LETTER
FROM THE
SECRETARY OF STATE

INCLOSING A
REPORT

OF THE
DIRECTOR OF THE MINT,

SUGGESTING THE EXPEDIENCY OF SOME
ALTERATIONS IN ITS ESTABLISHMENT,

TO RENDER IT
LESS EXPENSIVE TO THE PUBLIC,

AND
MORE ACCOMODATING TO DEPOSTORS.

20th December, 1796,

. . . . . . . .

13th February, 1797,
Committed to a Committee of the whole House, on Monday next.

. . . . . . . .

8th December, 1797,
Committed to a Committee of the whole House, on Wednesday next.

Department of State,
December 1796.

SIR,

By the direction of the President of the United States, I have the honor to enclose a report of the Director of the Mint, suggesting the expediency of some alterations in its establishment, to render it less expensive to the public, and more accomodating to depositors. The report is accompanied with statements of the gold, silver and copper coins, issued from the mint, from its commencement to the 24th of the last month, accounts of the gold and silver bullion, which has been deposited, and an account of wastage, and a deficit in the silver coinage. which require an appropriation of two thousand eight hundred and twenty dollars and seventy one cents, to reimburse depositors.

I am, with great respect,
Sir,
Your most obedient Servant,

TIMOTHY PICKERING.

. . . . . . . .

The Speaker of the House of Representatives of the United States.

Mint of the United States,
November 29, 1796.

SIR,

I have the honor of inclosing, for the President of the United States, my annual Report of the State of the Mint, with the abstracts referred to therein.

With sentiments of esteem and respect,
I remain,
Sir,
Your most obedient, and very humble Servant,

ELIAS BOUDINOT.

. . . . . . . .

To the Secretary of State

REPORT

. . . . . . . .

The Director of the Mint of the United States, respectfully reports to the President of the United States on the state of the MINT -

That during the experience of twelve months, he has turned his attention (as far as been in his power) to the institution under his care. He has seen with regret an opinion generally prevailing, that the establishment is unnecessarily expensive, and less productive than was rationally expected by its advocates and friends.

The Director finding some foundation for the charge, has endeavored to discover the cause, as nothing appears in the general nature of the institution, to warrant the idea.

The issue of the enquiry is, that the extraordinary expences attending the Mint, are in a great measure, owing to itsoriginal plan and the priciples on which it was established. Among others, the whole coinage, including the refinement of the precious metals, was directed by law to be executed at the public expence, the depositor being fully indemnified from all charges whatever: On this principle, not only the original cost of the works, and the salaries of the stated officers, fall on the public; but also the whole amount of the workmanship, with the alloy, wastage and contingent losses.

The want of experimental knowledge in the business at the first establishment of the Mint prevented any tolerable precise estimate of the expences necessarily attending the process; but soon after the comemncement of the business, it was found impracticable to proceed with propriety, unless an addition was made to the establishment, by the appointment of a Melter and Refiner.

This important and necessary officer, is not known in foreign Mints, as the precious metals are there generally deposited of the proper standard, or above it; or they are purchased by the Mint, and become public property; there being professional refiners independent of the Mints whose business it is to purify metals under standard; but there being no such artists in this city who follow the business, it became indispensably necessary to execute this service in the Mint.

This circumstance was not foreseen, or if foreseen, was considered as included in the duties of the Assayer; but the necessity of so essential a check on that officer, forbad this measure, had it been otherwise practicable. This added considerably to the annual expenses of the Mint.

Formerly the Director could not make any charge for this process, against depositors, the whole expence therefore fell on the public. Thus on assaying one deposit of about 96,000 oz. of silver bullion, it turned out near 24,000 oz. under standard; to refine which, it cost the United States upwards of 500l, so that the depositor really gained that sum, by bringing his bullion to the Mint. This operated very unequally among depositors. The citizen who brought bullion in this debased state, to the Mint, received as much coin for the standard silver therein, as he whose bullion was previously refined equal to the standard, and ready for coining at a very trifling expence.

Again, the institution of the Mint, without any appropriation of capital, either to purchase the precious metals in bullion, anticipate payments due on deposits, or to coin for the public, has been another cause of very considerable expence. Depending upon depositors alone for the precious metals, it became necessary for their encouragement and satisfaction to coin every deposit as soon as possible after it came into the Treasury of the Mint, to prevent its remaining unproductive to the depositor; by which means the clippings and grains were obliged to be melted and coined as they arose, often three or four times for one deposit.

Thus the melting, refining and coining a deposit of 200 oz. of silver, or 20 oz. of gold, would cost the public nearly as much as 1000 oz. of either, and a much greater proportional wastage; whereas could the bullion be purchased for the public at the market price, and kept in the vaults till a large quantity might be coined at once or a capital of about ten thousand dollars be allowed to the Mint, so as to anticipate the payments to depositors without being obliged to an immediate coinage on every occasion, a very great public saving would take place, not only as to the wastage, but in the expenditure of the materials and labour used in the process, and no injury done to the United States, but in the loan of the money for a short time. In a word, the difference would be much the same, as between the wholesale merchant and the huckster.

This measure would also have a tendency to fix the price of bullion, and indemnify the public for some part of the expence of coinage. The only question that would arise is, whether, on the principles of political economy, it would be a prudent measure on the part of government? Suppose the expences of coinage, including wastage, to be fixed at three per centum to the depositor, while in foreign countries, it costs nothing. The consequence would be, that bullion in America, might vary its price three per cent. according to the balance of trade; while bullion in those countries must be supposed invariable in its price, let the balance of trade stand as it will. Bullion then, in those countries will always be at the highest price it ever can be at in America, since it is the price of coin; but in America it may be three per cent. lower. If therefore the United States, by coining free of all expence, contribute to keep the price of bullion higher than it is in countries where the coinage is paid for, a voluntary expence is created, of which there can be no just reason to complain.

