Coin dealers examining gold find off La. coast

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 New York-based Stack's Rare Coins.

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

Of particular interest to coin experts are gold pieces known as quarter eagles and half eagles, which carried face values of $2.50 and $5 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 reopened.

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

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

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

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. Seventeen of the 53 people aboard were killed when the ship sank in the Gulf; the others were rescued.

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

"What we've found is varied, a little of everything," said Craig DeRouen, who is on a leave from his 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 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 today because of current gold prices around $900 an ounce, that's only part of their value.

"The collector value may be three, five, eight thousand dollars more, depending upon their condition," he 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 might be possible for an exceptional coin, and that $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. The silver coins are etched by the seawater, giving them a "shipwreck effect" that is popular with collectors, he said.