A United States gold disk that might be something new for some of you
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During the Second World War the open market price of gold bullion skyrocketed well above the official U.S. Government gold price of $35 an ounce. For most of the war Aramco, the consortium of four American oil companies that that had developed the oil reserves in Saudi Arabia had been able to pay their $3 million annual oil royalties to the Saudi government with U.S. paper dollars, but in 1945 the Saudis demanded to be paid in gold.

 

As a service to Aramco, the Philadelphia mint struck 91,120 of these gold disks that the company used to pay the Saudis. Aramco paid for the gold and the cost of striking the disks. These coins did not circulate very much in Saudi Arabia, but they did show up from time for such uses a poker chips and were occasionally traded for official Saudi coinage of the realm. Many of them were melted in 1951 when the Saudis began to strike their own gold coinage. Other pieces were shipped to Bombay, India when they were melted and converted into bars. The final blow came when Swiss and Lebanese counterfeiters began to issue short weight copies of these pieces. That illegal activity effectively ended their commercial usefulness.

 

Today these unusual products of the United States mint are said to be scarce. To date NGC has graded 183 of these pieces. Ten have been graded MS-62, and one has been graded MS-63. Oddly enough none have been graded any higher. This is one of the pieces that NGC graded as an MS-62.

 

1945-5SaudiGoldsovO.jpg1945-6SaudiGoldsovR.jpg

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6,129 posts

Wow that is wicked cool Bill! I have never heard about these before. What are they worth today?

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High grade AUs have been selling on eBay for numbers in the $2,400 neighborhood. Lower grade examples sell for close to $2,000. Since this one is a Mint State piece, I paid a bit more. These pieces contain a little less than one ounce of pure gold.

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It looks like a smaller version was also made.

 

Yes the mint made 121,364 smaller pieces in 1947. I saw one them some years ago. The large ones weigh 493.1 grains while the small ones weight 123.27 grains.

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3,518 posts

Not into gold .. but i have a hankering for one of these .. sweet (thumbs u

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Prices seem to be way down on these. I thought these used to run around $4K. And that was when gold was much lower. For rarity/history compared to price and metal value these are a real bargain right now.

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Maybe a few updates are in order on this interesting subject.

 

1) The large pieces were equal to 4 sovereigns, the small pieces were 1 sovereign. The 4 sovereign pieces have been widely counterfeited and most on the current market that have not been certified are likely fake.

 

2) The gold pieces had nothing to do with Aramco. Local oil company employees were always paid in silver, never gold.

 

3) Casoc/Aramco oil concession payments to the Royal Saudi government were always in sovereigns Paper money or bank credits were never accepted until the mid-1950s.

 

4) The gold discs, and 5-oz gold bars made previously by the NY Assay Office, were a form of financial aid to the Saudis. A sovereign was valued at approximately $8.24 with gold at $35 per Troy ounce. The Saudi Government could sell them at $12-$14 each through the Banque de L’Indo-Chine, or at $14-$18 each in riyal exchange. But the Saudi Government could make a larger profit on sale of US gold discs for silver riyals than on sale of real sovereigns, even though the specifications were identical. In effect, the Saudi government doubled their money by reselling the US gold discs. Further profit was had by manipulating the exchange rate for silver riyals vs gold on the local market.

 

There is a 15-page section plus and Appendix of “Documents Relating to Saudi Arabian Coinage” in the forthcoming book, National Gold.

 

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14,311 posts

Very interesting! Thanks for posting it, Bill, and thanks for the added info, Roger.

 

Chris

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PS: There are two versions of the 4 sovereign discs - the differences are slight but I presume the authentication companies are familiar with both.

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Thanks for posting. Was there something similar to this in the 1970's or am I thinking of something else?

 

Happy 4th.

 

 

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11,432 posts

When I read the title, I knew what you would share and was really pleased to be reading about these. There was one for sale at the last Baltimore show that I noticed when walking the floor.

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Very interesting history. I am totally intrigued with the manipulations regarding the price of gold vs. the price of silver. Appears to be the value this particular issue came under the influence of quite a bit of political pressure.

 

Grading, other than authentication would seem to be inconsequential.

 

Carl

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These disks are the equivalent of four British sovereigns. The smaller ones are equivalent to one sovereign.

 

Does anybody know why they did a four sovereign piece rather than a five sovereigns? No bit deal, just curious.

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James,

Don't fret about the catalog description. The research has not been published as yet, and it appears I'm the only one who has ever accessed the archive files.

 

Capt.,

The Saudi's wanted a disc similar to the US double eagle but made to British standards.

 

One sovereign disc description:

 

On October 10, 1946 engraver Sinnock described the gold discs:

 

For the REVERSE:

Three panels of inscription – the top to carry the words “NET WEIGHT”; the panel below “113.00163 GR.” and at the bottom the “FINENESS 916-2/3”.

 

For the OBVSERSE:

Use the same master die and hub as those used for the gold discs made for Saudi Arabia in 1945. This would mean simply that the disc would have less plain field around the seal than the former one.

 

As you can see, the final inscription was different. $1 million worth were struck in early January 1947.

 

Grading - The eagle side is poorly detailed because Sinnock used one of the bar punches. The denomination side was determined by conversations between the Saudi representative and the mint. (Primarily Hajib Salha, personal representative of King Abd Al Aziz.) The amount of surface abrasion and number and severity of scrapes and scratches determine grade.

 

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PS:

 

Total production has never been explained.

 

$3 million = 91,022.2163 4-sovereign discs

But, Treasury reported 91,120,

Director Ross reported 91,210,

Phil production reported 91,272.

 

It is possible that the State Department had the excess pieces made to reimburse Saudi Arabia for loss in fabrication, production cost of approximately $3,240/$1 million, and other expenses. This was, after all, an attempt to aid the King’s finances.

 

The gold came from melted sovereigns.

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I wonder if these have a big following or just more obscure? I think billjones is the only member here or ATS that has posted that they own one....

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They are a product of the US Mint, but clearly not made as or intended to be coins. The US also made riyals and fractions, as did London and Bombay.

 

Negative comments by Leland Howard and his gold office buddies discouraged any of these coming back to the US or being parts of collections.

 

I think they fit someplace near the territorial coins and assay bars, or ...??

 

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I wonder if these have a big following or just more obscure? I think billjones is the only member here or ATS that has posted that they own one....

 

This is an obscure item, and I am odd. :insane:

 

I have been looking at these things off and on for last 20 years. I first heard of them back in the 1970s when I belonged to the New Jersey Numismatic Society. One night a member asked if anyone knew about "the American sovereign," and only one other collector among 20 or so advanced collectors did know. After that I've seen a few of them offered at coin shops, but I was not a buyer at the time. Given the counterfeit problems it was probably just as well. Of course it was not legal for Americans to own these coins until the restrictions on gold ownership were lifted in 1974.

 

I know this thing is kind of crazy, but since I'm not a "date and mint" collector, I went for it as something unusual and different. And now that more of the story behind this piece is becoming available to me (Thanks RWB!) it has even more interest for me.

 

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I like the things too...and the added background really makes the truth sound like fiction. A backstory to this was FDRs visit with King Abd Al Aziz in 1945 and his gift of a wheelchair to the Saudi ruler. This formed a relationship that continues to the present day.

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