When gold was discovered at Sutter’s Mill in California, less than 150 miles from San Francisco, hundreds of thousands of people poured into the area hoping to strike it rich. Virtually overnight, an economy sprang up for the goods and services needed by the miners. This nascent economy was in desperate need of a medium of exchange, a currency for the multitude of transactions. How this need was met paints a colorful picture of the chaotic and enterprising gold rush economy and the practical benefits of statehood.
Gold Will Do in a Pinch
In the earliest days of the gold rush, there simply wasn’t enough California currency to go around. Official coins struck by the U.S. Mint had to make a long journey out west and were in short supply. Miners began using the gold they mined or panned to buy and sell. People would walk around with a pouch of gold dust the way people today carry bills in a wallet. If a bartender charged a pinch of gold for a drink, it meant as much gold as the bartender could pinch between his thumb and index finger.
The inexact and inefficient use of gold gave rise to a number of private mints that produced standardized coins for large transactions. Norris, Grieg & Norris was the first company to mint coins, but they quickly went out of business. Moffat & Co. was far more successful, producing “Pioneer Coins” in denominations ranging from $1 to $50. Several other companies produced coins with varying degrees of use, and many of the remaining specimens from these producers are highly valued rare coins.
The Government Steps In
In 1850, Congress established an assay office in San Francisco to strike official $10 and $20 coins. These filled in for large transactions, but private companies continued to mint quarter-dollar and half-dollar coins in change-strapped California currency until an official U.S. Mint was finally established in San Francisco in 1854.
Counterfeit California Coins
Due to the confusion of the early Californian economy and the need for privately minted coins, there is a high prevalence of modern-day replicas that coin collectors need to be wary of. Coins minted by private companies before 1882, when the Coinage Act of 1864 was first enforced, are considered to be authentic. These coins have a denomination, including the word “DOLLAR” or an abbreviation, and resemble official U.S. coins of the time. The Coinage Act made it illegal to mint coins privately, so to comply, counterfeit coins will not have a denomination, usually only saying “1/2 CALIFORNIA GOLD” or something similar, and often have an image of a bear.
If you are looking to sell rare coins or purchase some for your collection, Atlanta Gold & Coin Buyers is here for you. We provide free appraisals and transparent, honest buying and selling practices. Our rates are among the most competitive for rare coin dealers in Atlanta and throughout the nation. We take pride in the fact that we have many repeat customers, some of whom have been with us since we first opened our doors for business. Call us at 404-236-9744 to schedule your appointment today.
Image by Tom Mulvaney of the Smithsonian Institution