When it comes to modern silver coins, the American Silver Eagle is the standard by which all other silver bullion coins are measured. It was not the very first .999 fine silver coin issued by a major government mint-the Canadian Silver Maple Leaf earns that distinction—but the Silver Eagle (or ASE, as it is often called in shorthand) continues to be far and away the world’s most popular silver coin in terms of worldwide sales numbers. In fact, with each successive year, the Silver Eagle even seems to outdo itself! In 2013, 2014, and again in 2015, the ASE set new annual sales records in each year!
World’s Top Silver Bullion Coin
There are a whole host of reasons why this has consistently been the case in the 30-year history of this iconic coin. However, one would understandably be surprised to find that the vast majority of the American public has no clue what the Silver Eagle is. (There are even a number of demonstrations where an interviewer presents the coin to people on the street, and they actually believe it’s only worth its $1 face value!) Moreover, this fact also reveals that there is still a great deal of confusion among consumers regarding the real value of the American Silver Eagle dollar despite its undisputed status as the global leader among all one-ounce silver coins.
Like other forms of silver bullion, the market for Silver Eagles is based upon a premium above the silver spot price. This premium comprises largely of the U.S. Mint’s cost of fabricating the coin. Compared to more generic forms of silver bullion, the premia for ASEs may be slightly higher because of the added trust conferred upon them by the legal tender status, their backing by the full faith and credit of the U.S. government, and the very high quality of their design details. Naturally, the same dynamic exists between the popular American Gold Eagle coins and the price of gold.
Silver Eagle Obverse Design
The obverse design of the Silver Eagle is often described as “iconic,” but where does this image come from? It was in fact originally used for the U.S. half dollar from 1916 to 1947. Known as the “Walking Liberty” design, this motif was created by Adolph A. Weinman to reflect certain Progressive Era ideals that were becoming popular at the time. Miss Liberty is shown striding gracefully to the east as she greets the the sun rising over the horizon with an outstretched arm. This represents the “dawn of a new day,” embodying America’s ascendance in the early 20th century. She is draped in a dress that is designed like the American flag, which is waving in the wind over her shoulder to reveal the stars and stripes. In her other arm, Miss Liberty holds oak boughs. Upon her head, she wears a Phrygian cap, a classical symbol of liberty. (On many 19th-century U.S. coins, Lady Liberty is shown holding a stick with the Phrygian cap on the end of it.) The traditional legend “LIBERTY” that appears on all U.S. coins, as per law, spreads out along the top rim of the coin in large lettering. The motto “IN GOD WE TRUST,” which also must be included in all American legal tender by a law passed in 1908, is found to the right of Miss Liberty. The year of issue (a date between 1986 and the present) is found beneath Liberty’s foot at the bottom rim. The coin’s edge is reeded (also called serrated), which has long been used as an anti-counterfeiting measure on coins around the world.
It is often believed that A.A. Weinman based his theme for this design on a French coin design known as the “Sower,” which was used during the late 19th century and prior to World War I. Weinman is regarded as one of the great medallic artists of his time at the turn of the 20th century. He actually studied under Augustus Saint-Gaudens, a man who designed a pair of U.S gold coins—the Saint-Gaudens Gold Double Eagle and the Indian Head Gold Eagle—and is considered by many to be the inspirational father of the renaissance in American coin designs. Weinman was perhaps the most accomplished acolyte of Saint-Gaudens, so it is hardly a surprise that he followed his mentor into the business of designing coins.
Walking Liberty Silver Half Dollar
Weinman is best-known for the Walking Liberty half dollar, which was not only praised for its beauty and symbolism but also well-known because it was the largest denomination U.S. coin for many years: the silver dollar coin was no longer produced after 1929. Interestingly, the Walking Liberty design actually featured an obverse mint mark, a rather unusual feature, during its first two years of issue in 1916 and 1917, although the mintmark was moved to the back of the coin part of the way through production in 1917, so very few of the coins from this year of issue bear the uncommon feature.
In addition to the Walking Liberty half, Weinman also designed the very popular “Mercury” dime, which is officially known as the Winged Liberty design but is far more often referred colloquially as the Mercury dime. This is because Weinman’s depiction of Lady Liberty wearing a winged cap bears a strong resemblance to the Roman god of war, Mercury, who also wore such a cap. However, the portrayal of Lady Liberty wearing the winged cap had more to do with the notion of “liberty of thought,” an important American ideal, and the mint has always maintained that this coin does not in fact depict Mercury. Nonetheless, the moniker “Mercury dime” has stuck ever since this coin was introduced in 1916. Incidentally, if the observer looks closely, the left-facing portrait of Lady Liberty on Weinman’s dime is the same face used for the Walking Liberty motif, albeit without the winged cap in the latter case.
Although less popular than the Silver Eagle itself, many silver investors still enjoy buying heavily worn examples of these 90% silver coins like Walking Liberty half dollars and Mercury dimes in bulk. This is known by the nickname “junk silver” because the coins aren’t particularly collectible yet are purchased instead for the value of their underlying 90% pure (.900 fine) silver content.
