Coin experts examining gold find from Louisiana coast

By The Associated Press
via KATC-TV, Lafayette, Louisiana
Tuesday, May 13, 2008

http://www.katc.com/global/story.asp?s=8317513

NEW ORLEANS -- A steamship that sank off the Louisiana coast during an 1846 storm has produced a trove of rare gold coins, including some produced at two, mostly forgotten U.S. mints in the South, coin experts say.

Last year four Louisiana residents salvaged hundreds of gold coins and thousands of silver coins from the wreckage of the SS New York in about 60 feet of water in the Gulf of Mexico, said David Bowers, co-chairman of Stack's Rare Coins in New York.

"Some of these are in uncirculated or mint condition," Bowers said, predicting the best could bring $50,000 to $100,000 each at auction.

Of particular interest to coin experts -- numismatists -- are gold pieces known as quarter eagles and half eagles, which carried face values of $2.50 and $5, respectively, in the days before the United States printed paper currency.

Those coins were struck at mints in New Orleans; Charlotte, N.C.; and Dahlonega, Ga. The Charlotte and Dahlonega mints operated from 1838, when the first significant U.S. gold deposits were found in those areas, until the start of the Civil War in 1861, said Douglas Mudd, curator of the American Numismatic Association's Money Museum in Denver. Neither mint ever reopened.

The Dahlonega mint produced 1.38 million gold coins, while another 1.2 million were minted in Charlotte. That was only of the fraction of the tens of millions of gold coins minted in the United States before the federal government confiscated gold coins held by individuals, banks and the U.S. Treasury in 1933 and melted them into gold bars as the country abandoned the gold standard.

The treasure also includes $10 gold pieces, known as eagles, that were minted in Philadelphia and New Orleans, Mudd said.

"Relatively speaking, they are rare," Mudd said of the Charlotte- and Dahlonega-minted coins. "The mints were set up to take advantage of the resources there."

The New York was a 165-foot sidewheel steamer built in its namesake city in 1837. By 1846 it was making regular commercial runs between Galveston, Texas, and New Orleans. A storm took the ship to the bottom, killing 17 of the 53 people aboard. The other 36 were rescued.

A group of four hobbyists, who enjoyed looking for sunken vessels in the Gulf, discovered what was left of the SS New York around 1990. After several trips in the ensuing years and bringing up a handful of coins at a time from the mud that virtually covered the ship, the four invested in a full-scale salvage operation in 2007.

"What we've found is varied, a little of everything," said one of the four, Craig DeRouen, who is on a leave from his normal job as a mechanical engineer in the oil industry. "There are different denominations from different years, silver and gold."

DeRouen, along with fellow New Iberia, La., residents Avery Munson and Gary and Renee Hebert, have ownership of the coins after obtaining title to the wreck from a federal court.

Mudd said that although the coins are worth much more now because of current gold prices around $900 an ounce, that's only a fraction of their value.

"The collector value may be three, five, eight thousand dollars more, depending upon their condition," Mudd said. "It depends upon the individual piece and its individual rarity."

John Albanese, a rare coin dealer in Far Hills, N.J., since 1978, appraised about 200 of the gold coins. "This is the most impressive Southern-minted gold I've seen in my lifetime," he said.

Mudd said $100,000 for one coin likely would involve an exceptional piece, but a range of $8,000 to $16,000 wouldn't be unusual for a coin in high-grade condition.

"Historically, they are interesting. These are the first coins produced by gold from the United States," he said. "The California gold rush didn't occur until about 1850."

Gold resists saltwater corrosion, and mud that had collected on the coins was removed with a chemical compound that does not affect the metal, Bowers said. Meanwhile, the silver coins are etched by the sea water, giving them a "shipwreck effect" that is popular with collectors, Bowers said.

* * *

GATA is grateful for financial contributions, which
are federally tax-deductible in the United States.