1944: US Secret Service seized all robbed 1933 double Eagle.

The United States Secret Service initiated its inquiry into this issue as soon as the government became aware of a 1933 Double Eagle being offered at a public auction in 1944. The United States successfully reclaimed all the 1933 Double Eagles it could locate, even including one coin that had unintentionally received permission for export to King Farouk in Egypt in 1944. This particular coin was repatriated to the United States by a London coin dealer in 1996. Subsequently, it was sold at auction for $7.6 million, with the government and the coin dealer sharing the proceeds.

The decision to change their stance was, in part, triggered by an advertisement featured in the February 1944 edition of The Numismatist, the official publication of the American Numismatic Association (ANA). In this advertisement, Stack’s, a rare coin firm based in New York City, showcased the collection of Col. James W. Flanagan, which notably included an “Excessively rare 1933 double eagle.”

Joseph & Morton Stack under Secret Service Investigation.

While this offering by Stack’s was not the first instance of a 1933 double eagle being advertised, as a February 1941 issue of The Numismatist had an advertisement from the Chicago coin firm of Smith & Son, promoting a 1933 double eagle, which was described as “only three pieces known at the present time.” It is believed that the 1941 offering went unnoticed by the U.S. Secret Service.

However, on March 24, 1944, the U.S. Secret Service proceeded to take action by confiscating the 1933 double eagle that was being offered in the Flanagan auction. They classified it as stolen property and referenced the records held by the Mint, which indicated that no 1933 double eagles had ever been officially released for circulation.

In March 1944, a pivotal moment in the unfolding case involving the 1933 Double Eagle coin took place, driven by Leland Howard’s call to Frank Wilson, which set the wheels in motion. Frank Wilson excelled at tough assignments and was a renowned investigator. Early in his career, he played a crucial role in bringing down Al Capone while working for the Internal Revenue Service. This later proved beneficial when FDR needed a bulletproof car post-Pearl Harbor. Wilson’s meticulous work also included spending a night at J. P. Morgan & Company, recording ransom serial numbers in the Charles Lindbergh case, which led to Bruno Hauptman’s conviction and execution. Journalist Adela Rogers described Wilson as a slow-moving, round-faced man with a distinctive smile. The Secret Service Chief decided to transfer the case to its New York unit, where it landed in the capable hands of Special Agent Harry W. Strang, who would serve as the lead investigator.

The investigation began in earnest, with the initial interviews conducted on the very first day. To their surprise, the individuals questioned were highly cooperative, and events began to rapidly unfold. On a crisp Friday morning, March 24, 1944, Agent Strang, a robust man with a pleasant, ruddy face, along with Secret Service Custodian James Haley from the Washington D.C. office, met with Ernest Kehr in his office. Kehr, a newspaperman, disclosed critical information about an upcoming auction at “Stack Bros., Numismatists,” providing the address as 12 West 46th Street.

This day marked the second day of the Flanagan sale, and anticipation was building as the 1933 Double Eagle was scheduled to go under the hammer. Upon their arrival at the Stack offices, it is likely that Joseph and Morton Stack were engrossed in reviewing bids for the upcoming auction session at their partner’s desk.

The Secret Service agents wasted no time and promptly identified themselves, getting to the heart of the matter. They asserted that Colonel Flanagan’s 1933 Double Eagle was stolen property, having been pilfered from the United States Mint. Investigations initiated by the United States Mint had previously confirmed that no 1933 Double Eagles were ever released for public circulation. Agent Strang decisively informed James A. Stack that he was seizing the coin.

As the interview continued, a multitude of leads began to unfold, but two were particularly significant. Firstly, the question of who Colonel Flanagan had purchased the Flanagan’s 1933 Double Eagle from was crucial. Secondly, there was the matter of the portion of the auction catalogue that suggested, “…we know that 8 to ten of the pieces were sold privately….” In response to the first question, the Stacks presented a letter received the previous week from B. Max Mehl, which corrected their catalogue description. The letter clarified that Colonel Flanagan had acquired the gold coin from B. Max Mehl for $1,250.00, and not the $2,200.00 stated in the catalogue. Addressing the second question, Joseph and Morton Stack, recognizing the gravity of the situation, provided the agents with all the information they had. Special Agent Strang officially seized the Flanagan coin and issued a receipt at 2:00 PM. Alongside James Haley, he proceeded to the office of Max Berenstein, whose name the Stacks had just divulged as part of their cooperative effort in unraveling the mystery surrounding the 1933 Double Eagle coin. (Flanagan’s 1933 Double Eagle was melted down in August 1956.)

Secret service pay a visit to Max Berenstein.

