Sovereign (British coin)

A Gold Sovereign is a gold coin first issued in 1489 for Henry VII of England and still in production as of 2008.cite web |url=http://www.royalmint.com/RoyalMint/web/site/PackedSets/SV07.asp?orderby=&pg=&thumb=3 |title=2007 Gold Proof Sovereign |publisher=British Royal Mint] While the coin typically had a nominal value of one pound sterling or 20 shillings, the sovereign was primarily an official piece of bullion with no mark of value anywhere on the coin itself.

The name "sovereign" comes from the majestic and impressive size and portraiture of the coin, the earliest of which showed the king facing, seated on a throne, while the reverse shows the Royal coat of arms on a shield surrounded by a Tudor double rose.

History

Original sovereigns were 23 carat (96%) gold and weighed 240 grains or one-half of a troy ounce (15.6 grams). Henry VIII reduced the purity to 22 carats (92%), which eventually became and remains the gold coin standard (so-called crown gold) in both England and the U.S.; the weight of the sovereign was repeatedly lowered until when it was revived after the "Great Recoinage" law of 1816, the gold content was fixed at the present 113 grains (7.322 g), equivalent to 0.2354 Troy ounces cite web |url=http://www.goldsovereigns.co.uk/technicalspecs.html |title=Gold Sovereigns - Technical Specifications |publisher=Chard Gold Sovereigns] .

In addition to the sovereign, the Royal Mint also struck 10 shilling coins Half sovereigns, two pound double sovereigns, and five pound quintuple sovereigns coins. Only the sovereign and the half sovereign were commonly struck for circulation.

Sovereigns were discontinued after 1604, being replaced by Unites, and later by Laurels, and then guineas. Production of sovereigns restarted in 1817, their reverse design being a portrayal of Saint George killing a dragon, engraved by Benedetto Pistrucci. This same design is still in use on British gold sovereigns, although other reverse designs have also been used during the reigns of William IV, Victoria, George IV, and Elizabeth II.

In Victorian times it was the practice of the Bank of England to remove worn sovereigns and half sovereigns from circulation and have them recoined. Consequently, although a billion sovereigns have been minted in total, that figure includes gold that has been coined and recoined a number of times. In addition, when coins were sent to places such as the United States for international payments between governments, coins were frequently melted down into gold bars because of the Federal regulations then in force. When gold coins were finally withdrawn from circulation in 1933 in the US, many thousands of British gold sovereigns were consigned to the melting pot in this way.

It is estimated that in circulation, a sovereign could have a lifespan of up to 15 years before it fell below the "least current weight", that is, the minimum amount of gold below which it ceased to be legal tender.cite web |url=http://www.econlib.org/library/YPDBooks/Jevons/jvnMME13.html |title=Money and the Mechanism of Exchange |first=William Stanley |last=Jevons] It was actually the half-sovereign that had the most circulation in Victorian England. Many sovereigns languished in bank vaults for most of their lives. It is estimated that only 1% of all gold sovereigns that have ever been minted are still in collectable condition. In 1891 a proclamation was made that members of the general public could hand in any gold coins that were underweight and have them replaced by full weight coins. Any gold coin struck before 1837 also ceased to be legal tender. This recycled gold was subsequently reminted into 13,680,486 half sovereigns in 1892 and 10,846,741 sovereigns in 1900. (Both figures for the London branch of the Royal Mint).

Sovereign obverse (heads) dies were also used in the nineteenth century to create farthings once they had become worn. (An obverse die could typically produce 100,000 coins.)

Sovereigns were produced in large quantities until World War I, at which time the UK came off the gold standard. From then until 1932, sovereigns were produced only at branch mints at Melbourne, Sydney, Perth, Bombay, Ottawa, and Pretoria (except for some in 1925 produced in London as part of Winston Churchill's ill-fated attempt to return the UK to the gold standard). The last regular issue was in 1932 (at Pretoria).

Production resumed in 1957, ostensibly to prevent the coin being counterfeited in Syria and Italy.cite web |url=http://www.coinauthentication.co.uk/newsletter2.html |title=Counterfeit Coin Newsletter July 2004 |first=Robert |last=Matthews] Subsequent publication of treasury papers appear to indicate that sovereigns were widely used in pursuance of British foreign policy in the Middle East, and it was felt that the coin could not be allowed to fall into disrepute, as many individuals were receiving payments in the form of sovereigns for services rendered to the British government.

Sovereigns were produced most years as bullion until 1982. From there to 1999, proof coinage only versions were produced, but since 2000, bullion sovereigns have been minted. Modern sovereigns are minted at the Royal Mint in Pontyclun, Mid-Glamorgan, Wales. The coins are produced in the precious metal unit which is sealed off from the rest of the Mint, the Mint itself being protected by Ministry of Defence police.

