Commems Collection Modern: American Gold Eagle Program / An Unusual Proposal In 1981

Check out my post on the seeds of the American Gold Eagle bullion coin program here: American Gold Eagle Program / First Steps in 1980.

The initial legislative follow-up to the 1980 letter by Representatives Henry Schoellkopf Reuss (D-WI) and Frank Annunzio (D-IL) addressed to the United States ("US") Secretary of the Treasury (see link above) was the bill introduced in June 1981, during the First Session of the 97th Congress. The bill was introduced in the House of Representatives ("House") by Daniel Bever Crane (R-IL) for himself and Ronald Ernest Paul (R-TX). It was a gold bullion coin bill, but did not term any of its proposed coins as an "Eagle".

IMO, it was a complicated and cumbersome piece of legislation that would have been very difficult to implement!

The proposed bill would have authorized the minting of United States gold coins and was to be cited as the "Free Market Gold Coinage Act". The bill specified that "It shall be the policy of the United States to promote the free coinage of gold at a free market price." The US was to be in the gold coin business and compete against other world gold bullion coins!

The coins were to be struck from US gold bullion reserves; no limit to the amount/percentage of the reserve that could be used was specified. The coins were to be 0.900 fine gold and 0.100 alloy (TBD by the Secretary of the Treasury).

The bullion coin specifications that the bill mandated were a bit unusual:

1. 1 Troy Ounce (31.103 grams)
2. 1 Avoirdupois ("AVDP") Ounce (28.349 grams) - Standard Ounce
3. 10 Grams (~32.1% of 1 Troy Ounce; ~35.3% of 1 AVDP Ounce)
4. 5 grams (~16.1% of 1 Troy Ounce; ~17.6% of 1 AVDP Ounce)

The 1 Troy Ounce specification makes sense for a precious metal coin - AVDP, however, does not. AVDP is not typically used for precious metal (e.g., gold, silver) weight measurements, these weights are expressed in Troy Ounces.

Note: A gram is the same in the Troy system as it is in AVDP system.

The Troy Ounce coin was to feature a left-facing porttait of John F. Kennedy plus the inscriptions "Liberty" and "In God We Trust" on its obverse with the inscriptions "E Pluribus Unum", "United States of America" and "One Troy Ounce Gold" on the reverse.

The AVDP Ounce coin was to present a right-facing portrait of Abraham Lincoln plus the inscriptions "Liberty" and "In God We Trust" on its obverse, with the inscriptions "E Pluribus Unum", "United States of America" and "One Ounce Gold" on the reverse.

The 10 Grams coin was to depict a left-facing portrait of Thomas Jefferson plus the inscriptions "Liberty" and "In God We Trust" on its obverse, with the inscriptions "E Pluribus Unum", "United States of America" and "10 Gold Grams" on the reverse.

The 5 Grams coin was to depict a right-facing portrait of Adam Smith plus the inscriptions "Liberty" and "In God We Trust" on its obverse, with the inscriptions "E Pluribus Unum", "United States of America" and "5 Gold Grams" on the reverse.

The coins were to include the year of striking on their obverse, along with an appropriate mint mark.

Note: Adam Smith (b. 1723, d. 1790) was the author of the seminal book on economics The Wealth of Nations, which introduced the concept of "free market". He is often referred to as the "Father of Economics".

Note: At least 50% of the total coinage weight struck was to be of the 10 grams and 5 grams variety.

Another interesting aspect of the legislation is that it would have allowed gold coins to be struck by "any State or local government or by any person, whether or not such person mints such coins in the United States, except that such gold coins shall not bear the inscription "United States of America". As the US Constitution prohibits anyone but the Federal Government from minting coins, the wording included in the bill contradicted this would have been hotly debated and likely altered if the bill had advanced.

The Secretary of the Treasury was given the task of setting the sales price of the coins. The price was to be based on the "competitive market price of gold." Such price was to be calculated/adjusted on an hourly basis using a weighted average of the prices in force at gold exchanges in London, Hong Kong, New York, Chicago, San Francisco and Los Angeles. Can you imagine the chaos arising from hourly price changes in the market?

In addition to each coin's intrinsic gold value, its selling price also had to cover a Treasury/Mint 'production' fee (no details stated). Gold coins purchases were not to be taxed.

The bill allowed public transactions using the coins, once converted to the appropriate prevailing dollar value.

Though not the smoothest of 'next steps,' the 1981 bill did initiate further US gold coin discussions and served as a base from which a more reasonable framework would begin to develop in 1982. Stay tuned for a look at these developments!


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