April 2, 1792.
An Act establishing a Mint, and regulating the Coins of the United States.
Section I. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, and it is hereby enacted and declared, That a mint for the purpose of a national coinage be, and the same is established; to be situate and carried on at the seat of the government of the United States, for the time being: And that for the well conducting of the business of the said mint, there shall be the following officers and persons, namely,--- a Director, an Assayer, a Chief Coiner, an Engraver, a Treasurer.
Sec. 9. And be it further enacted, That there shall be from time to time struck and coined at the said mint, coins of gold, silver, and copper, of the following denominations, values and descriptions, viz. Eagles--- each to be of the value of ten dollars or units, and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold. Half Eagles--- each to be of the value of five dollars, and to contain one hundred and twenty-three grains and six eighths of a grain of pure, or one hundred and thirty-five grains of standard gold. Quarter Eagles--- each to be of the value of two dollars and a half dollar, and to contain sixty-one grains and seven eighths of a grain of pure, or sixty-seven grains and four eighths of a grain of standard gold. Dollars or Units--- each to be of the value of a Spanish milled dollar as the same is now current, and to contain 371¼ grains of pure, or 416 grains of standard, silver. Half Dollars--- each to be of half the value of the dollar or unit, and to contain one hundred and eighty-five grains and ten sixteenth parts of a grain of pure, or two hundred and eight grains of standard silver. Quarter Dollars--- each to be of one fourth the value of the dollar or unit, and to contain ninety-two grains and thirteen sixteenth parts of a grain of pure, or one hundred and four grains of standard silver. Dismes--- each to be of the value of one tenth of a dollar or unit, and to contain thirty-seven grains and two sixteenth parts of a grain of pure, or forty one grains and three fifth parts of a grain of standard silver. Half Dismes--- each to be of the value of one twentieth of a dollar, and to contain eighteen grains and nine sixteenth parts of a grain of pure, or twenty grains and four fifth parts of a grain of standard silver. Cents--- each to be of the value of the one hundredth part of a dollar, and to contain eleven penny-weights of copper. Half Cents--- each to be of the value of half a cent, and to contain five penny-weights and half a penny-weight of copper.
January 18, 1837.
An Act supplementary to the act entitled "An act establishing a mint, and regulating the coins of the United States."
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the officers of the mint of the United States shall be a director, a treasurer, an assayer, a melter and refiner, a chief coiner and an engraver, to be appointed by the President of the United States, by and with the advice and consent of the Senate
Sec. 9. And be it further enacted, That of the silver coins, the dollar shall be of the weight of 412½ grains; the half dollar of the weight of two hundred and six and one-fourth grains; the quarter dollar of the weight of one hundred and three and one-eighth grains; the dime, or tenth part of a dollar, of the weight of forty-one and a quarter grains; and the half dime, or twentieth part of a dollar, of the weight of twenty grains, and five-eighths of a grain. And that dollars, half dollars, and quarter dollars, dimes, and half dimes, shall be legal tenders of payment, according to their nominal value, for any sums whatever.
Sec. 10. And be it further enacted, That of the gold coins, the weight of the eagle shall be two hundred and fifty-eight grains; that of the half eagle one hundred and twenty-nine grains; and that of the quarter eagle sixty-four and one-half grains. And that for all sums whatever, the eagle shall be a legal tender of payment for ten dollars; the half eagle for five dollars; and the quarter eagle for two and a half dollars.
Act of February 21, 1853.
An Act Amendatory of existing laws relative to the half dollar, quarter dollar, dime, and half dime.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That from and after the first day of June, eighteen hundred and fifty-two, [three] the weight of the half dollar or piece of fifty cents shall be 192 grains, and the quarter dollar, dime, and half dime, shall be, respectively, one half, one fifth, and one tenth of the weight of said half dollar.
Sec. 2. And be it further enacted, That the silver coins issued in conformity with the above section, shall be legal tenders in payment of debts for all sums not exceeding five dollars.
Sec. 6. And be it further enacted, That, at the option of the depositor, gold or silver may be cast into bars or ingots of either pure metal or of standard fineness, as the owner may prefer, with a stamp upon the same, designating its weight and fineness; but no piece, of either gold or silver, shall be cast into bars or ingots of a less weight than ten ounces, except pieces of one ounce, of two ounces, of three ounces, and of five ounces, all of which pieces of less weight than ten ounces shall be of the standard fineness, with their weight and fineness stamped upon them; but, in [all] cases, whether the gold and silver deposited be coined or cast into bars or ingots, there shall be a charge to the depositor, in addition to the charge now made for refining or parting the metals, of one half of one per centum; the money arising from this charge of one half per centum shall be charged to the Treasurer of the Mint, and from time to time, on warrant of the Director of the Mint, shall be transferred into the Treasury of the United States: Provided, however, That nothing contained in this section shall be considered as applying to the half dollar, the quarter dollar, the dime, and half dime.bill 271 introduced, March 8, 1852.