Mintage figures for the latest British coin production are given below. Please note: these are the actual number of coins issued, not the official issue limits often advertised. In addition, the Mint will strike extra coins for the purposes of quality control, i.e. samples of coins are submitted for the Trial of the Pyx which involves their destruction. Thus, an issue limit figure never fully reveals the true number actually created. Furthermore, the date on a bullion coin refers to the year the die was made, not necessarily the year in which it was struck. It is not unknown for the Mint to strike gold sovereigns with the date of the previous (or even older) years, e.g. bullion sovereigns struck during the reign of George VI were all dated 1925 and featured the head of George V.

Counterfeiting

To modern eyes, the gold sovereign appears quite a small coin, however, it must be remembered that £1 in 1895 was the equivalent in purchasing power of £150 as of 2007. Gold is also a highly dense metal, so a small coin like a sovereign can contain nearly a quarter of an ounce of metal. Another reason for limiting the production of double sovereigns (£2) and quintuple sovereigns (£5) was the relative ease of removing gold from these larger coins — chemically, by filing, or using other techniques; for example, the drilling of small holes into the coin followed by hammering to conceal the holes, or "sweating": shaking a leather bag full of coins for a long period and collecting the gold dust that was knocked off. ["Encyclopædia Britannica" (2008): Money ]

Composition

Sovereigns usually have a higher premium to the price of gold than some other coins, like the Krugerrand. This is due to a number of factors: the higher unit cost of the Sovereign (at under one-quarter of an ounce); the higher demand for the Sovereign from numismatists (compared to the Krugerrand which is not sought-after numismatically); and the higher costs of identifying and stocking a numismatic coin. For other ways to invest in gold, see gold as an investment.

Current sovereigns (2000 onwards) are struck in the same 22 carat (92%) gold alloy as the first modern sovereigns of 1817,cite web |url=http://www.gold.org/discover/sci_indu/GBull/2002_4/R%20Matthews.pdf |title=The Production of the Proof Sovereign |last=Matthews |first=Robert] which is also known as Crown Gold, which contains 11/12 gold and 1/12 copper. The only time there has been a deviation from this composition was in the production of early Australian sovereigns, which used silver as part of the alloy and in London sovereigns dated 1887, when an additional 1.25% silver was added in order to make the blanks softer for new Joseph Boehm effigy of Queen Victoria. Consequently, 1887 London Mint sovereigns are more yellow in appearance than other London produced sovereigns. This additional silver affected the amount of copper in the coin, not, of course, its gold content. (Nineteenth century techniques of refining were not as advanced as today, and nineteenth century sovereigns became more accurate in terms of their gold weight as silver — which is often naturally combined with gold — was removed as an impurity from the "pure" gold used. Such minor inconsistencies would not affect either their numismatic or bullion value).

Modern production

The Royal Mint created a new die for the 2007 and 2008 bullion issues. The 2007 reverse die was based on a handmade original created by Pistrucci which was reworked to make new master tools. The Mint spent time choosing what it believed was the most pertinent die (from the reign of George III) which they believed contained the most detail. Using a combination of hand engraving skills and digital technology, the Mint attempted to restore detail that had been lost over the years.

Consequently, the 2007 sovereigns have significant differences in their reverse design from the other coins produced from 2000 to 2006. In the 2007 version the shape of the horse's tail has changed, as has the left hand side of the edge of the ground. The initials B.P. (for Benedetto Pistrucci) are also a lot smaller than on previous versions. It is also possible that the folds in St. George's cloak have also been rearranged. The reverse now most closely resembles the version of St. George and the Dragon which appeared on the 1818 silver crowns of George III.

Production summary

Sovereigns were produced as follows:

*London: 1817–1917, 1925, 1957 onwards
*Melbourne: 1872–1931
*Sydney: 1855–1926
*Perth: 1899–1931
*Bombay: 1918 only
*Ottawa: 1908–1919
*Pretoria: 1923–1932

"James Bond Money"

In "From Russia with Love", James Bond is given a travel briefcase with 50 gold sovereigns hidden in a secret compartment. The coin has occasionally been marketed by private dealers with this connection emphasized.

References

External links

* [http://www.royalmint.com/Annexes/sovereign.aspx The Royal Mint]
* [http://www.hm-treasury.gov.uk./media/C/2/trial_of_the_pyx_2007.pdf The verdict of the jury from the Trial of the Pyx 2007, with confirmation as to the purity of gold and silver British coins]
* [http://www.coinsgb.com British Coins] - Free information about British coins. Includes an online forum.
* [http://www.londoncoins.co.uk/index.php?page=GoldCoinPrices Latest Sovereign Values]