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Gold Bullion Coin Race Started by Peru?
By Mark Benvenuto, World Coin News
September 16, 2013

This article was originally printed in World Coin News.
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Perhaps the only coin collector out there today who has not heard anything about gold bullion coins is that one who has been living under a rock for the last few years (or who has been hit by one and plunged into a long coma). This is not intended to be offensive. It is hard to believe that anyone living in the last 340 or 50 years could have missed the development of bullion coins.

Gold bullion coins seem to be everywhere. Sure, the United States Mint produces them, but there are also gold bullion issues from Canada, China, Austria, Australia and South Africa, to name a few in what has become a crowded field.

When a person looks back, trying to find the roots of this bullion love affair, most of us end up in South Africa, with the now famous Krugerrand. First issued in 1967, these one-ounce pieces stood alone on the market for years and didn’t have any little siblings until 1980. But guess what? The Krugerrand came decades after what can be called the first of the gold bullion coins. You’ll have to cross the Atlantic Ocean westward from the Mint of South Africa to find what is arguably the first of them all.


Standard Catalog of World Gold Coin
Standard Catalog of World Gold Coin

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Peru Gets the Credit

In 1821, the leaders of Peru, following Jose de San Martin and Simon Bolivar, declared independence from Spain, which makes it a republic not all that much younger than our own United States. Of course, it took some serious fighting, as well as the passage of a lot of time, for Spain to recognize Peru’s independence – which they finally got around to in 1879 (the war was over and won in 1824, by the way). One reason that Spain ached to hold onto Peru so very much was all the wealth in those Andes mountains, including the gold.

Moving forward to 1898, a look through the Krause Standard Catalog of World Coins helps a person see that Peru decided then to get into the business of producing gold coins that were specifically made to be a trade coinage. Oh, the idea of trade coinage itself wasn’t hatched in Peru, but the folks in Lima did a pretty amazing job stealing a march on the competition when everyone else was simply using the coins minted for their own country. In a domestic monetary system in which 16 reales were equal to 1 escudo, as it was under Spanish rule, Peru then also hammered out the gold libra (also called the pound in English as it was based on the British sovereign) coin starting as the century was ending.

One side sports a bust of a native Peruvian, while the other displays the Peruvian coat of arms. Just as a wonderful piece of trivia, this coat of arms itself displays a cornucopia at its base spilling out not food, but coins. Thus, like many of the coins of Peru, the libra is a coin with a coin design on it.

Gold libras were produced from 1898 to 1930, in a pattern often seen with other coinages, meaning big mintage numbers at the front end, tailing off to tiny mintages in the final few years. Each is about the size of a United States nickel, and all are 0.917 fine gold. This latter number is noteworthy because it is rather different than the purity of some gold bullion coins today, but it is the same imperial British standard from which the Krugerrand was taken. But we’ll get back to that in a moment.

Collecting a full set of gold libras will probably require some effort, simply because most dealers don’t stock too many of them, preferring to go with gold coins that are currently more in the public eye and appetite, including the modern bullion coins.

As well, the mintage totals for the libras from 1922 to 1930 are down in the thousands, coming as they did after the pretty amazing 1917 total of 1.9 million. But if you can get the entire date run, the next challenge might be to land any of the later libras, those made from 1959 to 1969.

You see, after almost three decades of nothing, the libra made a return of sorts. Not one of those stunning, turn-the-world-upside-down returns, but still a re-awakening, as it were. Yet this time the mintages were never that large, with the 1959 and 1961 being particularly rare (each was coined to a total of less than 1,000 pieces), and with 1966 rising to the high for this new date run of only 39,000 pieces.

Clearly, while the early dates of the libra series were big enough that they could be felt on the growing world stage, these later attempts are probably better thought of as collector issues. If assembling a collection of these gold trade coins, either in the earlier or the later years, is just too rich a proposition for you, well, there’s some good news related to them: in 1902, the Peruvian Mint expanded to the smaller half libra, and in 1906 to the even smaller one-fifth libra.

The half libra has only 0.1177 ounces of gold in it, and the fifth libra – which is significantly smaller than a United States dime – has only 0.0471 ounces of the precious metal per coin. Thus, if gold were at $1,500 per ounce, the fifth libra contains only about $71 of gold in each. In our current day and age where gold coins almost always seem out of reach, maybe it’s again time to look at this tiny gold trade piece.

The half libra must have been someone’s brain child, but ultimately couldn’t have been too big a one, as it was coined first from 1902 only until 1908, and then again starting in 1953 almost every year until 1969. It never jumped above 10,000 coins in the initial seven-year run, and only did so for three of the years between 1953 and 1969. But still, this denomination of libra might also be worth collecting as a date run, if a person has the patience for it.

Like both of its big siblings, the fifth libra made another showing in the 1950s. But again, like the larger denominations, these smaller coins had pretty tiny mintages before finally going the way of the dodo bird in the late 1960s. Still, all in all, there are some great possibilities here when it comes to what is arguably the world’s first gold bullion coin. Plus, since the collector base for these tiny bits of gold is pretty tiny as well, they still don’t cost much more than their bullion value.

Now, we just mentioned that the purity of each of the libras was 0.917 fine – downright low when compared to the high purity of some of the bullion coins of today. But let’s be fair. These were made to be trade coins, to circulate widely, and not just to sit in some drawer or bank vault as a store of wealth. What makes this very interesting for the one-libra piece is that the gold weight at this fineness is 0.2354 ounces.

If this number looks familiar to you, you have a good eye and memory for gold. This is the same weight in gold that is in a British sovereign.



Great Britain

It has been said many times in the past decades or so that a person can spend a United States dollar today in numerous cities and countries far from home. Such is the power of the currency right now. In the 19th century, and well into the beginning of the 20th, the same held true for that small gold coin, the British sovereign. Issued in one form or another for centuries, by the early 1800s, the British sovereign had been standardized at 0.2354 ounces of gold in a coin that was 7.9881 grams and a 0.917 fineness.

It was coined in mints in Australia, India, South Africa, and of course, London, to name a few places. In other words, it is the same weight, purity, and gold amount as the libra, and was circulating world-wide when the libra first came out of the Lima Mint.

And that’s why we mentioned that the libra was arguably the first of the gold bullion coins – because with these numbers in hand for the sovereign, we can argue that it is not.

Now once again, to be fair, the sovereign was not made to be a bullion coin (although it does function that way now), nor was it made to be a trade coin (but with an empire as large as Britain’s, it seems obvious that it would be used internationally in trade). It was made to be the bedrock of commerce for Great Britain and the British Empire. But look what this unintentional trade coin ended up doing. It spawned an imitator that truly was made to trade, and that ended up being bullion to many.

Finally, in our own time today, when gold purity and fineness are often mentioned right on a bullion coin as part of its legends, Peru’s 0.917 fine libras might seem somewhat outdated and outmoded. But they had a rather prominent place on the world’s markets as the 19th century blossomed into the 20th. They were capable of being traded right up there with the “big dog” of the day, the British sovereign. And importantly for us, they remain a fascinating and under-valued collectible today, at the beginning of the 21st century.



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