Why are Early U.S. Gold Coins so Rare? The Fate of the 1821 Capped Head Half Eagle Tells the Story

Why are early U.S. gold coins so rare? Most of the gold coins struck at the first U.S. Mint in Philadelphia were melted down because of international bullion profiteers of that era.

The Mint Act of 1792, sometimes called the Coinage Act of 1792, required silver to gold value to be held firmly at a ratio of 15 to 1 in the United States.

Increased silver output from mines in Central and South America in the early 1800s caused the worldwide value of silver to drop relative to the value of gold. Many nations adjusted their silver to gold ratio to 16:1, sometimes as high as 18:1, but the United States held the ratio at 15:1, in accordance with the Mint Act of 1792.

In this ratio discrepancy, bullion profiteers saw an opportunity. A speculator could take 15 ounces of silver, or some other unit of measurement, to the U.S. Mint in Philadelphia and exchange it for one unit of gold in the form of coins and then export the gold coins to Europe where they could be exchanged for 16 units of silver. The speculator would return to the U.S. with more silver in his pocket than he started with, set aside his one unit of silver profit and repeat the cycle as many times as possible. This scenario played out for decades.

And, as an added incentive to exporters, the Mint provided free assay services for raw gold and conversion into coin form before being sent overseas. That made it easier for the speculators to turn a profit.

And what happened to the exported U.S. gold coinage? Foreign governments welcomed the heavier U.S. gold coins, melting them down and converting them to their national coinage, consisting of lesser gold weight. This is critical in understanding US gold coin history and rarity today.

Of all the early US gold coins that have suffered heavy melting losses, nowhere is this more pronounced than with the Capped Head $5 half eagles of 1813 to 1834. Almost 99.9% of the original mintage of the Capped Head half eagles perished, leaving behind a very small number of survivors for collectors to compete for.

The fate of the 1821 Capped Head half eagle typifies that of what are now considered rare early US gold coins. The date is legendary among collectors, with a value trend record rated as one of the very finest in United States numismatics.

Learn more at:
https://www.rarecoins101.com/
https://www.rarecoins101.com/key-date-coin-list.html
https://www.rarecoins101.com/1821-capped-head-five-dollar-half-eagle.html

SOURCES:

https://coins.ha.com/itm/early-half-eagles/half-eagles/1821-5-bd-1-high-r6-ms63-pcgs-secure-pcgs-519929-/a/1216-4291.s?ic4=GalleryView-Thumbnail-071515
1821 Capped Head Left Half Eagle
Jan 2015

https://auctions.stacksbowers.com/lots/view/3-4HYGR/1821-capped-head-left-half-eagle-bass-dannreuther-1-rarity-6-mint-state-66-pcgs
1821 Capped Head Left Half Eagle. Bass Dannreuther-1. Rarity-6+. Mint State-66+ (PCGS).
May 2016

https://coins.ha.com/itm/early-half-eagles/half-eagles/1821-5-bd-1-jd-1-r8-as-a-proof-pr65-cameo-pcgs-cac/a/1353-11052.s?ic4=GalleryView-Thumbnail-071515
1821 $5 BD-1, JD-1, R.8 as a proof, PR65 Cameo PCGS. CAC
Sep 2022

https://home.treasury.gov/about/history/history-overview/history-of-the-treasury

Todd, Lewis and Curti, Merle. Rise of the American Nation 3rd ed.
New York, NY: Harcourt Brace Jovanovich, Inc., 1972.

Orosz, Joel J. and Augsburger, Leonard D. The Secret History of the First U.S. Mint.
Atlanta, GA: Whitman Publishing, 2011.

Taxay, Don. The U.S. Mint and Coinage.
New York, NY: Arco Publishing Company, 1966.

Potosi Silver Mine History
https://www.rockngem.com/potosi-silver-mine-history/

COIN IMAGES:

Stack’s Bowers
https://stacksbowers.com/

IMAGES:

Most of the historic images on this video are in the public domain. Many can be found at the Library of Congress. https://www.loc.gov/

Washington Taking Oath of Office
HBO 2008 Mini-series: John Adams

First Meeting of the U.S. Supreme Court
Drawing by Irwin Smith

USS Constitution
https://ussconstitutionmuseum.org/2017/08/04/eagle-of-the-seas/

Jay Treaty
https://commons.wikimedia.org/wiki/File:Jay-treaty.jpg
lucas, Public domain, via Wikimedia Commons

Plan of the City of Washington
https://www.loc.gov/resource/g3850.ct000509/

Map of the World 1811
https://www.loc.gov/resource/g3200.awh00011/

BACKGROUND MUSIC:

Plain / Acoustic Inspiring Folk Music
https://pixabay.com/music/corporate-plain-acoustic-inspiring-folk-music-128699/

United States | Patriotic song : "Hail Columbia" (Instrumental version)
https://www.youtube.com/watch?v=jAijgbmY4dk

Bach Fugue No.21
https://pixabay.com/music/classical-piano-bach-fugue-no21-110853/

Epic Historical Orchestral
https://pixabay.com/music/adventure-epic-historical-orchestral-244718/