No. 79.-AVERAGE AMOUNT OF NATIONAL-BANK NOTES OUTSTANDING AND THE REDEMPTIONS, BY FISCAL YEARS, FROM 1875 (THE FIRST YEAR OF THE Agency).

No. 80.-CHANGES DURING THE FISCAL YEAR 1910 IN THE FORCE EMPLOYED IN THE TREASURER'S OFFICE.

No. 81.-APPROPRIATIONS MADE FOR THE FORCE EMPLOYED IN THE TREASURER'S OFFICE AND SALARIES PAID DURING THE FISCAL YEAR 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 Statutes 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 considerably below the value of the gold deposits. The gold deposits in the fiscal year 1909 amounted to $142,124,941.59 and the gold coinage 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 bullion 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

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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 coining presses in the Philadelphia Mint, accomplishing a considerable reduction in the number of employees required to operate the 21 presses in that institution. These feeds have also been introduced at Denver and San Francisco. Similar apparatus had previously 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 coinage 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 opening of the new mint at Denver in 1905 came, therefore, almost simultaneously 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 continuance 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 operations in the near future, the estimates for 1911 have been made for the conduct of the institution as an assay office only. The appropriations asked total $17,940, which compares with $107,300 appropriated 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

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 districts 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 mining 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 manner the function of a mint. Later, the further step was taken, by way of increasing 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 inaugurated the policy of shipping the bullion to the mint at the expense of the Treasury instead of 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 production is mainly by well-organized companies and from ores, which are commonly shipped to smelters or reduction works, and the product eventually reaches 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 ship 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

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 call 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 unnecessary 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. In the report for 1904 I said:

There has never been any continued demand upon the Treasury for gold except for export, and a demand for export is always a demand for bars. The exporters prefer bars because the latter are always of full weight, while all coin that has been in circulation is to some extent abraded. During the six months from January 1, 1904, to July 1, 1904, the total presentations of United States legal-tender notes for redemption in gold amounted to only $6,591,240, while in the same time the Treasury gave $60,790,511 in gold bars in direct exchange for gold certificates. At times in the last year it has been difficult to meet the demand for bars as fast as it came, and some coin has doubtless been exported which would not have gone if bars had been available. It is clear that nothing is gained by compelling the mints to work bars up into coin while it is being taken for export because bars can not be had. And it is equally plain that the Treasury would not be weakened by carrying a larger proportion of its reserve in bars.

Practically the entire gold production of this continent is going into the vaults of the Treasury. This gold will never be wanted in the form of coin. It will be held as the basis of our monetary system, but the habits of our people are fixed, and it is certain that they will always prefer paper money for actual use. The only important demands upon the Treasury for gold have always been for bullion for export. With $1,000,000,000 of coined gold in the Treasury it is perfectly safe to permit the issuance of gold certificates against bullion, allowing the Secretary of the Treasury to determine in his discretion when and how much shall be converted into coin. Such action will result in important economies in the mint service.

DEPOSITS OF GOLD BULLION.

The value of gold bullion contained in original deposits at the mints and assay offices during the fiscal year 1910 was $126,767,967. The redeposits during the year, consisting of bullion transferred from one office to another and bars bearing the stamp of one of the mints or assay offices, amounted to $35,519,671. The value of the gold bullion and uncurrent domestic and foreign coin received, including redeposits, amounted to $165,890,779, which was the total of gold receipts.