1849 Mormon $2.50 PCGS AU55. The surfaces of this 1849 Mormon Quarter Eagle are problem free and show much luster especially around the periphery of the coin. All of the letters in the legend on both sides are legible, which is very rare for the issue. The obverse exhibits the normal convex striking as do all examples; however, the eye and Phrygian crown are much better defined than usual.

One of the richest gold discoveries of during the time of the California Gold Rush was at Mormon Island, downstream from Sutters Mill on the American River. James Marshall and Sam Brannan were Mormon Forty-Niners who were involved in the actual discovery of gold. In 1848 Brigham Young decided to create a distinctive coinage for the Mormon Territory. He met with John Kay, who had worked at a private mint in England, to set up a process for smelting oar and coining gold. Brigham Young and Kay created the devices and inscriptions for the new coinage. They were engraved by Robert Campbell and Kay. The obverse devices included the three pointed Phrygian Crown, the emblem of Mormon priesthood, above the All-Seeing Eye. The inscription Holiness to the Lord is from the Old Testament and was originally intended for engraving on sacred jewels of the Hebrews. The reverse devices included the clasped hands for friendship, and G.S.L.C.P.G. meaning Great Salt Lake City Pure Gold. (It is interesting to note that none of the gold actually came from Salt Lake City. Until 1860 all bullion came from California. The 1860 bullion came from Colorado.) The words PURE GOLD were written out on the ten dollar piece instead of the initials. The Salt Lake City minters called their coins Valley Coins.

The first name of the Mormon Territory was the State of Deseret meaning the State of the Honeybee. Beginning in 1849, Mormon gold was minted in a small adobe building in Salt Lake City, Utah. It was actually the home of Dr. William Sharp. Brigham Young initiated the coinage and personally supervised the mint. Most Mormon gold coinage was light in weight and low in fineness. When they reached non-Mormon territories know as Gentile areas, the coins became objects of contempt as much as polygamy was. No doubt both contributed to federal opposition to the Mormons. Considering that most of their coins had a quite low fineness, it is ironic that their church sponsored issues were inscribed PURE GOLD. Because of its substandard weight and fineness, most of the early Mormon coinage was melted outside Mormon territory. Bankers accepted them with a twenty-five percent discount. To remedy this situation, Young ordered new coins for 1850. They were alloyed with silver and redesigned. However, by that time Mormon coinage had such a poor reputation, the new issues were not accepted and also wound up in the melting pot.

In 1854 the Board of Regents of the University of Deseret, which is now the University of Utah, adopted a phonetic alphabet. At the behest of President Brigham Young, President of the Church of Jesus Christ of Latter-day Saints, George D. Watt developed this new phonetic alphabet to help simplify the spelling of English. Among other works, the entire Book of Mormon was published in Deseret in the 1860s. Despite being promoted by Young and used by the Deseret News, the new alphabet did not gain wide acceptance. It fell into disuse after his death in 1877.

In 1861, Governor Alfred Cumming, a Democrat appointed by President James Buchanan to replace Brigham Young, prohibited the use of Mormon gold despite the fact that the five dollar piece is reported to have net weight of one-third gram more gold than the Federal coinage of the time. Cumming served at the governor of the Territory of Utah from 1858 to 1861.
All of the 1849 to 1850 coinage use the same main devices, the three pointed crown above the All Seeing Eye on the obverse and the clasped hands on the reverse.

All Mormon gold coins are rare and sought by collectors and specialists. In its population report PCGS shows this coin tied for fourth best. PCGS has graded 7 others at AU55 with 3 better. As collector interest in Territorial Gold expands, this coin will significantly increase in value because of its scarcity.