On a brisk March afternoon in 1944, Secret Service Special Agents Harry Strang and James Haley left Stack’s establishment holding a receipt for the Flanagan coin, the time precisely 2:00 PM. Their destination was Max Berenstein’s jewelry shop, conveniently situated at 435 Madison Ave. The Stacks had just divulged their prized possession, the Flanagan coin, along with a crucial lead regarding the elusive 1933 double eagles. Max Berenstein was said to be in possession of one of these rare coins.

Agent Strang: Knocks on Max Berenstein’s door, which slowly creaks open. Max Berenstein appears at the entrance with a guarded expression.

Berenstein: (Eying the agents warily) Can I help you gentlemen?

Agent Haley: (Flashing his badge) Good afternoon, Mr. Berenstein. We’re Special Agents Strang and Haley from the Secret Service. We have some questions regarding a certain 1933 double eagle coin.

Berenstein: (Brows furrowing) The 1933 double eagle, you say? What’s this all about?

Agent Strang: (With a reassuring tone) We’re investigating the history of this coin, Mr. Berenstein. We’ve been told it passed through your hands.

Berenstein: (Reluctantly) Well, yes, I did have such a coin once. What do you want to know?

Agent Haley: (Politely) We’re interested in how you came to possess it, Mr. Berenstein. We’ve heard you acquired it from James G. Macallister. Can you tell us more about that transaction?

Berenstein confirmed this tip and informed the authorities that he had acquired the coin from James G. Macallister. During an interview with the Secret Service, Macallister revealed his involvement in the acquisition of five 1933 double eagles from Israel Switt, a gold dealer in early 1937. The first of these acquisitions took place on February 15, 1937, for a hefty sum of $500. This price may have seemed exorbitant for a modern coin, but the value of the 1933 double eagle was well known, especially since Switt had managed to obtain them in limited quantities. It was, indeed, the first 1933 double eagle that Macallister had ever seen.

The coin Macallister purchased on February 15th eventually became the property of Berenstein, who paid a staggering $1,600 for it just two days later, sealing the deal on February 17, 1937. Subsequently, Macallister returned to Switt and secured a second 1933 double eagle for $500 on February 21. In total, he confessed to purchasing five such coins from Switt before ceasing his acquisitions, suspecting that Switt may have more coins in his possession than he initially let on.

Further investigation, led by the writer David Tripp and published in Illegal Tender (2004), revealed that Berenstein had additional dealings with 1933 double eagles. He admitted to keeping one for himself and purchasing another from a New York collector named Taylor, subsequently selling it to R. H. Smith of Chicago. Smith, operating through his firm Smith & Son, listed the coin in a February 1941 ad in The Numismatist. According to Berenstein, Smith eventually sold the coin to Philadelphia dealer Ira Reed.

In gratitude for Berenstein’s cooperation, the federal agents confiscated the coin. The following day, Strang and Haley met with Berenstein once again, receiving more valuable information. Berenstein shared that owners of 1933 double eagles—F.C.C. Boyd, Ira Reed, and J.F. “Jake” Bell—were likely to be present at the upcoming Stack’s auction. He also mentioned that New York dealer Abe Kosoff had sold another of these coins to collector T. James Clarke of Jamestown, New York.

The agents then returned to Stack’s, continuing their investigation into the tangled web of the 1933 double eagles’ history. (Berenstein 1933 Double Eagle coin was also melted down in August 1956.)

The ensuing investigation revealed the existence of nine more 1933 double eagles from a common source, all of which were either seized by authorities or voluntarily surrendered.

From March 23-25, 1944, Stack’s conducted an auction of the Col. James W. Flanagan Collection, including the 1933 Double Eagle (lot 1681).
On March 24, 1944, Secret Service Agents Jack Haley and Harry W. Strang seized a 1933 Double Eagle (#1) from Stack’s. On the same day, Secret Service agents Haley and Strang also confiscated a second 1933 Double Eagle (#2) from coin dealer Max Berenstein.
March 25, 1944, marked the day when Agents Haley and Strang interviewed Messrs. J.F. Bell, F.C.C. Boyd, and Ira Reed in New York City; J.F. Bell promptly surrendered a 1933 Double Eagle (#3) to the special agents.
On March 29, 1944, in Philadelphia, Secret Service Agents conducted follow-up interviews with Ira Reed and James Macallister. Macallister informed the agents that he had purchased five 1933 Double Eagles from Israel Switt, a gold dealer with a history of violations of the 1934 Gold Reserve Act.
March 30, 1944, was when Leland Howard, Acting Director of the United States Mint, sent a memo to the Chief of the United States Secret Service, recounting the events leading to the granting of the Export License to King Farouk. He explained the Mint’s awareness of the illicit removal of 1933 Double Eagles from the Mint, a realization that only came after the export license had been issued.
On April 6, 1944, the Chief of the United States Secret Service received written confirmation from the Treasury Department stating that their records “do not show that any payments of 1933 Double Eagles were authorized to be made by the United States Mint, Philadelphia, to any Federal Reserve Bank or Branch.”

