Family fights government over rare ‘Double Eagle’ gold coins
in 1904 THE RAREST V. S. COIN*. •
The rarest coin of the United
Slates is not, as many suppose, the
silver dollar of 1804 ; but the double
j eagle of 1849, of which there is only
| one in existence, and that belongs
to the cabinet of the United States
mint. It cannot be bought.
Lot 1: THE 1933 DOUBLE EAGLE
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Augustus Saint-Gaudens – 1848-1907
Auction House: Sotheby’s
Auction Location: USA
Auction Title: The 1933 Double Eagle
Auction Date: 2002
Description: Designer: Augustus Saint-Gaudens (1848-1907) Obverse : LIBERTY; in lower right field, 1933 above designers monogram ASG. Liberty striding forward wearing a flowing gown and with her hair blowing in the wind. Her left foot on a rock, at the base of which lies an oak branch. In her right hand she holds a lighted torch aloft and before her; in her extended left hand she holds an olive branch. To the lower left, a small representation of the Capitol building, behind which the rays of the sun emanate. Around, 48 stars (representing the states of the Union). Reverse: UNITED·STATES·OF·AMERICA· / TWENTY·DOLLARS· in two lines. An Eagle flying left across rays of the rising sun. Edge: E*PLURIBUS*UNUM***********
THE PROPERTY OF THE UNITED STATES OF AMERICA
SOLD BY ORDER OF THE UNITED STATES MINT
Condition: Gem Brilliant Uncirculated.
Notes: Die Characteristics :
“The coin is identified by a slight doubling of the vertical bar of the E of LIBERTY on the obverse and by a die scratch in the field of the reverse, traversing the tip of the beak of the eagle.
“The coin is a genuine and unaltered product of the United States Mint at Philadelphia. It was struck from the same reverse die which produced the reference coins in the Smithsonian collection, also viewed at the same time. The obverse is consistent with those of the Smithsonian coins, including some doubling of the E. The obverse is quite likely from the very same die, as well, although the doubling is not so certain an indicator as the die scratch.”
George E. Hunter, Ph. D., Assistant Director for Process Control and Quality Assurance, United States Mint. March 7, 1996
This is the only 1933 Double Eagle monetized and issued by the United States Mint. It is the also the only example that will ever be authorized for private ownership by the United States Government.
The two examples preserved in the Smithsonian Institution have never been monetized and are officially considered chattel by the government. Any additional examples which may exist, are similarly property of the United States Government, illegal to own, and subject to seizure.
A Certificate of Transfer will accompany this lot, attesting to its unique status.
Gem Brilliant Uncirculated.
The Augustus Saint-Gaudens Double Eagle 1907-1933
What has justly been called “America’s most beautiful coin design” was the result of a chance meeting between President Theodore Roosevelt and Augustus Saint-Gaudens in November 1905. In conversation the two innovative men agreed that the design of then-current United States coins was lacking in artistic inspiration. Not long after, the President commissioned Saint-Gaudens to produce a coinage aesthetically worthy of the ancient Greeks.
Saint-Gaudens, America’s greatest living sculptor, produced a series of designs that were immediately hailed by his President. The process of development went through numerous stages and changes. The original concept called for exceptionally high relief which, artistically, was exactly what the two men had been striving for; it was however thoroughly impractical for a circulating coinage. Sadly it was also the only design Saint-Gaudens saw before succumbing to cancer in August 1907.
A moderated high relief based on the original design, with the date expressed in Roman numerals, was attempted with modest success; but it too, proved unworkable in day-to-day transactions. In the end the need to produce a true circulating medium required simplicity – a lowered relief which required only a single blow from the coining press. The adaptation, by Charles Barber, translated a sculptured texture by utilizing graphic elements. While the monumentality of the original concept could not be preserved, Saint-Gaudens’ brilliant composition, richly symbolic, was not altered, and it remains the most highly regarded of all United States’ coins.
America’s Double Eagle – Child of the Gold Rush
The vast gold deposits discovered in Northern California in 1848 proved to be the economic engine that powered the United States onto the world stage as one of the wealthiest of all nations.
The United States Mint instantly recognized that a new denomination would soon be required to meet the country’s growing economic needs. In 1849, the bill to create a One Dollar gold piece was amended to include a provision for a new, Twenty Dollar denomination, to be called the Double Eagle.
Struck in almost every year between 1850 and 1933 its design remained surprising constant. James Longacre’s original, austere imagery graced the Double Eagle for more than fifty years, until Augustus Saint-Gaudens exuberant designs were adopted.
Just as the two artistic designs of the Double Eagle embodied the era of their creation; so too did the very life and death of this large coin. Created as a child of the unbounded optimism of the Gold Rush, and containing nearly a full ounce of gold, the Double Eagle became one of the most beloved and treasured of all United States coins. It became a symbol of wealth and prestige, of power and success. And when in the darkest days of the Depression, Franklin Roosevelt ordered an end to these magical coins, that too was a reflection of our national mood.
The Unknown History of the 1933 Double Eagle 1933
It was a time of crisis for the United States. The Great Depression had spread its tendrils of woe throughout the industrialized world – engulfing all. It was the cruel payback for the glittering 1920’s and their promise of two cars in every garage and a chicken in every pot. As the Inauguration of Franklin Delano Roosevelt drew near, observers saw a country poised on the brink of catastrophe or far-reaching change. Lowering on the economic horizon was the black cloud of an incipient banking crisis.
