The Saint-Gaudens Confiscation of 2005

Over the last year, we’ve seen a lot of American investors, weary of turbulent stocks and real estate, turn to Gold Eagle investing.

If you want to ask “Why buy Gold Eagles?” the answer is obvious. Gold Eagles are worth very nearly their weight in gold (accounting for the filler metals used to strengthen the gold, of course), and this makes them a great option to keep your money safe in times of economic strife and recession, as we are experiencing now. So certainly, we will invest in certified Double Eagles and other gold coins rather than take a gamble on a stock option.

But… why Gold Eagles? Of all the thousands of different coins that the US mint could have reissued in order to pique the interests of numismatists and investors, why choose the Saint Gaudens Gold Eagles?

Well the answer is simple: Bullion Gold Eagles are widely considered, amongst numismatists, to be the most beautiful coin ever minted in the US, bar none.

The irony of all of this is that it is, in fact, illegal to own an original Saint Gaudens Double Eagle. In fact, four years ago there was a story of a jeweler who got his hands on ten Double Eagle gold coins from 1933. He took them to the US Mint for verification and… the US Mint simply confiscated them without compensation.

So it’s kind of a catch-22 that the original mints of these coins are amongst the rarest and most valuable in the world. If you manage to find one, its value is nearly impossible to measure, however, the actual value will only be as a collector’s piece, as you certainly wouldn’t want to hold an auction and draw the attention of the Mint.

So for the time being, if you want to invest in Gold Eagles, you will have to be content to purchase Gold Eagles that are reproductions of the originals.

The reasoning behind this was that, while Double Eagles started being minted in 1850 and were circulated, the nearly half a million Double Eagles minted in 1933 were never put out into the public. Every one of the coins was ordered to be melted down, but a few US Mint employs managed to salvage a handful here and there, at the risk of their jobs and possible incarceration. Very, very few of these coins exist today.

And so, the US Mint considered the jeweller’s coins to be stolen property. This is technically true, although it seems kind of silly that numismatists would be denied their right to own the original Gold Eagles thanks to events that occurred nearly one hundred years ago, but remember, this is the US government we’re talking about.

Of course, as an investment option, today’s reproductions should be more than enough to meet your financial goals. In light of the current recession, gold has remained a pretty strong investment, and a nice healthy collection of gold Double Eagles is a great way to protect yourself from any economic weather.

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Kenneth Hansen

April 5, 2009