any recovered 1933 Double Eagle, as gold bullion, was destined to be melted, so while Double Eagles recovered prior to 1974 were melted down, any Double Eagle recovered now can be spared from this fate. Currently, with the exception of the one sold on July 30, 2002, 1933 Double Eagle coins cannot be the legal possession of any member of the public, as they were never issued and hence they remain the property of the US government.

Unauthorized replicas

In 2004, National Collectors Mint released gold-plated replicas of the 1933 Double Eagle, ostensibly under the authority of the Northern Mariana Islands, a U.S. Commonwealth. NCM advertised and certified the coins as "legal tender of the CNMI," a bogus designation.

The replica coins did not include any "REPLICA" or "COPY" indications on their faces. The design of the replica coins match the original coins in concept of design, though were not physical replicas. The only difference in basic design between the NCM replicas and the original Double Eagle was the addition of the CNMI territorial seal under the U.S. motto on the reverse.

After some controversy over the nature and marketing of these replicas, the coins were reissued with the word "COPY" stamped across the eagle's stomach.

See also

Notes and references

Further reading

  • Alison Frankel: Double Eagle: the epic story of the world's most valuable coin. New York: Norton, 2006 ISBN 0-393-05949-9
  • David Tripp: Illegal tender : gold, greed, and the mystery of the lost 1933 Double Eagle. New York: Free Press, 2004 ISBN 0-7432-4574-1

  • Curse of the Double Eagle, Playboy Magazine, April 2004 by Bryan Christy
  • COINage Magazine, January 2006, "Barry Berke and the 1933 Double 'Legal'", Pgs. 46-48

External links

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