Pioneer gold coins exist because when gold was first discovered in the South in the early 1800’s and later in the West in 1849, government facilities did not exit to convert oar or dust into bullion or coin. In the South private mints like the Bechtler’s and Templeton Reid filled this vacuum by opening assay offices. While these early Pioneer Gold producers were successful, the federal mints at Charlotte and Dahlonega, which opened in 1938, gave them competition by coining large numbers of gold dollars. Once the federal facilities were opened, they were the preferred assayers in the region and the quantity of Pioneer Gold being minted rapidly diminished.

In California gold was discovered at Sutter’s Mill in 1848. As a result, California had the largest number of private minters who made Pioneer Gold. Bullion dealers paid between $6 and $8 per ounce for gold ore. Much of it was shipped to Philadelphia where it made $16 to $18 per ounce. Pressure was acute to have local companies convert oar and avoid shipping it east. While native California gold was .850 to .925 Fine, it averaged close to .880. Most of the remainder was silver. Some companies alloyed their gold with copper, but it was scarce. By the end of 1849, there were eighteen firms in California doing assay work. The federal government did not stop them since the coins they produced did not attempt to imitate federal coinage. It was not illegal to produce a privately minted coin as long as it did not try to defraud the public or misrepresent itself a governmentally issued.

Extensive private minting also took place in Colorado, Utah, and Oregon. In each case these businesses existed as long as the miners needed to convert their gold into a form exchange. The Pioneer Gold coins were used and accepted in commerce as if they had been minted by the federal government. They circulated because of coinage shortages, particularly in the western states.

One reason for the coinage shortages was the lack of parting acids necessary to refine gold. Without these acids, it was almost impossible to separate the impurities from the raw gold. The San Francisco Assay office, which closed in 1853, was limited because it was not allowed to issue gold coins in small denominations. Finally, the San Francisco Mint began to issue coins in April 1854, but they were not in sufficient quantity to relieve the coinage shortage. Private minters again stepped in to issue Pioneer Gold again to meet the needs of local commerce. Finally in 1856 the San Francisco Mint obtained the parting acids they needed to refine gold and issued enough coins to relieve the shortage. By then the gold rush in the West was over.