Prices were cheap – two-cents for a daily newspaper, twenty-cents for a pack of cigarettes or four hundred and forty-five dollars for a new Chevrolet coupe – but with a quarter of the nation’s work force unemployed, even those who had money were not inclined to spend it. As the crisis of confidence grew the only currency that seemed to be holding its own was gold.
Throughout the country banks were besieged by depositors withdrawing funds and the drain on the United States’ gold supply was dire; frightened businesses and individuals were hoarding gold and sending vast sums abroad to help see them through until economic recovery. Overseas, equally desperate foreign governments looked to America as a source of gold, and bought up huge amounts of bullion for export. The country was literally hemorrhaging gold and the government realized that if the flow was not stanched the nation might never recover.
On March 6, 1933, just two days after his inauguration, President Roosevelt launched the famous “100 Days.” With Presidential Proclamation 2039 he declared a Bank Holiday, closing the nation’s banks, prohibiting the payment of gold in any form, and putting an embargo on the export of all gold. The steamship S.S. Paris whose specially rebuilt hold was ready to receive nearly 14 tons of gold, sailed empty of fleeing bullion.
As Roosevelt later wrote, “For nearly two months prior to my inauguration I had discussed with a number of people the gloomy banking situation toward which the country had been drifting for some time…The crisis was being intensified by an ever-increasing wave of withdrawal and hoarding of gold. This became more and more marked during the two months immediately before Inauguration.”
The public response to the Presidential action was overwhelming. In New York City, the first day after the hoarding policy was announced, long lines stretched outside the Federal Reserve Bank and some $30 million in gold coin and gold certificates was returned. An unnamed business firm returned $6 million in bullion, while a single businessman turned in $700,000. The response across the nation was equally robust and eventually some $300 million in gold coin and “yellow notes” was safely stored in the government’s coffers.
The bank holiday was extended at the pleasure of the President and three days later, on March 9th, Congress passed a bill approving and confirming his actions. Over the next few months a series of Executive Orders were issued to tighten the rules and allow for specific exemptions. Ultimately on January 30, 1934 these individual regulations and proclamations were condensed, codified and passed into law by Congress as the Gold Reserve Act of 1934.
Philadelphia: The Last Gold Coin Shipment
The United States Mint at Philadelphia was the nation’s chief producer of gold coinage. On Sunday, March 5, 1933, in anticipation of the President’s proclamation the next day, the employees of the vault, weigh and transfer rooms were hard at work. They were preparing what was to be the last shipment of gold coin to any Federal Reserve bank or branch. This last movement was to ensure that there was an adequate gold supply on hand for payments already contracted. The shipment, to Federal Reserve Banks in Cleveland, Louisville, Baltimore, Richmond, Charlotte and the Treasury in Washington was fairly modest in size, carrying a face value of $12,250,000. Weighing about 19 tons, it contained Half Eagles, Eagles and Double Eagles. But none of these gold coins, the last to leave the United States Mint legally, were 1933 Double Eagles. The reason was simple: no 1933 Double Eagles had yet been made.
Philadelphia: Life at The Mint Goes On
In the absence of instructions from Washington to stop gold coin production, the Mint continued its ordinary operations. As reported the day after the President’s first Proclamation in the Philadelphia Inquirer : “This is just a factory,” one official stated, “and we send out money only on orders from the Treasury Department. We have no orders with regard to the present situation.”
Dies for the 1933 Double Eagles had already been engraved, bullion had been melted and assayed to .900 Fine as required by law, and strip had been rolled and was ready for stamping into planchets. Absent of orders to the contrary, the striking of Double Eagles would begin – and it did.
On March 15, 1933, the first 25,000 1933 Double Eagles were struck and delivered by the Coiner to the Cashier of the Mint. Two days later, Mint Director R.J. Grant wrote to F.H. Jackson of Atlanta, Georgia, “Under regulations recently issued by the Treasury Department no gold or gold certificates may be paid out.” An additional 25,000 were delivered to the Cashier five days later, and by the end of the month a total of 100,000 pieces had been struck.
Beginning on April 7, work continued and during the month an additional 200,000 were manufactured, being delivered to The Cashier in four equal groups of 50,000 each. Finally, during the month of May, 145,500 more were produced. The last delivery to the Mint Cashier was made on May 19, 1933; the year’s production of gold coins was complete. And, although it was not known at the time, the grandest of all United States’ coins – the Double Eagle – was extinct.
Philadelphia: 1933-1937. Death of the 1933 Double Eagle
The 1933 Double Eagles may have had all the obvious attributes of coins but they lacked the all important one that would give them life, so to speak. They lacked legal status as money. The Treasury, as required by law, had not authorized their release to the Federal Reserve banks for circulation. They were nothing more than shiny gold disks.
Regardless, in accordance with a law nearly as old as the nation, one out of every thousand 1933 Double Eagles struck was reserved for the annual meeting of the Assay Commission. The body had been established in 1792: its charge, based on the ancient Trial of the Pyx, was to test and verify the soundness of the nation’s coinage.
