1818 $5 STATES OF MS64 PCGS. B. 2-B, Miller-124, R.4. "In the depression following the War of 1812," Neil Carothers wrote in his classic study of American currency called Fractional Money, "specie payments were suspended and metallic money disappeared." Gold and silver were replaced in commerce by an unknown quantity of paper that was often "redeemed with difficulty" by the wildcat banks that issued them. Treasury-issued, gold-backed currency notes remained a distant invention, not to be seen for another half century. What became, then, of the many tens of thousands of U.S. gold coins minted during the decade or so that followed that nearly disastrous war?
It was a time of fluctuating ratios between the values of the two precious metals, gold and silver, that backed faith in early America's commerce. Bowers put it succinctly in his illustrated history of U.S. gold coins when he explained that "As supplies of silver continued to increase, silver became 'common' in relation to gold, with the result that holders of silver wanted to exchange it for gold, and holders of gold were reluctant to do so, at least at 'official' rates. As the United States Mint did not adjust its standards, freshly-minted gold coins could be melted and the bullion sold at a profit in terms of silver. Walter Breen cites a reference to public assays held in Paris in 1831 in which approximately 40,000 American half eagles 'of recent mintage' had been melted." As others too have written, silver went abroad, often to the West Indies, where it was hoarded for several decades, and gold was privately secreted away. Only with the discovery of gold ore in the South, and when Congress lowered the intrinsic content (weight) of gold coins manufactured beginning in 1834, did the bartering of metals cease, and gold finally assumed its intended commercial use. Again, Carothers gives us the key to why these beautiful gold pieces are so rare today, though made in sizable numbers all those years ago. "From the day of its passage," he writes, "the law of 1834 affected the whole course of trade and finance." Payments formerly made in silver now were tendered in the lower weight gold pieces just freshly minted. "The old gold coins were worth more than $1.05 in terms of the new dollar, and such amounts as were in bank reserves and other hidden stores were brought out for recoinage."
Three distinct die pairings were utilized in 1818, the initial year of Robert Scot's slightly modified design. High grade examples from this year are especially prized as among the most obtainable dates of the challenging Capped Head Left design. Those with the STATESOF reverse, however, are seen with far less frequency than the normal dies reverse. The present example displays frosty green-gold surfaces that are especially notable for their radiance. Only the slightest softness can be found over the major design elements, and a rim-to-rim die crack angles down from star 6, through the portrait and final 8 of the date. Just a few wispy luster grazes on the obverse keeps this beautiful early half eagle from an even loftier grade. Population: 7 in 64, 1 finer (3/07). (#8121)