Enacting Legislation Supported Domestic Precious Metals Mining
Noteworthy anniversaries are approaching for numismatists, and gold and silver proponents.
Forty years ago this coming week, Americans could buy newly minted U.S. gold coins for the first time in over 50 years.
The American Gold Eagle coin was released on Oct. 20, 1986, marking the first gold coins produced by the U.S. Mint since the Great Depression.
Release of the American Silver Eagle coin followed on Nov. 24, 1986, allowing Americans to acquire new legal tender silver coins for the first time since the Mint removed the silver content from all U.S. coinage in 1964 and 1970.
Since their introduction, American Eagle coins have become among the world’s most recognized and top-selling bullion coins. More than 22 million troy ounces of the gold coins, and more than 500 million ounces of the silver coins, have been stuck and sold over the last four decades, according to the U.S. Mint.
Congress Authorized American Eagle Coin Program
Congress authorized issuance of American Silver Eagles with passage of the Liberty Coin Act. President Ronald Reagan signed the legislation into law on July 9, 1985. Introduced and sponsored by Idaho Sen. James McClure, the measure allowed domestic silver miners to sell their surplus metal to the U.S. government.
The act required the Treasury secretary to use silver from the nation’s strategic and critical minerals stockpile to produce the legal tender coins with a $1 face value. Subsequent legislation passed in 2022 allowed the coins to be minted from silver purchased on the open market once the stockpile was depleted.
The American Gold Eagle was authorized by the Gold Bullion Coin Act, which became law with President Reagan’s signature on Dec. 17, 1985. While supporting the minting and selling of U.S. gold coins, he expressed reservations about the legislation, particularly the provision mandating the coins only be produced with new, domestically mined gold.
The president was concerned the requirement might conflict with international trade agreements. He also opposed the law’s prohibition on using existing U.S. gold holdings to mint the coins as a means to reduce the nation’s budget shortfalls.
“I must note, however, that certain provisions are troublesome. Specifically, enactment of this legislation may raise questions about the willingness of the United States to honor its international obligations,” Reagan said in a written statement. “In addition, I am also concerned about a provision of this legislation that would effectively prohibit the Secretary of the Treasury from using gold held in the United States' reserves in producing gold coins. In my view, this restriction denies the United States a potentially major source of revenue. At a time when we have committed ourselves to eliminating the budget deficit over the next several years, a limitation of this nature is especially unfortunate.”
Despite the president’s reservations, the legal tender gold coins were issued in 1-ounce, half-ounce, quarter-ounce and one-tenth ounce weighs with respective $50, $25, $10 and $5 denominations. The 22-karat bullion coins depicts torch-bearing Lady Liberty on its face and a bald eagle, the nation’s majestic wildlife symbol, on its reverse.
Containing 1 troy ounce of 99.9 percent pure silver, American Silver Eagles coins have a $1 face value. They also feature Lady Liberty and a bald eagle.
Presidential Order Legalized Monetary Gold Ownership
The stage was set for issuance of the American Eagle coins after President Gerald Ford legalized private gold ownership in the United States a decade earlier. On Dec. 31, 1974, Ford signed an executive order revoking President Franklin D. Roosevelt’s 1933 decree, which outlawed most private ownership of monetary gold and prohibited American citizens from keeping more than $100 worth (about 5 troy ounces at the time) of the demonetized metal.
Issued during the Great Depression, Roosevelt’s decree, codified into law by the Gold Reserve Act of 1934, ended the domestic gold standard and prompted the Mint to halt production of $20 Saint-Gaudens double eagle gold coins and $10 Indian Head Eagle gold coins. Millions of formerly legal tender U.S. gold coins subsequently were melted down and turned into gold bars held by the U.S. Treasury.
Market Value Far Exceeds Face Value
While American Eagle coins are legal tender, they aren’t used as currency in everyday transactions because the market value of their gold and silver content far exceeds their face value.
With gold priced at $4,200 an ounce and silver selling for around $60, the coins are acquired and held by numismatic collectors as well long-term investors concerned about ongoing depreciation of the unbacked U.S. dollar.
The U.S. Mint earns income by selling gold and silver coins to individuals and authorized purchasers/resellers. During profitable years, excess revenue is transferred to the U.S. Treasury to help finance the national debt. In 2025, the Mint reported a net income of $73 million, but no funds were transferred to the Treasury’s general fund.
While establishment of the American Eagle coin program hasn’t solved the nation’s compounding fiscal woes, it has allowed Americans to preserve some of their wealth by buying and owning U.S.-minted precious metal coins. The program also signaled a slight—though significant—step toward restoration of sound, constitutional money by reversing the eradication and scarcity of monetary bullion.
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