by Ed Reiter, CoinAge Magazine, August 2006 issue
The word never fails to fire mankind’s imagination. Jewelry, artworks, medals, coins all of these gleam with special luster when the metal used to make them is gold.
Soon, a new spotlight will illuminate one of the most fascinating but least explored incarnations of gold one with particular significance for numismatists. A major book now nearing publication will examine the origin, history, lore and market value of monetary ingots the multi-sized chunks of refined precious metal that transformed miners raw gold ore into a form they could readily sell or spend.
The book is a collaborative effort by two of the most knowledgeable experts in the field: Adam Crum, vice president of Monaco Financial, LLC of Newport Beach, California, one of the nation’s largest dealers in rare coins and precious metals, and Fred Holabird, owner of Holabird Americana, an auction company in Reno, Nevada, that specializes in Western collectibles.
Collectors will get a preview of what the book covers and an opportunity to meet the co-authors at the 2006 World’s Fair of Money, the annual midsummer convention of the American Numismatic Association, Aug. 16-20 in Denver. Monaco has put together a stunning multimillion-dollar exhibit containing a variety of dazzling gold bars and ingots, as well as rare coins from the days of the California Gold Rush and the mining era that followed elsewhere in the West.
Many will be treasures recovered from the wreckage of the SS Central America, a find that is widely credited with stirring broad new interest in Gold Rush-era ingots. Others will be pieces made in Colorado during the second half of the 19th century reminders that Old West gold and silver mining flourished well beyond California during that eventful, exciting period. The latter will also pay homage to this year’s convention locale.
Assay offices had a huge impact on the development of the American West, Crum declared. The bars, ingots and coins they produced were vital to the economy, so they really have tremendous historical importance.
This book will delve into that rich history show what these ingots are and what they represented. And unlike anything previously written on the subject, it also will provide detailed pricing information, based on auction results, private-treaty sales and dealer-to-dealer transactions. That’s the kind of tool potential buyers really don’t have right now.
There’s not a lot of transparency today as to what these ingots are worth and what they’ve been traded for in the marketplace. This book will provide transparency and that will help expand the collecting base of these items.
The California Gold Rush was not America’s first; decades earlier, prospectors had flocked to the Carolinas and Georgia when gold was discovered there. But while gold coins were minted privately in the Southeast notably by Christian Bechtler and Templeton Reid ingots are thought to have made their first appearance in California.
There are ingots purported to be earlier, Crum said, but all credible ingots are traced to 1849 and later. There are none that I’m aware of from the Carolinas and Georgia.
Ingots came into being simply because the sheer quantity of gold in California was so huge. Concentrating the gold in this form made it easier to transport and use in commerce. Banks said if ingots were created in this form, they could literally be traded as money. If you brought them in, you could get money for them.
Miners would take their gold dust, nuggets and other raw metal to a refiner, who, for a modest fee, would melt and assay it and cast it into ingots. Typically, these would be stamped with the name of the refiner, the weight and fineness of the gold and the monetary value of the metal (at the then-official rate of $20.67 per pure troy ounce). Ingots from trusted refiners such as Blake & Co., Justh & Hunter and Kellogg & Humbert were readily accepted at this stated value by banks and merchants, giving the miners a much-needed means to transact business conveniently.
A high degree of trust developed between banks and respected assayers, Crum said. If Kellogg & Humbert produced an ingot and stamped it with a value of $1,029.62, banks had confidence that it contained gold worth $1,029.62.
If you were a miner, you could take an ingot to the bank and store it as money or you could just take it to the mint and trade it for coinage. Then the mint would destroy it and make more coins with it.
Most of the Old West ingots have long since been melted, releasing their gold for other uses, because they were viewed as utilitarian objects, not collectibles, and preserving them would have tied up too much money. As a result, relatively few remain today Crum puts the number of known survivors at barely a thousand and these can command substantial premiums.
Surviving gold ingots range in size from less than an ounce to hundreds of ounces (silver ingots sometimes weigh thousands of ounces apiece), and their weight plays a part in determining their value as collectibles. According to Holabird, though, the most important factor is natural competition.
Collectors, he said, are guided by whether an ingot is gold or silver, by its age, by the geographic region where the piece was made and demand for pieces from that region, and finally by personal taste.
A collector may want a certain kind of ingot and not others, since there are different kinds of ingots assayer ingots, exhibition ingots, presentation ingots and mint ingots. Some people collect all categories and some only collect single categories. You might consider it somewhat similar to collecting quarters versus dimes versus Morgan dollars.
Condition matters, too though not nearly to the extent that higher grades enhance the value of collectible coins.
A good, well-marked piece that’s clean will probably bring more than a lightly punched piece, Holabird said. But most of the older ingots are unique unto themselves, so condition has much less bearing.
Wide variations in ingots size, weight and fineness were especially pronounced in the early days of the California Gold Rush. That changed with the coming of the U.S. Assay Office in 1851, followed three years later by the San Francisco Mint.