By May 19, 1933, therefore, 446 examples should have been reserved for counting, weighing and testing by the 1933 Assay Commission; in fact 500 coins had been selected. One bag of 250 from the delivery of March 15th; the other of equal size from the delivery of April 26th. These were segregated and kept in the Cashier’s Vault, in the Pyx box, which needed two keys to open it. On June 27, 1933 the remaining 445,000 1933 Double Eagles were sealed in Mint Vault F, Cage 1 by the Cashier.
It was not until 1934 that the Commission sat and the samples were sent for testing. Accordingly on February 2, 1934, thirty-four coins were extracted from the 500, and are believed to have been stored in the Cashier’s vault. On February 14th and 15th the Annual Assay Commission met and carried out their assigned task. In the process nine coins were destroyed by testing. An additional twenty “specials” were sent to Washington D.C. and, prior to March 1934, melted during an internal assay as mandated by the office of the Director of the Mint. The remainder were returned to the Mint Cashier’s office on February 20, 1934 .
On September 13, 1934 all United States Gold Coins remaining in the Mint were classified as uncurrent coin. Just over a month later, on October 20, 1934, two 1933 Double Eagles were forwarded to the Smithsonian Institution for inclusion in the National Collection.
From this point forth 445,469 1933 Double Eagles lay in storage. The vast majority in the Mint’s Vault F; a small group, 469 pieces, were in the Cashier’s Vault. It was accessible to one man only. Finally, the order came: between February 6 and March 18, 1937 all the 1933 Double Eagles were melted.
At least in theory.
On February 15, 1937, Israel Switt sold the first 1933 Double Eagle to James A. Macallister for $500.
1944: A King’s Coin
February 25th 1944 was another long, bleak day during World War II in Washington D.C. At the United States Treasury work went on as scheduled. Hardly noticed among the officers and secretaries carrying out their appointed errands was a diplomatic officer from the Royal Legation of Egypt, who made his way to the Office of the Secretary of the Treasury. His business was his King’s, and in his pocket he carried a king’s ransom: a 1933 Twenty Dollar Gold piece. Two days earlier his King had purchased the coin from the flamboyant Texas numismatic entrepreneur, B. Max Mehl. He had been told it was of the highest rarity, one of just three examples he had ever handled.
King Farouk of Egypt was a twenty-four year old playboy who had come to the throne eight years earlier. A notorious spendthrift, he was touched by a collecting mania that encompassed such unimaginably diverse fields as stamps, Gallé glass, erotica, early razor blades and aspirin bottles, gold boxes, and Fabergé Easter Eggs to name but a few. He also collected coins with a gargantuan appetite.
Well-known to American coin dealers, he dealt with them through his Royal Legation. Purchases were sent on to the King in Koubbeh Palace in Cairo in the weekly diplomatic pouch. In this manner he had assembled a collection of astonishing size, richness and complexity.
Farouk’s Legation would have also been familiar with United States laws governing the export of Gold Coins, and thus the diplomat making his way through the Treasury Building would have been on what must have become a fairly regular errand.
The Gold Reserve Act of 1934 provided his guidance: among its many provisions, this act made it illegal to export gold in any form without express license from the Treasury. In this case, as enunciated in President Roosevelt’s August 28, 1933 Executive Order 6260, was the mandate that the coin must have been of special value to a collector prior to April 5, 1933. Undoubtedly, dealer Mehl had assured Farouk’s representatives that the 1933 Double Eagle fulfilled this requirement.
For a Head of State such as Farouk, although the grant of a license was not guaranteed, it can be safely assumed that the process of application and decision was greatly accelerated. While the applicable regulations had established a “Gold Unit” in the Treasury Department to oversee such license requests; in this case it appears that the coin was sent, or taken, to the Bureau of the Mint ? Mint Director Nellie Tayloe Ross its recipient sometime during that late February day.
Ross, the first woman to serve as Director of the Mint, had been chosen by Franklin Roosevelt, and by 1944 had already served her President for more than a decade. On February 25, 1944, Ross dictated a letter to the Curator of History at the United States National Museum, noting that the Royal Legation of Egypt, “desires to export from the continental United States,” the 1933 Double Eagle. She asked, “Whether it was of recognized special value to collectors?immediately prior to December 28, 1933 [and] ?immediately prior to the issuance of the Executive order of April 5, 1933 .”
That same day she entrusted the coin to her assistant, Mrs. W. D. Fales, who took the coin to the “Castle”, the original Smithsonian Institution building. She showed the 1933 Double Eagle to the Curator of History, Theodore Belote, who had been appointed in 1924, and was responsible for the formal accounting of the newly received Mint Coin Collection. A collector at heart, his record keeping skills were somewhat haphazard, and his knowledge of the events leading up to the discontinuance of gold coinage was flawed.
Dr. Belote met with Mrs. Fales; after examining the coin and the letter, he dashed off an affirmative reply to both questions on the bottom of Mrs. Ross’s letter, and returned the coin. Based on this opinion, four days later, on February 29, 1944, Secretary of the Treasury Henry C. Morgenthau, Jr. issued export license TGL-11-170 to the Royal Legation of Egypt. Interestingly formal confirmation of Theodore Belote’s somewhat hasty finding from the Associate Director of the Smithsonian, J.E. Graf, was not sent to Mrs. Ross until March 6 – after the license had already been approved. Mr. Fahim of the Royal Legation of Egypt retrieved King Farouk’s 1933 Double Eagle and its export license from the Treasury on March 11th, it was then secured it in the diplomatic pouch for transport to Cairo, and inclusion in the King’s rapidly growing collection.
