American Arts Commemorative Series medallions

A 1981 Willa Cather half ounce medallion

American Arts Commemorative Series medallions are a series of gold bullion medallions produced by the United States from 1980 through 1984 in order to compete with the South African Krugerrand and other bullion coins. The series was first proposed by North Carolina senator Jesse Helms after the United States Department of the Treasury began selling portions of the national stockpile of gold. Iowa state representative Jim Leach suggested that the medallions featured notable American artists. The Bill containing the legislation authorizing the issues was signed into law by president Jimmy Carter on November 10, 1978, despite objections from Treasury officials. The medallions were initially sold through mail order; anyone interested in purchasing one was required to obtain that day's price by telephone before ordering. Later, they were sold by United States Mint officials through a telemarketing operation. Mintage ceased after the ten different medallions initially approved by Congress were produced. All were struck at the West Point Bullion Depository. The series sold poorly, prompting critics to blame the fact that the medallions were not legal tender and the process by which they were initially marketed.

Background

A South African Krugerrand bullion coin dated 1984

On April 19, 1978, the United States Treasury Department announced that a portion of the national stockpile of 400 ounce gold bars would be auctioned through the General Services Administration beginning on May 23, 1978.^[1] The sales were intended to have the effect of "reducing the U.S. trade deficit, either by increasing the exports of gold or reducing the imports of this commodity", and to "further the U.S. desire to continue progress toward the elimination of the international monetary role of gold."^[1] On the same day of the announcement, North Carolina senator Jesse Helms introduced the Gold Medallion Act of 1978.^[2] The intent of the act was to provide average consumers with affordable, small–sized gold bullion in order to compete with the South African Krugerrand and other world bullion coins, which were becoming increasingly popular with American investors;^[2] 1.6 million ounces of gold had been imported into the United States in the form of Krugerrands in 1977 alone.^[2] In an August 25, 1978 hearing before the United States Senate Committee on Banking, Housing, and Urban Affairs, Helms gave the following statement:

North Carolina senator Jesse Helms

In the first year after enactment the bill would require that the first 1.5 million ounces of gold sold be made into medallions. Under the stepped-up rate of gold sales, that is only two months worth of gold. The amount is about equal to last year's importation of foreign bullion coins, mostly Krugerrands from South Africa.^[3]

Helms goes on to describe the characteristics of the proposed medallions, stating:

The one-ounce medallion would have on one side the head of the statue of Freedom atop the Capitol, and it would be marked with the words, "One ounce fine gold," and the word "freedom." The reverse of the piece would be the Great Seal of the United States and the words "United States of America," and the year in which it was produced. The one-half ounce medallion would have on one side some representation of the rights of individuals and the words "Human Rights," and "One-half ounce fine gold." The reverse would be similar to the back side of the "Freedom" medallion, with the Great Seal.^[3]

Iowa representative Jim Leach

Support for the medallions grew in Congress, prompting more legislation to be introduced. Iowa representative Jim Leach proposed that the series feature designs honoring American artists. During the Committee on Banking, Housing and Urban hearing, Leach outlined the reasons for his proposal. He noted that the House Subcommittee on Historic Preservation had been sent a large number of suggestions of worthy individuals for the dollar coin that had previously been proposed,^[4] which later became the Susan B. Anthony dollar. Leach felt that a dollar coin was not a suitable way to commemorate the individuals, as it was impossible to honor such a large group with a design that remained relatively stagnant.^[4] He also noted that all United States coinage up to that point had depicted individuals whose principal contributions have been in government and politics rather than the arts.^[4] Leach goes on to describe the specifics of his proposal, stating:

I am suggesting in H.R. 13567 that we honor 10 individuals who have been distinguished contributors to the arts—music, painting, writing, architecture and the theatre. Other fields might well be chosen, or other people than I have selected within the field of arts; but the point I want to emphasize is this: while our coinage is and should be devoted to honoring those who have contributed to our political heritage, medals offer us an opportunity to honor those who have contributed to our cultural development, our economic achievements, our technological expertise, and other accomplishments which reflect the wide dimensions of our democratic society.^[4]

The subjects designated by the bill were Grant Wood, Marian Anderson, Mark Twain, Willa Cather, Louis Armstrong, Frank Lloyd Wright, Robert Frost, Alexander Calder, Helen Hayes and John Steinbeck.^[5]

Though the program received widespread support in Congress, Treasury officials opposed the idea.^[2] In a letter, Treasury secretary W. Michael Blumenthal wrote "I do not believe the U.S. Government should permit the erroneous impression to be created that it cannot or will not take the necessary steps to combat inflation and that the public therefore needs to buy gold as a hedge against inflation."^[6] Blumenthal also believed that if the government were to sanction the striking of gold medallions, the public would believe that the Treasury was actively encouraging investment in gold.^[2] Despite these objections, the bill was attached to the Bank Omnibus bill, which was signed into law by president Jimmy Carter on November 10, 1978.^[7]

