Continuing the discussion of the House Subcommittee on Consumer Affairs and Coinage Hearing on the Representative Ron Paul bill that called for an American Gold Eagle bullion coin program...The first part of the Hearing recap can be found here:
American Gold Eagle Program / 1982 Proposals - Part II.
Following Buziek, Annunzio called Adna Wilde, Jr., President of the
ANA.Wilde/ANA supported the proposed legislation offering:
"[The House bill] is an act that will afford American citizens the opportunity to purchase gold in quantities that any person can afford in lieu of purchasing like amounts from foreign sources. Annually, millions of dollars are added to the imbalance of payments through the purchase of South African krugerrands, Canadian maple leafs, Mexican centennarios, and even the People's Republic of China is preparing to issue a gold noncirculating coin for sale in the United States. The new American Eagle Gold Coin Act of 1982 will help stem the flow of American dollars overseas."Wilde did express two concerns, however. The first involved the proposed names of the coins. He argued that "Eagle" was traditionally associated with a US gold $10 coin and that using the name for coins of one ounce would cause confusion. He proposed referring to he one-ounce coins as a "Double Eagle", the half-ounce coin as an "Eagle", the 1/4-ounce coin as a "Half Eagle" and the 1/10th ounce coin as a "Quarter Eagle".
Wilde's second concern was in regards to the number of stars on the coin's obverse. He noted that the original design cited in the legislation had 46 stars (the number of States in the Union at the time), but that a modern use of the design should incorporate 50 stars to reflect the current roster of the nation.
To help avoid counterfeits of the gold coins, Wilde discussed "the need of the Treasury Department to enforce or have enacted stronger legislation prohibiting the reproduction of U.S. coin design." He followed this with a anecdote regarding the current market for gold coins confusion in design.
"There is offered today in novelty shops and through advertisements in Sunday supplements reproductions of the $20 gold piece in miniature form. Some of these are reproduced in base metal that is gold plated, and others purport to be in fine gold without fineness actually being indicated. This could lead to confusion after the American Eagle Gold Coin Act of 1982 is enacted and the gold bullion coins made available. Unfamiliarity with the issue may lead unscrupulous promoters to pass off their imitations on unsuspecting buyers."Wilde also let it be known that the
ANA supported the bill's proposed distribution method for the gold coins and how it differed from the American Arts Commemorative Medallions. He recommended:
"...the sale and distribution of coins under the proposed legislation not be encumbered with procedures similar to those necessary to purchase gold under previous legislation enacted under the American Arts Commemorative Medallion Series."Dr. Joseph Salerno, Economics Professor at Rutgers University was next to testify. He supported a US return to a gold standard for its currency, and 'sounded the alarm' regarding a fiat currency system. He opened with:
"The merest reference to the possibility of runaway inflation afflicting the American economy tends to be summarily dismissed as unwarranted or even irresponsible and alarmist. Nevertheless, I believe that reflection on prevailing economic and political realities reveal that there are forces now operating which may point the U.S. economy down the path to hyperinflation."Dr. Salerno grudgingly supported the gold coin legislation:
"Without going into detail, I support a gold standard. However, considering the proposals coming out of the U.S. Gold Commission, it appears that the possibility of restoring such a standard is remote. Therefore, I believe that the American Eagle Gold Coin Act, while it does not represent a restoration of a genuine gold standard which will terminate permanent inflation, does provide a vital form of insurance against the worst effects of a paper fiat money regime. It does this by returning a part and possibly all of the Government gold hoard to private hands in a form conducive to use as alternative money, that is, in the form of coins.
"It is precisely in a hyperinflationary scenario, the scenario of a runaway inflation, that the American Eagle Gold Coin Act will prove vitally useful. It will provide people with a readily available alternative currency to the hyperinflated paper dollar. As hyperinflation proceeds, individuals will begin to utilize the coins first as a means of payment stipulated in their credit contracts, and later as money in current transactions. I see that enormous losses in efficiency, production, and living standard which typically attend the retrogression into barter after runaway inflation will be partially mitigated."A ray of hopeful sunshine, Dr. Salerno was not!
Next to be called was Edwin Vieiera, Jr. an attorney from Washington, DC. His first order of business was to establish his credentials:
"I am an attorney specializing in legal economic problems involving issues of constitutional law, and for some time recently I have been interested in monetary matters, and earlier this year I submitted to the Gold Commission a study on the constitutional law of money."As Professor Salerno before him, Mr. Vieira, Jr, was a supporter of a gold standard and supported a "transition from the irredeemable fiat currency to
precious metal as the basis of the Nation's monetary system."
He concluded his testimony with:
"...it is my belief that [the House Bill] can and will make a significant contribution to the resurrection of this country's monetary system on sound economic and constitutional principles, and I urge the subcommittee to act favorably upon it."The Hearing's final witness was Luis Vigdor, Vice President, Manfra, Tortella & Brooks ("MTB") of New York ("MTB") - a major buyer and seller of silver and gold coins. He was clear from the start that he was in favor of the American Eagle gold bullion coin program.
Vigor/MTB supported the striking of US gold coins, noting that MTB's large customer base would most likely switch to purchasing US gold bullion coins vs. the foreign gold coins (e.g., South Africa's Krugerrand) they were currently purchasing. He believed it would be a large-scale transition.
He offered multiple comments/observations/opinions:
1. The American Arts Gold Medallions program was handled poorly and its poor sales results are the outcome.
2. The US gold mining industry needed to be re-invigorated.
3. The new gold bullion coins should be legal tender - not a medal in name or reality.
4. The coins should be distributed by the Federal Reserve System to banks across the country. The Federal Reserve should generate the pricing for the coins.
5. He supported the proposed Capital Gains and Sales Tax exemption on the coins.
He concluded his statement to the Subcommittee with another statement of support for the gold bullion coin program:
"I finally believe, representing MTB and myself, the United States will become the new gold trading center of the world. It will replace Zurich and London, and I believe nothing would be better to commemorate the freedom we have of the American people buying and selling coins than coming out with a true American bullion coin to symbolize this freedom which in many countries the people do not have."Mr. Vigdor's testimony was followed by a lengthy Q&A that involved all of the panel members and dealt with potential tax impacts, potential sales volumes, the coin program's use of the US gold reserves, the coin designs, mintage limitations, developing a secondary market for the coins, circulating gold coins and other topics.
The Hearing concluded with Annunzio thanking all of the panelists for their cooperation and "enlightening" comments. The Hearing was adjourned at 12:15pm (it had started at 10:05am).
The Hearing appears to have been the final stop for the Ron Paul bill as, other than having co-sponsors added to the bill's roster, the House did not take up the bill for further consideration. Follow-up bills would be introduced in 1983 and will be covered in my next installment.
For other of my posts about commemorative coins and medals, including other US modern-era US coin stories, see:
Commems Collection 
Posted Today 3H 47M ago
