The victim of gold reserve act

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1 Aug 2023

Well, this time I will start with a break (like I always do at my job… I hope that my chief doesn’t read that), particularly I mean a break from cryptos.
I’d like to write about a small, shiny piece of material … a coin, and meanwhile, refresh my knowledge about the history of numismatics.
Gold Reserve Act of 1934 January 30, 1934, was signed by U.S. President Franklin D. Roosevelt in January 1934, due to Roosevelt’s controversial gold program. In short, the Act transferred ownership of all monetary gold in the United States to the US Treasury and prohibited the Treasury and financial institutions from redeeming dollars for gold.
There is a quite comprehensive article on: https://www.federalreservehistory.org/essays/gold-reserve-act, so I wouldn’t focus much on it.
Getting back to business, the Saint-Gaudens double eagle is a twenty-dollar gold coin, produced by the United States Mint from 1907 to 1933. The coin is named after its designer, the sculptor Augustus Saint-Gaudens, who designed the obverse and reverse.
And the story is about the ones minted in 1933…
Due to the reminder at the beginning Gold Reserve Act, none of the minted 1933 Double Eagles were ever officially circulated, and all but two were ordered to be melted down. The two intentionally spared coins are exhibited in the U.S. National Numismatic Collection.
And that's the end of the story …well actually it isn’t, now the most interesting part begins.
Unaware, an amount few double eagles which were destined to be melted, had evaporated, which means not literally, they just disappeared.
But, as my biology teacher from primary school used to say: „In the nature environment, nothing disappears” (that's an exact translation from the Polish language), the coins were stolen, possibly by the U.S. Mint cashier, and found their way via Philadelphia jeweler Israel Switt into the hands of collectors.
For several years, the coins were circulating in the numismatic market before the Secret Service became aware of their existence.
An official investigation into the matter was launched by the Secret Service in March 1944. Prompted by the fact, that the investigation was taking place, a Texas dealer sold one of the coins to a foreign buyer, and it left the U.S. on February 29, 1944...
This way, the beautiful shiny coin, started an exciting journey.
Unfortunately, unlike this coin, seven other double eagles didn’t have much luck, and were seized or voluntarily turned in to the Secret Service, in the first year of investigation, then ended its life at a melting pot at the Mint. An eighth coin was recovered the following year and met the same fate.
While the investigation was carried on, secret service officers managed to identify an alleged thief and his accomplice, during an interrogation in 1945, Switt (the thief) had admitted to selling nine coins, however, he didn’t remember how he go into possession of them.
Although the 20 Dollars (double eagles) were issued in 1933, before Roosevelt's withdrawal order, so they may be legally owned by private citizens, it is estimated that no more than 40 exist, the rest having been melted, making them exceptionally rare.
Meantime a ninth coin was from the collector's black market and destroyed in 1952.
Coming back, to one Adventerus coin, it was obtained by a quite prominent person – the King of Egypt: Farouk. He was well-known in t collector's environment and his huge collection consisted of such things as imperial Fabergé eggs, antique aspirin bottles, paperweights, postage stamps—and coins, in general over 8500 exhibits.
Due to strict adherence to the law, Farouk’s ministers applied to the United States Treasury Department for an export license for the coin, and just days before the mint theft was discovered, the license was granted, and the coin left the U.S.
Although the Treasury Department attempted to work through diplomatic channels to request the return of the coin from Egypt, it was stormy times of World War II, and all their efforts were delayed for several years.
Unluckily for King Farouk, he was deposed in a coup d'etat in 1952, and a big amount of his possessions were made available for public auction – including the famous, I can say mystery double eagle coin.
The United States government requested the return of the coin, and the Egyptian government stated that it would comply with the request. However, the coin had very different plans, it decided to dematerialize, just like magic coins can do.
What happened with the coin for over forty years? Probably there are very few people, who know it.
However in 1996, a double eagle surfaced again, it appeared when U.S. Secret Service agents acted in a sting operation at the Waldorf-Astoria Hotel in New York and a British coin dealer Stephen Fenton was arrested by the U.S.
As it is used to say, no one would lie with electrical wires attached to his balls, he admitted that the double eagle had come from the collection of King Farouk, and thought this fact couldn’t be verified.
Luckily for Fenton, he defended his ownership of the coin in civil court, and criminal charges against him were dropped.
Then the U.S. government started a five years court battle to retrieve the coin and bring it back to the U.S.
In 2001 after the civil court decision, the coin could then legally be sold at auction to the highest-bidding private owner, in this case, it was obtained by Stuart Weitzman, then handed for safekeeping to The United States Treasury, transferred, and secured in safe in Fort Knox.
Well, at last, this amazing, magic coin came back to the U.S. and found a safe home, it's probably living there till nowadays.
This is the story of the most famous 1933 Double Eagle… but at the beginning of this post was written, that about 40 coins like that were stolen, what happened to the rest of them… well it will be revived in the next article.
I hope you enjoyed it, have a good day.
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