An Error Acknowledged
Within a matter of days officials at Treasury and the Mint discovered that a terrible mistake had been made.
“As far as I know, Mr. Belote did not have information in his possession which would indicate whether or not these coins had ever been paid out by the Treasury. In fact, Mr. Belote may have had the impression that they had been paid out because the Mint forwarded two of the above-mentioned coins to Mr. Belote for the Smithsonian collection.”
Acting Mint Director Leland Howard to Secret Service Chief Frank Wilson, Treasury Department Inter Office Communication – March 30, 1944
A Routine Inquiry
New York City was the center of the rare coin business in 1944, and most major newspapers carried regular columns devoted to the subject. The editor of the New York Herald Tribune’s Stamp and Coin column was one Ernest A. Kehr, a stamp man by inclination: he would later be inducted into the American Philatelic Society’s Hall of Fame. But his curiosity was piqued by an advertisement placed in his paper by Stack’s, announcing their sale by auction of the Colonel James W. Flanagan Collection of Coins.
Brothers Joseph and Morton Stack had started their coin auction business in 1935 and, in less than a decade, had become one of the pre-eminent firms in the nation. The sale of the Flanagan collection was to be their greatest ever, and the advertisement they placed in the February 1944, Numismatist, proudly noted that: “we expect this sale to realize the world’s record to total amount of dollars!”
Kehr noticed the last lot of the sale, lot 1681, which was described as “the excessively rare 1933 double eagle.” A curious man and careful researcher, he must have wondered why it was so rare. He directed a simple question directly to the United States Mint: How many 1933 Double Eagles were released? An equally simple reply was given: None.
The Acting Director of the Mint, Dr. Leland Howard, as he recalled in the March 30, 1944 memo to the Chief of the United States Secret Service, had received the “routine inquiry,” and upon personally checking, “discovered that none were ever legally paid out by the Mint.” Alarmed, Howard immediately contacted Secret Service Chief Frank B. Wilson, and advised him that, “the coin was for sale in New York and others were reported to be in collections there.”
Although it was the Stack’s advertisement for the Colonel Flanagan auction that ultimately initiated the Secret Service investigation, curiously, it was not the first public offering of a 1933 Double Eagle. Three years earlier, the Chicago firm of Smith & Son had taken an advertisement in the February, 1941 issue of the Numismatist. It read: “1933 $20.00. Uncirculated, the rarest of all Double Eagles with the exception of the 1849; only three pieces known at the present time. Price on application to interested buyers.” Had the Secret Service been aware of that offering, who knows how history might have changed?
A Lighted Fuse – the First Seizures
Leland Howard’s call on Frank Wilson set the wheels in motion. The Secret Service Chief turned the case over to its New York unit; the case was assigned, the lead investigator, Special Agent Harry W. Strang. His work began, those first interviewed the first day were extremely co-operative, and events unfolded rapidly.
March 24, 1933 was a Friday. That morning Strang, together with Secret Service Custodian James Haley from the Washington D.C. office, met briefly with Ernest Kehr in his office. The newspaperman told them of the impending auction at “Stack Bros., Numismatists” and gave them the address, 12 West 46th Street.
It was the second day of the Flanagan sale, and the day before the 1933 Double Eagle was scheduled to be sold. When agents Strang and Haley arrived at the Stack offices, Joseph and Morton Stack were most probably seated at their partner’s desk reviewing bids for the next session of the auction.
The Agents identified themselves and got to the point quickly. Colonel Flanagan’s 1933 Double Eagle was stolen property – stolen from the United States Mint. Investigations initiated by the Office of the Director of the United States Mint had determined that no 1933 Double Eagles had been released for circulation. Agent Strang informed the Stacks that he was seizing the coin.
As the interview continued, a panoply of leads was opened. Two were of particular importance: From whom had Colonel Flanagan had purchased the coin? And, what was the basis of the portion of their catalogue description that read, “?we know that 8 to ten of the pieces were sold privately…”?
In response to the first question, the Stacks produced a letter sent the previous week from B. Max Mehl, correcting their catalogue description: “You state that Colonel Flanagan paid $2200.00 for this piece. This is incorrect. He purchased the coin of me as per invoice of November 26th, 1937, and remittance was received from him on December 3rd, same year, for the amount of $1250.00.”
Replying to the second, Joseph and Morton Stack, recognizing the seriousness of situation provided the agents with much information as possible. Strang issued Stack’s a receipt for the Flanagan coin at 12:00 Noon and, with James Haley, headed to the office Max Berenstein, whose name the Stacks had just provided.
It was convenient, less than four blocks away. Berenstein, a jeweler, was exceptionally helpful. As he handed over his 1933 Double Eagle, he told the Secret Service men that he had bought the coin from James G. Macallister of Philadelphia. His records revealed that he had made the purchase on February 17, 1937, for $1,600 – an enormous sum at the time.
Berenstein was expansive. He provided the names and addresses of three other owners – numismatic greats: F.C.C. Boyd, J.F. Bell and T. James Clarke. He further informed the agents that he believed that Macallister may have once had three 1933 Double Eagles. The jeweler also admitted that he had once owned a second example, it too traced its origins back to Macallister. Berenstein was well versed with its history, which he willingly provided; he had sold it to a Chicago firm, R.H. Smith, they had, in turn, sold it to coin dealer, Ira Reed of Philadelphia. The agents made arrangements to continue the interview the following day, and took the two seized 1933 Double Eagles to the U.S. Assay Office in New York. They were, “weighed and found to be within the weight range of perfect coins.”
