Now that the United States has decided to mass-market gold medallions, can gold coins be far behind?

The first U.S. gold pieces in 50 years to be produced in quantities will be offered for sale by the government starting in mid-June.One million medallions containing one-half troy ounce of gold and bearing the likeness of singer Marian Anderson plus 500,000 one-ounce medallions picturing painter Grant Wood will be sold by mail order at a premium of about 5 percent to 6 percent over the price of gold bullion on the day the order is placed.

The gold medallion originally was conceived as America's answer to the Krugerrand. Last year, Americans bought about $900 million worth of foreign imported gold coins, 65 percent of which came from South Africa, according to House Banking Committee estimates. The idea back in 1978, when the Treasury was holding regular gold auctions, was to allow U.S. citizens to retain some of the gold that was being bought primarily by large foreign banks. The sponsors of the authorizing legislation opted for a medallion rather than an official coin of the realm to try to appease the objections of the Treasury to any sign the United States was remonetizing gold.

Even before the medallion has made its appearance, times have changed. The price of gold -- and the demand for it -- have skyrocketed. The United States has suspended its gold auctions as a futile way of lowering the price of that precious metal in international markets. Forty-nine countries minted gold coinage in 1978, and the number appears to be increasing. European countries, especially France, have begun to talk of making gold a monetary asset, a world money once again.

Because the U.S. gold medallions' limited sales of 1.5 million the first year will be controlled by the government, and because, as a manufactured item -- as opposed to a coin -- foreign countries can slap a tariff on them, the numismatic medallion could not compete effectively against the Krugerrand or any other gold coin in overseas markets.

Therefore Rep. Henry Reuss (D.-Wis.), chairman of the House Banking Committee, has called on the administration to consider promptly issuing a U.S. gold coin in one-ounce and in one-half-ounce weights. In a letter to Treasury Secreatry G. William Miller, Reuss pointed out that if the United States would take only some of the $180 billion in unrealized capital gains it has on its gold supply, it could wipe out a substantial portion of the $16 billion deficit projected for the next fiscal year. By putting a small fraction of the country's gold reserve, now valued at $200 billion, into coinage to be marketed around the world, the United States could reduce its trade deficit. And, he continued, "by announcing that the mintage of the new coin would probably cease when these accounts are in substantial balance, their value -- particularly to traditional-gold-hoarding people -- would be enhanced."

Reuss proposed a coin called a Roosevelt, bearing a likeness of Theodore on one side and Franklin on the other. It would have an extremely low face value. He added that only minimal amendments in present law would be necessary to authorize the Treasury to mint and market gold coins.

Sen. Jesse Helms (R-N.C.), author of the medallion legislation, supported the Reuss bill, saying "I think that his proposal to make the coins legal tender will confound the Keynesian officials still populating the Treasury Department. These fellows still regard gold as a 'barbaric relic'."

Mindful of the Treasury's original opposition to medallions, Reuss takes the position that minting official coins doesn't constitute remonetization of gold for two reasons. First, although the U.S. government would redeem any gold coin for the dollar equivalent on its face (should anyone be foolish enough not to sell it on the market for its gold content), that obligation would not tie all U.S. paper currency to gold. Second, gold would not become an official primary reserve asset.

However, Miller told Reuss recently at a Joint Economic Committee hearing that any effort suggesting the remonetization of gold must be considered carefully because of its potential impact on the markets involved.