In the fall of 1986, the first silver bullion coins produced by the United States were released, marking the beginning of a series whose enduring popularity is evidenced by rapid sellouts of U.S. Mint products that include them. The American Silver Eagle (ASE) remains one of the world’s most sought-after bullion coins, and its inaugural issue presents collectors with a “first year of issue” coin with an interesting backstory and distinctive qualities.
The coins themselves, struck in both bullion and Proof finishes at the San Francisco Mint, are affordable in most grades, necessary for a date set, or for collectors interested in the first year of issue.
Bullion coin programs emerged around the world in the mid-to-late 20th century. South Africa introduced the first modern bullion coins, Krugerrands, in 1967. Other nations introduced their own bullion issues over the following decades, and by the early 1980s, the United States began taking steps towards establishing a bullion coin program. Politicians’ and bureaucrats’ eyes turned to the silver held by the National Defense Stockpile (NDS) .
Established in 1939, the NDS was (and is) a branch of the Defense Logistics Agency tasked with maintaining stocks of strategic resources, compiled to ensure access to necessary raw materials. In the 1980s, the NDS owned almost 140 million ounces of silver, held by the General Services Administration (GSA). But already by the ’70s, many had begun to feel that the DNS silver holdings exceeded any potential demand related to national defense and multiple presidential administrations tried to sell the silver over the ensuing years.
Concerned that a glut from the NDS would drive silver prices down, Western senators and representatives opposed efforts to sell the stockpiled silver directly into the market. In the early 1980s, bullion coins were hit upon as a compromise. The United States would now be throwing its hat into the global bullion coinage arena.
A 1982 New York Times story quoted a Government Accountability Office (GAO) report that described a bullion coin program as “an attractive alternative method” for selling stockpiled silver. The late senator James A. McClure (R–ID) introduced legislation in 1982 and 1983 to sell the stockpiled silver through a silver bullion coin program, but both bills died in committee.
On June 21, 1985, Senator McClure introduced the Liberty Coin Act as an amendment to the Statue of Liberty-Ellis Island Commemorative Coins Act, which authorized the striking and sale of bullion coins struck from silver purchased from the NDS. President Ronald W. Reagan signed the bill into law on July 9. The coin had to “have a design (A) symbolic of liberty on the obverse side; and (B) and [an] eagle on the reverse side;” and contain an ounce of silver. The coins were priced based on the market value of silver and the cost of striking, marketing, and distribution.
One of the bill’s stated objectives, to “redirect the sale of silver from our national defense stockpile in an effort to minimize its [effect] on the already depressed price of silver,” underscores the consideration given to the effect of the silver sale on the value of the white metal.
Adolph Weinman’s Walking Liberty design, which appeared on the obverse of the half dollar from 1916 to 1947, was selected for the new bullion coin’s obverse. Reusing Weinman’s design drew criticism, according to a 1986 NYT article, which quoted Weinman’s son Robert: “‘My Dad’s Walking Liberty and Saint Gaudens’ Liberty gold coin served their purposes admirably in their time,’ Mr. Weinman said. ‘But they should be put on the shelf and remembered as outstanding designs, period. To drag them out, dust off the embalming fluid and try to breathe new life into them is, I think, ridiculous and unnecessary.’”
John Mercanti, a sculptor-engraver who joined the Mint’s staff in 1974 and would eventually become the Mint’s Chief Engraver in 2006, created a Heraldic eagle design that would appear on the ASE’s reverse for 35 years. Mercanti’s design was phased out earlier this year, replaced by an eagle coming in for a landing; Weinman’s Walking Liberty remains on the obverse
Almost 1.5 million Proof coins were struck by the end of 1986. The bullion strike coins do not bear San Francisco’s “S” mint mark, unlike their Proof counterparts, which do. Then-Treasury Secretary James Baker presided over a striking ceremony on October 29, 1986 (the first day of striking) at which he quipped “I don’t need a pick and shovel to start the San Francisco silver rush of 1986.”
Mercanti writes in American Silver Eagles: A Guide to the United Bullion Coin Program that “For the first few years of American Silver Eagle production, Weinman’s obverse Walking Liberty was used without any modifications, and there were what is referred to in the industry as ‘fill problems’ related to modeling and basin issues.”
