RUSH TO GOLD
From the Mines to the Mints
Gold rushes had a significant impact on American monetary policy and coinage during the 19th century. Together with a silver-mining boom, these gold rushes profoundly affected both the circulation of coinage and the United States Mint’s expansion. At the start of the 19th century, the nation’s single mint at Philadelphia faced a severe shortage of gold and silver.
Yet by the end of the century, the nation was awash in gold and silver and had seen the establishment of six federal branch mints and 20 short-lived private mints. When the Philadelphia Mint began striking coins in 1793, the United States had no domestic gold and silver sources and obtained its limited supply through foreign trade and by melting down the mix of foreign coinage then in circulation.
During the early 1800s, the Philadelphia Mint coined only about 25,000 troy ounces of gold per year. But production took a big jump in 1820 when the mint, thanks to its growing stockpile of gold from new mines in North Carolina, struck 263,800 Capped Head $10 half eagles from 118,712 troy ounces of gold.
FARM-BOY FIND MAKES HISTORY
The nation’s first documented gold discovery was made in 1799, when a farm boy near present-day Charlotte, North Carolina, found a baseball-sized rock that weighed an astounding 17 pounds. That rock served as a doorstop for three years until a goldsmith identified it as gold. The boy’s father, John Reed, then partnered with neighbors in a successful placer-mining venture that triggered the nation’s first gold rush.
But the only buyer willing to pay a fair price for North Carolina gold was the Philadelphia Mint, which was 450 miles and three weeks distant over rough, dangerous trails. Another problem was that high shipping and insurance costs often amounted to ten percent of the gold’s value. Despite these difficulties, North Carolina miners still managed to send their first small gold shipment to the Philadelphia Mint in 1804.
By 1825, John Reed’s mine alone had yielded 5,000 troy ounces of gold worth nearly $100,000—a fortune at the time. And as the easy-to-mine placers depleted, miners turned to underground workings to extract even more gold from quartz veins. By the early 1830s, 10,000 miners and mill workers in 54 North Carolina mines had boosted annual gold production to 35,000 troy ounces. In 1834, the Philadelphia Mint, now sitting on a growing stockpile of bullion, set a record for gold coinage, striking 719,835 Classic Head and Capped Bust $5 half eagles and $2.50 quarter eagles from 344,000 troy ounces of gold.
But few U.S. gold coins ever reached North Carolina, and German emigrant Christopher Bechtler saw that as a business opportunity. In 1831, he opened a private mint at Rutherfordton, west of Charlotte, to strike $5, $2.50, and $1 gold coins. By 1838, Bechtler’s mint had turned out $2.24 million in coinage from 112,000 troy ounces of gold, along with 70,000 troy ounces of bullion worth another $1.4 million. Bechtler paid a fair price for newly mined gold to gain the miners’ confidence, encourage mine production, and provide a widely accepted medium of exchange to boost North Carolina’s developing economy. Meanwhile, in 1828, prospectors found gold in northern Georgia, setting off another gold rush. Boomtowns like Dahlonega, its name an anglicization of the Cherokee word talonega for
“yellow money,” sprang up overnight. The first shipment of Georgia gold—a substantial 25,000 troy ounces—reached the Philadelphia Mint in 1832. In Georgia, gold mining followed the pattern already established in North Carolina: Miners worked placers before developing dozens of small underground mines. In 1830, Templeton Reid had opened a private mint at Dahlonega, which predated North Carolina’s Bechtler Mint by one year as the nation’s first private gold-coin mint. By 1835, the Reid mint had struck $10, $5, and $2.50 coins from 20,000 troy ounces of Georgia gold. Through the combined output of the North Carolina and Georgia mines, the Philadelphia Mint doubled its gold-coin production during the 1830s. But shipping gold from the mines to Philadelphia remained difficult, and few newly minted U.S. gold coins ever made it to the South to stimulate the regional economy.
MINT ACT SHAPES THE FUTURE
Therefore, Congress passed the Mint Act of 1835 to authorize the establishment of three federal branch mints. The new mints at Charlotte, North Carolina, and Dahlonega, Georgia, would strike only gold coinage. The third mint, located in New Orleans, Louisiana—then the largest U.S. port in terms of foreign trade—would strike both gold and silver coinage, mainly from Mexican bullion obtained in trade. Another reason for locating this mint in New Orleans was its proximity to new gold discoveries in central Alabama (which never met expectations).
