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The Greatest World Coin Auction of All Time (Part 5): Gold Coins as World Currencies
Posted By Greg Reynolds On July 16, 2008 @ 10:50 pm In Auction News,Goldberg Auctions,World Coins | 4 Comments
By Greg Reynolds for CoinLink
This is Part 5 of my review and analysis of the auction of the Millennia collection of world coins.
The sizeable core of the post-1300 AD coins in the Millennia collection is comprised of coins of the types that were used for international trade and for trade within societies that were far from the Mints that actually issued these respective coins. A coin issue becomes an international monetary unit by being accepted as a medium of exchange in several nations. A coin issue that is an international monetary unit becomes a world currency by circulating easily as money in many societies that are far from where the coin was minted. Of course, such coins played central roles in economic history.
In Part 4, I interpreted Ira Goldberg’s plan for the Millennia collection, and I discussed how Ira emphasized the historical importance of coins, including his preferences for large coins, for coins that were intended for circulation and for coins that showcased cultural aspects of societies. Almost all serious collections of rare world coins, however, contain a large number of coins that are historically important. My theory is that it is the theme of certain types of coins having served as international monetary units, especially those that became world currencies, together with amazingly choice representatives of these types, that distinguishes the Millennia collection from almost all other very high quality collections of world coins.
In past centuries, many societies around the world used coins of the British Empire, of The Netherlands along with Dutch possessions, and/or of the Spanish Empire, not just for international trade but often also for transactions within societies (internal trade). Societies that were politically fractured or were dominated by outside forces often did not attempt to Mint their own coins, or did so to a very limited extent. In many cases, there was no need for a society to mint its own coins and the costs of doing so may have outweighed the benefits.
In the 1790s, a large number of Americans opposed the creation of a U.S. Mint because they felt that coins from abroad, especially those of the Spanish Empire, served well and a Mint would be a financial burden on the taxpayers. In 1791, legislation authorizing a U.S. Mint barely passed the House of Representatives by a vote of twenty-five to twenty-one. As late as 1802, Rep. John Randolph, an influential Congressman from Virginia, introduced legislation to abolish the U.S. Mint.
An over-arching point is that transactions are facilitated, and life is made easier for most all buyers and sellers, by the use of coins that were minted, more or less, in accordance with the standards of coins that were widely accepted in many societies or even in a significant portion of the world.
Ducats are classic international monetary units. A single ducat weighs around an eighth of an ounce, 3.5 grams, and is about 98.6% gold. For six to seven centuries, starting in the late 1200s, Ducats, and coins with other names minted in accordance with the Ducat standard, circulated widely and frequently in Central and Western Europe, and certainly circulated in many other societies. Coins of multiple Ducat denominations circulated widely as well.
I mention some Ducats that were in the Millennia collection in Part 2 and in Part 4. There are more. For example, a 1672 Two-Ducat coin from the German speaking society of Augsburg is NGC graded MS-63. It brought $8913.
The region of Pomerania is on the Baltic Sea and now overlaps Germany and Poland, though was mostly incorporated into Poland after the end of World War II. From 1630 to 1815, it was subject to Swedish rule. A 1706 Swedish-Pomeranian Two-Ducat coin, which weighs 6.93 grams (and thus is about 1% underweight), was in the Millennia collection. It is NGC graded MS-62. It realized a rather strong price of $14,375.
A 1678 Five-Ducat coin, 0.85% underweight at 17.35 grams, from Olmütz is distinctive. Its crowded design packs numerous symbols and some explicit information. Olmütz (also known as Olomouc) is now part of the Czech Republic. This 1678 coin is NGC graded MS-64, a very high grade for such a large gold coin. It realized $24,150.
Another noteworthy Five-Ducat coin in the Millennia collection was minted in Vienna in 1661. It is extremely well detailed and is very rare. It is NGC graded MS-63 and went for $16,100.
A 1777 Ducat from the German State of Würzburg is worth mentioning. It is neither very popular nor very rare. Even so, it has an unusual design and has historical significance. It brought $1610, and was one of many interesting coins in the Millennia collection that were or could have been purchased by collectors who do not have vast wealth. Indeed, in general, many coins of the types that served as international monetary units during the past half-millennium can be acquired for relatively modest sums.
