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The World’s Most Expensive Gold Coin
(February 26, 2002) Since WWII, it has been illegal to own a 1933 double eagle. But on July 30th, 2002 an example once owned by the King of Egypt will be sold to the highest bidder in a single-item public auction widely expected to fetch $3 million to $8 million. The Treasury Dept. struck 445,500 double eagles in 1933, and has been busy confiscating them since 1944. But this one, they promise, comes with a clear title.
“This storied coin has been the center of international numismatic intrigue for more than 70 years. The Mint has certified the authenticity of this legendary 1933 double eagle. We will officially transfer full, legal ownership of the coin to the highest bidder at this historic sale.” - U.S. Mint Director Henrietta Holsman Fore.

“The story of this coin is one of the great numismatic mysteries of all time whose final chapter will be written with this auction. Currently held at the United States Gold Bullion Depository at Fort Knox, KY., the coin has an intriguing history which includes seizure by the United States government, a five-year trial with a landmark resolution and a possible connection to a royal Egyptian collection dispersed in the 1950s.” - From a joint statement upon the announcement of the awarding of auction rights by David Redden of Sotheby’s and Lawrence R. Stack.

But let’s start at the beginning, back when this coin was struck, in the depths of the Depression. The economies of the US and the world in 1932 were in a shambles - productive activity was slowing every year, unemployment soared to over 20%, and people were looking for answers to the abysmal business conditions. Franklin D. Roosevelt was elected President of the US in November, with a mandate to do something, anything, to snap the country out of the worst economic times seen in living memory.

FDR got busy in a hurry: he closed the banks for a long holiday weekend, weeded out the weakest of them, and took gold coins, which had defined the dollar for since the 1700s, out of circulation and out of reach of US citizens. This was part of an effort to de-value the dollar to $35 per ounce of gold rather than the $20 per ounce of gold that had held for decades previous. On March 6th of 1933, Presidential Order #6260 halted the release of gold coins from the Treasury, thus essentially ending the free coinage of gold into dollars which had been law and practice since 1795.

But gold eagle $10 and double eagle $20 coins had already been struck at the Mint dated 1933. A number of the $10 pieces had already been distributed by the time of the order halting the release of any gold coins, but the status of the 445,500 double eagles dated 1933 is where this story gets interesting.

What is not in dispute is that a number of the 1933 double eagles did get out of the Mint. Not many escaped, perhaps as few as ten coins or so. The question is, how did it happen?

Some have maintained the possibility that they were freely available at the Mint’s cash window for perhaps the three weeks between the time they were struck and before the order of March 6th halted the payout of gold coins. The Treasury often accommodated interested collectors or people who may have requested a newly-struck coin for an occasion such as a birthday. Thus, there may have been public access to the newly-struck 1933 $20 pieces for a short time, which could have led to the perhaps ten or so specimens that have been known over the years.

The Treasury, however, has always contended that these coins were never legally released. The most likely scenario is the one that Walter Breen put forward in his “Encyclopedia of US and Colonial Coins:

“In March 1933, Presidential Order 6260 prevented any further release of gold coins from the mints. Though eagles had been legally issued in January and February from Philadelphia, double eagles were not. Nevertheless, an unknown quantity managed to leave the Mint Bureau, allegedly obtained by clandestine exchange for other double eagles in unissued stocks in the Philadelphia Mint.”

Soon thereafter, examples of 1933 double eagles started to change hands among dealers and collectors, sometimes even appearing in numismatic advertisements. Its rarity was immediately recognized among the small circle of people who bought and sold U.S. gold collector coins, and specimens brought $1000 - $2000 back in the late 1930s.

But in 1944, the Treasury Department took its first action against a 1933 $20 double eagle. Colonel James W. Flanagan’s coin collection was sold at public auction that year, and it included a 1933 double eagle that he had paid $2200 for previously.

Treasury confiscated the coin, asserting that no U.S. double eagles of that date had been legally issued. They also began to inquire of other coin dealers the identities of collectors who had purchased 1933 double eagles in the past. A number of dealers did privately contact their clients, refunded their money, and returned the coins to the Treasury, which presumably had them melted. One collector who had a 1933 double eagle sued the Treasury, only to lose the case as the government’s contention that all 1933s were illegally held (save for the Smithsonian collection specimen) was upheld in the courts.