Another Coin: Another Story
The next morning found Haley and Strang back in Berenstein’s company. The jeweler told them that Messrs. Bell, Boyd and Reed were around for the Col. Flanagan auction and could be located at Stack’s. Clearly the men were waiting for the agents, and were prepared for their interviews. The results of the ensuing conversations were somewhat mixed, some answers were evasive, but the trail remained hot, and focus of the investigation continued to tighten.
F.C.C. Boyd, Vice President of the Union News Company, was politically well-connected and had served on the board of the National Recovery Administration in the 1930’s. While he freely admitted to owning a 1933 Double Eagle, also purchased from James Macallister, he adamantly refused to surrender it until he was presented with proof that it had been stolen from the Mint. Boyd explained that it was his understanding that all the 1933 Double Eagles in collectors’ hands had come from a single bag that had been delivered to the Federal Reserve Bank of Philadelphia. And when, “the order to recall same had been issued by former Secretary of the Treasury Woodin?that instead of returning the bag intact to the Mint ten of these coins were abstracted?” Boyd, of course, could not have known that at the time of recall the coins had not yet been struck.
J.F. Bell was more co-operative, but must have been embarrassed and frustrated. He had his 1933 Double Eagle with him and surrendered it immediately. He had bought it only two days earlier, from Ira S. Reed.
Reed was a canny Philadelphia coin dealer. He admitted cautiously that he had once owned two of the pieces. One he had just sold to Bell, but as to the other his memory failed. He promised he would check his records. Curiously, just three weeks after this interview, on April 15, 1944, knowing full well that the 1933 Double Eagles were illegal to own and subject to seizure, Ira Reed sold one to Louis Eliasberg of Baltimore.
The third seized 1933 Double Eagle was in hand. Harry Strang headed to Philadelphia.
The City of Brotherly Love: Philadelphia 1944
The local Agent assigned to assist Strang was George C. Drescher. Together, on March 29th and 30th they conducted a series of interviews. The responses ranged from candid to evasive to imaginative: the conclusion though, was unmistakable.
Berenstein had inadvertently given James Macallister’s previous address, and so Stephen K. Nagy was the first interviewed. Nagy was a well-known authority on coins and antiques, had once had remarkable contacts within the Mint, and had a tendency to dissemble. He told the agents that former Secretary of the Treasury William F. Woodin had once shown him five 1933 Double Eagles and had offered him one; unaccountably Nagy had declined.
Ira Reed was next. His careful replies continued, but he now admitted to having handled three examples – with a hint that more may have passed through his hands. He had no records, but furnished the agents with the names of those to whom he had sold the coins.
A welcome relief greeted the two agents, when at last they met with James G. Macallister. He came from a wealthy Philadelphia family and was a “gentleman’s” numismatist; knowledgeable and courtly, he nevertheless had some interesting contacts. In his interview he was completely forthright; he had kept meticulous records and was pleased to share them. He provided dates, purchase and sale prices, as well as what he knew about the subsequent disposition of the coins he had sold.
He freely recounted that he had bought five of the 1933 Double Eagles from one Israel Switt, whose shop was on “Jewelers Row” in Philadelphia. He also noted that each time he inquired as to the source of the gold pieces, Switt gave him different, vague and thoroughly unsatisfactory answers.
Macallister was clearly uncomfortable having a relationship with a man whom he styled as a “gold coin bootlegger,” and stated that he was aware that Switt had once been convicted of a violation of the Gold Reserve Act of 1934. Secret Service files confirmed this information, noting that Switt had been arrested and his license to deal in scrap gold had been cancelled. However he had continued to do business through the transfer of the license to his brother-in-law and partner, Edward Silver. Macallister concluded his statement by saying he had not bought a 1933 Double Eagle from Switt since December 1937, when it became clear that there were, “too many available to warrant their being represented as rarities.” At one point Macallister recalled Switt telling him he once had 25 and had only sold 14!
Another Faulty Memory
Israel Switt was wary. Ira Reed had called him on March 27th and had told him the Secret Service had already seized three of the 1933 Double Eagles. On March 30th Switt met with the agents when they arrived at his shop at 130 S. 8th Street. As the questioning wore on it was moved to the Secret Service offices in Philadelphia. Switt admitted, during a four hour session, that he had sold nine 1933 Double Eagles; five to James Macallister in 1937, and sold two each to Ira Reed and Abe Kosoff, “about two years afterward.” He denied having had more, and his memory failed completely when asked about his source. The Secret Service agents were unconvinced, and their continued questioning did open a viable lead. Switt and Silver in their capacity as depositors of scrap gold had developed close ties to a number of employees at the United States Mint.
Strang poured over the Mint Records concerning the disposition of the 1933 Double Eagles. One thing was certain; the stories of the coins having come from the son of the Philadelphia Federal Reserve Bank president, or the Secretary of the Treasury or other “high officials” before the gold recall simply wouldn’t wash. None of the coins had yet been made.