From the 1400s to the 1800s, gold coins of the empires of the British and the Spanish evolved into the currencies of world, along with Ducats and European Crowns. A substantial percentage of European Crowns were of similar weight and/or similar silver content as each other and as the Crowns (eight reales coins) of the Spanish Empire. There were deviations and variations, and standards changed a little over the centuries.
For both silver and gold coins, widely accepted standards were not established by treaties or plans, though sometimes treaties or plans provided additional support for standards that had already evolved. Generally, standards for coinage evolved over time to meet the demands of consumers, merchants, banks, and semi-private corporations, especially for travel and international trade. Leading nations minted denominations of coins in response to the demands of the people who used such coins.
British Angel coins were minted from the late 1400s until well into the 1600s. Each Angel weighs five grams. Leading references provide inconsistent information regarding the dates and fineness (% gold content) of Angels. If it is true that Angels are about 99.5% gold, then eight escudos of the Spanish Empire contain almost exactly the same net gold content as five Angels, though Angels were first minted more than a half-century before escudos, which were first struck in the 1530s.
British George-Noble gold coins were minted from 1509 to 1547. This was the first primary British gold denomination to be eleven-twelfths fine (91.67% gold), and ’11/12′ soon became a British and international standard of fineness. Six George-Nobles weigh 27 grams, about the same weight of the yet to be born Spanish eight escudos coins.
The Spanish adopted the eleven-twelfths fine (91.67%) standard for gold coins in 1536. Earlier Spanish gold coins were 98.6% gold, the same fineness as the Ducat, which had, by then, been an international monetary unit for more than two centuries. Indeed, from 1476 to 1515, a Spanish coin issue termed an ‘excelente’ was actually a Ducat.
By the 1530s, the Spanish abandoned the Ducat standard and another previous set of gold denominations in order to establish the escudos standard. This new Spanish system seems to be largely copied from the British in terms of both total weight and net gold content, as will be detailed below. The difference seems to be that the Spanish preferred divisions into eighths or multiples of eight, while the British curiously preferred a variety of odd multiples in their systems of measurements and standards. Consider that twelve inches equal one foot, and three feet equal one yard. Plus, three teaspoons equal one tablespoon!
The French copied both the British and the Spanish when the French introduced a new set of gold denominations, centered on the Louis D’Or, in 1640. French Louis D’Or coins were minted until the 1790s. There were widely circulating, Double Louis D’Or, single Louis D’Or and half Louis D’Or French gold coins. (Four Louis D’Or and Eight Louis D’Or coins may have circulated to a minor extent, but were probably intended for special purposes.)
In keeping with Ira Goldberg’s theory about the greater historical importance of the largest, widely circulating denominations, there were three Double Louis D’Or gold coins in the Millennia collection. A rare 1717 Paris Mint Double Louis D’Or, which is NGC graded MS-62, brought $6900. King Louis XV is depicted. The two others are NGC graded MS-63 and show portraits of King Louis XVI, who was executed by revolutionaries in 1792. A 1777-W, Lille Mint, coin realized a strong $6325. A 1786, Lyon Mint, Double Louis D’Or sold for $1495, perhaps a reasonable price for an interesting artifact of French history.
Unlike previous French gold coins, the Louis D’Or was eleven-twelfths fine (91.67%), and an easy multiple of Louis D’Or coins weighs approximately 27 grams, as do eight escudos. Six British George-Nobles or three British Unites weigh exactly 27 grams. Indeed, a Charles II Unite, minted around 1661, in the Millennia collection, weighs exactly 9.00 grams. This coin is NGC graded AU-55. It sold for $26,450.
Four Louis D’Or about equal eight escudos, and eight escudos equal three British Unites or six George-Nobles. The gold coins of the Spanish, from the 1530s to the 1770s, and the French, from 1640 to the 1790s, were consistent with most British gold coins that were minted from 1485 to 1662. By the mid 1600s, most of the gold coins of the British, the Spanish and the French were interchangeable to a great extent, though not perfectly so.
