The Amazing History of the Most Notorious U.S. Coin

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... and four more "rock star" pieces from the world's most famous collection of American coins

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What makes a coin valuable? It's not the numbers etched on the metal, it's the story behind the piece. That's why coin collectors -- or numismatics -- stockpile pennies. That's why silver dollars draw lines in museums. That's why $20 coins sell for $7 million. Yes, million.The Money Report

No collection in America has more storied coins than the National Museum of American History. In the gallery below, we've collected five of their most famous pieces, with descriptions inspired from my conversation with curator Dr. Richard Doty. The full history of the notorious 1804 silver dollar (pictured above) continues below:



THE 'MOST NOTORIOUS' COIN

The 1804 silver dollar is one of the most coveted and fascinating American coins in the world -- a jewel of the Smithsonian's collection. But the infamous 1804 silver dollar wasn't struck in 1804. Or 1805. It was struck half a century later under bizarre, controversial and, well, illegal circumstances.

The story begins in 1804, when the U.S. Mint struck 20,000 silver dollars with year-old casts. As a result, the front of the coins read "1803." Due to traders profiting off the sale of Spanish-American Pieces of Eight, the Mint stopped striking these coins. They wouldn't make another silver dollar for thirty years.

In 1834, President Andrew Jackson needed a diplomatic gift for dignitaries across the Pacific. He requested pieces of every coin in US circulation-- "gold, silver or copper" -- to present to the King of Siam and other foreign leaders. To fulfill this order, the U.S. Mint checked its records and saw that silver dollars were struck in 1804. So they made a small batch of silver dollars dated 1804. But since the original 1804 coins had been dated 1803, this meant the date "1804" didn't appear on a silver dollar coin until 1834.

Confused yet? It gets better!

Over the years, this small batch of 1804 silver dollars became renowned among coin collectors. After all, it was already quite a story: The only 1804 silver dollars in existence had been mistakenly struck in 1834 as a gift to Pacific Island kings! So one crafty Mint employee named Theodore Eckfeldt decided he would make himself a fortune by using new Mint dies to strike a fake 1804 coin. Between 1858 and 1860, he secretly and illegally printed the characteristics of a 1804 silver dollar on top of existing coins. Eckfeldt sold these illegal strikes -- known officially as "Class II" 1804 silver dollars -- to a Philadelphia coin store. The US Mint found out, tracked down these "Class II" coins, and destroyed them all. All except one. Today, the only "Class II" 1804 Silver Dollar in the world lives at the Smithsonian.

This coin is the counterfeit of a mistake. It is the illegal replica of a coin that never should have existed in the first place. And it is quite possibly the most famous American coin in the world. Here are big fat picture of the coin, provided by the National Numismatic Collection.


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What makes a coin expensive, anyway? "The biggest thing is demand," says Dr. Richard Doty, a curator at National Numismatic Collection at the National Museum of American History. "You can have a roman coin that is 2,000 years old and unique, but if there is no demand or legend around it, it's nothing, "he said.

In 1909, for Lincoln's 100th birthday, the U.S. Mint made half a million Lincoln pennies designed and by Victor David Brenner, who engraved his initials on the reverse. The government wasn't pleased, and so Brenner was told to leave off the initials on subsequent issues. Still, about half a million pennies with Brenner's initials were released. Coin collectors suddenly realized that the coin would be scarce enough to be valuable and interesting enough to generate high demand. Today it's probably the most popular American one-cent piece ever made.

"A coin has to have notoriety," Doty says. "If you have three collectors and two coins you have a market. If you have three coins and two collectors you don't."

All mages: Courtesy of the Smithsonian
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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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