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1933 Double Eagle Gold Coin

 
1933 double eagle $20 gold coin
By Mark Anning of Chatelaine Antiques, Copyright 2013

The 1933 Double Eagle is "one of the most sought-after rarities in history" according to the U.S. Mint. Only one coins has been declared "legal tender", the fabled 'Farouk-Fenton specimen' which is on display at the New York Federal Reserve Bank, after setting a world record price for a coin of $7,590,000 in 2002. 

Two other legal 1933 Double Eagle coins were presented to the U.S. National Numismatic Collection and have been on display in the "Money and Medals Hall" of the National Museum of American History, Smithsonian Institution.

Rumours persist of other clandestine 1933 Double Eagle coins. A privately held 1933 Double Eagle is mentioned and pictured in David Tripp’s book Illegal Tender: Gold, Greed, and the Mystery of the Lost 1933 Double Eagle. In 2002, Armen Vartian, a well known lawyer for coin dealers, wrote that he had heard rumors from reliable sources of other privately held 1933 Double Eagles. Noted rare coin expert Quirin David Bowers has written about the existence of other coins in very private collections in  An Official Red Book: A Guide Book of Double Eagle Gold Coins: A Complete History and Price Guide.

The $20 gold coin was designed by famed sculptor Augustus Saint-Gaudens. The obverse features “Liberty,” a figure reminiscent of a Greek goddess, and the reverse features a majestic eagle. Measurements overall: diameter 34.1 mm; weight 33.431 g

US Mint Pressroom Image Library

 

"Forbidding the Hoarding of Gold Coin"

U.S. President Franklin D. Roosevelt signed Executive Order 6102 on April 5, 1933 "Forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States" and ordering Americans to 'deliver' their gold by May 1st 1933 to help the struggling economy recover from the Great Depression. Citizens worried about the economy were withdrawing vast amounts of gold coin, causing stress on the banking system. Coins that were 'valued by collectors' were exempt from this order.

445,500 specimens of the Saint-Gaudens 1933 gold double eagles were minted, but because they were no longer legal tender, most of the 1933 gold coins were melted down or destroyed, beginning in late 1934 until the last batch were melted in March 1937. The 1933 Double Eagle $20 coins were the last strikes of US gold coins until minting was resumed in 1986.

The 1933 Executive Order forbidding gold ownership in the U.S. was overturned when President Gerald Ford signed a bill to "permit United States citizens to purchase, hold, sell, or otherwise deal with gold in the United States or abroad" which went into effect December 31, 1974.



The Eagles have Flown

An unknown number of the 1933 Double Eagle coins were removed from the U.S. Mint sometime between 1933 and 1937 before the final batch was melted down. The U.S. Secret Service suggest they were stolen by the U.S. Mint Cashier, George McCann. 

The book Illegal Tender: Gold, Greed, and the Mystery of the Lost 1933 Double Eagle by David Tripp, former head of Sotheby's coin department, claims that George McCann was foreman of the Weigh Transfer Room in 1926 at the Mint when ten thousand dollars in gold was 'lost' - the discrepancy was put down to 'wastage' and forgotten. In 1941 McCann was sentenced to a year in jail over another loss of a bag of ten dollar gold coins from the Mint in 1933, which was not discovered until 1937.

Israel Switt, a Philadelphia jeweller and gold scrap dealer with a shop at 130 South Eighth Street, sold ten 1933 Double Eagle coins (or more?) between 1937-1939 to collectors. Switt regularly dealt in gold at the cashier's window of the Philadelphia Mint and it has been claimed, and countered, that he was friends with McCann.

Alison Frankel, author of Double Eagle: The Epic Story of the World's Most Valuable Coin (2006) notes that "Beginning on February 6, 1937, McCann supervised the transfer of bags of 1933 double eagles … to the melting room. ... On March 18, 1937, the Mint was able to report that all of its 1933 double eagles had been melted down into gold bars. But they hadn’t. On February 15, nine days after the meltdown commenced … Israel Switt sold a 1933 double eagle to Philadelphia coin dealer James Macallister for $500."

Unrelated to the 1933 Double Eagles, Switt had been arrested on 22 August 1934 at Philadelphia's 30th Street Station, when he was caught lugging an unusually heavy briefcase and prosecuted under the new 1934 Gold Reserve Act. The trial took four years to go through the courts and in 1938 Switt lost his license to trade in gold and forfeited over a hundred gold coins, mainly Double Eagles from the nineteenth century, a severe fine in post-Depression USA.