October 10, 1944, witnessed the Secret Service interviewing the chief suspect, former Mint Cashier George McCann.
On February 6, 1945, a communication stated, “Re: Israel Switt et al…prosecution for the alleged offense has been barred by the Statute of Limitations.” – United States Attorney Gerald A. Gleeson.
June 18, 1945, F.C.C. Boyd surrendered a 1933 Double Eagle to Special Agent Strang (#4).
On June 19, 1945, the Secret Service seized a 1933 Double Eagle from T. James Clarke through his attorney (#5).
Finally, on June 20, 1945, the Secret Service confiscated a 1933 Double Eagle from James A. Stack (#6), and Charles M. Williams surrendered his example to the Secret Service (#7).”

A tenth specimen surfaced in 1952, within the collection of Lewis Eliasberg, Sr., a prominent American collector. the Secret Service investigation determined that all of the recovered pieces were traced back through the Secret Service investigation to Israel Switt, a Philadelphia merchant.

Some collectors try to fight back the Goverments.

Despite the efforts of three collectors who chose to challenge the government’s claim of ownership, they were unsuccessful in their attempts.

Most important case is L.G. Barnard, a collector from Memphis, stood firm against cooperation. He received a summons from the United States government in August, sparking a legal battle as they sued him to reclaim the coin. Refusing to yield, Barnard placed the disputed coin in the care of the federal court clerk, defending his ownership vigorously. Despite his efforts, the court ruled against Barnard in August 1947, declaring his possession of the 1933 Double Eagle as wrongful. Similar to Stack’s predicament, Barnard fought the government’s attempt to reclaim his 1933 $20 coin, but unlike Stack, he couldn’t substantiate its bank origins to bolster their collective case. Sadly, Barnard’s unsuccessful battle concluded in 1947, while Stack persisted in his pursuit. The legal saga of U.S. v. Barnard, documented in volume 72 of the Federal Supplement on page 531 (Western District of Tenn., 1947), highlighted Barnard’s claim that the coin was lawfully minted U.S. currency, complete and transferable, asserting his superior right, title, and interest against the government’s claim.

Annex : Civ. No. 898.

