USA Coin Album: The Coins of 1916 - Part 3
Posted on 9/16/2014
As the USA was furnishing Europe with much of its provisions during the war, the amount of gold coming into the country had been growing steadily since 1914. The amount of gold coinage in circulation was determined by the dollar value of gold certificate currency, as the law stipulated that two-thirds of this value be backed in actual coin. Early in 1916 Treasury Secretary William G. McAdoo requested that the ratio be altered to half coin and half bullion to ease the production of gold coins that were “circulating” only on the books. In reality these coins were not wanted in daily commerce and were simply piling up in vaults. Congress not only altered the ratio, it reduced it to just one third gold coin, and this meant that existing stocks were adequate to meet legal requirements until 1920 before mass production resumed.
The quarter eagle was a coin that typically had no role in ordinary commerce, and predictable numbers were coined mostly near the end of each year simply to meet the demand for holiday gifts and other special presentations. These coins were either preserved as mementos or quickly returned to banks in deposits. Since the presenters always wanted new coins, the quarter eagle’s useful role had effectively ended after this single cycle was completed. By the time that 1916’s gift giving season came around the minting of gold had all but ceased, and this charming tradition was suspended until 1925. Thus, there would be no 1916 quarter eagles.
The half eagle, in contrast, did enjoy some actual circulating demand, though this was restricted to the western states where paper money was still viewed with some suspicion. The San Francisco Mint alone turned out 240,000 Indian Head half eagles in 1916, but this would be the last production of this denomination until 1929. The suspension of gold coinage during 1916 had the unanticipated effect of changing western minds, and paper money was finally accepted as a suitable currency. One writer noted that it was during America’s participation in World War I (1917-18) that western banks finally began to install barred teller cages, as it was thought that a wad of paper was more liable to being snatched than a stack of gold coins!
The 1916-S half eagle is common in the lower grades of Mint State from hoards that were dispersed during the 1970s and ‘80s. These coins were repatriated from Latin America and Europe, where faith in paper money had never been strong. Gems are fairly elusive, as the coins had been moved about many times, receiving numerous marks and abrasions. Because the mintmark is the only raised feature on this distinctive coin type, it was particularly subject to abrasion and is often found very weak.
The Indian Head eagle was likewise coined only at San Francisco during 1916, some 138,500 pieces being struck in the early part of the year to meet western demand. The utility of the ten-dollar coin was not as great as that of the half eagle. Few of these were to be seen in daily commerce, but banks still liked them as hard money reserves. The majority of surviving 1916-S eagles were also retrieved from overseas hoards, and these coins suffered the same fate of being heavily bag-marked and abraded. Examples grading higher than MS-62 are scarce, while those grading MS-65 are very rare. Keen-eyed collectors should be on the lookout for a nice repunched mintmark variety.
In the 20th Century the double eagle was always the most important of United States gold coins, and its mintage during 1916 was significantly higher than for the other denominations. Nearly 800,000 1916-S twenties were produced, but these too were mostly bagged and forgotten in vaults. A large percentage was lost to the melting pot during 1936-37 when the coins retrieved from Americans under President Roosevelt’s executive order of a few years earlier were finally rendered into bars that were shipped to the Fort Knox Bullion Depository. The coins which have survived were mostly recovered from European and Latin American sources starting in the 1950s. The sheer number of surviving pieces is sufficient that gems are only moderately scarce.
The final entry in America’s coinage for 1916 is, of all things, a gold dollar. This denomination was discontinued by law in 1890, yet it was revived for a series of commemorative coins beginning in 1903. The 1916-17 issue intended to raise funds for the building of a memorial to slain President William McKinley proved to be its penultimate appearance, and sales for both dates were mediocre. Much the same may be said for the coin’s design. Charles Barber’s disappointing portrait of McKinley was his last work, executed during the final year of his long life. George Morgan’s elevation view of the memorial structure was crudely engraved and rather inaccurate, though he may have been supplied with faulty renderings by the memorial committee.
David W. Lange's column, “USA Coin Album,” appears monthly in the Numismatist, the official publication of the American Numismatic Association.