The ten 1933 Double Eagle coins that Switt sold had been circulating among collectors for 6 or 7 years, most coins changing hands more than once, sometimes publicly advertised. 

The matter came to the attention of the U.S. Mint when Ernest Kehr, a journalist for The New York Herald Tribune, contacted them about mintage numbers whilst looking into the history of a 1933 Double Eagle coin he had seen in a Stack's coin auction advertisement in 1944.

The U.S Secret Service began their investigation in March 1944, directed by Frank Wilson, head of the Secret Service since 1936. Wilson had worked as a detective for years on a number of cases including the Lindbergh kidnapping, the arrest and conviction of corrupt politician Huey Long, and the capture of gangster Al Capone. The case was assigned to Special Agents Harry Strang and George C. Drescher. Drescher was reassigned to President Truman's protection detail in 1945.

Despite the evidence pointing to Switt and McCann, plus Switt's business partner and brother-in-law Edward Silver, no-one could be prosecuted because the statute of limitations had expired.

 

All known examples of the 1933 Double Eagle coins:

 U.S. National Numismatic Collection

1.& 2. 1934 - Two 1933 Double Eagle $20 gold coins were presented to the Smithsonian Institution, U.S. National Numismatic Collection, where they are today. One was said to have been donated by  J.G. Macallister and  Frederick C. C. Boyd in 1938. These are the only two 1933 double eagles that were not subject to seizure by the U.S. government's Secret Service whose responsibility encompasses U.S. currency.

Farouk-Fenton specimen

3. 1944 - Originating with Israel Switt, the coin was sold by Texan coin dealer B. Max Mehl to King Farouk of Egypt for $1,575.00 on February 23 1944 who was granted a U. S. Treasury export license on February 29, 1944.  The coin left the USA for Egypt just days before the Mint theft was discovered. World War Two delayed the application by the US Treasury Dept. to return the coin to the USA.

1952 - King Farouk was deposed, his Palace Collections of Egypt seized in the coup d'etat and his 1933 Double Eagle coin offered for auction at Sotheby's in 1954. The Egyptian Government withdrew the coin from sale and stated that they would comply with a US request to return the coin, but it disappeared for more than 40 years.

Image courtesy Sotheby's Galleries New York

1996 - Seized by the Secret Service from British coin dealer Stephen Fenton who was selling a 1933 Double Eagle coin to Kansas City dealer Jasper "Jay" Parrino at the Waldorf-Astoria Hotel in New York for $1,650,000.  Fenton claimed this was the Farouk coin which he had purchased from an Egyptian military officer's estate for $220,000 - quite plausible as the officer's collection was said to include other coins from the Farouk Collection although this was never proven beyond doubt.

The Treasury Department realised that they may lose their prosecution of Fenton and Parrino as most of the witnesses involved had died, it was difficult to prove the theft from the Mint after so many years despite one of the 1947 federal courts determining that the coins were stolen government property, and the granting of the export license to Farouk had possibility legitimised the coin. Treasury cut a deal with Fenton, settling the case out-of-court by officially issuing the coin, auctioning it and splitting the profits with him.

The coin was placed with Sotheby and Stacks auction houses, who had lost their opportunity to sell Double Eagles in 1944 and 1954. The auction was held on July 30, 2002, the day before the annual meeting of the American Numismatic Association, ensuring that all the important coin dealers would be in New York City. Bidding opened at $2.5 million and ended at $7,590,000, including the buyer’s premium, making it the most valuable coin in the world at the time. The winning bidder was also required to reimburse the government for the $20 face value of the coin.

The anonymous buyer loaned the Farouk-Fenton specimen to the American Numismatic Society to be displayed at the New York Federal Reserve Bank where it is today.

 

U.S. Secret Service Seizures and Surrendered Coins

The provenance is based on the notes of agent Secret Service agent Harry Strang. These numbers are in order of seizure/surrender, not the numbers assigned by Strang:

4. 1944 March 24 Flanagan - Seized from Stack's Bowers auction house, coin owned by Col. James W. Flanagan. Provenance: Sold by Switt to coin dealer J.G. Macallister of Philadelphia on  Feb.20 1937, then on July 15, 1937 sold to B. Max Mehl of Forth Worth Texas, then on Nov.26 1937 sold to Flanagan. Destroyed.

5. 1944 March 24 Berenstein - Seized from dealer Max Berenstein, New York City. Provenance: Sold by Switt to Macallister on Feb.16 1937 for $500, then on the same day sold to Berenstein for $1,600. Destroyed.

