This week saw reports of the upcoming anniversaries of two of the world’s classic gold bullion coins: the 50th anniversary of the gold Krugerrand, and the 200th anniversary of the gold Sovereign that preceded it. World Mint News Blog decided to take a look at the Sovereign’s storied history, along with a handful of rarities that were produced after it was removed from circulating coinage in 1936.
In 1816, the Liverpool Act (also known as the Coinage Act) made gold the sole standard on which British currency—formerly consisting of both gold and silver—would be based. The Sovereign was valued at 20 shillings (more convenient than the 21-shilling Guinea that had been in use to that point). Silver coinage was still permitted for payments under 40 shillings; otherwise, the United Kingdom had formally declared itself to be on what we now think of as the classical gold standard.
The machine-struck gold Sovereign was a thing of beauty. The reverse design featured St. George slaying the dragon, as depicted by Benedetto Pistrucci. The Sovereign became the dominant trade coin the world over, and played a key role in British colonial affairs.
The circulating gold Sovereign was the signature coin of the classical gold standard. Along with the half Sovereign, it was struck almost continuously from 1817 to 1936, although production was limited mostly to branch mints after the Great War, when the United Kingdom came off the gold standard.
Three interesting rarities of the coin were produced the year after the Sovereign was discontinued. The first is one of several trial coins produced with the effigy of Edward VIII, newly made King of England following the death of his father, George V. Edward insisted that his royal portrait face left on the coinage to show his “better side,” even though tradition dictated it should face right (opposite the direction of the previous monarch’s profile). The pattern coins were struck, but before the circulating coins were produced, Edward famously abdicated his throne to wed the American divorcee Wallis Simpson. The pattern Sovereign with his left-facing portrait is on display at the Royal Mint Experience in Llantrisant, South Wales.
The second rarity was created when Edward’s brother ascended to the throne in Edward’s place, taking the name George VI. In 1937, to celebrate his coronation, the Royal Mint issued a four-coin Proof set consisting of a half Sovereign, Sovereign, double Sovereign, and quintuple Sovereign.
The third rarity is connected to the 1937 Proof set, which, once the sets were struck, faced a marketing problem. Cameras of the era were incapable of recording a clear image of the shining surfaces, and without photos, it was difficult to advertise the coins for sale. The Royal Mint experimented with a special, matte finish, gently sandblasting the reflective surfaces off a few Proof sets so they could be photographed. Only two of these sets are known to exist in private hands; one of these two sold at auction for $147,300 a year ago.
Discontinuation was not the end of the story for the gold Sovereign, which remained in demand outside the United Kingdom. The Treasury estimated that as many as 300 million were still circulating worldwide. In the early 1950s, rampant counterfeiting of the sovereign in Syria and other locations was discovered. One might think this was no concern for the British government, which no longer produced the coins, but it was—very much so. The Treasury’s official position was that the fakes tarnished the prestige of the Royal Mint. According to former Royal Mint assay master Robert Matthews, however, the real problem wasn’t revealed until later years: the counterfeit sovereigns hampered the government’s ability to use the currency in its “semi-clandestine activities in the Middle East.” (Scroll to the bottom for more on this part of the story.) To correct the situation, the Royal Mint began in 1957 to strike millions of new sovereigns; it continued to do so each year through 1968 (excluding 1960 and 1961), and on an irregular schedule afterward until the coin was resumed permanently in 2000.
The increase in supply of genuine bullion sovereigns lowered their value, making it more difficult to strike profitable fakes that contained enough real gold to be plausible. The counterfeiters largely turned their attention elsewhere—in particular, to the widely popular American silver dollar.
For an in-depth article on the subject of counterfeit sovereigns, see Robert Matthews’s excellent article, “The Counterfeiting of the British Sovereign in the Second Half of the Twentieth Century.” Among other things, he relates the following development that arose in 1991, during the first Gulf War: “British Special Forces were issued with packs containing a number of sovereigns to buy assistance from local people behind enemy lines. The Ministry of Defence bought these coins in the Middle East. It is perhaps not surprising that when these were examined after the end of the conflict a number were found to be counterfeit!”