However, earlier in 1944 the U.S Treasury Department had granted an export license for a 1933 double eagle that the Royal Legation of Egypt wanted to export to Egypt. It was probably an inadvertent slip by the Treasury when they permitted its export, a simple case of the left hand not knowing what the right hand was doing. One arm of the Treasury in charge of licensing gold exports gave the Egyptian Legation permission to export the coin, not knowing that the Treasury’s own Mint had never officially released it.

Why did it go to Egypt? Simply to fill a hole in the coin collection of King Farouk. Farouk was the "Boy King" who took the throne at age sixteen and ruled Egypt from 1936 until he was deposed in 1952, if such an incompetent and corrupt a regime can actually be called 'ruling.' Farouk, a corpulent sybarite and free-spending playboy, went through millions of dollars of the Egyptian treasury on an extravagant lifestyle and the building of numerous collections, notably coins, stamps, and a pornography collection said to be the size of a small municipal library.

In 1954, the new government of Egypt announced the public auction of a coin collection which included many great rarities such as one of the five specimens of 1913 Liberty nickels and, among the 8500 gold coins, the 1933 double eagle which the Treasury released to Egypt in 1944. The U.S. Treasury protested the inclusion of the 1933 $20 in the sale, and the Egyptian government complied by withdrawing the coin, but they did not turn it back over to the U.S. Treasury.

So what happened to it, the only 1933 double eagle to actually have been legally approved for export by the U.S. Treasury?

In all likelihood, it is the very same coin that British coin dealer Stephen Fenton brought into the United States in February of 1996 in hopes of selling it, discreetly and for cash, to a willing American buyer. Unfortunately for Mr. Fenton, the "buyers" were Secret Service agents engaged in a sting operation to recover the 1933 double eagle.

So, some 53 years after discovering their mistake, the Treasury was finally able to recover the coin that they had accidentally allowed out of the country during the FDR administration.

Which would be a very neat ending to the story, except for one thing: Mr. Fenton argued convincingly in pre-trial motions that his coin was in fact the Farouk specimen, the only 1933 double eagle with a legal pedigree - i.e., the Treasury export license granted in 1944. Fenton could trace the coin's lineage through London dealer Andre de Clermont, who, with an Egyptian jeweler, had handled a number of coins and medals traceable back to the Farouk collection. De Clermont documented these dealings, which occurred while he was employed with Spink's in London.

This muddied the case considerably for the Feds. Although the evidence was circumstantial that this was the Farouk specimen, and even if it was, the Treasury's case still had merit in the fact that Mr. Fenton was a bit less than candid when filing his Customs documents when he brought the coin into the U.S.

But finally, the government dropped all criminal charges, settling for a simple forfeiture of the coin. In a Solomonic fashion, a federal court decided that the coin will be publicly auctioned, with the proceeds of the sale to be split even between Stephen Fenton and the U.S. Mint.

This particular specimen of 1933 has now been stipulated in federal court as of January of 2001 to be the only specimen that will be allowed in private hands. Its new owner will receive a "Certificate of Transfer" making this the only publicly tradeable example of the storied 1933 U.S. $20 gold double eagle. Any others that may surface (and there is rumor of at least one other in existence) are still subject to seizure by the Secret Service, with a quick trip to the melting pot their inevitable fate.

So the numismatic world awaits this momentous and unprecedented auction on July 30, 2002, at the offices of Sotheby's at 1334 York Avenue in Manhattan. The coin is currently in storage at Fort Knox.

The auction will be jointly promoted and conducted by Sotheby's and Stacks. It was from Stacks' sale of the Colonel Flanagan collection in 1944 that the first seizure of a 1933 double eagle occurred. And ten years later it was Sotheby's who conducted the Farouk sale in Egypt in 1954.

And then 42 years later this 1933 double eagle turned up in a New York hotel room in a federal sting operation.


Credit is due to Paul Gilkes' informative articles in the February 25th, 2002 edition of Coin World, from which much was cadged without permission asked, David M. Akers book Double Eagles, an Auction Price Record, and the late Walter Breen's magnum opus, the Encyclopedia of U.S. and Colonial Coins


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