A representation of some of these difficulties, with the dangerous situation of the Mint, for want of protecting laws to secure the instruments of coinage, the metals and the coin, as also to prevent counterfeits, has been heretofore made by the officers of the Mint, with but with little other success, than a resolution of Congress, enabling the Director to retain the expence of refining the precious metals under standard; but the wastage, alloy and coinage, are still dead charges on the public Treasury.

While therefore this policy, on the whole, is considered as beneficial to the United States, the complaints against the Mint for its heavy expences to the public, are without solid foundation, as it is impossible to carry on an institution of this nature, under these circumstances, and which requires from 15 to 20 workmen and labourers to attend it, without great expence. Add to this, that the alloy of silver and copper, with the loss by necessary wastage, must unavoidably rise to a considerable annual amount.

But notwithstanding these, and other difficulties attending an infant institution, especially the late great advance in the prices of materials and labour, the aggregate expences of the Mint, are greatly reduced, either from the superior knowledge of the persons employed, gained by experience, or from new arrangements found to be more advantageous than those made on the spur of the occasion. This will appear more evident, by a review of the progressive reduction of the contingent expences, in the quarterly accounts rendered into the Treasury Department, and it is hoped that there will be a further progress in this desirable economy.

When the present Director entered upon the administration of the Mint, there was no appropriation of money for the purchase of copper, for the coinage of cents. This he clearly foresaw would prove a source of further expence, by often leaving the workmen without employ. He made application to Congress by their committee, on this subject; but all that was obtained was thirteen thousand dollars, which was coined into cents, and returned into the public Treasury, or remitted for the purchase of copper, before the rising of Congress the last spring. No further appropriation was made, till it was too late to procure the necessary importation of copper for the summer's coinage, whereby much time has been lost, and some considerable expence of workmen has been added to the summer's account.

It is now hoped, from the present arrangement, no such inconvenience will arise hereafter; but a continual and ample supply of copper coinage be produced adequate to the public wants.

As the laws relative to the Mint now stand, the officers are obliged to pay to each depositor the coins arising from his deposit, in strict order, and to reserve three pieces of coin from each mass; yet no appropriation has been made to replace the reserves, or to make good the wastage: it is therefore impossible for the officers of the Mint to comply with the law; and the depositors complainof being kept out of their property, till provision is made by Congress for their relief.

By a number of new half-johannes brought to the Mint for assaying, said to have been coined in the United States, it appears that a coinage for that purpose is carried out in some state in the Union. Some of these are found to be under standard in their quality, and between two and three penny-weights less than their true weight. These are facts which the Director thinks it his duty to communicate to the President.

from the various experiments made since the establishment of the Mint, it is found unnecessary to make use of silver in alloying of gold, unless it is for the purpose of beautifying the coin; in which case it should be composed at the proportion of one-third silver to two-thirds copper.

By the following abstracts of the bullion and coin received and issued from the Mint, since its first establishment, may be seen, as well the nature of the deposits made, as the coins returned to the Treasury, and the dates of the receipts and issues to this day, with the amount of the copper coinage.

from this it appears, that there is dur for wastage, during that period, the quantity of fifteen hundred and ninety-nine ounces, fifteen penny-weights and fifteen grains of silver, equal to eighteen hundred and forty-five dollars, ninety-five cents and five mills; besides a deficit of eight hundred and forty-four ounces, seventeen penny-weights and five grains of silver, equal to nine hundred and seventy-four dollars, seventy-five cents and five mills; making in the whole two thousand eight hundred and twenty dollars and seventy-one cents; for which an appropriation ought to be made by law, to satisfy a deficient deposit.

The Director thinks it necessary to mention, in exculpation of the former officers of the Mint, that by a report made on this subject, it appears that there is yet a considerable quantity of old pots and test bottoms, from which it is expected that nearly the amount of the deficient silver, as stated above, will be extracted.

ELIAS BOUDINOT.

Mint of the United States,
29th November, 1796.

Abstract (A.)

A Statement of the Denomination and Value of Gold Coins, issued from the Mint of the United States, from the commencement of the establishment, to the date hereof.

Mint of the United States,

Treasurer's-Office, November 24, 1796.

NICHOLAS WAY.

Abstract (B.)

A Statement of the Denomination and Value of Silver Coins, issued from the Mint of the United States, from the commencement of the establishment, to the date hereof.

Mint of the United States,

Treasurer's-Office, November 24, 1796.

NICHOLAS WAY.

Abstract (C.)

A Statement of the Denomination and Value of Copper Coin, issued from the Mint of the United States, from the commencement of the establishment, to the date hereof.

Mint of the United States,

Treasurer's-Office, November 24, 1796.

NICHOLAS WAY.

Abstract (D.)

A Statement of the gross and standard Weight of Gold Bullion, deposited at the Mint of the United States, for coinage, from the commencement of the establishment, to the date hereof.

Mint of the United States,

Treasurer's-Office, November 24, 1796.

NICHOLAS WAY, Treasurer.

Abstract (E.)

A Statement of the gross and standard Weight of Silver Bullion, deposited at the Mint of the United States, for coinage, from the commencement of the establishment, to the date hereof.

Mint of the United States,

Treasurer's-Office, November 24, 1796.

NICHOLAS WAY.

Abstract (F.)

Chief Coiner, his account of Silver, in Account Current with the Treasurer of the Mint.

Mint of the United States,

Treasurer's-Office, November 24, 1796.

NICHOLAS WAY.