Production and sale

Despite the fact that the bill was signed into law, the Treasury lacked the funding necessary to put the medallions into production.^[7] As such, an appropriations bill was passed.^[7] After the bill was signed into law, the General Services Administration was tasked with determining how best to market the new issues.^[7] The Administration proposed several plans for distribution. One such plan, which was ultimately rejected, involved the distribution of the medallions to a network of banks for sale to the public.^[7] The method that was finally approved required purchasers to make a telephone call to learn the cost for the medallions on the day of purchase. After the call was made, the purchaser was required to have a form dated at a post office in order to validate the date of purchase.^[7] According to the authorizing legislation, the issues were to be "sold to the general public at a competitive price equal to the free market value of the gold contained therein plus the cost of manufacture, including labor, materials, dies, use of machinery, and overhead expenses including marketing costs."^[8]

A half ounce medallion depicting Willa Cather, in original box of issue

Production of the medallions began in 1980.^[7] The first in the series, struck at the West Point Bullion Depository, were those honoring painter Grant Wood on the one ounce issue and contralto singer Marian Anderson on the half ounce issue.^[8] Both were designed by United States Mint Chief Engraver Frank Gasparro.^[8] Sales were poor, and in September 1980, the Mint announced that a private firm would be hired in order to market the medallions; commodities trading firm J. Aron and Company was selected.^[9] The new marketing plan involved selling the medallions through a network of bullion dealers, banks, brokerage houses and coin dealers,^[9] in a system similar to that used by South Africa to distribute the Krugerrand in the United States.^[10] 1981 marked the second year of production. That year's designs depicted authors Mark Twain and Willa Cather. These were designed by Matthew Poloso and Sherl Winter, respectively.^[11] These first four medallions bore no notation of their metallic content or country of origin. This was done intentionally so as to distinguish them from federal coinage.^[8] Beginning in 1982, small, toothlike denticles and a statement of gold content and national origin were added to the face of the medallions, while reeding was added the edge.^[7] That year's issues depicted musician Louis Armstrong, as designed by John Mercanti, and architect Frank Lloyd Wright, designed by Edgar Steever.^[11] The following year's medallions depicted poet Robert Frost and Alexander Calder. The former was designed by P. Fowler, while the latter was designed by Michael Iacocca.^[12] The final year of production saw the mintage of medallions honoring actress Helen Hayes and author John Steinbeck. Both were designed by John Mercanti.^[12] 1984 also marked the termination of the Mint's contract with J. Aron and Company.^[10] The Mint opted instead to sell the medallions through a telemarketing program.^[10] In 1985, Mint director Donna Pope announced that the medallions would be sold in sets of five (one each of the one ounce medallions and one each of the half ounce medallions) in another telemarketing operation beginning in September of that year and ending on December 31, or sooner if all sets sold.^[13]

Reception

In an interview with New York Magazine in October 1980, Luis Vigdor, assistant vice-president for bullion and numismatic operations of Manfa, Tordella & Brookes, then one of the largest coin firms in the country, compared the medallions and the efforts to market them unfavorably to the South African Krugerrand.^[14] Vigdor noted that the medallions were difficult to market due to their lack of notation of weight, fineness and country of origin.^[14] He also criticized the marketing of the medallions, noting that people are unlikely to buy gold at the post office, and that the medallions were advertised poorly. In contrast, Vigdor notes that the widespread success of the Krugerrand is due to the vigorous attempts to market them in countries around the world.^[14] Commenting on the poor sale of the medallions, assistant director of marketing for the Mint Francis Frere stated that "it just hasn't worked. They're not selling. We've made a strong effort, but it's not working." in 1984.^[15]

On February 12, 1982, following the release and poor sale of the medallions, the United States Gold Commission recommended the minting of a gold coin.^[16] Donald Regan, Secretary of the Treasury and chairman of the commission, later told reporters that a gold coin could be easier to sell than medallions, because the suggested coins "could be redeemable in dollars."^[16]

Designs and sales figures

References

Bibliography

• Gilkes, Paul (August 2010). "Gold Medallions Launching Pad for Future Bullion Programs". Coin World (Sidney, Ohio: Amos Press). 
• United States Senate (1978). Treasury Sale of U.S. Gold and the Gold Medallion Act of 1978. Washington, D.C.: U.S. Government Printing Office. http://books.google.com/books?id=DF9_8VPckjoC&printsec=frontcover#v=onepage&q&f=false. 
• Yeoman, R.S. (2008). A Guide Book of United States Coins (62nd ed.). Atlanta, Georgia: Whitman Publishing, LLC.