Consider that eight escudos contained just ¼% more gold than three British Unites (= six George-Nobles), and that four French Louis D’Or contains just ¾% less. Moreover, the gold content of two British Ryal gold coins, a denomination that was minted from 1485 to 1625, is less than one percent more than the gold content of eight escudos.
A deviation of one to three percent was typically permissible in the realities of commerce for transactions that were not extremely large. Many coins of different nations were designed and minted such that they could circulate alongside coins produced by leading societies, even if there was a 0.5% to 3.5% deviation in silver or gold weight. During eras long before the inventions of computers and machines for chemical analysis, merchants and consumers demanded coins that could be traded everyday without the need for an expert, time-consuming determination of the precious metal content of each.
As there was an allowable standard of deviation in gold content in most transactions, six British ten shilling gold coins, three British Unites (or Laurels), two British Ryals, six British George-Nobles, and eight escudos of the Spanish Empire were all approximately equal, as were four French Louis D’Or and probably five British Angels! All these contained around seven-eighths of an ounce of gold, and this seems to have defined the international gold standard.
For centuries, a clear multiple of British, Spanish and French gold coins added up to about seven-eighths of an ounce of gold, an amount which plausibly was one unit of some other measurement standard. A key point is that, for very long periods of time, British, Spanish, and French coins were easily mixed together to make purchases, to keep as savings, or to settle accounts.
Of course, in very large transactions, the buyer and the seller would be concerned about even a small fraction of a percentage of the gold content of individual coins, and thus would spend time to adjust accordingly. For most transactions, the above-mentioned multiples of leading gold units were usually considered to be equal. These British, Spanish Empire and French coins were world gold currencies from the 1500s to the late 1700s.
In 1663, the British introduced a new gold denomination incorporating a new standard, the Guinea, which weighs 8.35 grams (about 0.29 ounce), much less than the total weight of the previous standard British gold coin, the Unite (= Laurel) which weighs 9 grams. The British fineness standard remained eleven-twelfths (91.67% gold). So, in the late 1600s, three Guineas had about six percent less gold than eight escudos and were thus not (yet) interchangeable with escudos coins.
Around 1772 or 1773, depending upon the individual Mint, the gold content of the escudos coins of the Spanish Empire was changed from 11/12 (0.917 fine) to 90% or so. In 1786, the fineness of the gold coins of the Spanish Empire was changed again.
From 1786 until the 1830s, and even later in independent Latin American nations, escudos coins were seven-eighths fine (87.5% gold). The gold content of three Guineas then became almost equal to the gold content of eight escudos. Once again, Spanish gold coins were consistent with British gold coins. Three Guineas could be used, in much of the world, to pay for an item that costs eight escudos and vice versa.
There were numerous Guinea coins in the Millennia collection. Please see my article on the 1703 ‘Vigo’ Five Guinea coin. A 1680 Guinea, from the era of Charles II, is fairly graded MS-62 by the NGC. It sold for $6038.
A 1687 Guinea, minted during the brief reign of King James II, is more impressive. It is NGC graded MS-63 and could possibly merit a MS-64 grade. It is certainly attractive. Plus, truly choice uncirculated Guineas of James II are extremely rare. This prize brought $11,213.
In Part 3, I discuss several eight escudos coins of the Spanish Empire and of independent nations of Latin America. The Millennia collection, however, contained only one eight escudos coin from the mother country of Spain. It is dated 1713 and was minted in Seville. It is NGC graded MS-64 and is exceptionally impressive. For his own collection, Lance Tchor bought it for $9200.
In the Millennia collection, the selection of Ducats from various European societies, the incredible sections of Crowns and large gold coins of the Spanish Empire, the amazing quality of the pre-1700 British gold coins, and the extensive runs of quality Crowns from Central and Western Europe are all tied to the concept of international monetary units and world currencies. Many of the Millennia collection coins that were of the international monetary unit types are very rare and/or of very high quality. The whole Millennia collection is characterized by an amazingly special combination of rarity, quality and history.
The Millennia collection of world coins Series of Articles
Part 1 – Overview and Famous Pieces
Part 2 – European Coins
Part 3 – Latin American coins
Part 4 – The structure of the Millennia collection
Part 5 - Gold Coins as World Currencies
Part 6 – The Event of the Millennia
©2008 Greg Reynolds
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