Miners and merchants were faced with the problem of how to convert the gold dust and nuggets from the gold fields into money. Dust varied in purity depending on source (the farther downstream the higher the purity) and honesty of the participant (brass shavings are documented as being passed off to San Francisco business, for example). Amalgam balls, formed by dissolving the gold in mercury and boiling away the mercury, were harder to lose, but still varied in purity and weight. Coins were originally invented because of the need for standardized weight and purity of the monetary metal.
About 70% of the total gold produced in California in the first ten years of the Gold Rush had been minted as US coin by 1859. Much of the remainder was exported and entered coinage in other countries, while another fraction became bullion reserves or was used for industrial or decorative purposes.
Until the San Francisco mint opened in 1854, the US mints were at the other end of a dangerous three-month plus journey. The US Constitution prohibits the states from coining money, but it does not prohibit private individuals from making coins. Local issues of private gold coins began in 1830 in Rutherfordton, North Carolina, near the area’s gold mine, by a jeweler, Christoph Bechtler. Over the next decade, Bechtler produced about $2.2 Million in coins, half of them as gold dollars. In California, local assay offices and jewelers took advantage of this experience by taking in gold in exchange for coins of their own manufacture. These are the “California Gold” private mintage issues.
“By the end of 1849 there were approximately eighteen such companies in California, almost all located in the San Francisco area. Norris, Gregg and Norris was the first of these concerns to issue coins. Norris produced five dollar coins, and virtually all of these were minted in Benicia, although inscribed San Francisco.”
April 20, 1850, the California legislature established the state Assay Office which produced gold ingots, stamped with exact values, such as $35.96. Such a state agency was, however, unconstitutional, so the federal assay office was established in 1851 in San Francisco with Augustus Humbert as assayer and Moffet & Co. as the subcontractor.
Anything passing San Francisco, even the 49er’s laundry returning from the Sandwich Islands, became subject to inspection and duty at the San Francisco Customs House. Duty could only be paid in coins, not in dust or ingots. State and city taxes ($25 per foreign-born miner, $5 poll tax, 1% state property tax, 2% city property tax) also would be paid in cash. The California Gold issues were accepted as legal tender (though not considered US coins) between 1850 to 1852.
Banker James King of William, sent coins from the firms of Baldwin, Schultz, and Dubosq to the US Assay office in March 1851. The coins averaged 97-99% of the stated content, which King had publicized in the newspapers. The publicity caused a panic during which King and his friends bought the coins at 80% of their value, melted them, and sold at handsome profit to the Assay office.
A Mormon mint operated in Salt Lake City between 1849 and 1860, producing 2 ½, 5, 10, and 20 dollar coins.
In Sacramento, Dr. J. S. Ormsby and Major William M. Ormsby minted 5 and 10 dollar coins, (unfortunately with less gold content than standard) in 1849.
Private coinage was officially stopped June 8, 1864, by act of Congress, but debased versions were made for the jewelry and tourist trade for many years thereafter. There was little enforcement of the ban until 1884. Sometimes coins or tokens were made to conform to the 1864 act by lacking a denomination or by such denominations as “Not 1 Dollar”.
It was cheaper and more convenient to make larger coins from the flow of gold, so Congress authorized the production of the Double Eagle and the Moffat company minted the legendary $50 “slug”. On the other hand, there were few small coins available for change, so locallyproduced fractional gold coins were also minted in quantity. Approximately 15,000 fractional gold coins still exist in over 500 varieties.
During period, the half-eagle and dollar were the common coins of day-to-day commerce (roughly like our $20 and $100 bills) and the double eagle was primarily used in banking. Moffat & Co. John Moffat and his three partners began striking five and ten-dollar gold coins in 1849 and continued until the end of 1853. Moffat’s reputation remained unimpeachable throughout the era, and its coins passed at par with federal coinage, the only privately minted coins to do so. When the company finally closed its doors in December, 1853, its equipment was purchased by the San Francisco Mint.
John Kellogg was a former cashier for Moffat & Co. While only in operation for two years, 1854 and ‘55, Kellogg & Co. produced more than six million dollars in gold coinage, including $50 coins.
Samuel Wass and Agoston Molitor were two Hungarian mining engineers who established an assay office in San Francisco in 1851. With a reputation for scrupulous honesty second only to John Moffat’s, the two men issued five and ten-dollar pieces in 1852. When the Assay Office and later the federal mint began striking their own gold coins, Wass and Molitor ceased their coining operations. But when the newly opened mint failed to produce enough coinage to satisfy demand and then closed in 1855 because of a lack of parting acids, local bankers and merchants petitioned the firm to resume production. Obliging, they and Kellogg issued ten, twenty, and fifty-dollar gold pieces in 1855, the only circulating $50 coins ever minted in California.
Miners Bank ten-dollar coins were crudely manufactured, struck using the ancient hammer method, as coining presses were unavailable at the time. Baldwin & Co. issued fives and tens in 1850, adding twenties the following year. Other gold coin issuers in 1849-50 include such names as J.H. Bowie, Cincinnati Mining & Trading Co., Dubosq & Co., Massachusetts and California Co., J.S. Ormsby, Pacific Company and Shultz & Co.
Fractional gold coins (half and quarter gold dollars) were made by jewelers in Sacramento and San Francisco. They either have no date (1852), or are dated from 1852 through 1856. The San Francisco mint started full production of silver coins in 1856, so the need for these hard to use pieces was eliminated that year.