Contrary to popular belief, the American Eagle coin series weren't the first bullion program in the US. In 1974, it became legal for US citizens to own gold bullion. During this time, most citizens owned their gold in the form of Pre-1933 coins or foreign coins such as Krugerrands.
In 1978, Congress made plans to produce gold medallions to compete against the Krugerrand. This proposal was known as the Gold Medallion Act of 1978. The Act was the US government's first attempt at supplying citizens with gold bullion. The Act required the gold medallions to honor famous American artists. Artists that were commemorated on these medallions included Mark Twain, Louis Armstrong, and Frank Lloyd Wright. The medallions were produced in 1 oz and 1/2 oz sizes. The medallions were 90% fine gold, similar to Pre-1933 coins.
The first medallions were minted in 1980. The US Mint sold the medallions directly to the public. To purchase the medallions, customers must call the Mint for quotes on the spot price of gold and to place an order. Afterwards, customers must mail their payments to their local post office. This ordering process proved to be overly complicated. Thus the Mint contracted telemarketers to distribute the medallions. The medallions were minted for only four years (1980-1984) due to poor sales.
There are many reasons why the medallions sold poorly. The medallions were ineffectively marketed and distributed. In addition, most citizens preferred legal tender coins over medallions. The medallions also lacked inscriptions denoting weight and purity. The failure of the American Arts medallions resulted in President Reagan signing a bill that introduced the American Eagle coin series. The rest is history..........
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