The world's most valuable gold coin, the 1933 Double Eagle, will be auctioned on July 30 in New York, where some experts predict it could fetch as much as $10 million. James Donahower has the story of how this particular piece of pocket change came to be worth so much and on the controversy surrounding its sale.
In 1933, U.S. President Franklin Roosevelt took the United States off the gold standard in an effort to revive the ailing U.S. economy. Several thousand of the 1933 Double Eagle, a $20 gold coin, had already been struck but not yet issued. In response to the president's executive order, they were all destroyed, or so the government thought. And this is where the Double Eagle's incredible story begins.
In fact, the U.S. Department of the Treasury says 10 1933 Double Eagles escaped destruction, and it spent the next 10 years rounding them up. In large part, they were successful. Ninety-percent successful, to be exact. The 10th coin, the coin which will be up for bidding on July 30, eluded the Treasury Department for 60 years.
Armen Vartian, coin expert and collectibles lawyer, recounts the coin's seizure. "There was a meeting where the coin was brought over from London and at the Waldorf in New York in 1996 these undercover agents met with the British dealer, he brought the coin out, and then the SWAT team came in and grabbed the coin," he says.
Mr. Vartian says little is known about the coin's many years on the run, except that due to miscommunication between government agencies, it actually left the United States legally in 1944. "It was owned by King Farouk of Egypt who went through all of the due process to get a license from the treasury department to take his coin out of the country. The treasury department said 'Okay'. This was before they realized that they were all stolen," he says. "So, one part of the U.S. government said 'Okay' to letting the coin out before the other part of the government said 'Those are stolen. We don't want those to leave.'"
The coin surfaced in 1954 at an auction of deposed King Farouk's possessions in Cairo. The U.S. government requested that the coin be withdrawn from the sale and it was, only to disappear once again, until the mid-1990s.
In 2001, after five years of legal haggling, the United States reached a landmark agreement with the British dealer from whom they seized the coin in 1996. The agreement stipulates that the coin will be officially "monetized", or made legal, by the Treasury Department and simultaneously sold to the highest bidder. The U.S. government will then split the profit with the dealer.
David Redden, who will himself auction the coin for Sotheby's auction house, says the coin's intriguing history will translate into a historic sale. "This is the Holy Grail of coin collecting," he says. "What's huge about it is the enormous interest that's already been generated about this extraordinary coin. I think what's also going to be huge is the price it fetches."
Mr. Redden says he will start the bidding at $2.5 million, but he expects the coin to shatter the $4.1 million world record for a coin sale.
Mr. Vartian thinks the coin could go for as much as $10 million. If, he says, a brewing scandal surrounding the coin does not interfere. There are collectors who believe, despite what the U.S. government says, that other 1933 Double Eagles may exist. Mr. Vartian says the manner in which the government has attempted to ease those concerns has only heightened them. "They're saying it's the only one that will ever be legalized," he says. "And there are some people who think that's somewhat abusive of the government. Because to protect their own financial interest in the coin, they are saying they are never going to declare another one of these legal. They want this one to sell for as much as possible, and so they are saying it's the only one."
Ultimately, Mr. Vartian thinks the coin will be bought not by a coin collector worried about resale value, but by someone interested in owning something very special, something that no one else can have.