The King Farouk 1933 double eagle

Interestingly enough when the Treasury department tried to seize the King Farouk double eagle, the argument made that it should be legal to own was that Farouk had declared it on his customs form when he wanted to take it to Egypt, and the customs agent, a US government employee, signed it, suggesting that the US government endorsed that coin as legal to own.

The treasury department didn't want to set a precedent if they lost in court (and there was a very good chance they would have), so they settled, basically saying they could auction the coin, the treasury department keeps half the proceeds of the auction, and then the owner pays the treasury department $20 and they declare it officially monetized and legal to privately own. They wanted to retain the status as being the only authority that could declare US coins monetized and legal to privately own.

Side note, the treasury's stance on the 1913 Liberty head nickels is that since there's no official record of them being authorized to be produced, they're not truly US coins as far as they're concerned so they don't have the authority to declare them legal or illegal to own. (Essentially their official position is they have no official position.)

I wonder what would happen if anyone found a 1964 peace dollar in their basement. It's known some were made, and they were all supposed to be destroyed... but all of the 1933 double eagles were supposed to be destroyed too. Maybe someone's hiding one until they can come up with a good legal argument as to why they should be legally able to keep it.

 

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The grade on the piece should match the grade it actually is. Using the logic that the finest known or the only one known should be given an out of bounds grade is ridiculous. There are Sheldon varieties of large cents where the best one is VG with problems or something even lower. Are those pieces now “MS-65” because of their rarity and condition status? Of course not.

This brings up another game the grading services and even CAC play. To get a famous rarity into their plastic, they up the grade, even though it’s a clear example of over grading. The coins in the King of Siam Proof set were an example of this. I think the coins started out PR-64s. Now they are PR-66. Either the coins got better over time, or marketing dictated that they got better.

 

Don't disagree, but market grading is a thing whether we like it or not. I don't think it should be, but the TPGs didn't ask for my opinion.

 

The argument that US Customs could monetize a coin seems pretty lame. I suppose it was murky enough and they were getting half the money, so good enough for government work.

I would contend that there was nothing clandestine about them, they were struck at the same time as the Buffalo patterns, in the same press with the same collar. All 8 of them were once in the same coin holder. I'm sure there are arguments against that, but coin dealers love a good mystery

 

It's not so much they were arguing Customs could monetize a coin. Their argument was: King Farouk was basically asking permission to take the coin out of the country, and a US government official signed the declaration form without raising any objections, effectively giving him permission to do so, which in effect was the US government saying it was legal for a private individual to won the coin. Would that argument have convinced a jury? It might have... and the US Treasury department didn't want to take that chance, because of the precedent it would have set, so they chose to settle out of court as a compromise.

As to the 1913 Liberty Head nickels (note there's only 5, not 8, known to exist): It was pretty clear whoever minted them wasn't officially directed to do so, and while I can't prove what their motives were, I highly doubt they were entirely innocent; there's no way they thought that what they were doing was legal. Nobody who had the access necessary to do that would have reasonably believed that. But well, no proof as to who did it exactly, and obviously the statue of limitations has long since expired lol (that and the culprit is likely no longer alive). But Treasury just chooses to not acknowledge them as official issues of the US Mint, and thus they take no official stance about the legality of owning them. (And whatever is not illegal, is legal.)

Who did it and why can really only be guessed at, and may never be conclusively proven (though there are a few strong suspects).

 

I was referring to the 5 Liberty plus 3 Buffalo patterns. The case the 5 Liberties were originally in had 8 holes and at least two of the holes had the Buffalo patterns in them. I'll have to dig around for the article with images. I'm curious what evidence there is that whoever made them was not directed to do so. Absence of evidence that they were directed to coin them doesn't mean that they weren't - mint records are hit and miss. Like the girl spending two 1894-S dimes on ice cream, when there's a void in hard evidence coin collectors tend to make up a good story. Subject for a different thread though.

 

Well-said, Troo.

 

The piece was not monetized when it went to Egypt. It been forgotten by most, but when the coin was sold at auction the first time, the buyer had to pay an extra 20 bucks to the government to monetize it.

 

Sorry, that would have been the deal breaker. No way would I have allowed them to extort that $20 from me.

 

You can't really prove a negative. It is known they weren't supposed to exist... it was already known that they would switch to the new design in 1913. There's really no logical reason anyone would have been told to mint 5 and only 5 of what was already known to be the outgoing design. Also, the 3 on the 1913 Liberty nickels do not match the 3's on any other US coin, so it was definitely hand engraved. If it was an authorized issue that would have been very unlikely.