Senate of the United States.
Monday, January 6, 1868.
Senate bill 217.
Mr. Sherman asked, and by unanimous consent obtained, leave to bring in the following bill; which was read twice, referred to the Committee on Finance, and ordered to be printed.
In relation to the coinage of gold and silver.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, with a view to promote a uniform currency among the nations, the weight of the gold coin of five dollars shall be one hundred and twenty-four and nine-twentieths troy grains, so that it shall agree with a French coin of twenty-five francs, and with the rate of thirty-one hundred francs to the kilogram; and the other sizes or denominations shall be in due proportion of weight, and the fineness shall be nine-tenths or nine hundred parts fine in one thousand.
Sec. 2. And be it further enacted, That, in order to conform the silver coinage to this rate and to the French valuation, the weight of the half dollar shall be one hundred and seventy-nine grains, equivalent to one hundred and sixteen decigrams; and the lesser coins shall be in due proportion, and the fineness shall be nine-tenths. But the coinage of silver pieces of one dollar, five cents, and three cents shall be discontinued.
Sec. 3. And be it further enacted, that the gold coins to be issued under this act shall be a legal tender in all payments to any amount; and the silver coins shall be a legal tender to an amount not exceeding ten dollars in any one payment.
Sec. 7. And be it further enacted, That when the gold and silver coins of the United States are brought to the mint or its branches for recoinage, such coins shall be received by weight, and those of them which have been issued as nine-tenths fine shall be so received, but all others by assay. And in payments at the mint for both gold and silver coins above specified, the value shall be rendered according to the weights prescribed in the first and second sections of this act; and there shall be no charge for coinage, seigniorage, or internal revenue; and on all other deposits of gold for coinage the charge shall be one-half of one per centum.
41st Congress, 2nd Session
Senate of the United States.
Thursday, April 28, 1870.
Senate bill 859.
Mr. Sherman asked, and by unanimous consent obtained, leave to bring in the following bill; which was read twice, referred to the Committee on Finance, and ordered to be printed.
Revising the laws relative to the mints, assay offices, and coinage of the United States.
Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled, That the mint of the United States is hereby established as a bureau of the Treasury Department, embracing in its organization and under its control all mints for the manufacture of coin, or assay offices for the stamping of bars which are now, or which may be hereafter, authorized by law. The chief officer of the said bureau shall be denominated the Director of the Mint of the United States, and shall be under the general direction of the Secretary of the Treasury. He shall be appointed by the President, on the recommendation of the Secretary of the Treasury, by and with the advice and consent of the Senate, and shall hold his office for the term of five years, unless sooner removed by the President, upon reasons to be communicated by him to the Senate.
Sec. 14. And be it further enacted, That of the gold coins, the weight of the double eagle, or twenty-dollar piece, shall be five hundred and sixteen grains; that of the eagle, or ten-dollar piece, two hundred and fifty-eight grains; that of the half-eagle, or five-dollar piece, one hundred and twenty-nine grains; that of the quarter eagle, or piece of two and one-half dollars, sixty-four and one-half grains; that of the three-dollar piece, seventy-seven and four-tenths grains; that of the one-dollar piece, or unit of value, twenty-five and eight-tenths grains; and these coins shall be a legal tender in all payments.
Sec. 15. And be it further enacted, That of the silver coins, the weight of the half dollar, or piece of fifty cents, shall be one hundred and ninety-two grains; and that of the quarter dollar and dime, shall be, respectively, one-half and one-fifth of the weight of said half dollar. That the silver coin issued in conformity with the above section shall be a legal tender in any one payment of debts for all sums less than one dollar.
Sec. 16. And be it further enacted, That the standard for minor coinage shall be an alloy of copper and nickel, to be composed of three-fourths copper and one-fourth nickel.
Sec. 17. And be it further enacted, That of the copper-nickel coinage the weight of the piece of five cents shall be five grams, or seventy-seven and sixteen-hundredths grains troy; that of the three-cent piece three grams, or forty-six and thirty-hundredths grains; and of the one-cent piece, one and one-half grams, or twenty-three and fifteen-hundredths grains, which coins shall be a legal tender in any one payment to the amount of fifteen cents.
