When Gold Coins Were ‘Just Money’

When Gold Coins Were ‘Just Money’

With gold stealing up on the $1,000 mark, it’s silver bulls who are just coming to the party. Better late than never, we say. Silver would be trading for around $54 an ounce right now if it were keeping pace with gold the way it did in the early 1980s. In fact, you can still buy all the pure silver you want for around $20/ounce -- a relative bargain. That’s about where we got on board when ‘Ag’ was rampaging toward $48/ounce during the 1970s bull market in precious metals. We bought two bags of “junk” silver from “Trader Sam” Frudakis, whose San Francisco coin shop sits like a vault in the heart of the Mission District.

Coins are a great way to go if you find that you are constantly getting in and out of precious metal stocks as they nervously ascend to who-knows-how-high. Once the coins are socked away in your safe-deposit box, you’re not as likely to part with them as you would shares. They’re not so easy to lug around, since each bag contains a little more than 44 pounds worth of pre-1965 dimes, quarters and halves with a face value of $1,000.

It’s hard to believe there was a time when Americans actually paid for things like chewing gum, soap and cigarettes with coins that were 90% pure silver. But we did, and few even thought to hoard these coins when their pot-metal replacements first started to circulate in the mid-1960s. You’d have to be an old-timer to remember the ringing sound coins used to make when you dropped them on a hard surface. Now they just go “thunk,” since they are mostly zinc. Even the slugs that thieves once used in parking meters and vending machines were classier than what the government mints today.

An Insult to Jefferson

Some of the newer coins are downright insulting to those whose faces appear on them. Remember the Sacajawea dollar, which the Treasury practically couldn’t give away? And Thomas Jefferson, whose alleged face appears on a $1 coin currently circulating, didn’t fare much better: From most angles he looks like his eyes have been pecked out. Compare it to the $20 “Double Eagle” designed by Augustus St. Gaudens (shown above). Looking at this coin, you could get the idea that Miss Liberty was a source of deep pride to Americans back then.

Let the price of gold fall by 90 percent and the Double Eagle will still be an object of incomparable beauty. They were minted from 1907 and 1933 and used by ordinary Americans to buy ordinary things. The St. Gaudens was commissioned by Teddy Roosevelt, who, inspired by the beauty of ancient Greek coins, felt that America, too, should have magnificent coins. How ironic, then. that the St. Gaudens was confiscated by his cousin FDR for a measly $20.67 an ounce. The government seized them because they were not considered collectible.

Were any country to circulate coins like the St. Gaudens today, it would be set upon by barbarian hoards. Will such a nation as that ever rise again?