Fiscal Year Ended June 30, 1910 REPORT OF THE DIRECTOR OF THE MINT. TREASURY DEPARTMENT, BUREAU OF THE MINT, Washington, January 6, 1911. SIR : In compliance with the provisions of section 343, Revised Stat­ utes of the United States, the following report covering the operations of the mints and assay offices of the United States during the fiscal year ended June 30, 1910, being the thirty-eighth annual report of the Director of the Mint, is respectfully, submitted: VOLUME OF COINAGE. The value of the coinage executed at the mints in the fiscal year ended June 30, 1910, was less than in the preceding year, and con­ siderably below the value of the gold deposits. The gold deposits in the fiscal year 1909 amounted to $142,124,941.59 and the gold coin­ age of that year was $120,399,953.35. The gold deposits in the fiscal year 1910 amounted to $126,767,967, and the gold coinage for the latter period was only $47,578,875. The principal reason for not doing more coinage was that automatic weighing machines were under construction which were expected to materially reduce the cost of weighing the individual coins, and pending their completion gold bulHon was allowed to accumulate. AUTOMATIC MACHINES. For a number of years the machine shop of the Philadelphia Mint had been at work developing an automatic weighing machine to do away with the hand weighing of each individual coin produced. The first machine was completed in 1907, was a success, and exhibited at the Jamestown Exposition. About that time, however, the experts who were engaged upon this machine were called upon to build a machine for the customs service, which they were successful in doing, but the task diverted them temporarily from the equipment of the mints. Four machines were completed by the end of 1908, and early in 1910 the Philadelphia machine shop began work upon four more. These machines have now been completed and are in use, three in 241 65872°—FI 1910 16 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Fiscal Year Ended June 30, 1910 242 REPORT ON THE FINANCES. San Francisco, two in Denver, and three in Philadelphia. They are very satisfactory and have accomplished an important reduction in the number of employees in the mints. During the year an automatic feeding apparatus was placed upon all the coimng presses in the Philadelphia Mint, accomplishing a con­ siderable reduction in the number of employees required to operate the 21 presses in that institution. , These feeds have also been intro­ duced at Denver and-San Francisco. Similar apparatus had pre­ viously been attached to the upsetting machines. REDUCTION IN COINAGE OPERATIONS. An important reduction in the amount of work for the mints to do has occurred in recent years by reason of the cessation in the coinage of silver dollars and the practical completion of the Philippine stock. The silver bullion purchased under the act of July 14, 1890,'was exhausted in 1905, and the coinage of dollar pieces, which had been at the rate of 1,500,000 per month, ended with it. The record coin­ age for the mints is that of the fiscal year 1902, which amounted in value to $228,202,151.55, not including 12,552,629 pesos in silver and a considerable minor coinage for the Philippines, and 2,730,000 pieces for foreign countries. There were in operation, in this record year only three mints, to wit, those at Philadelphia, New Orleans, and San Francisco. The open­ ing of the new mint at Denver in 1905 came, therefore, almost simul­ taneously with an important reduction in the amount of coinage to be done and at a time, moreover, when new labor-saving machines and devices were about to seriously diminish the number of employees required*. NEW ORLEANS MINT IDLE. - The result of all these influences has been to force a scaling down of operations in all of the mints and a suspension of coinage in the New Orleans Mint. The amount of gold which is available for coinage at New Orleans is small, and the total coinage of the country can be done materially cheaper at three mints and with three organizations than at four mints and with four complete complements of officers and employees. The amount of coinage which could be given to the New Orleans Mint under these conditions did not warrant the con­ tinuance of operations there, and they were suspended April 1, 1909, and a large reduction of the force made at that time. At various dates in 1910 further reductions were made, and there appearing to be no likelihood that the mint could advantageously resume opera­ tions in the near future, the estimates for 1911 have been made for the conduct of the institution as an assay office olily. The appro­ priations asked total $17,940, which compares with $107,300 appro­ priated for the fiscal year 1911. THE MINOR ASSAY OFFICES. In the estimates submitted for 1912 the assay offices at Charlotte and St. Louis are dropped, for the reason that the volume of business handled is unimportant and that the few producers making use of them could without much inconvenience send their bullion direct to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Fiscal Year Ended June 30, 1910 DIRECTOR OF MINT. 243 the mints, thus saving the Treasury not only the cost of maintaining the offices, but the cost of transporting the bullion to a mint. The larger part of the deposits at the St. Louis office come from Chicago and Cincinnati and the depositors could as well send them direct to the Philadelphia Mint as to St. Louis. When the policy of maintaining assay offices in the producing dis­ tricts was entered upon, the gold production of the country was chiefly from placers and by the labor of individual miners working claims on their own account. The Government assay offices were designed to serve these niining communities by giving reliable assays and by melting the placer dust and nuggets into bars, which were returned to the depositor with the weight and fineness stamped upon them; that is to say, they performed in a simpler maimer the func­ tion of a mint. Later, the further step was taken, by way of increas­ ing the service of these offices to the public, of buying the bullion at its coinage value, thus saving the miners from the exactions of the bullion buyer. This was done in 1878, and still later Congress inau­ gurated the policy of shipping the bullion to the mint at the expense of the Treasury instead or collecting the transportation charge from the depositor. This policy is still maintained. It is apparent that the conditions surrounding the production of gold and which prompted the establishment of these assay offices have radically changed. At the time the offices at Denver, Helena, and Boise were established, not only was the production chiefly at the hands of individual miners who were obliged to dispose of their gold on the spot, but these localities were distant from a railway and the risks and cost of transportation were a serious handicap to the producers. When. these offices were established, the country was using inconvertible paper as currency, and it was deemed a wise public policy to encourage the production of the precious metals and the exploration and development of the districts an which these metals were known to exist. At the present time, however, our gold produc­ tion is mainly by well-organized companies and from ores, which are commonly shipped to smelters or reduction works, and the product eventually reacnes the offices of the mint service at some distance from the place of production. A large share of the receipts of these assay offices come to them by express, in many instances costing the shippers practically as. much as would shipment direct to a mint. For example, a producer in Nevada, who ships bullion to the assay office at Salt Lake City^ as a number of them do, might as well sliip it direct to the San Francisco Mint, thus saving the Government the expense of transporting it from the assay office to a mint. In view of these conditions Congress may well consider whether the service now rendered by these offices warrants the expenditure for their maintenance. GOLD CERTIFICATES AGAINST BULLION. In the report of this bureau for the fiscal year 1902, the director called attention to the uselessness of coining all the gold bullion and foreign coin received at the mints, and again in the report for 1904 the embarrassment occasioned by the statutory requirement that so Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Fiscal Year Ended June 30, 1910 244 REPORT ON THE FINANCES. much of the reserve fund must be kept in coin was pointed out. The paragraph in the 1902 report is as follows: It is opportune here to caU attention to the fact that the gold coinage of the country is now entering almost entirely into storage and that the cost of coinage is an unneces­ sary expense. The Treasury holds now about $500,000,000 of coined gold, which is doubtless more than will be called for in a generation to come. Practically all of the current coinage is being deposited in the Treasury for certificates, ' When gold is required for export it is wanted in bars, while for domestic circulation the public prefers the Treasury certificates, which, with some modifications of the statutes, might as well be issued against bars, ' The case is stronger now than then, for the amount of coined gold in the Treasury is more than double the sum held at that time.