The government set standards that refiners had to meet in order to be recognized, Holabird said.
Up to then, there had been multiple systems for weight and fineness, but the government did away with pennyweights and karats and grains in favor of a standard system using troy ounces, with fineness reported in thousandths.
The new standards also involved weight. The government didn’t want ingots weighing thousands of ounces that might require two or more people to lift, so it started putting restrictions on the size. That’s why the later ingots are much more uniform in size generally in increments of 25 ounces although they still retained a degree of individuality.
The changes didn’t happen overnight. It took a few years but they did happen.
Interest in Gold Rush-era ingots has existed for many years, and some hobbyists have collected them along with private gold coins and other artifacts from that era. They’ve been much more highly publicized and more ardently sought, however, since the discovery and salvage of the SS Central America and the subsequent dispersal of the treasures from this fabled Ship of Gold.
More than 500 gold ingots were recovered from the Central America, roughly doubling the number known to survive from the California Gold Rush. The largest, now known as the Eureka bar, weighs more than 933 ounces (or about 80 pounds) and is stamped with an 1857 monetary value of $17,433.57.
This magnificent specimen was sold privately for $8 million a record price for any ingot. Indeed, it might be argued that this is a record for any single numismatic item, since the highest price known to have been paid for a single coin is just $7.59 million the amount that was achieved at a 2002 Sotheby’s/Stack’s auction by the 1933 Saint-Gaudens double eagle ($20 gold piece).
A number of other Central America ingots brought strong six-figure prices at a 1999 Sotheby’s auction, attesting in a very tangible way to the new excitement the ship and its gold have kindled.
I personally believe that the Central America is the most significant thing ever to happen not just to the market for ingots but to the coin market as a whole, Crum exclaimed.
I can produce the names of half a dozen people who have spent over $40 million altogether on United States rare coins that didn’t own a coin before they purchased something from the Central America. I could produce another 100 names that have brought in over $100 million that did not own a coin prior to the Central America. That’s a tremendous impact.
Beyond increasing the known population so dramatically, the Central America ingots also provide a benchmark for helping determine the authenticity of other ingots claimed to be from that period. This has been a controversial area since the 1990s, when skeptics charged that many ingots sold since 1950 have been frauds and actually were made much more recently.
All other ingots are going to be held up now against the Central America ingots, Crum remarked. How do they stand up to that test? We know those are real and where they came from and that we can trace an absolute pedigree to them. There are really no other ingots that we can do that with.
Holabird, a geologist by training, has been deeply involved in scientific research that may help provide further evidence of whether given ingots are genuine and the book will include a detailed report on this promising new development.
With the help of advanced technology, he said, we’ve been able to discern differences on an atomic level between metals from specific ore deposits. The gold from California is different from gold that was mined in Colorado. What’s more, the gold from one part of California isn’t the same as gold from another part. They have different atomic signatures.
Someday we should be able to tell you, using non-destructive technology, whether a specific planchet from a rare Dahlonega gold coin is real or not because we’ll be able to look at the content of that coin on an atomic level and see whether it matches the planchets known to be genuine.
Likewise, we’ll be able to check the atomic signature of the metal in an ingot and see how it compares with gold from the original source.
This is technology that didn’t exist 10 years ago, and it’s still a long way from being perfected. But we’ve come a long way already and with time and funding, I’m confident we’ll reach our objectives.
It’s extremely important science, and it’s a significant element of the book. There are bad ingots out there, just like there are bad coins, and we’ve got to find a way to definitively understand in a scientific manner what we’re dealing with so that we take the guesswork out of it.
Holabird and Crum were brought together last year by Bob Evans, a key member of the Columbus-America Discovery Group, the team that found and salvaged the Central America.
Evans, who is also a geologist, met Holabird under somewhat adversarial circumstances at legal proceedings aimed at determining ownership of the salvaged treasure. Holabird was an expert witness for another claimant. The two men’s common interests soon overcame any initial strain.
Evans met Crum when the treasure came up for sale. Crum’s company, Monaco Financial, was a major buyer of the Central America gold.
Evans is excited about the book, tentatively titled Gold Ingots of the Wild West.
I think it will create new enthusiasm for the subject, he said, because these are really, really it’s almost a trite adjective neat pieces. They’re about as historical as an artifact can be, since they are literally the precious metal that was mined from ore bodies and then melted down and hand-stamped. What a fantastic connection!
I think it will also tend to clear up some of the mud that surrounds the subject so that people will feel safer in collecting this kind of material. There have been some good articles about Western ingots and some really fine little historical pieces. But there hasn’t been a central repository of that knowledge.
A lot of people feel a real connection with the history of their coins and their other numismatic objects, and knowing more about the history of these ingots and knowing more about the people who produced them and knowing the systems that were used to mark them I think that will give people greater confidence in collecting this material.
Orders for the book will be taken at the Denver convention. It’s expected to be available soon afterward.