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Bad $4 Coin Idea Got Strong Support
$4 gold stella coinBy R.W. Julian, Numismatic News
May 03, 2010
$4 gold stella coin



The $4 gold piece, or Stella as it is familiarly known, has long intrigued collectors. Many numismatists consider this denomination necessary for a type set although it was never issued as regular coinage. The origin of these patterns lies in the 19th century problems with too much silver produced in the United States.

Beginning in 1859 the massive output of silver from the Comstock mines, in what is now Nevada, began slowly to undermine the value of this metal on the open market. With the outbreak of the Civil War in April 1861 the question of silver was put on the back burner, however, as the Union government had more pressing problems facing it.

In June 1862 the public suddenly hoarded all of the available silver coinage, which meant that the large quantities being mined were put to better use by paying for military supplies bought in Europe. In the late 1860s, however, the Europeans notified the American government that silver was not quite as welcome, in paying for wartime debts, and would Washington please send gold instead. This caused a build-up of silver and the gradual weakening of prices.

In the summer of 1873 the government was finally able to begin putting minor silver coins back into daily use, thus creating a demand for silver by the mints. This slowed the decline in silver prices but by 1875 the amount of silver being mined reached even higher peaks and the mints could not use that much of the pale metal for the coinage.

By the mid 1870s there were spirited public debates about the role of silver in the coinage. Proponents of this metal wanted unlimited coinage, regardless of the need while opponents saw this as financial disaster and insisted on the gold standard. It was at this point in time that one of the most interesting individuals of that 19th century stepped forward with his solution to the age-old question of silver and gold coinage.

Dr. William Wheeler Hubbell was an eccentric scholar who believed that he had found the answer to the monetary problems of the world. He thought that a coin containing both gold and silver would circulate around the world and end the rivalry between the two metals. Hubbell’s name for this new alloy was “Goloid.”

What Dr. Hubbell failed to realize was that a combination of gold and silver – called electrum – had long been known and was in fact the metallic alloy used for the first coinage, about 600 B.C. in the Kingdom of Lydia. These electrum coins are well known today to collectors of ancients but perhaps not so well known in the 1870s.

In 1876 he filed for a patent on the Goloid metal. Apparently the Patent Office knew as little about coinage as did Dr. Hubbell because the patent was granted in May 1877. At the end of 1877 the inventor gained the attention of Georgia Democratic Rep. Alexander H. Stephens, chairman of the House Committee on Coinage, Weights, and Measures. Stephens – who was the former vice president of the Confederacy – thought the idea feasible and asked Treasury Secretary John Sherman to have patterns struck.

Political relations between the Republicans and Democrats were still touchy because of the Civil War and the disputed presidential election of 1876. In that election, which was decided by the House of Representatives in early 1877, Republican Rutherford B. Hayes got the nod while Democrat Samuel Tilden was the loser; there was a secret arrangement between the parties, however, and Hayes agreed to withdraw the remaining federal troops from the South. Some scholars who have studied this era think that the Democrats, by regaining control of the Old South, were the real winners despite the presidential outcome.

No doubt Sherman thought it politically wise to accede to the request from Rep. Stephens, whatever the merits of the request. At the end of December 1877 Sherman ordered Mint Director Henry R. Linderman to strike a set of Goloid coins, consisting of the dollar, half dollar and quarter dollar.

Linderman was considered an expert when it came to coinage and realized that the Hubbell scheme would lead nowhere because of the ease of counterfeiting. The Goloid mixtures devised by Hubbell would have been virtually impossible to verify except with time-consuming specific-gravity tests, a skill not often found among the general public.

On his own authority Linderman simply ignored the order for the two smaller coins, but directed the Philadelphia Mint engraving department to prepare dies for a Goloid dollar. The patterns were then struck in mid-January 1878. In order to deflate both Hubbell and his theories, Linderman ordered the Mint coining department to strike some additional pieces in .900 fine silver, the regular coinage alloy. Dr. Linderman displayed both the Goloid and standard silver specimens for the congressional committee and defied anyone to determine which was which. No one could but Hubbell was infuriated at the sleight-of-hand pulled by Linderman.