 6. 1944 March 25 Bell - Seized from James F. Bell, Chicago, a pseudonym of Jacob F. Shapiro. Provenance: Sold by Switt to coin dealer Abe Kasoff, New York City in 1937 then to Hammell, NYC, then to Ira Reed then to Bell on March 23, 1944. Destroyed.

7. 1945 Boyd - Surrendered by Frederick C. C. Boyd who had admitted to the Secret Service in March 1944 that he had the coin but refused to surrender it at the time. Provenance: Feb.20 1937 sold by Switt to Macallister for $500 then to Boyd for $1,100. Destroyed.

8. 1945 Clarke - Seized from T. James Clarke, Jamestown, NY, who lost a 1947 lawsuit to return the coin. Provenance: Sold by Switt to Ira Reed in 1939 then to Clarke. Destroyed.

9. 1945 Stack - Seized from James A. Stack, whose heirs lost a 1955 lawsuit. Provenance: Sold by Switt to Ira Reed about 1939 then to Stack, NY, unrelated to Stack's auction house. Destroyed.

10. 1945 Williams - Surrendered from C. M. Williams. Provenance: Sold by Switt to  Kasoff, then to Sol Kaplan, Ohio, then to Williams. Destroyed.

11. 1945 Barnard - Surrendered by L. G. Barnard who lost a 1947 lawsuit. Provenance: Dec.6 1937 sold by Switt to Macallister then to B. Max Mehl then to C. M. Williams, then to Barnard. Destroyed.

12. 1952 Eliasberg - Surrendered by Louis E. Eliasberg, Sr. Provenance: Sold by Switt to Macallister, then to B.L. Taylor, NYC, then to Ira Reed, then to J.F. Bell then to B. Max Mehl who denied to the Secret Service investigators in 1944 that he received the coin. (Note: The provenance is traced by a process of elimination - all others are accounted for by the last known owner before being seized or surrendered. This is the coin that the Secret Service stated was possibly confused with the Farouk specimen). Destroyed.

The book Illegal Tender: Gold, Greed, and the Mystery of the Lost 1933 Double Eagle by David Tripp, former head of Sotheby's coin department who consulted on the 2002 auction of the Farouk-Fenton specimen, goes into more detail about the trail of each of the coins uncovered by the Secret Service.

Special Agent Harry Strang and the team at the Secret Service had done their job, tracking down and destroying all known examples of the 1933 double eagle coin. Until ...

 

The Langbord 10

In another twist to the legend of the 1833 Double Eagle, another ten coins surfaced in 2004.

Israel Switt, the Philadelphia jeweller at the centre of the distribution of all the illegal coins died in 1990 aged 95. In August 2004 Switt's daughter, Joan Langbord, discovered another ten 1933 Double Eagles in a family safety deposit box.  She surrendered these coins to Treasury officials to authenticate them and hoped she could strike a deal similar to Fenton. Treasury refused to return the "Langbord 10" claiming they were stolen property.

The U.S. Mint showcased the Langbord 10 double eagle coins under heavy security at the Aug. 16, 2006 ANA American Numismatic Association’s summer convention in Denver.

Joan Langbord, aged 77 and two of her sons, Roy of New York and David of Virginia, filed suit in December 2006 to have the coins returned, claiming that the Secret Service investigation seven decades earlier had not proved Switt had stolen them. In July 2009, U.S. District Judge Legrome D. Davis ruled that the seizure violated the Langbords' right to due process and told the Bureau of the Mint that if it wanted the coins, it had to bring a civil- forfeiture suit.  In September 2009 the U.S Treasury filed suit which was heard in July 2011.

Records show that on July 29, 2002, the day before the auction of the Farouk-Fenton specimen, Joan Langbord visited the safety deposit box containing the coins she says were not discovered until 2004. Langbord claims the box contained contents she inherited from her mother and she did not notice the coins because they were wrapped in a gray paper Wanamaker's department store bag in the bottom of the large steel box.

The attorney for Langbord, Barry H. Berke with Kramer Levin Naftalis & Frankel in New York, argued in court that theft from the Mint could not be proven. "The government, at the end of the day, has a theory of how they left." What it doesn't have are conclusive facts about "when the 1933 Double Eagles left the Mint, how the 1933 Double Eagles left the Mint, or by whom the 1933 Double Eagles left the Mint."

Berke, who was also the attorney representing Fenton during his legal battle, argued that the coins could have left the Mint legitimately through a "window of opportunity" between March 15 and April 5, 1933.

