Saturday, August 24, 2013

The Ship of Gold

SS Central America's recovered riches

This year, investors are abandoning gold like a sinking ship.  Bloomberg reports prices are down 28% since their high of $1,921 an ounce reached in September 2011.

Passengers aboard the  SS Central America abandoned gold too, as their ship was sinking in 1857.

Later dubbed the "Ship of Gold,” the wooden vessel got caught in a hurricane off the coast of the Carolinas. Most of the 581 passengers and crew were lost as well as the more than $2 million in gold specie prospected from California intended to refill reserves of Eastern banks.

Over 128 years later, the gold was recovered by a diving team—the 
Columbus-America Discovery Group of Ohio. After a legal battle in which 39 insurance companies claimed that because they paid damages in the 19th century they had a right to the treasure in the 20th, the divers were awarded 92% of the riches arguing successfully that the gold had been abandoned.

Back in 1857, a survivor of the wreck told reporters from the New York Tribune what happened after all the women and children had boarded the life boats.

All discipline was at an end, as the fate of the ship was rapidly and surely approaching. It was every man from himself...

In that trying hour gold was valueless. The miner threw his hard-earned 'pile' into the sea, lest its weight might drag him down. I saw many men thus relieve themselves of their treasure, and hundreds of thousands of dollars were thrown away. Capt. Badger threw down $17,000 in gold in the Captain's cabin just before jumping into the boat and saved his life...

In regard to the specie, Mr. Jones says that it was stowed away in the run, right along the keelsons of the ship, and before anything could be done to get it up (even if there had been a chance at saving it) it was under water.

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Flannery O'Connor

You shall know the truth and the truth shall make you odd.