The rare double eagle gold coins: Was grandpa a thief, or a great collector?
Before the executive order could take effect, the mint produced almost a half million gold $20 coins. After giving two to the Smithsonian institution, officials sent the rest off to be destroyed. However, a few of the 1933 Saint Gaudens double eagles (as the coins later came to be known) survived, largely through the efforts of Israel Switt, a Philadelphia jewelry dealer. The best-known of these began a long odyssey which took it into the collection of Saudia Arabia's King Farouk and, ultimately, into the hands of Stephen Fenton, a British coin dealer. When Fenton attempted to sell the coin in 2002, he was arrested; later, he struck a deal whereby he was able to sell the coin in return for sharing the proceeds with the government. When it fetched $7.6 million at auction in 2002, it became one of the most valuable coins in the world.
In 2002, reading about Fenton's ordeal, Switt's grandson, Roy Langbord, learned about the strange part that his grandfather played in the tale of the Farouk double eagle. Later, he began to wonder if Israel might have left some other valuable coins behind and began to investigate. In 2003, following a tip from his mother, Langbord opened an old safe-deposit box belonging to his grandfather. Inside, he found ten 1933 Saint Gaudens double eagles.
While it would have been relatively easy to dispose of the coins on the black market, Langbord decided to follow a more honest approach. He took the coins to the United States Mint and asked officials to authenticate them. The government determined that the coins were genuine and immediately seized them, claiming that they were stolen property. Retaining the services of Barry H. Berke, the lawyer who successfully represented Stephen Fenton, the Langbord's took the government to court.
In August, U.S. District Judge Legrome Davis ruled that the seizure of the coins was illegal and gave the government until September 28 to prove that the coins were stolen by Mr. Switt. Given that the crime -- if, indeed, there was a crime -- was committed over 75 years ago, this will be exceedingly difficult to do. In fact, as Burke has pointed out, there are a few circumstances under which Switt could have legally gotten his hands on the coins. For example, the mint had a gold-for-gold exchange process in the early 1930's, whereby customers could trade bulk gold for gold coins; Israel Switt was known to have participated in this program. Moreover, even if Switt did steal the coins, the statute of limitations for the crime has long since passed.
In the end, of course, this is all legal wrangling: Switt was known as a "gold bootlegger" who sold gold coins even after private ownership of them was deemed illegal, and it is hard to imagine circumstances under which his possession of the Saint Gaudens coins was legal. However, as my editor so often reminds me, the distance between what we know and what we can prove is generally measured in lawsuits. Given the disposition of the Farouk double eagle case and the difficulty of proving that there is no way that Switt could have legally acquired the coins, it seems likely that the government will agree to allow the sale of the Langbord double eagles in return for a share of the profits.
It's worth remembering that much of the federal government's coin minting is a money-making operation in more ways than one. While the penny and the nickel both cost more than their face value to produce, dimes cost only three cents to make, quarters cost seven cents, and dollar coins cost just under 30 cents. This, incidentally, is one reason that the government produces limited edition or commemorative coins: for every "statehood" quarter that ends up in a collection, the government effectively pockets 18 cents. Similarly, every "president" dollar that leaves circulation nets 70 cents. These profits go up drastically for commemorative and uncirculated coins.
As the Langbord double eagle fiasco demonstrates, the value of coins goes up even faster when the government makes a mistake. The most famous of these is probably the 1943 copper penny: only about 40 are known to exist, and they are worth approximately $200,000 apiece. However, the mint often double-strikes coins, messes up edge lettering, or makes other mistakes, and these errors can be worth thousands of dollars.
Releasing the coins would be highly profitable for the government, in both the short term and the long run. Many experts believe that Switt smuggled up to twenty 1933 Saint Gaudens double eagles out of the Philadelphia mint. If the government were to set a precedent for the legal sale of these coins, it could reap a portion of the proceeds from future sales. With ten Langbord gold eagles ready to go on the block and nine more in private collections around the country, the government's portion of these sales could be considerable. Perhaps more importantly, it would continue to fuel the coin collecting trend that the government has spent so much time and money to develop.