Mint officials no doubt thought that they had effectively sabotaged the whole scheme but in October 1878 Dr. Hubbell was granted yet another patent on Goloid metal. It seems that the inventor had found that his “error” in the first coinage had been due to do his calculations in troy weights rather than the metric system! One wonders why the Patent Office fell for this a second time.

As might have been expected, this new patent naturally called for a second round of pattern coins, obligingly ordered by Congressman Stephens. After Dr. Hubbell again met with Stephens the result was an elaborate coinage proposal, House Bill 2698, calling for a comprehensive metric coinage.

Mint Director Linderman dutifully ordered the patterns to be struck, all in dollar denominations as before, but nothing came of this latest effort. This time there was no sleight-of-hand with a standard .900 silver alloy, as Treasury Secretary Sherman did not care to face the wrath of Stephens.

Having failed once again with his Goloid dollar ideas, Hubbell persuaded the ever-helpful Stephens to ask the Treasury to strike a metric $20 gold piece. Hubbell thought that the current double eagle – which weighed 33.44 grams of .900 fine gold – was all wrong and ought to be replaced by one containing his combination of metals. The fact that European banks already widely used the American double eagle for their reserves did not enter into Hubbell’s calculations.

Using the historic ratio of 16 to 1 (16 ounces of silver worth one ounce of gold) Hubbell came up with a coin containing 30 grams of gold, 1.5 grams of silver, and 3.5 grams of copper. The total weight was 35 grams and it was .900 fine, if one counted the gold and silver together, which was never done except, of course, by Dr. Hubbell. Moreover, the historic ratio of 16 to 1 had been dead for some years, the true ratio being above 20 to 1.

A small number of metric double eagles were struck at the Philadelphia Mint in early 1879 but the result was the same as before. No one except Hubbell, and perhaps Stephens, thought that they would be of the slightest value in international commerce.

The failure of the metric double eagle galvanized Hubbell to fresh thoughts as to how his Goloid ideas could still save the coinage from the perils of the gold-silver rivalry. At this point the authorship of one of the proposed coins, the $4 piece, becomes somewhat muddled. It has been traditional to credit this idea to John Kasson, then the Minister (Ambassador) to Vienna and the court of Emperor Francis Joseph I of Austria-Hungary.

Kasson’s letter promoting the idea of a $4 gold coin – dated Jan. 3, 1879, reached the committee towards the end of that month. The Minister claimed that an American gold coin roughly equivalent to the 8-florin gold coin of Austria would somehow smooth international transactions. The problem is, however, that two coins are either the exact same value or they are not and these two coins were not, the values being $4 and $3.86. Rather than a boon to exchange, it would have been more of a bad dream.

The Austrian gold piece of 8 florins barely circulated, even in Austria. It was the equivalent of the French 20 francs, which did enjoy wide usage. That the obscure Austrian coin was used as a model is a sign that Hubbell had virtually no support for his international metric coinage ideas.

If we accept the official version of what happened, Hubbell seized upon the Kasson suggestion and prepared an alloy for the $4 piece: six grams of gold, 0.3 gram of silver, and 0.7 gram of copper, making in all 7 grams. It was one-fifth of the metric double eagle in value, but nothing else could be said for this odd proposal.

Hubbell claimed that the $4 alloy was .900 fine but again this was true only if one added the gold and silver, which was never done in determining fineness. It did give Hubbell the ability to claim that his coins were metric, however.

Two other Goloid dollar coins were suggested at the same time as the $4 piece, by now conveniently called the “Stella” after the star on the reverse. (Stella is Latin for star.) One of the Goloid dollars weighed 14 grams, the other 25 grams. In connection with the three coins Congressman Stephens had conveniently produced yet another coinage bill incorporating the Goloid ideas. A bill of course required pattern coins and once more the Treasury acquiesced.

Mint Director Horatio Burchard, who had assumed the office after the death of Linderman in January 1879, ordered the Mint engraving staff to execute the necessary dies. Because Chief Engraver William Barber had recently died, Burchard ordered that both Charles E. Barber (William Barber’s son) and George T. Morgan prepare designs for all three coins. The choice for the new chief engraver had not yet been made and Burchard was perhaps using this as one way of helping to make the decision. (Charles Barber was eventually named to the post.)