The answer was closer to home. Harry Strang and George Drescher began interviewing present and former employees of the Mint. Who had known whom? Who had had access to the 1933 Double Eagles – and when – As employees, retirees, widows, friends and acquaintances gave their statements threads of the mystery began to knit together. Copies of financial records and tax returns were scrutinized and the results provided yet more pieces to the vast jigsaw.
Only one name seemed to fit the profile.
Whippersnapper and the Four Horsemen
George A. McCann was a crook. That was what the former Mint bookkeeper John J. Carey told Agents Strang and Drescher on April 17, 1944. He’d known him to be a crook since 1926 when he had discovered, and reported, discrepancies in McCann’s records as foreman of the Mint’s Weigh Transfer room. Nothing had been done. McCann had been protected by superiors.
The interviews and records revealed that, as he had worked his way through the ranks of the Mint, McCann had become close to Assistant Superintendent Ralph Roland, Chief Clerk Fred Chaffin and Assayer Chester “Doc” Ziegler. While still a junior employee he had done their bidding, or in Carey’s words, “was their whippersnapper.” As he had risen in seniority he maintained their favor and was eventually taken into their powerful clique; one that was styled in the Secret Service reports as “the Four Horsemen” who “ran the Mint.” Their meetings would take place at a hotel at Broad and Catherine Streets, and until 1932, “Doc” Ziegler allowed his personal friend, coin dealer Henry Chapman, “exclusive numismatic privileges at the Mint.”
On March 19, 1934, George A. McCann was appointed Cashier of the Mint. His salary, $2,421.79, was a good one, nearly twice that of a schoolteacher. He was in a position of trust, one that granted him access unavailable to other Mint employees. He had exclusive access to the 1933 Double Eagles that had been returned to the Mint from the Assay Commission a month earlier.
The Secret Service investigation revealed that McCann had deposited varying amounts of cash into his brokerage accounts “not traceable to any known source or income” beginning in 1934. It also established, through interviews, that Israel Switt, Edward Silver and George McCann knew each other at that time and had been seen having private discussions at the Mint.
In May, 1940 McCann was accused of having stolen uncurrent silver coin from the Mint. He found no cover from his superiors. He was dismissed, arrested, pleaded guilty, and jailed. He was now, four years later, the primary suspect in the theft of the 1933 Double Eagles.
October 10, 1944. Westmont, New Jersey. Agents of the Secret Service interviewed George McCann for two hours. He denied ever having custody of the 1933 Double Eagles from the Assay Commission; he denied having sent two 1933 Double Eagles to the Smithsonian; he admitted to knowing of Switt, but said that he had never heard of Edward Silver. He sought to point the finger of suspicion at others, grew agitated at certain questions, was ultimately unconvincing, and refused, through his lawyer, to meet with the agents again. His denials were proved by subsequent interviews and investigations to be untrustworthy at best.
It was clear, over the years McCann and his cronies had used their positions at the Mint to obtain uncurrent coin and sell it for personal gain. In hindsight, their chicanery has the appearance of having been an open secret, and why it was not until 1939 that McCann’s activities drew the attention of the law is not known. However, it may be surmised that cracks in the wall of protection the “Four Horsemen” created for themselves must have begun to show when, in 1936, member Fred Chaffin suddenly died; and two years later, February 1938, Assayer Chester Ziegler committed suicide.
It looked as if the case was solved, and in a remarkably short space of time. The Secret Service investigation, commenced in March 1944, drew to a head in December, when it was decided to bring charges against “Israel Switt et al.” The recommendation was made to the United States Attorney in Philadelphia, Gerald A. Gleeson. Two months later, on February 6, 1945, the Secret Service received the following decision: “…prosecution for the offense alleged has been barred by the Statute of Limitation. Consequently, no criminal prosecution will be instituted in this matter.”
And Then There Were Ten
McCann, Switt and Silver were now beyond the long arm of the law; but the 1933 Double Eagles were still stolen United States property, and only three of the nine Switt admitted selling were in government custody. Agent Strang reviewed his notes and proceeded to track down the rest; again he was relentless – and successful.
From the interviews with Mehl, Berenstein, Reed, Macallister and Bell the current owners were identified and located. Between mid-May and mid-June, 1945, the Secret Service informed these collectors of the illegal status of the 1933 Double Eagle and demanded their return.
Fred Boyd, the notable hold-out in 1944, was now convinced it had been stolen. Not only did he turn over his example, but he wired fellow collector Charles Williams in Cincinnati, informing him of his decision. A day later Williams surrendered his example.
The other owners were not so co-operative. L.G. Barnard, a Memphis collector, refused. In August he was issued a summons by the United States government, which sued him for return of the coin. Barnard placed the coin in the custody of the federal court clerk and fought the case. In August 1947, the court found Barnard to be in wrongful possession of the 1933 Double Eagle.
Justice Marion S. Boyd stated that he believed the coin had been stolen by someone “who substituted a similar coin for it before the coins were reduced to bullion.” His opinion also noted that in light of the circumstances surrounding its production during the gold recall:
“The coin here involved was not, at any time, money or currency, but was a chattel, or an article of virtu.” The coin was surrendered to the Secret Service.
James A. Stack and T. James Clarke had their coins seized by the Secret Service a day apart in June 1945. However, like Barnard, they chose to fight; and like Barnard they lost. Clarke’s case was dismissed in 1947 and Stack’s in 1955.
