The $2 1/2 Gold Indian Shares a rather unique story with it's sibling coin, the $5 gold Indian, which is nearly identical in design, but double the metal content. The story begins with then President Theodore Roosevelt, who took an acute interest in changing the currency coins of the United States to reflect the power, technology, and wealth of his great nation. Roosevelt felt that the current coins lacked the beauty and sophistication that should be present in the mintings of the United States.
Roosevelt had commissioned his sculptor friend Augustus Saint-Gaudens to create a new design for the $20 Double Eagle, and Roosevelt was quite pleased with Saint-Gaudens' work. Had Saint-Gaudens not died of cancer in 1907, chances are that the $2 1/2 coin and $5 coin would probably be similar in design to the $20 Double Eagle design.
In fact, the assumption at the was time was that Saint-Gaudens' work would be adapted to the smaller coins, however, a Congressional act had been passed that mandated that each legal tender coin bare several inscriptions including "United States Of America" and "E Pluribus Unum", and it was expected that new legislation would also require the motto "In God We Trust" . Whether it was opposition from the U.S. Mint (There was dissent between Saint-Gaudens and then Mint Director George E. Roberts) or truly a difficulty in scaling down the design of the $20 Double Eagle or $10 Eagle for use on the $2 1/2 coin, also known as the Quarter-Eagle, eventually a new design was ordered. Since Saint-Gauden's had passed, the assignment of creating a new design was tasked to Bela Lyon Pratt, a protege of Saint-Gaudens, and the Indian Coin was born.
Because the $2.50 denomination was quite useful due to it’s ability to pay for everyday purchases and settle small bills and accounts, many of these coins saw quite a bit of use when in circulation. Because gold coins (even when alloyed with copper for durability) are softer than their silver counterparts, they tended to scratch and dent more easily and these wear and circulation marks effect the collectible value of the coins today.
Nevertheless, keep this is mind when you are deciding which types of gold and silver coins to add to your portfolio; the $2.50 Indian Head gold coin used to have the equivalent value to about two and a half ounces of silver. Even at today’s substantial prices for an old circulated common date silver dollar, you would now need roughly ten of these silver dollars to equal the value contained in a circulated $2.50 Indian Head gold coin. That is to say that the $2.50 Indian Head gold coin has outpaced it’s silver counterparts by at least four-to-one over the years.
In addition, the smaller fractional gold coins such as the $2.50 Indian Head gold coin tend to carry a heavier proportion of their overall value due to their rarity and condition than some of the larger gold and silver coins that were perhaps either less circulated or more likely to survive a century or more unscathed due to low usage. These same Indian Head gold coins in excellent high grade mint conditions and rare / low mintages can bring tens of thousands of dollars on the open market. How is that for appreciation and profit!
The Mint Act of 1792 declared the value of an "Eagle" to be $10 U.S funds, hence the name Quarter-Eagle which is commonly applied to both the $2 1/2 Indian Head design and the $2 1/2 Liberty design. The $2 1/2 Indian was minted from 1908 to 1915, and again from 1925 to 1929, with the 10 year gap in production being attributed to World War 1.
The coin is 90% pure gold and 10% copper in composition, and has a gold content of .12094 Troy ounces. The coin has a reeded edge, much like the George Washington Quarter Dollar we use today, however, the $2 1/2 Indian and it $5 counterpart share a design very unique to American coinage; a recessed or "incuse" design. Rather than the Indian Chief depicted on the coin's front and the standing Bald Eagle gripping arrows in it's talons on the coin's back being of a raised design, these features are recessed into the coin.
Initially the coin was disliked by the public, and it was thought that the recessed design might harbor germs and disease, though today collectors find the design to be not only unique but quite desirable. The relatively low production numbers of this coin, combined with the fact that the low denomination coin was used in day to day financial transactions, has resulted in high market prices as well as profits for those that hold these pieces in good to very good condition, with excellent examples fetching very high premiums over the gold value inherent to this piece of American History.
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