The Mint used a number of different die preparation methods, resulting in ASEs with the appearance of different finishes. Prooflike examples of the 1986 bullion strike are known.
Sales began in November, and 5,393,005 bullion/business strike ASEs were struck at the San Francisco Mint in 1986, a mintage that would prove relatively small as the series’ popularity grew but nevertheless underscored the demand that materialized in the short sales window. The 1986 NYT piece that quotes Weinman’s son characterized the program as a “substantial success.”
The origin of the first ASEs was disputed for some time. While some sources correctly maintained that the coins were products of the San Francisco Mint, others said that a share of the mintage had been struck at the West Point and/or Denver facilities. In October of 2020, in response to a Freedom of Information Act (FOIA) request from Lee Minshull, owner of Lee Minshull Rare Coins Inc., the Mint confirmed that all 1986 and 1987 ASEs, bullion strike and Proof alike, were struck at the San Francisco facility.
At the time of writing, NGC records 180,481 grading events for bullion/business strike 1986 ASEs–not including 118 listed with a Prooflike designation–while PCGS records 24,183, not including 24 with a “Struck at San Francisco” designation. Reported certified populations of MS-70 1986 ASEs are higher from both PCGS and NGC than any other date before the early 2000s. This suggests that the first-year-of-issue coins were popular submissions, and the relative abundance of MS-70 examples makes 1986 one of the most accessible early bullion strike ASE dates in that “perfect” grade.
Values for bullion strike 1986 ASEs remain under $100 in all grades below MS-70. In MS-70, typical auction results lie between $500 and $1,000.
The 1986 ASE is listed as #83 in the fourth edition of Scott Schechter and Jeff Garrett’s 100 Greatest Modern U.S. Coins. Several other ASEs, including the 2006-P Reverse Proof issued to mark the series’ 20th anniversary, also made the list.
Created as a vehicle by which to sell the government’s stockpiled silver, ASEs became a mainstay of modern American numismatics.
Numismatic writers, catalogers, and collectors are quick to point to the 1986 ASE’s distinction as “the coin that began it all”, but the date is interesting and worth study for more than just its “first-year-of-issue” status. The evolving die preparation process resulted in distinctive appearances that could offer some variety for a keen-eyed collector. Those interested in an accessible early ASE in the highest possible grade also have reason to look at the 1986. A “perfect” example of America’s first silver bullion coin could complement any number of collections.
Obverse: A full-figured representation of Liberty draped in an American flag walking towards the sunrise. Liberty’s right hand is extended, representing an offering of freedom. In her left arm, Liberty holds a bouquet of laurel and oak. This bouquet represents civil and military glory. The inscription LIBERTY wraps around the top of the design with wide spacing between each letter. IN GOD WE TRUST appears to the right of Liberty’s right leg. The date appears in the exergue. The designer’s initials “AW” appear in the seam in Liberty’s dress. The American Silver Eagle design touches up some of the softness of Weinman’s original work and is not an exact replica of his half dollar design.
Reverse: A heraldic eagle with its wings spread is depicted in the center of the design. The eagle holds a ribbon in its beak, on it is inscribed in incuse lettering: E PLURIBUS UNUM. The eagle is clutching in its talons a bundle of arrows and an olive branch. A glory of thirteen stars in a 5-4-3-1 formation appears above the eagle’s head. The designer’s initial JM (John Meranti) appears to the right of the eagle’s tail feathers. The legend UNITED STATES OF AMERICA wraps around the top of the design. 1OZ. FINE SILVER ~ ONE DOLLAR wraps around the bottom of the design. The top and bottom inscriptions are separated by a dot on either side.
The edge of the 1986-(S) American Silver Eagle bullion coin is reeded.
|Year Of Issue:||1986|
|Denomination:||One Dollar (USD)|
|Mint Mark:||None (San Francisco)|
|Alloy:||99.93% Silver, 0.07% Copper|
|OBV Designer||Adolph A. Weinman (adapted)|
|REV Designer||John M. Mercanti|