Eight coins had been seized.
While Switt had admitted to selling only nine, there had been the hint of at least one other. In 1952, quite unannounced and unexpected, Louis Eliasberg, one of America’s great coin collectors, wrote to Leland Howard at the Mint, and surrendered what turned out to be the tenth 1933 Double Eagle.
Eliasberg had bought the coin from Ira Reed in April 1944, quite unaware of their illegal status (although Reed did know). When he learned “that there was a cloud to title to the title,” he returned it. But, his letter gently pleaded: he hoped the Mint would return it to him to complete his remarkable collection. They did not.
The ninth coin, of course, was Farouk’s – half a world away.
Almost as soon as it was determined that the 1933 Double Eagles had been stolen from the Mint, and that an erroneous export license had been granted to King Farouk, the Treasury Department began to think of ways to get the coin returned. As early as May 4, 1944, only six weeks into the Secret Service investigation, the Treasury’s general counsel felt that, “it would be proper to attempt by diplomatic representations to have the coin returned to the United States.” However, with a war raging overseas, the return of a single coin, from the ruler of a strategically important nation, may not have been seen to be of the highest importance. Nothing was done – but the coin was not forgotten.
The end of the war in 1945 did not usher in the peace the world had hoped for. An iron curtain descended across Europe as the two great allies in the war against Nazism, America and the Soviet Union, squared off against one another in a game of international cold war. Egypt was vital to the west; a key piece on the global chessboard it controlled the Suez Canal, and with it the Indian Ocean.
The Treasury Department, on September 14, 1949, drafted a letter for State Department review asking for the return of the Farouk 1933 Double Eagle. Acutely aware of the tense international climate, State “considered raising the question politically inadvisable.” Again, the matter was dropped.
Three years later, everything changed. In 1952 King Farouk was ousted by a group of Colonels led by charismatic nationalist Gamal Abdel Nasser. Their attitude to the outside world was suspicious and hostile. The revolutionary government’s chief occupation was the reconstruction of Egypt and erasure of the country’s colonial and royal past. One of their tasks was to sell off the fabulous riches which the fleeing King had left behind.
Sotheby’s was chosen to conduct the sale after what essentially amounted to a year of negotiations conducted by Peter Wilson, and another year of cataloguing the collection in Cairo. Fred Baldwin of the esteemed London coin dealers of the same name, was asked to write the coin catalogue. It was a vast undertaking, some 8,500 gold coins alone. One of them was the 1933 Double Eagle. The sale was scheduled to begin on February 24, 1954.
In late 1953, the Mint found the coin listed in the catalogue as part of lot 185. It immediately informed the State Department and the news inspired a flurry of diplomatic cables. On January 27, 1954, Washington wired Cairo with instructions that, “The Embassy should request that the coin be withheld from sale and that it be returned to the United States Department of Treasury.”
A month later, the day before the sale was to begin Cairo wired back that President Naguib has “ordered the withdrawal [of] coin from auction.” The action was confirmed two days later in a cable from the American Consul:
“It has now been definitely established, on the basis of reports received from two reliable witnesses…The auctioneer, when putting up lot No. 185 on the auction block on February 24, 1954, is reported to have announced that the controversial twenty dollar gold piece, 1933 issue, was being withdrawn from the lot ‘at the request of the American Government’. The balance of the lot was purchased by an American citizen who confirmed the withdrawal of the coin in question.”
The buyer of record was David Spink, acting for American collectors the Honorable and Mrs. R. Henry Norweb. The price for the other 16 coins, even without the 1933 Double Eagle, was enormous £2,800 ($8,467) – the highest price in the sale.
On March 31, 1954 the U.S. embassy reported that the return of the Farouk coin was “under consideration” by the Egyptian government. Nothing further was heard on the subject. The coin was never returned, and its whereabouts have been a mystery ever since.
Back to the Future
New York City. On the afternoon of February 7, 1996 English coin dealer Stephen Fenton arrived in New York on British Airways Flight 3 – with him was a 1933 Double Eagle. The next morning Fenton met with American coin dealer Jasper Parrino at the Waldorf Astoria to negotiate the sale of the 1933 Double Eagle for $1,500,000. Secret Service agents, made aware of the meeting through a confidential informant and wire taps, arrested Fenton and Parrino, and seized the coin.
Over the next five years a lengthy series of legal bouts were fought. During the process a deposition given by English coin dealer Andre de Clermont was taken, and his story may shed some light on the subsequent history of the celebrated Farouk coin.
According to de Clermont’s sworn statement, between 1993 and 1995, he and Stephen Fenton had bought numerous gold coins and patterns from an Egyptian whose father was said to have been a jeweler to one of the colonels who had overthrown King Farouk in 1952. The colonel had been a coin collector who purchased coins at the Palace auction, and privately after the sale. His family was now selling his collection. De Clermont stated that he was able to match coins exactly to the descriptions in Sotheby’s Farouk catalogue. In late summer, 1995, de Clermont asked Fenton if he wanted to buy the Farouk 1933 Double Eagle. Fenton agreed and after some haggling, bought the coin with some other, minor U.S. gold coins, directly from the Egyptian jeweler for $220,000.
This was the coin seized from Stephen Fenton on that February morning.
Piecing together the Pieces – How and When
So what really happened, when did it happen, and who was responsible? Only those who took part will ever know for sure, but the Secret Services reports prepared more than a half century ago clearly point the way.
