A Brief History of the Silver American Eagle Coin

Mining States Oppose the Silver American Eagle Coin

Investors and coin collectors alike love the American Silver Eagle coins. But for a long time it was highly questionable whether or not the Silver American Eagle coins would ever be minted. Here’s a brief history of how these coins came to be.

From the 1970s through the early 1980s several administrations were determined to sell off silver from the Defense National Stockpile. Their intent presumably was to reduce the federal deficit.

Although they argued that the domestic production of silver far exceeded the strategic needs at the time, mining state interests opposed any legislation aimed at selling the stockpile.

During that time, whenever sporadic sell offs were pushed through, or even announced, the price of silver immediately plummeted.

In September 1976 the Wall Street Journal reported that when “the US government makes noises about selling silver from the federal stockpile, futures traders start unloading futures contracts in speculation that such a sale would depress prices.”

The House Armed Services Committee Decides to Sell Silver

Nonetheless, the House Armed Services Committee decided on June 10, 1981 to approve the Reagan administration’s request to sell stockpiled silver at the beginning of the 1982 fiscal year so that the federal budget could be balanced.

Both the House and Senate approved the sale of 105.1 million troy ounces of silver over a three year time span. This represented 75% of the silver that was in the US stockpile.

Politicians Block the Sale

Right before the first sale was about to begin a group of Idaho politicians tried to block the auction. They claimed that in addition to having a “disastrous effect” on the silver mining industry in the United States it would particularly affect a number of silver mining companies in Idaho.

As a result, an appropriations billed was signed that stopped the sale until July 1, 1982. Within that time frame the President was advised to redetermine “that the silver authorized for disposal is excess to the requirements of the stockpile.” At the time it looked like Silver American Eagle coins were doomed.

McClure Tries to Pass a Bill to Issue the Silver American Eagle Coin - And Fails

Five weeks before the July deadline Senator James A. McClure (R-Idaho) introduced a bill that proposed that the National Defense Stockpile of silver be disposed of through the issuance of silver coins. He felt that this would minimize the effect on the price of silver.  There was now some home for the Silver American Eagle coins.

Soon after the price of silver soared.

McClure Tries Again - And Fails Again

At the end of January, 1983, Senator McClure tried again and introduced virtually the same bill. Once again it did not get past the committee.  Silver American Eagle coins were still waiting in the wings.

McClure Finally Gets His Way with the Liberty Coin Act - The Silver American Eagle Becomes Reality

Finally, two years later, Senator McClure got his way when he added an amendment to another bill. This amendment – the Liberty Coin Act – authorized the Secretary of the Treasury to mint and issue silver bullion coins as well as coins that had numismatic and legal tender status.  It looked like Silver American Eagle coins would soon become a reality.

The bill became law when President Regan signed it on July 9, 1985. Thus, the American Silver Eagle bullion program was born.  Finally people around the world would be able to invest in the Silver American Eagle coins.

The American Silver Eagle Becomes a Hit

The program proved to be extremely popular. By 2002 so many people were investing in the Silver American Eagle that it was obvious that the stockpile would be depleted in the near future.

Subsequently another bill, S. 2594 – the Support of American Eagle Silver Bullion Program Act – was passed and signed into law by President Bush on the 23rd of July, 2002. This bill authorized “the Secretary of the Treasury to purchase silver on the open market when the silver stockpile is depleted.”  Thus, the Silver American Eagle coins would continue to be minted.

Since 1986 more than 200,000,000 Silver American Eagle bullion coins have been minted and sold by the US Mint.