The design by Charles Barber for the Stella obverse has the head of a woman with flowing hair while that by George Morgan is of a woman with her hair tied in a bun. In that era loose hair normally meant a young unmarried woman or girl while the coiled hair signified marriage or an older woman. This may well have been the deciding factor in the choice, by Burchard, of the Barber head.

The dies for all three coins were ready by early December 1879 but no orders came from Washington; in the meantime Philadelphia Mint Superintendent A. Louden Snowden had directed the melter & refiner to prepare ingots sufficient for a coinage of 40 specimens for each pattern. Finally, in early January 1880, Snowden wrote Director Burchard to ask if officials had changed their minds about having the patterns made.

(For some reason it has been accepted by many numismatists that a small number of Stella pieces, said to be 15 in number, were struck in December 1879 for special distribution. Internal Mint records say otherwise and there was no coinage of Stellas in December. It is of course likely that a few copper trial strikes had been made in December 1879, prior to Snowden sending his request to Washington, but it is clear that there was no Goloid coinage from any of these three sets of dies in 1879.)

The answer from Director Burchard was to strike 25 sets of the three coins, 75 pieces in all. Twenty-three of the sets were for the Stephens committee and the remaining two for the director’s office. The sets were mailed to Burchard on Jan. 24; these were perhaps more carefully struck than later issues and possibly the source of the claim of “originals” being made in December 1879. In point of fact, however, all 1879 Stellas were struck in 1880.

The gold Stella struck the fancy of the committee members and all 23 sets were quickly sold for the official price of $6.10. Stephens soon asked Burchard for an additional 100 sets.

This new request irritated Superintendent Snowden and he asked Director Burchard for permission to submit the whole Goloid scheme to the National Academy of Sciences. Snowden felt safe in doing so as he was confident that this prestigious group would turn thumbs down on the idea. Burchard no doubt agreed but was under political constraints and denied the request.

One hundred more sets were duly struck and sent on April 5 to Washington. These may have been minted on a regular coining press as opposed to the screw press used for the first 25 sets but this is uncertain. If true, however, it may account for the difference in striking quality noted by numismatists.

Despite ill-founded rumors, perhaps spread by disappointed collectors, most of the Stellas did not wind up as presents to Red-Light madams. Instead virtually all of the pieces went to collectors with political pull. Unfortunately, other collectors had no such access and were irritated at not being able to acquire one of the prized Stellas; these numismatists wrote increasingly unpleasant letters, denouncing the Mint in particular.

The one hundred sets sold out as promptly as the first twenty-five so the committee responded by ordering another 150 sets. Burchard, on his own, raised this to 300 to anticipate future orders from Congress. The 150 sets were sent to Stephens in May 1880 but, oddly enough, all was quiet on the Goloid front for the next several months.

In late November 1880 Snowden wrote Burchard inquiring what should be done with the remaining 150 sets, which seem to have been forgotten by virtually everyone. Snowden suggested selling them to collectors for $15 per set but Burchard instead abruptly ordered the remaining sets to Washington, where once more they were sold through friendly congressmen. Early in 1881 a mere 30 sets were returned to Snowden, who was given instructions that only numismatic societies could have them at the original price of $6.10. The remaining sets were quickly dispersed.

The number of 1879 Stellas with Flowing Hair officially made was 425 but we can add perhaps 15 or 20 pieces clandestinely made for Mint officers and friends. Some were made in copper and then gilt so that a low-cost specimen was available.

In addition the Coiled Hair 1879 pattern by Morgan was struck in a handful of pieces as were both designs (Barber and Morgan) for pattern Stellas dated 1880. The 1879 Morgan and both 1880 varieties are quite rare, even in off metals.

The 1881 dispersal of the remaining 30 sets brought to an end the Hubbell experiments. Even though there had never been a real chance of his ideas being accepted, the whole matter has left us with some very interesting patterns to enrich numismatic collections.



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2010 U.S. Coin Digest, The Complete Guide to Current Market Values, 8th ed.

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Standard Guide to Small-Size U.S. Paper Money, 1928 to Date

Strike It Rich with Pocket Change, 2nd Edition

 

 



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