A Gold Bounty to Shiver the Timbers

Archive for Saturday, April 10, 1999
A Gold Bounty to Shiver the Timbers

By Michael Luo
April 10, 1999 in print edition B-1

Inside a nondescript building in a nondescript office park in Santa Ana sits a long-lost treasure. More than 1,000 coins, each about the size of a half-dollar but with the heft of pure gold, are being scrutinized by experts in a basement room guarded by three locked doors and a bevy of security officers.

The booty comes from the Brother Jonathan, a Gold Rush-era paddle wheel boat that sank a few miles off Crescent City in 1865. More than 140 passengers perished in one of the costliest shipping disasters in American history.

The ship sat undisturbed until divers from Deep Sea Research began trying to raise its buried treasure in 1993.

Now, after a protracted legal struggle over who has rights to the gold coins, valued conservatively at $5 million to $10 million, the divers–plunderers, to critics–are reaping their reward.

The job of counting treasure may conjure images of one-eyed pirates biting on doubloons, but judging the condition of these coins is purely clinical: Employees of Professional Coin Grading Service in Santa Ana, the largest rare-coin grading service in the world, use magnifying glasses and expert eyes.

They assess a range of factors, including each coin’s brightness and scratches on its face, before assigning a numeric value between 1 and 70. Any grade above 60 is considered mint. The vast majority of the 1,006 pieces left to Deep Sea Research by a federal court have been found to meet this standard despite years spent 250 feet below the ocean’s surface.

“It’s as if you transported yourself back in time, went to a bank and scooped up a bunch of new coins,” said David Bowers, chairman of Bowers and Marena Inc., a New Hampshire-based company that will handle the auctioning of the coins.

Divers recovered 1,207 gold coins from the wreck. Of those, a court awarded 200 to the state of California. Another coin, encrusted in coral, was donated to a museum in Crescent City. The rest were awarded to Deep Sea Research and will be sold at auction May 29 in Los Angeles, an event expected to draw collectors from around the world.

As part of their court settlement, Deep Sea Research divers received permission to return to the wreck to hunt for more gold. They plan to go back in August.

Meanwhile, half a dozen coin graders, sharing a cramped room in the building’s basement, have been examining the Brother Jonathan haul.

They study the coins underneath the glare of bright lamps positioned at each workstation, with reference manuals in hand.

The process of assessing the coins and then sealing them in heavy plastic goes fairly quickly, they said.

“After doing a few million coins, it gets easier over time,” said Rick Montgomery, president of the grading company, who examined each of the coins in the Brother Jonathan haul.

Most of the coin graders were collectors before joining the company. Grading the thousands of coins that come through every year is simply an extension of their hobby, they say.

Even they were stunned by the Brother Jonathan coins.

“These are almost unheard of in this condition and in this quantity,” Montgomery said. “It’s unlike anything we’ve ever seen.”

*

Several hundred of the coins are pristine $20 coins struck in the San Francisco mint in 1865. Previously, only a handful of such coins existed in the world and were worth about $20,000 each.

One of the recovered coins is an 1865 $10 coin that mistakenly had its date punched upside down. The error was recognized and a correction was punched over it. The rare mistake makes it worth somewhere between $50,000 and $100,000.

Their watery grave acted like a time capsule for the coins, perfectly preserving them for collectors. Had the Brother Jonathan not been caught in rough weather and smashed into a hidden rock, the coins would have undoubtedly been spent and, subsequently, lost, Montgomery said.

Gold coins, which were the currency of choice in California during the heady Gold Rush days, were phased out of nationwide use in 1933, when they were called in and melted down.

The coins will now be taken by armored truck and plane to the Bowers and Marena headquarters in Wolfeboro, N.H., for cataloging, before returning to Los Angeles.

A 400-page book on the saga of the ill-fated ship, published by Bowers and Marena, is scheduled to hit bookstores next week.

The auction will serve as vindication for divers who participated in the arduous recovery operation and subsequent court battle, as well as those who supported them. But they don’t expect the profits to make them rich.

“We’ve spent so much time and money through the court system and in the recovery operation,” said Harvey Harrington, director of offshore operations for Deep Sea Research and the man who first saw the coins on the ocean floor four years ago. “There will be enough to go around, but nobody will be millionaires.”

source:
http://articles.latimes.com/1999/apr/10/local/me-25973