Archive for July 15th, 2011

July 15, 2011

High-End Civil War; Clark, Gruber & Co.

        Austin Clark and his brother, Milton owned a successful wholesale dry goods business in Leavenworth, Kansas selling commodities such as sugar, tobacco, tea, fish and corn to the local population and to nearby Fort Leavenworth.

In January 1858 the Colorado gold rush brought great demand for goods such as were sold by the Clarks.  That March, the brothers decided to form a banking business partnership with Emanuel Gruber, also of Leavenworth.

Clark, Gruber & Co. prospered from the start.  Heavy trade in gold dust at both the bank and their wholesale operations created a need for a branch bank and mint in Colorado near the source of the gold.  It was not cost effective for the firm to ship gold dust to Philadelphia and wait sometimes up to three months for their funds.

The Clark, Gruber & Co. Bank and Mint opened in Denver, Colorado on July 20, 1860.  By October, the gold coins of Clark, Gruber & Co. had become the principal currency of Colorado.  The coins were well made and of proper weight and fineness.

During 1860 & 1861 Clark, Gruber & Co.  minting Colorado gold into coin. A $2.50, $5.00, $10.00 & $20.00 bearing either the name or image of Pikes Peak Were minted. The coins of 1861have turned out to be the rarest Civil War specimines minted.

In 1862, the firm started to assay the gold into small bars perhaps due to fiscal problems from the Civil War.  This ended minting operations in Colorado until 1906 when the Denver Mint opened for business.

Obverse of 1861 Clark, Gruber & Co. $2-1/2Reverse of 1861 Clark, Gruber & Co. $2-1/2

July 15, 2011

1933 Double Eagle Case Ready To Go To Trial

By Steve Roach-Coin World Staff | July 07, 2011 11:26 a.m.
Article first published in 2011-07-18, 1933 Double Eagle Trial section of Coin World

Click to Enlarge

This example is one of 10 1933 Saint-Gaudens gold double eagles whose disputed ownership is scheduled to decided in a federal jury trial starting July 7.n Images by Thomas Mulvaney courtesy of United States Mint.

The federal trial that should decide whether a family or the government owns 10 1933 Saint-Gaudens gold $20 double eagles will begin July 7 in Philadelphia.

The trial of Langbord v. U.S. Department of the Treasury et al, is scheduled to start at 9 a.m. It is anticipated that the trial will take two weeks. Judge Legrome D. Davis will preside over the case in Room 6A of the U.S. District Court, 601 Market Street in Philadelphia.

The legal dispute over the 10 1933 Saint-Gaudens gold $20 double eagles began in 2003 when Joan Langbord, the daughter of Philadelphia coin dealer Israel Switt, allegedly learned that a family safe deposit box contained the coins. She and her two sons, Roy and David, transferred the coins to the U.S. Mint for authentication in September 2004.

In May 2005, the Mint authenticated the coins but refused to return them or initiate forfeiture proceedings. The Langbords sued the government in December 2006. On July 28, 2009, Judge Davis ordered the government to file a forfeiture action, ruling that the coins were unlawfully seized. The government filed its amended complaint for forfeiture and declaratory judgment against the Langbords and the 10 coins on Nov. 10, 2010.

The government’s case attempts to create a framework for the 10 1933 double eagles as being embezzled or stolen from the Mint and wrongfully retained. The Langbords have argued that there was a window of time where people could legitimately obtain 1933 double eagles from the Mint cashier, and that some pieces may have left the Mint that way.

At the heart of the case is the problem of proving actions alleged to have taken place in the 1930s and 1940s. To this end, both sides have retained three experts each, including numismatic experts David Enders Tripp, who is testifying on behalf of the government, and Roger Burdette, the numismatic expert retained by the Langbords.

A landmark case

The case is important for several reasons. Most obvious is that the coins are extremely valuable. On July 30, 2002, at Sotheby’s in New York, more than 700 people watched as six different bidders fought for eight minutes until the 1933 Saint-Gaudens double eagle allegedly once owned by Egypt’s King Farouk sold for $7.59 million, plus $20 to officially monetize the coin. The buyer of that coin has remained anonymous.

If the Langbord coins are legal to own, the Professional Coin Grading Service Million Dollar Coin Club estimates that they would bring $2.5 to $3.5 million each at auction. Numismatic Guaranty Corp. posted a press release to its website on Nov. 3, 2009, announcing that it had graded the Langbord coins. One was graded Mint State 66, two were MS-65, six were graded MS-64 and a single one received an NGC UNC Details, Improperly Cleaned grade. The press release was removed from the NGC website several days later, adding further mystery.

