Gold Commission recommendations set stage for bullion coins
- Published: May 9, 2014, 4 AM
The Gold Commission was created to “conduct a study to assess and make recommendations with regard to the policy of the U.S. government concerning the role of gold in domestic and international monetary systems.”
Established by law on Oct. 7, 1980, the commission was to issue its findings and recommendations to Congress within a year.
However, the new Reagan administration did not appoint members until June 22, 1981.
To allow sufficient time for the commission to do its work, the reporting date was changed to March 31, 1982.
Selecting appointees, particularly members from the public, was a delicate balancing act.
There were clear anti-gold and pro-gold members, as well as some who were careful not to disclose their views prior to the commission’s meetings.
The pro-gold members were in the minority and they insisted that the commission’s sessions be held in public.
Only the first, organizational session was held behind closed doors.
The remaining eight sessions, including two hearings, were held in public, which drew a great deal of interest and press coverage.
Howard Segermark, senior economic counsel to Sen. Jesse Helms, worked to ensure that Treasury Secretary Donald Regan would have strong pro-gold members from which to select when naming members from the public sector.
Regan selected gold dealer Herbert Coyne, president of J. Aron & Co.; businessman Lewis Lehrman; California lawyer Arthur Costamagna; and Paul McCracken, an economist and a member of President Reagan’s economic policy advisory board.
Coyne, Lehrman, and Costamagna joined with Rep. Ron Paul (one of the members of Congress appointed to the commission) in articulating strong pro-gold positions, particularly the need for gold coins — a position roundly endorsed by Sen. Helms, who was not a member of the commission.
The Gold Commission issued six recommendations, only one of which would lead to legislation and a change in public policy.
It recommended that the U.S. Treasury be directed to issue gold bullion coins of specified weights, without dollar denomination or legal tender status, to be manufactured from Treasury’s existing stock of gold and to be sold at a small mark-up over the market value of the gold content.
A majority of the commissioners held out for the coins to be exempt from capital gains taxes and from sales taxes.
Of course, this ringing endorsement for U.S. gold coinage excited collectors and the coin market.
Although a number of gold coin proposals were introduced in Congress, none moved out of committee.
It would take three years and a rising tide against South Africa’s policy of racial segregation known as apartheid before members of Congress turned their attention to the need for the United States to have its own gold bullion coins.
To replace the banned Krugerrand and compete against other gold bullion coins, gold American Eagles would be denominated in dollars and accorded legal tender status.
The American Eagles would also be struck from gold newly mined in the United States, and would not be exempt from capital gains taxes.
Not exactly what the Gold Commission recommended, but its work opened the pathway for the U.S. Mint to produce gold bullion coins.
Beth Deisher was editor of Coin World for 27 of the 31 years she was on the publication's staff. She may be contacted at Beth@CashInYourCoins-Book.com.
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