Gold Coins: The Mystery of the Double Eagle By Susan Berfield
| August 25, 2011, 4:45 PM EDT
How did a Philadelphia family get hold of $40 million in
gold coins, and why has the Secret Service been chasing
them for 70 years?
most valuable coin in the world sits in the lobby of the
Federal Reserve Bank of New York in lower Manhattan. It’s
Exhibit 18E, secured in a bulletproof glass case with an
alarm system and an armed guard nearby. The 1933 Double
Eagle, considered one of the rarest and most beautiful coins
in America, has a face value of $20—and a market value
of $7.6 million. It was among the last batch of gold coins
ever minted by the U.S. government. The coins were never
issued; most of the nearly 500,000 cast were melted down
to bullion in 1937.
Most, but not all. Some of the coins slipped out of the
Philadelphia Mint before then. No one knows for sure exactly
how they got out or even how many got out. The U.S. Secret
Service, responsible for protecting the nation’s currency,
has been pursuing them for nearly 70 years, through 13 Administrations
and 12 different directors. The investigation has spanned
three continents and involved some of the most famous coin
collectors in the world, a confidential informant, a playboy
king, and a sting operation at the Waldorf Astoria in Manhattan.
It has inspired two novels, two nonfiction books, and a
television documentary. And much of it has centered around
a coin dealer, dead since 1990, whose shop is still open
in South Philadelphia, run by his 82-year-old daughter.
“The 1933 Double Eagle is one of the most intriguing
coins of all time,” says Jay Brahin, an investment
adviser who has been collecting coins since he was a kid
in Philadelphia. “It’s a freak. The coins shouldn’t
have been minted, but they were. They weren’t meant
to circulate, but some did. And why has the government pursued
them so arduously? That’s one of the mysteries.”
The story begins just after the inauguration of Franklin
Roosevelt on Mar. 4, 1933, in the midst of the Great Depression.
Thousands of banks had already gone under as people panicked
and withdrew their gold and other deposits. As the gold
supply—much of it kept at the Federal Reserve Bank
of New York—dwindled, the country faced possible insolvency.
On Apr. 5, Roosevelt issued Executive Order 6102, which
prohibited the hoarding of gold and required citizens to
exchange their gold coins for paper currency.
It was Roosevelt’s distant cousin, Theodore, who
had commissioned the sculptor Augustus Saint-Gaudens to
design a high-relief $20 gold coin in the early 1900s. Teddy
Roosevelt wanted an American coin that matched the beauty
of the ancient Greek ones, and Saint-Gaudens completed the
work just before his death from cancer in 1907. On one side
is an image of Liberty, a figure reminiscent of a Greek
goddess, hair flowing, olive branch in her left hand, torch
in her right. On the other is an eagle in midflight, the
sun rising behind it.
The Mint had produced the Saint-Gaudens Double Eagles almost
every year since 1907, and 1933 was no different. By May,
as the gold recall was under way, the Mint finished pressing
445,500 of the coins. None were issued. Instead the coins,
weighing nearly 15 tons, were put into 1,780 canvas bags
and sealed behind three steel doors in Philadelphia Mint
Vault F-Cage 1. Only two were thought to have been saved,
and they were sent to the Smithsonian.
In January 1934, Congress passed the Gold Reserve Act,
which allowed the President to nationalize, in effect, the
gold held by the Federal Reserve and increase the price
of an ounce. This in turn devalued the dollar, which was
supposed to stimulate the troubled economy. The director
of the Mint then ordered all the nation’s gold coins
to be melted into bars. The bars would be kept in the newly
constructed Fort Knox. The task was enormous: It wasn’t
until early 1937 that the Philadelphia Mint sent its $50
million worth of coins, including the 1933 Double Eagles,
to the furnace. Read