With the American Silver Eagle, the United States Enters the Bullion Coin Business

The American Silver Eagle is a one ounce silver bullion coin, produced by the United States Mint under the authority of the 1985 Liberty Coin Act (Public Law 99-61 – PDF Link).

Congress’s intent for producing the coin was born out of a desire to deplete the Federal Government’s massive silver stockpile, which at the time exceeded 139 million ounces.^[1]The Liberty Coin Act called for the Mint to strike .999 fine silver coins measuring 40.6 millimeters in diameter and weighing 31.103 grams. The coin was to feature a design “symbolic of Liberty on the obverse side; and… of an eagle on the reverse side…”^[2]

John Mercanti, the former Chief Engraver of the U.S. Mint and designer of the American Silver Eagle reverse, says in his 2012 book American Silver Eagles: A Guide to the U.S. Bullion Coin Program that the coin’s obverse design (featuring Adolph Weinman’s “Walking Liberty”) was predetermined – although he didn’t know by whom.^[3] Research published later established that the choice to use the Weinman design on the American Silver Eagle, as well as the Saint-Gaudens Double Eagle design on the American Gold Eagle, was made almost immediately as the Mint did not have a sufficient amount of time to develop designs from outside artists.

But even with the convenience of having a classic design ready to use, a series of technical challenges had to be overcome to get the coin to fully strike up, and by the time it was finally ready, 1986 was almost over. The first coins didn’t roll off the press until Secretary of the Treasury James Baker initiated Coin Press 105 at the United States Assay Office in San Francisco at a striking ceremony for the coin held on October 29, 1986.^[4] A number of coins were struck for and by VIPs in attendance.

November sales totaled 1,400,000 pieces, and 3,696,000 American Silver Eagles were sold in December.^[5]

1986-dated Eagles were produced in two finishes: a bullion strike, which bore no mintmark but was struck exclusively at the San Francisco Mint (a fact the numismatic community did not know until a 2020 Freedom of Information Act (FOIA) request was fulfilled by the government, leading to a lengthy Coin World feature article by veteran journalist Paul Gilkes); and a Proof issue, which also was struck exclusively at San Francisco but did bear the ‘S’ mintmark.

The 1986 American Silver Eagle: A Popular Collector Coin and a Cautionary Tale of Vanishing Value

The American Silver Eagle is a bullion coin that is both widely held as a commodity and traded as a collectible. As a bullion play, American Silver Eagles from any date are seen as interchangeable. As a collectible, however, the first-year issue 1986 bullion strike is usually offered at a 15-30% premium over generic issues struck throughout the series’ 37-year run. This premium puts the 1986 issue on or near par with the scarcer bullion strike issues of 1995 and 1997.

With a mintage of 5,393,005 pieces, one should not confuse the 1986 American Silver Eagle with a scarce or rare coin. Pay a couple of dollars “numismatic premium” over spot for raw examples that come especially nice. Otherwise, pass.

Certified examples do carry a premium over raw ones and a very interesting story can be told about them.

To understand today’s pricing levels we must first take a step back and look at the certified Silver Eagle scene of 2013-2015.

Through the end of 2013, PCGS and NGC treated the 1986 American Silver Eagle (as well as other 1980s and early ’90s issues) differently. NGC owned a lion’s share of the market and represented in their census report bullion strikes in the grades MS69 and MS70. Some dates were tougher than others, but no dates were prohibitively rare.

PCGS took a different approach. While PCGS’ submission numbers for American Silver Eagles were lower, there were some dates where MS69 was the highest grade that submitters could reasonably expect to earn. So stingy was the PCGS policy pertaining to certifying MS70s that some dates had no MS70 coins, and others had MS70 populations in the single digits.

1986 was one of the latter dates, and for a time, the PCGS population of MS70 coins sat at just three.

In February 2013, Heritage Auctions sold one of those three PCGS MS70 coins for the brain-cracking sum of $21,150 USD. In the NGC white core holder, with a population of just over 1,200, the same coin would sell for about $775. The Heritage sale was not an outlier. Two years later, with the population still at three, GreatCollections sold another 1986 PCGS MS70 coin for $22,000.

Then something changed. In the summer of 2015, PCGS certified 30 Silver Eagles dated 1986 as MS70. The price level dropped to $5,000.