Junk silver is typically sold in large, bulk amounts because these coins contain far less silver than the 1 troy ounce found in the American Silver Eagle. These bulk purchases are typically sold in banks rolls or bags that are based on the combined face value of the coins. For instance, you will often see $5 face value rolls of silver dimes sold for purposes of convenience and providing customers with substantial quantities of these small coins. Meanwhile, the larger denomination coins like silver halves might instead be sold with a total face value of $1 or $10.
Silver Eagle Reverse Design
The reverse design is the work of artist John Mercanti, who is the former Chief Engraver of the U.S. Mint. Mercanti based his design of an American bald eagle in a heraldic pose on the Great Seal of the United States. The bald eagle has its wings spread wide. The intricacy of the feathers on the eagle’s wings are shown in great detail, much like the folds in Lady Liberty’s dress on the obverse. (Mercanti did make slight alterations to Weinman’s original design to adapt it to the much larger Silver Eagle.) The eagle’s head faces left and it holds a banner that reads “E PLURIBUS UNUM,” meaning “Out of Many, One” in Latin, clasped in its beak. An unsupported Union shield hovers in front of the eagle’s breast while thirteen five-pointed stars are arranged in an inverted triangle above its head. In one talon, the eagle is holding an olive branch, a traditional symbol of peace; in the other talon, the eagle is holding a bundle of arrows, which speaks to America’s preparedness for war despite its desire for peace (the olive branch). The issuing country “UNITED STATES OF AMERICA” is inscribed around the top half of the outer rim with a small bullet point on each side. The weight and composition are accompanied by the legal tender denomination at the bottom rim, reading “1 OZ. FINE SILVER~ONE DOLLAR.”
Ways to Buy Silver Eagle Coins
Although many buyers will simply opt for individual Silver Eagle coins, bullion investors are often interested in buying Silver Eagles in bulk amounts. There are two different methods for doing this: mint rolls of Silver Eagles, which include 20 coins; and monster boxes of Silver Eagles, which include 25 mint rolls for a total of 500 coins. Because the American Silver Eagle is only offered in the one-ounce size, that means that each monster box (which comes sealed from the U.S. Mint) contains a whopping 500 troy ounces of pure silver! For a more modest purchase that still involves a quantity purchase of silver bullion, the rolls of 20 Silver Eagles come in mint-sealed plastic tubes that make for convenient storage.
The U.S. Mint has a policy of not selling Silver Eagles directly to the public. The mint chooses instead to sell the coins to a limited number of authorized distributors around the United States, who then engage in direct sales with consumers. Because they are so liquid and so widely traded, you will also find Silver Eagles on the secondary market, like on eBay. Yet, a word to the wise about buying Silver Eagles from the auction site: Caveat emptor, meaning: Buyer beware! You never know if the seller will ultimately be held accountable for passing off a low-quality or, God forbid, even a counterfeit item. For the best results, you should always research the precious metal dealers who are the various authorized distributors for the U.S. Mint and find a trusted source for your coins and bullion.
American Silver Eagles and Your IRA
The 1986 Bullion Coin Act that authorized production of American Silver Eagles, as well as 22-karat American Gold Eagle coins, stipulated that the Silver Eagles could only be produced using silver from the U.S. Strategic Silver Stockpile. However, the growing popularity of the Silver Eagle meant that the strategic silver stockpile was nearly depleted by 2002. A law amending the Bullion Coin Act to allow the U.S. Mint to purchase silver on the open market was quickly passed in July of 2002.
In a follow-up to this law about a decade later known as the Taxpayer Relief Act of 1997 (sometimes abbreviated as TRA), the U.S. Treasury Department expanded its rules about what kinds of assets can be included in an Individual Retirement Account (IRA) to include certain precious metal products. The 1986 Bullion Coin Act that authorized the production of legal tender bullion coins was passed by Congress with the notion of providing the American public with a trusted silver or gold investment vehicle specifically in mind. As investors increasingly demanded a way to pair this idea with their tax-deferred (or capital gains-deferred) retirement accounts, the TRA was conceived of.
The TRA made it possible to include the .999 fine 1 oz American Silver Eagle as well as the .917 fine (22-karat) American Gold Eagle in a self-directed IRA. In contrast to the typical structure of an IRA, a self-directed IRA gives the account holder more control over what kinds of items are used to fund the account rather than relying upon an intermediary to handle those decisions for them. Otherwise, all of the other same rules about annual contribution limits still apply to these types of IRAs. In addition to the Silver Eagle, Gold Eagle, and newly-commissioned American Platinum Eagle coin, the Proof Silver Eagle is also eligible for inclusion in your IRA provided that it is accompanied by its original presentation box and paperwork (i.e. the certificate of authenticity, which is sometimes shortened to “COA”). For these reasons, the self-directed precious metals IRA is most commonly called by its nickname “Gold IRA.”