The 1873 Coinage Act still in effect when the first 1933 double eagles were coined. The Mint started minting 1933 double eagles on March 15. Roosevelt signed the Executive Order prohibiting the private ownership of most gold coins three weeks later, on April 5. Theoretically, under the Coinage Act for those three weeks it would have been legal for a coin collector to go to the Mint Cashier’s window and exchange gold bullion, or even older $20 gold coins, for the newly minted 1933 double eagles. The coins continued to be minted until May 19.

In 1996 whilst Berke was working on the Fenton matter, he had Robert W. Julian, an expert in Mint history, research the 1933 Double Eagle coin. Julian discovered a letter from the Mint's Acting Director Mary M. O’Reilly to Lewis Froman of Buffalo, N.Y., dated 15 March 1933 - the same day the 1933 double eagles were first recorded in the Mint’s books - stating that he could deposit gold bullion directly at the Mint in exchange for gold coin. An exchange involving gold for gold was permissible, because it "neither increases nor depletes the stock of gold in the Treasury."

 Bowers writes in An Official Red Book: A Guide Book of Double Eagle Gold Coins: A Complete History and Price Guide "The [O’Reilly] letter is critical to understanding how the mints were operating in March 1933. Under Mint practice dating back for generations, coins in the hands of the Mint cashier could be paid out without any further special instructions."

Berke also argued that the 1933 coins might have been substituted for coins from other years and removed from the U.S. Mint by other employees, as was common and legitimate practice at the time.

David Tripp, author of Illegal Tender: Gold, Greed, and the Mystery of the Lost 1933 Double Eagle was a paid witness for the U.S. Treasury Department who testified that no Mint records exist of any transaction in 1933 Double Eagle coins.

On July 20, 2011 the jury in the U.S. District Court in Philadelphia unanimously reached a verdict following a ten day trial determining the controversial ownership of the "Langbord 10" 1933 Double Eagles $20 gold coins. They decided that these ten coins were stolen from the U.S. Mint and are thus the property of the U.S. Government.

Berke motioned that the jury’s verdict be set aside (overruled) because  the U.S. Treasury Department did not prove that these ten 1933 Double Eagles were stolen from the U.S. Mint in Philadelphia sometime in the 1930s.

U.S. District Judge Legrome D. Davis wrote in his Aug. 29 2012 ruling on the motion "The disputed double eagles were not lawfully removed from the United States Mint and . . . remain the property of the United States," upholding the decision of the federal court jury in July 2011.

"In the end, Tripp admitted on cross examination that there was a small 'window of opportunity' during which gold coin was authorized to be released from the Philadelphia Mint," Davis wrote. "And many gold coins did, in fact, leave the Mint during this period of time. ... But as Tripp correctly noted, the Mint records reflect that no 1933 Double Eagles were part of those transactions."

"The Mint meticulously tracked the '33 Double Eagles, and the records show that no such transaction occurred," Davis wrote. "What's more, this absence of a paper trail speaks to criminal intent. If whoever took or exchanged the coins thought he was doing no wrong, we would expect to see some sort of documentation reflecting the transaction, especially considering how carefully and methodically the Mint accounted for the '33 Double Eagles. The jury saw no record of a legitimate '33 Double Eagle release, and from this lack of documentation one may reasonably infer that the responsible party appropriated the coins in secret, knowing full well the wrongfulness and illegality of his actions.

"In the 1940s, the Secret Service traced the leak to George McCann, a Philadelphia Mint cashier, and Israel Switt, a coin dealer and the proprietor of a local antique store." Davis ruled that the double eagles belonged to the government, "regardless of . . . how the coins came into claimants' possession."

The Langbord family plans to appeal the judge's ruling.
 

References:

David Tripp, Illegal Tender: Gold, Greed, and the Mystery of the Lost 1933 Double Eagle

Alison Frankel, Double Eagle: The Epic Story of the World's Most Valuable Coin (2006)

 Quirin David Bowers An Official Red Book: A Guide Book of Double Eagle Gold Coins:
A Complete History and Price Guide

U.S. Mint Press Release 11 Aug. 2005 United States Mint Recovers 10 Famed Double Eagles

  The National Museum of American History information on their coins is here.
 

 

 


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Coining XI
Buy This Art Print At AllPosters.com

An Official Red Book: A Guide Book of Double Eagle Gold Coins: A Complete History and Price Guide (Official Red Books) Q. David Bowers 2004

David Tripp’s book Illegal Tender: Gold, Greed, and the Mystery of the Lost 1933 Double Eagle.

Alison Frankel, author of Double Eagle: The Epic Story of the World's Most Valuable Coin (2006)

Legal Guide to Buying and Selling Art and Collectibles
by Armen Vartian

Planning Your Rare Coin Retirement
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