 

Nobody knows if originally it was only 5. The dies were already made for 1913 Liberty nickels. In fact, they shipped 10 pairs to San Francisco on 11/12/1912.
February 24, 1913 - "Now that the new design five-cent nickel piece has been approved, would it not be well to destroy the dies and hubs of the 1912 design. The engraver has on hand a lot of working dies made for this mint and those sent to San Francisco and returned."
So the 3 was not hand engraved. They had already made Liberty head dies for both SF and Philly, and those dies existed from Nov 1912 until at least Feb 24, 1913. You may be referring to the 1913 pattern Buffaloes, which had both a rounded 3 and a flat 3?
Production of the new nickels was delayed by the Hobbs Manufacturing Company, who complained that they would mess up Hobbs' counterfeit detection mechanism. My notes have the key piece to my assertion - "January 7, 1913 - Experimental pieces of new Buffalo design struck. Fraser (sculptor) "later wrote that he remembered several of the workmen commenting that the new piece struck more easily than the old.""
The mint was attempting to prove that the new nickels were fine, as related to the complaints of this Hobbs person. The implication of this quote (to me) is that they were striking both the Liberty and the Buffalo nickels side by side as an experiment. There is a raised fin on all of the 5 1913 Liberties (reverse) and 3 of the J1950 Buffalo patterns (obverse) that leads me to believe that they were all struck in the same collar and press as an experiment.
I don't pretend to know more than the "experts" on this, but when I see a perpetuated theory about clandestine whatever in the coin world, I tend to be skeptical. The mint didn't record everything they did. They were under a lot of pressure to get the new nickels minted. This "connected" Hobbs guy was screwing everything up. This went on into February 1913. Who knows how many times they had to demonstrate that the new nickels were just as good as the old ones by striking them both. Meanwhile, Samuel Brown somehow grabbed the 1913 Liberty nickels, which I believe were legitimately coined as a demonstration, and his suspicious behavior afterwards spawned this whole thing.

 

This gets back to the so-called “chestnut grading system” where the rarer a coin is, the loser the grading standards. That is garbage. An 1877 Indian Cent should be graded using the same standards that are used for an 1879. In the old days, with HONEST dealers, half a “LIBERTY” graded VG. Now it might grade Fine or even VF.

You pay higher prices for better dates. The dealer does not get a double dip with a higher price for the better date AND a lose grading standard to moves up the price more.

Sometimes you will see what looks to be “bargain” prices for coins in some grades. For example, years ago I had a collector who wanted a 1916-D Mercury dime in VF. He figured that VF met that all of the vertical lines on the ax were showing. Today that is not the case. A VF will have about half of them, which is what the old VG used to be. To get all the lines, you have to pay for an EF. The VF price might look low, but in reality you are not getting the “old time” VF. You are getting something less.

 

A few things to consider, the severe friction on the breast, stomach, and knee are all considered cabinet/roll friction. If they were not, the coin would have to be graded AU and not mint state. Ask @GDJMSP, Doug would probably grade this coin no higher than AU55.

The other problem is that the TPGs have always followed the practice of ranking ultra rarities rather than grading them. The coins are graded against each other instead of graded against a standard. If a coin is unique, it doesn't really matter what the assigned grade is on the label. In this case however, it seems dangerous to intentionally overgrade the coin since we know that there are other specimens that may enter the market in the future.

That said, when the obverse friction is ignored, I don't think an MS65 grade is completely out of line. I haven't seen the coin in hand, and my guess is that the luster is better than the photos make it appear.

 

My source for all this is the book "Million Dollar Nickels" which covers the topic extensively. Could they have got some things wrong? Not impossible, but it was very well researched. Still there's always some parts of the story that will forever be in the realm of speculation. But it quotes multiple experts that the "3" on the 1913 Liberty Head nickels does not precisely match the 3 on any other coin, including 1883, 1893, and 1903 Liberty Head nickels.

Is it possible that there was a legitimate reason to mint 5 and only 5 of them in 1913? Yes. Is it likely? I would have to say no. They had plenty of the old nickel to do whatever tests they felt a need to do.

In the absence of evidence either way, the default assumption should be whatever is most likely. And it is much more likely these weren't authorized than that they were. That's what I'm going with unless someone ever discovers firm evidence either way.

 

Yeah, the 9 and the 1s don't "precisely match" either. So the contention is that not only were these struck in a clandestine operation, but they hubbed a die for it in secret too, and then engraved the date? My recollection is that annealing, hubbing, annealing, hubbing, hardening was a multi-day process. All in secret? Why bother? It's well documented that 1913 Liberty Head dies already existed. I guess I'll have to find a copy of Million Dollar Nickels. The notion that they not only coined them in secret, they also made their own 1913 die in secret, seems rather silly when we know for a fact that many 1913 dies already existed, and stayed around at least through Feb 24 1913 when deliveries of the new design began. I try to look at this stuff logically and not through the lens of having a story to perpetuate. At least 17 pattern Buffaloes were struck and were supposed to be destroyed, but nobody squawks about how some of those escaped the mint.

 

Didn't know Farouk owned one of the five 1913 Liberty nickels, lucky duck. I also read in a Numismatic News article that Bruce Sherman owned another one of the five, along with a 1927-D MS65 Double Eagle.

 

I know everyone's going to have their own favorite "best" coin in the world, but for me, the 1913 V Nickel IS the greatest coin there is, unless you want to get into specifics like:
-Best "American non-bullion Coin"
-Best "American Silver/Gold coin"
-Best "Nickel/penny/dime/quarter/half dollar/dollar"
and so forth. Come to think of it: That gives me an idea for a separate post

 

LordM, thank you for posting this story. First time I've heard about it. It's very interesting. Pawn Stars is kind of rehearsed and hokey, but I still enjoy watching it, especially when someone walks in with a rare coin. One of my favorite ones was the guy who came in with the 1888 O Scarface VAM LDS. I think he said he won it in a poker game.

 

I just watched that one and ended up looking up Scarface Morgans on eBay for the lol

 

Pretty sure he didn't own any of the 1913 Liberty head nickels.