In a larger sense, any court ruling that would question a collector’s right to own coins not issued as legal tender could jeopardize other legendary U.S. rarities like the 1913 Liberty Head 5-cent coin.

Final filings

While May and June were quiet months for filings, a June 24 order required the Langbord family to provide the court with two copies of its proposed trial exhibits before June 28.

On June 27, the Langbords filed a motion for leave to file a supplemental memorandum to allow the addition of Exhibits 200 to 207 to their exhibit list and prevent the government from offering several of Tripp’s expert appendices as summary charts.

The additional exhibits the Langbords seek to add fall under two categories.

The first includes two exhibits that should have been included in the Langbords’ original list and are not new to the government: Treasury Regulations issued under the Gold Reserve Act in January 1934 and an advertisement from a 1941 issue of The Numismatist for the auction of a 1933 double eagle.

The second category includes six additional documents that the Langbords are trying to introduce in response to exhibits produced by the government during discovery. These include three reports and a memorandum from a 1937 Secret Service investigation related to the Philadelphia Mint and “obsolete and inadequate” Mint record-keeping procedures in the 1930s, a document from April 1933 considering what constitutes “hoarding” and a 1934 memo to the Cashier of the Treasurer’s Office addressing gold and other coins being made available to “fill request[s] for a few pieces of new coins for special purposes.”

Perhaps more interesting are the Langbords’ objections to admitting all or parts of several of David Tripp’s summary charts introduced into evidence by the government.

Among them is Government Exhibit 75-B, titled a “Chronology of Relevant Dates regarding the History of 1933 Double Eagles, Including the 1944-1945 Secret Service Investigation and Reported Involvement of Israel Switt.” The Langbords characterize this chronology as being based on Secret Service reports that should not be admitted at trial. The Langbords also contend that it should not be admitted because it is written as an argument for the government’s position, and selectively characterizes (or as the Langbords argue, mischaracterizes) various presidential proclamations, laws and other directives while leaving out contradictory directives and letters.

In a June 23 e-mail to Coin World, Barry H. Berke, the attorney for the Langbord family, said that he fully expects that jury selection will begin July 7, with opening statements beginning on Friday, July 8 or Monday, July 11, while noting, “It’s always possible that a trial can have an unexpected delay.”

During the five years that this case has been in litigation, the possibility of a settlement has always loomed and could happen the day before trial is scheduled to start. ■

July 15, 2011

Gold Futures Add Over $23 To Close At New Record

Gold Tallies Seven-Session Gain of Nearly $103; Silver Up 7% On Day

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By Myra P. Saefong and Virginia Harrison, MarketWatch

SAN FRANCISCO (MarketWatch) — Gold futures climbed more than $23 an ounce Wednesday to close at a record level as European debt contagion fears and the U.S. Federal Reserve’s hints at further economic stimulus fed investment demand.

“Inflation and deflation have now been slugging it out for over a decade, and physical gold remains an obvious, sensible refuge for private savings caught in the middle,” said Adrian Ash, head of research at Bullionault.com, an online service for gold-bullion trading and ownership.

“A European debt-default, plus QE3 in the States, would make the perfect storm yet again,” he said, referring to the potential for a third U.S. round of quantitative easing.

Gold for August delivery GC1Q -0.12%  added $23.20, or 1.5%, to $1,585.50 an ounce on the Comex division of the New York Mercantile Exchange.

Prices, which marked their highest nominal settlement price, have now tallied a gain of almost $103 during a winning streak that, so far, has spanned seven sessions.

untested means to stimulate growth if conditions deteriorate, including another round of asset purchases, dubbed QE3, Fed Chairman Ben Bernanke said Wednesday in remarks prepared for the House Financial Services Committee. Read more of Bernanke’s remarks.

Bernanke’s comments “hint at inevitable emergency techniques in the face of various treasury-auction situations and credit-rating events,” said Richard Hastings, a macro strategist at Global Hunter Securities. So, “the tone is growing darker and gold, of course, is lighting up against this ominous background.”

The gains among the metals were strongest for silver Wednesday, with the September contract SI1U +0.24%  adding $2.52, or 7.1%, to finish at $38.15 an ounce.

Futures prices haven‘t closed above $38 since May 31 and analysts said silver is likely playing catch up with gold’s strength.

Brien Lundin, editor of Gold Newsletter, said Bernanke’s statement, in response to questioning from Congressman Ron Paul, that gold is not money “reveals either intellectual ignorance or arrogance — or both.”

“The rise in gold since [Bernanke] has taken office is a direct result of his accommodative monetary policies, and to confirm or pretend ignorance of this fact shows investors that he’s really not concerned with how high gold may go in reaction to his policies,” Lundin said.