Fabled Gold Coin Fights Terrorism

by Sam Ott and Mary Beth Guard

Nearly seven decades after the Secret Service began its search for the Holy Grail of American coins, the elusive 1933 gold Double Eagle, the quest has ended with a spectacular sale that yielded $6.6 million for the U. S. Treasury, part of which will be spent to fund the war against terrorism.

This is the story of the most fascinating coin in American history -- the tale of a coin that should never have been minted and, once minted, should never have left the possession of the U.S. government. It disappeared from the Mint, found its way into the hands of an Egyptian King and was spirited out of the country under a U.S. export license issued in error. It surfaced almost 50 years ago when it was offered for sale as part of the deposed King's assets, but after an objection from the U.S. government, was not sold. It then disappeared until 1996 when Secret Service agents posing as coin buyers seized it from a coin dealer at the Waldorf Astoria in New York City. Litigation ensued, a settlement was reached, and this week the U.S. government offered the coin for sale.

Sounds like the script for a grade B movie. But it really happened.

The saga starts on March 6, 1933 with the issuance of Proclamation 2039 by President Franklin D. Roosevelt declaring a Bank Holiday and taking the nation off the gold standard. A subsequent Executive Order on April 5, 1933 required the return of all gold coins to the U. S. government, with certain exceptions.

After Roosevelt removed the U.S. from the gold standard, the Mint produced three new batches of 1933 Double Eagle $20 gold coins, totaling 445,500 in all. They were never authorized for release by the U. S. government and they never became legal tender. In 1937, all of the 1933 Double Eagles were ordered to be sent to a refinery and melted. But a small handful of these precious pieces of coinage escaped the melting pot.

Two of the coins were delivered to the Smithsonian and nine mysteriously fell into the hands of a coin dealer. In 1944, one of the coins was sold to King Farouk of Egypt who applied to the U. S. Mint for an export license. Through a bureaucratic snafu, the license was issued and the coin left the country to join the royal collection, but not long thereafter the Secret Service commenced its pursuit of the handful of Double Eagles that had gone astray. Over the next eight years, all but one of the Double Eagle coins that were originally in the possession of the coin dealer were located and either seized by the government or voluntarily surrendered.

In 1952, King Farouk was ousted and the new Egyptian government seized his assets, including 8,500 gold coins. The infamous 1933 Double Eagle was part of his collection offered for sale in 1954. When the U.S. government learned of the impending auction, it sought the removal of the coin and requested its return to the United States. The coin was removed from the auction, but was not returned, nor was it heard of again until it resurfaced in the Waldorf Astoria hotel in the hands of a coin dealer 42 years later. Until it was seized by the Secret Service during the sting operation that ensued, the coin's true existence had been in question. At that point, the legendary coin was confirmed to be real.

Subsequently, a lengthy lawsuit ensued over the ownership of the coin. A settlement was reached with the coin dealer under which the U.S. government retained ownership and possession of the coin.

Ultimately, the Treasury Department made a decision to sell the coin at auction, selecting Sotheby's to handle the sale. It was an ironic twist, since Sotheby's was originally scheduled to sell the coin for the Egyptian government as part of Farouk's seized assets in 1954.

On July 30, 2002, those in the crowded Sotheby's showroom watched expectantly as an anonymous telephone bidder paid $7.59 million (a portion of which was the sales commission) for this fabled piece of gold with its rare and illustrious history. This is the only 1933 Double Eagle monetized and issued by the United States Mint. It is 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 designated legal tender and any additional 1933 gold eagles which may exist are property of the United States Government, illegal to own, and subject to seizure.

The Director of the U.S. Mint reports that a portion of the proceeds from the sale will be used to fight the war on terrorism.

Related Links

• Sotheby's detailed account of the coin's history
  
• U.S. Mint account of the 1993 Gold Double Eagle
  
• Stack's information on the Gold Double Eagle
  

First published on BankersOnline.com 8/1/01