"Sam Stone" is about a drug-addicted war veteran, presumably from the Vietnam War although it's not explicitly mentioned, who dies of an overdose. Prine was drafted into the Army during the conflict in the late '60s and was inspired by his fellow soldiers to write the song.
"There's no one person who was the basis for Sam Stone, more like three or four people; like a couple of my buddies who came back from Vietnam and some of the guys I served with in the Army," he told Performing Songwriter. "At that time, all the other Vietnam songs were basic protest songs, made up to slap each other on the back like "Yeah, this is the right cause." I don't remember any other songs that talked about the soldiers at all."
"I came up with the chorus first and decided I really liked the part about the 'hole in daddy's arm.' I had this picture in my mind of a little girl, like Little Orphan Annie, shaking her head back and forth while a rainbow of money goes into her dad's arm. I think I invented the character of Sam Stone as a storyline just to get around to that chorus."
Johnny Cash covered this during his 1987 appearance on the Austin City Limits TV show, which was recorded for his album Live From Austin, TX.
John Prine was a mechanic in the Army, stationed in Germany while his friends saw combat in Vietnam. His observations of the effect the Vietnam conflict had on his pals inspired this song. Prine told Uncut.
"All my buddies came home changed me. They weren't the same. I was trying to explain that to myself, and that's how I wrote 'Sam Stone.' I wasn't a protester or anything like that. I was trying to figure out why this crazy war was happening and what people were going through over there. We had been raised on John Wayne and World War II, but this was the opposite of that."
Prine cites a lyric from this song as his favorite from his catalog:
There's a hole in daddy's arm where all the money goes
Jesus Christ died for nothin' I suppose
"I was trying to say something about our soldiers who'd go over to Vietnam, killing people and not knowing why you were there," he told Rolling Stone. "And then a lot of soldiers came home and got hooked on drums and never could get off of it. I was just trying to think of something as hopeless as that."