The three new mints began production in 1838. By 1845, two of these mints, the Charlotte Mint, using a “C” mint mark, and the Dahlonega Mint, using a “D” mint mark, together had struck $12 million in Liberty and Liberty Coronet $5 half eagles and $2.50 quarter eagles from 600,000 troy ounces of gold.
The Carolina and Georgia goldfields’ collective output is poorly documented, but by 1847 it had probably exceeded 1.5 million troy ounces worth roughly $30 million. Although production was declining by then, these mines had made a substantial contribution to the national economy. They contributed to double the amount of circulating gold coinage, brought branch mints to Charlotte and Dahlonega, and established a base of technological gold-mining expertise that would soon find use elsewhere.
In 1848, prospectors discovered fantastically rich placer deposits on the American River in California’s Sacramento Valley. This strike set off a monumental rush that would draw a quarter-million Americans west, including many out-of-work North Carolina and Georgia gold miners.
In 1849, its first full year of mining, California produced 300,000 troy ounces of gold. In 1852, the aptly named “Golden State” turned out four million troy ounces of gold worth $80 million. That year’s production alone amounted to more than three times all the gold that had been mined in North Carolina and Georgia over the past 50 years. In 1848, California’s military governor had shipped 228 troy ounces of newly mined gold to the Philadelphia Mint, where it was coined into 1,389 Liberty Head $2.50 quarter eagles. The reverse of each coin was punched with the letters “CAL” to identify it as the first of what would be many millions of U.S. coins made from California gold.
But getting California gold to the Philadelphia Mint required a dangerous, 10,000-mile-long, “round-the-horn” sea voyage, or two shorter voyages linked by a difficult overland transit of the Central American isthmus.
With California knee-deep in gold dust but with little circulating coinage, 15 private mints began striking gold coins in denominations from fractions of a dollar to twenty dollars. Many produced undersized coins that gained only limited acceptance. The successful California private mints that turned out “full-weight” coinage included
Moffat & Co., Kellogg & Co., and Wass, Molitor & Co.
In 1852 Congress authorized the establishment of a branch mint in San Francisco. In 1854, its first year of operation, this new mint with its with its “S” mint mark struck $6.8 million in $20 eagles and $10 half eagles from 300,000 troy ounces of California gold—half as much as the 15-year output of the Charlotte and Dahlonega mints combined.
In 1848, the four eastern U.S. mints—Philadelphia, Charlotte, Dahlonega, and New Orleans—had coined 210,000 troy ounces of gold.
But in 1855, these four mints and the new San
Francisco Mint coined 2.25 million troy ounces of gold. And in 1856, the San Francisco Mint alone struck 1.89 million $20 Liberty double eagles from
3.4 million troy ounces of California gold.
GOLD BOOM SPARKS MINT EXPANSION
By 1857, California’s mines had yielded more than 20 million troy ounces of gold worth $500 million. Facing huge production demands and short on space, the San Francisco Mint moved to a larger facility in 1874.
Georgia prospectors returning home from California in 1858 discovered placer gold near present-day Denver, Colorado, and started the Pikes Peak gold rush. Three private mints soon opened: Clark, Gruber & Co. in 1860, and two smaller, short-lived operations, John Parsons & Co. and J. J. Conway & Co., in 1861. Clark, Gruber & Co. would strike $1 million in gold coinage each year for the next three years, with its coins meeting or exceeding U.S. Mint standards.
Also, in 1861, Congress authorized the establishment of a branch mint in Denver. The following year, it approved the Clark, Gruber & Co. building and equipment purchase, not to strike coinage, but as a federal assay office to assay and refine gold. It would take another major gold strike 40 years later before Colorado would have a coinage mint.
In 1864, concerned with the proliferation of private mints and competition from first-class operations like Clark, Gruber & Co., Congress finally banned private mints. Production at Colorado’s placer mines peaked in 1862 with 225,000 troy ounces of gold. But while Colorado never lived up to its billing as “the next California,” it did contribute 1.5 million troy ounces to the mint’s growing stockpile of domestically mined gold. By then, the precarious balance of gold and silver upon which the nation’s bimetallic monetary system depended had been thoroughly disrupted. And events already underway in Nevada would disrupt it even further.
In 1859, Nevada prospectors discovered the Comstock Lode, an enormous silver-gold deposit near Virginia City.
