Commems Collection Modern: American Gold Eagle Program / First Steps In 1980

By request...


The most obvious forerunner of the 1986-2026 (and likely beyond) American Gold Eagle ("AGE") program is the 1980-84 American Arts Gold Medallions series. I've posted about the medallion series here: 1980-84 American Arts Gold Medallions.

In January 1980, however, the seeds of a United States ("US") gold bullion coin program were planted when Henry Schoellkopf Reuss (D-WI) addressed the US House of Representatives ("House") and let his colleagues know that he and Frank Annunzio (D-IL), Chairman of the Subcommittee on Consumer Affairs of the House Committee on Banking, Finance and Urban Affairs, had co-authored a letter and sent it to G. William Miller, the US Secretary of the Treasury, indicating that they stood ready to introduce legislation calling for a new gold bullion coin that would use a small portion (~5%) of the then-current US gold reserves.

The letter was driven by the then-recent market advance in the spot price of gold.

Reuss inserted the letter that he and Annunzio had sent to the Treasury:

"As a result of the rise in the market price of gold, the United States has a gold reserve of some $200 bllllion, vastly in excess of any international monetary need. The United States' unrealized capital gain on this gold exceeds $180 billion.

"If the Treasury had acquired a portfolio of similar non-interest bearing assets, such as paintings or antiques, which had increased many times in value, prudent management would suggest the sale at advantageous prices of at least a small part of that portfolio.

"The Treasury's sale of gold bars in the recent past has had three disadvantages: (1) by reason of their set scheduling, the sales have missed an opportunity to make a bundle for the taxpayer when the price has been high; (2) because gold has been sold in the form of gold bars, rather than in the form of coins, selling at higher than the bullion price, the Treasury has missed out on a handy premium; and (3) the sale of 400-ounce gold bars means that only the wealthy are interested purchasers, whereas one-ounce coins would be attractive to the smaller investor.

"Why not, therefore, sell a newly minted U.S. gold bulllion coin, like the South African Krugerrand and the Canadian Maple Leaf, containing one ounce of pure gold at a premium over the gold value, with an extremely low face value, and bearing the likeness of some legendary Americans. (The Canadian one-ounce Maple Leaf has a face value of $50.00.)

"Present law, as you know, permits the sale of gold bars, and also of a gold commemorative medallion ([American Arts Medallions] Public Law ). Only a minor change in existing law would be necessary to authorize the Treasury to issue the gold bullion coins described above, and to sell them throughout the world at the best possible times and prices. The new law would, for reasons of prudence, limit the total amount of such sales to some small fraction of our huge gold hoard.

"The gold bullion coin proposal would have the following advantages:

"(1) A substantial portion of the projected $16 billion deficit for the next fiscal year could be financed by such gold sales. The psychological effect of a budget in substantial effective balance could make easier balancing the budget in future years.

"(2) Because of lessened Federal borrowing, pressure on the money market would be lessened, and interest rates would come down - a consummation devoutly to be wished.

(3) A large proportion of these gold bullion coins could be sold to foreigners, thereby improving our trade balance. It would improve our trade balance even more by diverting purchases of imported foreign gold coins, by United States citizens, which came to $728 million in 1978 and $900 million in 1979. An improved trade position would strengthen the dollar, enable us to buy needed imports cheaper, and thus further fight inflation.

"We stand ready to sponsor such legislation to carry out the proposal as the Treasury may request, and ask that you and your associates bring your reaction to our proposal before our Committee at an agreeable date within the next few weeks.

"Sincerely,
HENRY S. REUSS,
Chairman.

FRANK ANNUNZIO,
Chairman, Subcommittee on Consumer Affairs"

Cognizant of the American Arts Gold Medallions program, Reuss offered:

"The advantage of gold bullion coins over medallions is that it [sic] can be sold abroad as well as to Americans, without the sales taxes and tariffs to which medallions are subject."

Reuss concluded his remarks with:

"The sale of a small portion of our gold hoard would help reduce the balance-of-payments deficit, help finance the Federal deficit and thus reduce interest rates, and help fight inflation. There is no better purpose to which we could be putting a portion of our vast gold store at this time."

No immediate follow-up bill was introduced, but the ball toward a US gold bullion coin program was definitely beginning to roll!

Over the next week or so, I'll post about the next steps in Congress that led to the authorization of the American Gold Eagle bullion coin program. Stay tuned!


For other of my posts about commemorative coins and medals, including more gold coin stories, see: Commems Collection