Commems Collection Modern: What If? 1979 Gold $100 Coin

What would have been the point of a $100 gold coin intended for commerce? How would this have been better/different from the $100 note?

With a changing denomination and the price of gold these days, this seems like it would have been a bad idea, even in 1979. Also a 1/4 oz coin seems like it could easily get lost.

Not surprised this stalled in committee.

Very interesting and thank you for sharing!

I appreciate you sharing the history of the various attempts to initiate a gold coin, leading up to the gold Eagle debut.

I suggest we would all benefit from reading whatever legislative stories you come up with about the Gold Bullion Act of 1985 that lead to the Eagle debut in 1986.

Just saying.

I think it really was a case of bandwagon-jumping. Lots of countries were re-introducing or planning to re-introduce gold to their coinages in the late 1970s and early 1980s, after gold coinage essentially disappeared from production worldwide since the 1930s. These coins were NOT intended as circulation or trade coins, but were intended as a means of revenue raising, especially by gold-producing countries - selling off the national gold production and stockpile that was surplus to requirements. Australia launched it's first decimal gold coin, the $200 gold koala, in 1980; Mexico launched the gold Libertad in 1981.

It all followed the runaway success of the South African krugerrand, which proved exceedingly popular since its 1967 launch despite the apartheid regime's global unpopularity at the time seeing economic sanctions against importing krugerrands in many countries. At least some of the incentive to launch their own gold bullion coins, which governments were feeling, was to encourage their citizens to not buy South African gold by providing a patriotic alternative.

For the denomination, again countries were still figuring out how to make "gold coins work" without re-introducing them into general commerce (which the banking sector would not have liked). The krugerrand and the Libertad both had complex legal tender status in that the legal tender value was not fixed, but changed daily with the London spot price; most countries preferred a hard and fast fixed face value for coins they issued, but the question was where was a sensible value to assign. Too high and the coins would end up in circulation (which was undesirable), too low and they wouldn't be able to sell the coins for at or near face value (which was seen as desirable). Those proposed $100 coins were presumably likewise; containing $60 worth of gold, sold for face value of $100 (so, not entirely unlike the "$20 for $20" Canadian silver coins of more recent decades).

Some countries, such as Australia, gambled that the price of gold was not going to go down any time soon. The $200 coin had about $200 worth of gold in it when launched; the sale price (but not the face value) for these coins had to be increased once the price of gold per coin exceeded $200. Of course, the price of gold did indeed go down a few years later, meaning that many of these coins held by investors were simply banked and sent back to the Mint for melting, thus "forcing" the government to buy back its own gold at more than the market rate. Countries learned the lesson after the mid-1980s gold price slump; nowadays, most countries have "legal tender values" for their gold coins that are so ridiculously low that it's essentially impossible for the face value to ever exceed the gold content value. They no longer care about the disconnect between "face value" and "sale price".

The biggest flaw of the American proposal in the OP was the legal tender phrasing in point 3. How, exactly, would the legal tender value be conveyed? If a coin had a face value stamped upon it, they wouldn't want to arbitrarily change that. Yes, Congress has power under the Constitution to unilaterally change the face values of any of its coins, but up until now it has never actually seen the need to do so, and didn't want to start doing so in 1979. People might be happy if the "$100 coins" they owned were now worth $125 or $150, but certainly wouldn't be happy if it dropped to only $75. Jumping in $25 increments also seems unworkable in the modern high-paced gold market where fortunes are won and lost on tiny fractions of prices moving. That unworkability is probably what killed off this particular bill.

Very interesting. Thank you for posting it on CCF, commems.

That makes sense. I'm sure many of us would have appreciated that opportunity before gold went crazy. I wonder what face value of such a coin would be today per your point 3 above (or a few months ago!), maybe $1100?

But per your point 4, this program probably would have been suspended long ago.