An insider bulk submitter told us on background at the time that the company was now giving out grades that it previously wouldn’t, and that this led to their company increasing the number of bulk submissions that they would give to PCGS. This is not to suggest the PCGS had told him that they would grade coins looser, just that his recent Monster Box submissions were netting a handful of valuable MS70 coins.

The 1986 Silver Eagle wasn’t the only conditional rarity date to see the impact of this seeming shift in direction.

While the service has never explicitly stated that it would not grade American Silver Eagles at 70, we believe that the milk spotting issue may have played a major factor in the company’s dearth of perfect coins.

We also observed, through cert number analysis, that several of the low-pop 70 issues saw the 70-graded coins come in groupings from a handful of submissions. For one date, half of all of the 70s came from one monster box and every coin in that Monster Box was represented after CoinWeek conducted a sequential cert number analysis.

Moving ahead to the present day, we see that PCGS MS70 Silver Eagles from 1986 have advanced to the point where NGC was in the fall of 2014. Current pop data published on PCGS CoinFacts shows 1,763 MS70s. CoinWeek’s market research puts the pricing level of these coins at between $750 and $800.

While we’re not in the habit of patting ourselves on the back when it comes to coin market analysis, we did predict a collapse in the 1986 MS70 price after the 2013 Heritage sale, writing that “[s]afer money could be probably be ‘invested’ elsewhere.” We held firm to that belief even when, in April 2015, GreatCollections sold another example for $22,000. We said the same thing about the record-breaking 1995-W American Silver Eagle, which we called a “burial coin” (the owner would be “buried” in it at that level).

Now that we see a sustainable yield for MS69 and MS70 coins from both services, we believe that prices for PCGS- and NGC-certified Silver Eagles will approach equilibrium. NGC maintains a clear lead on the number of submissions, due in large part to long-term relationships they have developed with major submitters of modern bullion material.

The 1986 American Silver Eagle and the Phantom “S” Mintmark Designation

Since the 2020 disclosure mentioned above that all Uncirculated strike American Silver Eagles came from the San Francisco Mint, the grading services have allowed submitters to market coins with the parenthetic “(S)” label. Coins in those holders are no different than the rest of the certified population. They do not warrant a special premium for the notation.

Design

Obverse:

Adolph A. Weinman’s Lady Liberty is depicted mid stride. She is seen as a full-body figure, dressed in a flowing gown, and draped with a large billowing American flag. She holds laurel and oak branches in her left hand that symbolize the civil and military glories of America, respectively. As Liberty strides confidently towards the rising sun, she also reaches out and presents a welcoming and open hand. So large is Lady Liberty that she is superimposed over the obverse legend “LIBERTY” ringing the obverse – in fact, she obscures half of the “BE” and almost the entire “R”. Above Liberty’s outstretched rear foot is IN GOD WE TRUST and below her is the date (1986).

The design bears a notable resemblance to sculptor Oscar Roty’s The Sower, a common image on French coins. Numismatist Roger Burdette posited in his book Renaissance of American Coinage (2007) that this was not a coincidence and while Adolph Weinman did not directly copy, he did derive significant inspiration from Roty’s work. Weinman’s Liberty Walking design quickly became one of America’s most iconic numismatic images and would be used with minor modifications on the American Silver Eagle bullion coin starting in 1986.

Reverse:

John Mercanti’s Heraldic Eagle is positioned at the center of the reverse. Clutched in its beak is a ribbon that bears the motto: E PLURIBUS UNUM. Above its head, is a constellation of thirteen stars configured in an upside-down pyramid formation. Wrapping around the design is the legend (top): UNITED STATES OF AMERICA; and the fineness and denomination (bottom): 1 OZ. FINE SILVER. ONE DOLLAR.

Edge:

The edge of the 1986 American Silver Eagle bullion coin is reeded.

Coin Specifications

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Notes

[1] http://www.gao.gov/products/LCD-79-410. First accessed 1/31/15.

[2] “Liberty Coin Act” (PL 99-61, July 9, 1985). 99th Congress. 99 STAT. 113.

[3] Mercanti, John. American Silver Eagles: A Guide to the U.S. Bullion Coin Program. Whitman Publishing, LLC. Atlanta, Georgia. 2012. 24, 29-31.

[4] Rochette, Ed. “Sales Start Slowly for the New Silver Eagle Dollars”, Chicago Sun-Times. December 28, 1986.

[5]  http://www.usmint.gov/about_the_mint/index.cfm?action=PreciousMetals&type=bullion. First accessed 1/31/15.

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