In a nutshell.
The only accessible 1933 Double Eagles were the 471 in the Cashier’s vault. 437 had been returned from the Mint by the Assay Commission on February 20, 1934. They were stored in what was called the Pyx Box; it had two locks, each requiring a key held by a separate individual: the Cashier held one, and the Assayer the other. The coins remained in this box until the Assay Commission’s report was approved in Washington.
Upon that approval, the coins were removed from the Pyx Box, and kept in two bags (for Double Eagles the standard Mint bag held 250 coins) in the Cashier’s vault; along with the 34 already removed. As of February 20, 1934, the Cashier’s daily statement, carried all but the twenty-nine pieces destroyed by Assay testing on its books.
On October 2, 1934 an additional two examples were sent to the Smithsonian by Cashier George McCann (who, curiously, lied to the Secret Service about this), and he was only individual with access to the remaining coins, until they were destroyed. This left 469.
James G. Macallister stated that no 1933 Double Eagles were known in collecting circles until his first purchases from Israel Switt in mid-February, 1937. Switt himself recounted that he had bought his first 1933 Double Eagle in “early February, 1937.” It is a date that coincides with the first shipment of the 1933 Double Eagles to the refinery for melting – February 6, 1937.
Knowing the 1933 Double Eagles had never been issued and were about to be destroyed, must have made them particularly tempting. It also gave them considerable collector value. The mass movement of material to the refinery would have afforded McCann ample opportunity. He disguised his criminal act, by switching common coins of no collector value, but identical weight, with the now valuable 1933 Double Eagles. When the final tally by weight was added up, the United States Mint had accounted for every single 1933 Double Eagle ever made – or so they had thought.
As an added footnote, the identification of the coins as having come from the original 500 pulled for the Assay group, and kept in the Cashier’s vault for three years is also extremely likely. As the two coins sent to the Smithsonian from this group, are a die match to the current specimen.
It all makes sense. But we’ll never know for sure.
On January 25, 2001, just four days before jury selection was to have begun, The United States Government and attorneys for Stephen Fenton reached at out-of-court settlement. It was a singular agreement, and permitted the sale of the 1933 Double Eagle described in this catalogue. The United States Government will officially monetize and issue this single 1933 Double Eagle, making it unique, and the only one certified for private ownership.
Amidst swirling fables and rumors, the 1933 Double Eagle has become the stuff of legend; the focus of international numismatic intrigue, gossip and misunderstanding for nearly seventy years. There is no other coin that has been so shrouded by myth and secrecy: the stories of the 1804 Silver Dollar, 1913 Liberty Head Nickel and 1885 Trade Dollar seem pale in comparison. But its story is one which, until the decision of the United States Government to sell this single example, has been unknown to the public. Indeed, few outside the United States Secret Service and United States Mint were aware of the remarkable history of this fabulous glittering disk of gold – the 1933 Double Eagle – the Forbidden Fruit of American coins.
TORIES FAVOR S1LYER
It Is the English Lib ra1B Who Arc ItJ Worst
Arthur Fruim is an English Tory but
he has been interested in the silver mines
in this country for fifteen years and is an
able champion of the white metaL
Gladstone said Mr Fruim is the
worst enemy silver has got in England Ho
believes that any legislation favoring its
use is for the sole purpose of artiflcialy in
flating pries and is radically opposed to
it as ho is to protection
Arthur Balfour tbe late leader of the
house of commons he credits with having
taught tho Tories all they know about sil
ver Goshen is a very good silver man
for an Englishman and is the man who
wrote the best on foicign exchanges The
Tories are bimetalists and i they had
two more years of Tory rule Mr Balfour
believes that England would have blmet
alism He expects great results from the
silver conference to be held at Dresden in
I is not popular in this country he
said to believe that the conference will
accomplish anything for Americans want
to settle everything themselves but he is
of the opinion that the question cannot be
properly adjusted without the assent of
one or two of the great powers in Europe
Now when there is a chance to do some
thing you only recognize it as a track to
gain a political advantage I you dont
get a settlement at Dresden in No
vember it will be early enough
for Congress to take up the question of
free silver at its next session The men
who best understand the silver question
are in favor of bimetallsm
If we had two years more of the Tory
administration it would have resulted in
England adopting the double standard
Salisbury is in favor of it and i he were
at the head of the government now the silver
ver problem would be in a very fair way
CHIN ABOUT COIl
A gold double eagle of 1849 is worth 5100
A fivecent nickel of 1877 is worth SI
and a nickel fivecent piece of 1878 about
The pine tree shilling of 1650 is worth
25 A Maryland shilling of 1659 is valued
atl0 and a Louisiana crown coined in
France at 25
The silver dollars of 17931S3S 1839 185
and 1S52 are worth t23 each while that of
1S5S is valued at 15 Silver half dollars
of 1796 and 1797 are worth 2 each
The total number of gold pieces struck
at the English mint last year was S76S6317
as against 70b94445 in 1890 This was by
far the largest number ever executed In i
one year Their value was 8325503 9s
A gold Vermont doubloon is worth 200
and a Vermont silver half dollar whl fetch
510 The Massachusetts cent of 17S3 is
valued at 10 Washington silver pieces
of 1792 bearing the bust and name of G
Washington will fetch t50 each