Civ. No. 898.
July 22, 1947.
John Brown, Asst. U.S. Atty., of Memphis, Tenn., Chas. R. McNeill, Atty. for Treasury Department, of Washington, D.C., for plaintiff.
Frank J. Glankler, of Memphis, Tenn., and Harry J. Stein, of New York City, for defendant.
Action of replevin by the United States of America against L.G. Barnard to recover from defendant a $20 gold piece of the United States.
Judgment for plaintiff in accordance with opinion.
BOYD, District Judge.
This action, in the nature of a replevin, was brought by the United States of America to recover from the defendant a $20 Gold Piece of the United States, commonly called a “Double Eagle”, bearing date of the year 1933.
The coin in question was purchased in the year 1944 for $900, by the defendant, a member of the American Numismatic Association, from one Bell, who was also a collector of rare and unusual coins.
The plaintiff contends the coin in dispute was lawfully minted by the United States Mint at Philadelphia, but was never lawfully issued or put in circulation as money, and never became currency or legal tender of the United States; that said coin, never having been lawfully issued as money, or currency, was a chattel, or an article of virtu, at the time it left the Mint and thereafter, and the defendant, though a bona fide purchaser, acquired no title in the purchase of same against the United States Government, the rightful owner. Plaintiff alleges the coin was illegally taken from the Mint upon substitution of a like coin of another year.
The defendant denies plaintiff is entitled to have the coin returned to it, asserting that he is a collector of rare and unusual coins and, as such, purchased this one from another collector in good faith, in due course of trade and without knowledge that it had been stolen or surreptitiously taken from the Mint if it had, in fact, been so stolen, or taken. He claims the coin in controversy was lawfully minted as United States money, or currency, was issued as such, and is not a chattel, or an article of virtu; further, that regardless of the manner in which the coin left the Philadelphia Mint, it was complete on its face, negotiable and transferable by delivery, and his right, title and interest in same is superior to any claim or title of the plaintiff.
On these issues the decisive question, in the Court’s opinion, is whether the coin in dispute, after having been minted, was issued as money or currency of the United States, or whether the status of the same was that of a chattel, or an article of virtu.
The proof is that the United States Government minted 445,500 Double Eagle coins at its Philadelphia Mint during the period between March 15, 1933, and May 19, 1933; that such coin could only be issued and circulated legally by the Philadelphia Mint, upon receipt by said Mint of an order from the Treasurer of the United States; that the Mint did not, at any time, receive such an order except one to deliver two of these coins to the Smithsonian Institute. In addition to the two coins sent to the Smithsonian Institute, twenty-nine others were destroyed by testing and by the Assay Commission, leaving 445,469 Double Eagle coins for the year 1933 on hand at the Philadelphia Mint when they were later ordered melted into bullion. The remaining Double Eagle coins were carefully and meticulously weighed before and after they were melted and the weight of same, following the melting process at the Mint, equalled the weight of these coins prior thereto.
Restrictions on all gold became operative in the early part of 1933, when, on March 6, 1933, the President of the United States proclaimed a “Bank Holiday” during which all banks were prohibited from paying out gold coin. On the same date, the Secretary of the Treasury, with Presidential approval, issued instructions to the Director of the Mint and the Treasurer of the United States to make payments in gold coin only under license issued by the Secretary of the Treasury. On April 5, 1933, the President of the United States issued Executive Order No. 6102 requiring the delivery to the United States of all gold coin with the exception of gold coin and gold certificates in an amount not exceeding, in the aggregate, $100, and gold coin having a recognized special value to collectors of rare and unusual coins. The President of the United States, on August 28, 1933, issued Executive Order No. 6260, 12 U.S.C.A. § 95a, which prohibited the issue of gold coin as currency but permitted the acquisition of gold coin having a recognized special value to collectors of rare and unusual coins. The Secretary of the Treasury, on December 28, 1933, issued an order requiring the delivery to the United States of all gold coin other than that of recognized special value to collectors of rare and unusual coins. The Gold Reserve Act, approved January 30, 1934, 48 Stat. 337, prohibited the coinage and payment of gold coin by the United States. Under this Act and the regulations pursuant thereto, gold coin may only be acquired and held when such gold coin is of special recognized value to collectors of rare and unusual coins. These restrictions, generally, are still in full force and effect at this time.
In view of these undisputed facts, it is clear that the gold piece which is the basis of this lawsuit did not leave the Mint as regularly and lawfully issued money, or currency, therefore, the rule under the law merchant that title to money passes with delivery to a person who acquires it in good faith and for a valuable consideration, and which was adopted to insure the ready acceptability of money as currency in normal channels of trade, is not applicable here. Brown v. Perera, Sup., 176 N.Y.S. 215; Land Oberoesterreich v. Gude, 2 Cir., 86 F.2d 621. The coin here involved was not, at any time, money or currency, but was a chattel, or an article of virtu. In re Gay’s Gold, 80 U.S. 358, 20 L.Ed. 606; Moss v. Hancock, 2 Q.B. 3; Brown v. Perera, supra. It is virtually impossible, under the existing laws and careful methods in vogue at the Mint, for gold to be issued or released for circulation. It is a fair inference, from the proof in this case, that the Double Eagle here involved was taken out of the Mint in an unlawful manner; and, further, it is entirely reasonable to say, considering the customs and strict practices at the Mint, that it was abstracted by some one who substituted a similar coin for it before the coins were reduced to bullion. It is the Court’s opinion this coin was abstracted by some one who had in mind that it would have a special value as a rare and unusual coin and that it could be disposed of from that standpoint. Since this gold piece was stolen or, through fraudulent breach of trust, taken from the Philadelphia Mint, the defendant, as the purchaser, took the same subject to the defects in its title and this is true, even though the property was acquired in good fath, for a valuable consideration and without notice of any infirmity of title. He cannot maintain ownership in such property against one who has been deprived of it by theft or other illegal act. This principle of law is so well settled that it is only necessary to cite a few cases. Ventress v. Smith, 10 Pet. 161, 9 L.Ed. 382; Dows v. National Exchange Bank, 91 U.S. 618, 23 L.Ed. 214; In re Ketchum, D.C., 1 F. 815; Parham v. Riley 44 Tenn. 5; Godwin v. Taenzer, 122 Tenn. 101, 119 S.W. 1133; Cowan v. Thompson, 25 Tenn. App. 130, 152 S.W.2d 1036, certiorari denied by Sup.Ct.
It follows that title to the coin in litigation is in the plaintiff, United States of America, and plaintiff is entitled to its restoration.

United States v. Barnard, 72 F. Supp. 531, (W.D. Tenn. 1947)

UPDATE NOV 2023