The Comstock ore was the nation’s first major source of silver, grading 60-40 in silver-gold value. In its first four years, the Comstock yielded one million troy ounces of gold and a remarkable 30 million troy ounces of silver. Faced with a risky, 250-mile journey to deliver gold and silver to the San Francisco Mint, Comstock mine owners successfully petitioned Congress in 1863 to authorize a federal branch mint at nearby Carson City. Using a “CC” mint mark, the Carson City Mint opened in 1870 by striking Liberty Seated silver dollars. That year it coined 12,000 troy ounces of gold and 40,000 troy ounces of silver. The Carson City Mint had a banner year in 1878, striking 2.2 million newly introduced Morgan silver dollars from 2.3 million troy ounces of Comstock silver. But not all authorized gold-rush mints made it into production. In 1860, discoveries in Idaho, Oregon, and Washington had attracted 80,000 gold miners. This time, getting gold to the nearest mint meant a 900-mile-long journey, first by riverboat down the Columbia River, then
south by coastal steamer to San Francisco. To eliminate this shipping problem and boost the amount of circulating coinage in the Pacific Northwest, Congress approved a mint at Dalles City (now The Dalles), Oregon. But construction was half-completed in 1869 when the regional placers, which had yielded about one million troy ounces of gold, were depleted and the mint project was canceled.
COLORADO GOLD ORE USHERS IN NEW MINT
In 1890, prospectors discovered exceedingly rich gold ore at Cripple Creek, Colorado. In 1900, the Cripple
Creek mining district hit its peak with 475 underground mines turning out nearly one million troy ounces of gold. By 1910, the district’s cumulative output had exceeded 17 million troy ounces. Colorado already had a federal assay office from the days of the Pikes Peak gold rush. But when Cripple Creek’s potential became apparent in 1895, Congress approved a branch mint at Denver. Completed in 1904, the Denver Mint opened in February 1906, as the second U.S. branch mint to use the “D” mint mark
In its first year, the Denver Mint struck $20 Liberty double eagles and $10 eagles, and $5 Liberty Coronet quarter eagles from 2.5 million troy ounces of gold, along with Barber half dollars, quarters, and dimes from 3.1 million troy ounces of silver. In 1921, when Morgan silver-dollar production resumed after a 15-year hiatus, the Denver Mint struck 20.3 million silver dollars from 19 million troy ounces of silver.
Today, the San Francisco and Denver mints continue to strike circulating coinage. But the other gold-rush-era mints have faded into history.
At the onset of the Civil War in January 1861, the Confederacy seized the Charlotte and Dahlonega mints and continued limited coin production until the bullion ran out. Following the war, the Charlotte mint was converted to a federal assay office that operated until 1913. The Dahlonega Mint never reopened.
The state of Louisiana seized the New Orleans Mint in January 1861, shortly before joining the Confederacy. Nevertheless, the mint continued operating for several months to strike 2.5 million 1861-O silver Liberty Seated half dollars. Shortly before it closed that April, the Confederacy changed the Liberty Seated half-dollar reverse dies to its design and struck an unknown number of Confederate States of America coins, only four of which are known to exist today. Union forces recaptured the New Orleans Mint weeks later. The mint was reopened in1879 after the end of Reconstruction and struck coinage until closing in 1909.
The Carson City Mint in Nevada produced coinage from 1870 until 1885, then again from 1889 until 1893. From 1879 on, this mint struck gold eagles and half eagles, but only one silver coin—the Morgan silver dollar- produced 14 million. After the 1893 repeal of the Sherman Silver Purchase Act, the Treasury was no longer required to purchase huge amounts of newly mined silver to subsidize the West’s mining industry. The price of silver crashed and the Comstock, along with hundreds of other silver mines, closed. So, too, did the Carson City Mint, which was converted to a federal assay office that operated until 1933.
While the 19th-century gold rushes dramatically increased circulating coinage and greatly expanded the U.S. Mint’s capacity, the amount of gold produced during the rushes was not great by modern standards. The combined ten-year output of all the rushes did not exceed 40 million troy ounces of gold. Even the great California rush produced only 4 million troy ounces of gold per year at its peak.
Today, Nevada’s modern open-pit mines alone produce far more gold each year—and have for each of the past 30 consecutive years!
Nevertheless, the 19th-century gold rushes left behind a wealth of collectible coinage, a succession of branch mints, and an exciting story of how gold went from the mines to the mints.