Date: 1986-07-23
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. there are on H.R. 20. even if the press and the Americritical financial issues pending before the can public may have missed the issue. Congress. If they are not resolved in a timely The lack of action on closing a major regufashion there is certain to be a sharp drop in latory loopholethe nonbank bankreflects the publics confidence in our financial system poorly on the House. Until the H.R. 20 issue is and an even greater loss to the Federal funds settled. the Banking Committee would only which insure the deposits of millions of citi- add to this yearlong charade if it reported zens. H.R. 4701 and H.R. 4907. Mr. Speaker. special Interest and regional interest groups have zeroed in on this legislation. attempting to cripple or block its pas- AMERICAN GOLD TO IMPOSE sage. ITS OWN SANCTIONS ON The Congress must rise above these spe- SOUTH AFRICA cial interests or take the responsibility for potentially severe damage to our financial The SPEAKER pro tempore. Under system and rising costs for Federal regulatory a previous order of the House. the genoperations. tleman from Illinois is Especially I refer to: recognized for 5 minutes. H.R. 4701Financial Institutions Emergen- Mr. ANNUNZIO. Mr. Speaker. it appears cy Acquisitions Amendments of 1986which that the administration is not willing to support would give the Federal financial regulators sanctions against the Government of South greater power and flexibility to deal with failing Africa. However. beginning October 1. people and failed institutions. throughout the world will be able to exercise H.R. 4970Federal Savings and Loan Re- their own sanctions against the South African capitalization. Actwhich would provide $15 Government. billion in additional capital for a nowdepleted On that date. the United States will begin FSLIC fund which provides insurance for indi- selling its own gold bullion coins in direct comvidual depositors in savings and loans. petition with the South African Krugerrand. H.R. 20the Bank Definition Act of 1985- The American gold coin will give people which would close the nonbank loopholes throughout the world an opportunity to turn and require that these twilight zone institutions their back on the notorious South African gold come under regulation of the Bank Holding coin. Company Act. South Africa generates much revenue from Mr. Speaker. H.R. 20 Is the key to this Krugerrand sales. and the United States coin threesided solution to some of the most will help reduce that revenue. In addition. the pressing problems that ever faced our finan- harsh conditions of South African miners and cial system. the brutal steps taken to break the miners The nonbank bank loophole provides an union make the coins made with South Afrieasy. essentially unregulated means for insti- can gold a tangible product of the evil of tutions to move interstate and expand their apartheid. activity. As a result. the mergers which the The new American bullion coins are deFederal regulators attempt to arrange for signed to the specifications of the Krugerrand failed and failing institutions become much so that there will be a direct competition beless attractive and much more expensive. So tween the two countries for the bullion coin long as the nonbank bank loophole remains. market. The United States will sell four gold the market for failed and failing institutions- coins. a 1ounce gold coin with a $50 face sought by the regulatorsis greatly dimin- value. a onehalf ounce coin with a $25 face ished. value. a onequarter ounce coin with a $10 Thus. Mr. Speaker. the effectiveness of face value. and a onetenth ounce coin with a H.R. 4701 and H.R. 4907 is in question if we face value of $5. do not close the nonbank bank loophole. Powerful interest groupswith absolutely The coins will go on sale at bullion and coin no regard for the damage to the Federal in- dealers around the world. and it is hoped that surance funds or the publics concern about other outlets such as financial institutions will the financial systemcontrol many of these also join in the sales effort. nonbank banksor plan to controland The selling price for the coins will be based oppose enactment of H.R. 20. on the daily price of gold. plus a very small H.R. 20 was reported by the Banking. Fi- markup for production and sales costs. Based nance and Urban Affairs Committee on June on current projections. sales of the gold coins 18. 19851 repeat. 1985. Despite repeated could reach as high as 2 million ounces In requests by the Banking Committee. no rule the first year of the program. has been granted for consideration of the bill While the sale of American gold coins will on the floor. make a large dent in the sale of Krugerrands. Mr. Speaker. the Financial Institutions Sub- the gold coin program is not designed solely committee of the Banking Committee has re- as a sanction against South Africa. although that is an important side effect of the program. The gold bullion program is also designed to give Americans an opportunity to purchase gold coins produced by their own country so that they do not have to purchase it from a foreign source. With only two exceptions. the commemorative gold program for the 1984 Olympics and the 1986 Statue of Liberty gold coins. there has not been a U.S. gold coin produced since 1933. The first gold coin under the new program will be struck at the mints West Point. NY. facility on September 8. and full scale production will begin on that date so that there will be an adequate supply when the coins go on sale on October 1. Although the gold bullion coin has been the focus of much of the publics attention. there is also another American bullion coin making its debut on October 1. The United States will produce a $1 silver bullion coin containing an ounce of 99.9 percent silver. These coins will also be sold through a broad dealer network. Not only will these silver coins allow Americans to invest in silver bullion. but it is my hope that the new silver program will revitalize the silver mining industry in this country. Because of low world silver prices and an overabundant supply of silver. most silver mines in this country are closed. If the new silver coin program is as successful as expected. it will mean a new outlet for silver and hopefully spur interest in the metal. perhaps even putting silver miners back to work. Unlike limited commemorative coin programs. both the silver and gold coins will be produced annually in such quantities as to meet demand. However. the price of the new coins. unlike other programs. will fluctuate based on the price of gold and silver in the world market.