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SALT LAKE CITY — In 1863, a congressional act signed into law by Abraham Lincoln (later adjusted in 1864) prohibited banks from producing its own currency, which had caused plenty of problems across the country at the time.
While that may seem odd in today’s age (even printed currency may seem outdated to some), it was common practice in an expansion era of the U.S.
Banknotes were commonly used across the country as currency prior to the Civil War. However, not all banknotes were of the same value in other regions of the country and this often led to bank runs and failures (making the notes worthless), according to the Office of the Comptroller of the Currency. The OCC was created under the 1863 National Currency Act.
Instead, a centralized currency was set into place and the process of unifing the country's currency began to take shape.
Among other things, the act put an end to Utah’s creative first forms of currency after the first pioneers arrived and settled in 1847, including some of the more fascinating gold coins in American history.
Great Salt Lake City 'Pure Gold' coins
The first ever minting of gold coins from the famous California gold rush actually occurred in Salt Lake City in December 1848 — days before the first official U.S. mint of California gold in Philadelphia.
How Salt Lake City became the first city to mint coins made from California gold started with the Mormon Battalion, which marched into San Diego during the Mexican-American War.
Some members of the Mormon Battalion ventured north and began working for foreman James Marshall at Sutter’s Mill in Coloma, California. Those battalion members wound up helping Marshall discover gold in January 1848, which eventually sparked the famous California gold rush.
A few months later, those Mormon Battalion workers went on to settle their own mining town called Mormon Island and gold was found there, too. The gold found at Mormon Island made its way to modern-day Utah, where it would go on to be minted.
LDS president Brigham Young, and LDS officials John Taylor and John Kay, designed the dies for the first coins, according to LDS church historians. Twenty-five $10 pieces were made on the first run, while another 21 were made on the second. But likely due to inexperience, there were several hardships during minting process.
“In the manufacturing process … the crucible that was used to melt this raw gold plaster broke and there wasn’t any other,” said Robert Campbell, owner of All About Coins in Salt Lake City.
Campbell is an author and leading expert on Utah’s currency and holds an entire collection of the few remaining gold coins that now are worth thousands of dollars.
The initial design from the December 1848 minting included the words “Pure Gold” and “Holiness to the Lord” on the other side. It also featured a Phrygian cap — much like that of the first coins minted by the U.S. — above the “eye of Jehovah” and clasping hands that signified friendship.
Later, mints from the original $10 coin replaced "Pure Gold" with "S.L.C.P.G." — an abbreviation of Salt Lake City Pure Gold. Coins in 1860 included a lion and a beehive symbol, and the gold came from Colorado, Campbell said.
In all, six separate coin designs were made. The first was the $10 piece minted in 1848 but with 1849 as the printed year. Four of the six coin designs have 1849 printed on them with denominations rising from $2.50, $5, $10 and $20 in value. In 1850, a slight change was made to the $5 piece and the $5 piece was adjusted again in 1860, according to Campbell.
Campbell estimates that roughly 4,000 of the coins were made. The coins were met with controversy at the time, in that they were underweight (Campbell said it is now known most California gold was underweight). Not all gold coins are “pure gold” either, and U.S. minted coins were roughly 90 percent gold and 10 percent copper.
The “Mormon Gold” coins were about 80 percent gold, Campbell said. He said it, again, likely could be attributed to inexperience.
“We think at the time, pioneers and the people of the minting process just didn’t understand that gold — even though it’s found in nature — it’s not pure,” Campbell said. “They didn’t realize that it was alloy … these guys are not assayers, they were just pioneers.”
Campbell said that was no secret in the banking communities, and other banks would often pay out lesser than its Utah face value, which is where the coins often went. The majority of the coins went eastward and paid for supplies that ended up in Utah.
It was out East that many of the coins were destroyed — melted down along with other gold coins by the U.S. mint and used to create new U.S. gold coins.
In 1861, Utah territory governor Alfred Cumming ordered the minting of the coins to stop, according to LDS Church historians. Of the about 4,000 minted, Campbell estimates only a fraction of the coins remain in existence today, which have made them rare and valuable in auctions.
“Probably more than 98 percent of them were melted down,” he said. “Consequentially, the Mormon Gold pieces in all the denominations — there probably aren’t even 500 pieces that survived.”
When pioneers arrived to Utah, a bartering system was set in place. Later on, a system of tokens replaced exact barters, Campbell said.
Prior to the trek, the LDS church had tried using a paper currency known as the Kirtland Safety Society Bank Notes in 1836, but the system failed. Some of those notes, however, began circulating again in 1849.
According to LDS Church historians, the first-ever paper currency in the Salt Lake Valley appeared on Jan. 2, 1849 — weeks after minting of the gold coins began. These were often referred to as “Valley Notes.”
Unlike the Kirtland Notes, the Valley Notes were backed by the gold dust brought back from California. The notes came in issues of $.50, $1, $3 and $5.
In 1858, Deseret Currency Association Notes were printed and backed by livestock after a shortage of gold hit Utah.
In the end, each of the currencies would be banished by the National Currency Act, but its legacy lives on through history.