gold coins exist because when gold was first discovered
in the South in the early 1800’s and later in the
West in 1849, government facilities did not exit to convert
oar or dust into bullion or coin. In the South private mints
like the Bechtler’s and Templeton Reid filled this
vacuum by opening assay offices. While these early Pioneer
Gold producers were successful, the federal mints at Charlotte
and Dahlonega, which opened in 1938, gave them competition
by coining large numbers of gold dollars. Once the federal
facilities were opened, they were the preferred assayers
in the region and the quantity of Pioneer Gold being minted
In California gold was discovered at Sutter’s
Mill in 1848. As a result, California had the largest number
of private minters who made Pioneer Gold. Bullion dealers
paid between $6 and $8 per ounce for gold ore. Much of it
was shipped to Philadelphia where it made $16 to $18 per
ounce. Pressure was acute to have local companies convert
oar and avoid shipping it east. While native California
gold was .850 to .925 Fine, it averaged close to .880. Most
of the remainder was silver. Some companies alloyed their
gold with copper, but it was scarce. By the end of 1849,
there were eighteen firms in California doing assay work.
The federal government did not stop them since the coins
they produced did not attempt to imitate federal coinage.
It was not illegal to produce a privately minted coin as
long as it did not try to defraud the public or misrepresent
itself a governmentally issued.
Extensive private minting also took place
in Colorado, Utah, and Oregon. In each case these businesses
existed as long as the miners needed to convert their gold
into a form exchange. The Pioneer Gold coins were used and
accepted in commerce as if they had been minted by the federal
government. They circulated because of coinage shortages,
particularly in the western states.
One reason for the coinage shortages was
the lack of parting acids necessary to refine gold. Without
these acids, it was almost impossible to separate the impurities
from the raw gold. The San Francisco Assay office, which
closed in 1853, was limited because it was not allowed to
issue gold coins in small denominations. Finally, the San
Francisco Mint began to issue coins in April 1854, but they
were not in sufficient quantity to relieve the coinage shortage.
Private minters again stepped in to issue Pioneer Gold again
to meet the needs of local commerce. Finally in 1856 the
San Francisco Mint obtained the parting acids they needed
to refine gold and issued enough coins to relieve the shortage.
By then the gold rush in the West was over.