Sec. 18. And be it further enacted, That no coins, either of gold, silver, or minor coinage, shall hereafter be issued from the mint other than those of the denominations, standards, and weights herein set forth.
Sec. 19. And be it further enacted, That upon the coins of the United States there shall be the following devices and legends: Upon one side of each of said coins there shall be an impression emblematic of liberty, with an inscription of the word "Liberty," and the year of the coinage; and upon the reverse of each coin there shall be the figure or representation of an eagle, with the inscriptions "United States of America" and "E Pluribus Unum," and a designation of the value of the coin; but on the reverse of the gold dollar and three-dollar piece, the dime, five, three, and one cent piece, the figure of the eagle shall be omitted; and the Director of the Mint, with the approval of the Secretary of the Treasury, may cause the motto, "In God we trust," to be placed upon such coins as shall admit of such legend.
Sec. 25. And be it further enacted, That the only charge on deposits of bullion for coin, bars, or disks shall be as follows: For refining, when the bullion is below standard; for toughening, when metals are contained in it which render it unfit for coinage; for copper used for alloy, when the bullion is above standard; for silver introduced into the alloy of gold; for separating the gold and silver, when these metals exist together in the bullion; for the preparation of bars or disks. And the rate of these charges shall be fixed, from time to time, by the Director, with the concurrence of the Secretary of the Treasury, so as to equal but not to exceed, in their judgment, the actual average expense to each mint of the material and labor employed in each of the cases aforementioned.
Sec. 68. And be it further enacted, That this act shall take effect in two months from the date of it passage; at the expiration of which time the offices of the treasurer of the mints in Philadelphia, San Francisco, and New Orleans shall be vacated, and the assistant treasurer at New York shall cease to perform the duties of treasurer of the assay office. The other officers and employees of the mints and assay offices now appointed shall continue to hold their respective offices, they having first given the necessary bonds, until further appointments may be required, the Director of the Mint at Philadelphia being styled and acting as superintendent thereof. The duties of the treasurers shall devolve as herein provided, upon the superintendents, and said treasurers shall act only as assistant treasurers of the United States: Provided, That the salaries heretofore paid to the treasurers of the mints at Philadelphia, San Francisco, and New Orleans, acting as assistant treasurers, shall hereafter be paid to them as "assistant treasurers of the United States," and that the
Reported by Mr. Sherman with amendments, viz: Strike out the parts in [brackets] and insert the parts printed in italics.
Revising the laws relative to the mints, assay offices, and coinage of the United States.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Mint of the United States is hereby established as a bureau of the Treasury Department, embracing in its organization and under its control all mints for the manufacture of coin, or assay offices for the stamping of bars which are now, or which may be hereafter, authorized by law. The chief officer of the said bureau shall be denominated the Director of the Mint of the United States, and shall be under the general direction of the Secretary of the Treasury. He shall be appointed by the President on the recommendation of the Secretary of the Treasury, by and with the advice and consent of the Senate, and shall hold his office for the term of five years, unless sooner removed by the President, upon reasons to be communicated by him to the Senate.
Sec. 2. And be it further enacted, That the Director shall have the general supervision of all mints and assay offices, and shall make an annual report to the Secretary of the Treasury of their operations at the close of each fiscal year, and from time to time such additional reports setting forth the operations and condition of such institutions as the Secretary shall require. He shall lay before the Secretary the annual estimates for their support. [He shall appoint the necessary clerks to discharge such duties as he shall direct, whose appointment and rate of compensation shall first be approved by the Secretary of the Treasury. He shall also have charge of all other matters, statistical and otherwise, tending to the development of the mining industry of the precious metals.] And the Secretary of the Treasury shall appoint a number of clerks, classified according to law, necessary to discharge the duties of said bureau.
Sec. 25. And be it further enacted, That the only charge on deposits of bullion for coin, bars, or disks shall be as follows: For coinage, whether the gold and silver deposited be coined or cast into bars or ingots, in addition to the charge for refining or parting the metals, three-tenths of one per centum. For refining, when the bullion is below standard; for toughening, when metals are contained in it which render it unfit for coinage; for copper used for alloy, when the bullion is above standard; for silver introduced into the alloy of gold; for separating the gold and silver, when these metals exist together in the bullion; for the preparation of bars or disks. And the rate of these charges, other than for coinage, shall be fixed, from time to time, by the Director, with the concurrence of the Secretary of the Treasury, so as to equal but not to exceed, in their judgment, the actual average expense to each mint of the material and labor employed in each of the cases aforementioned.
Mr. Sherman. If there is no other morning business, I desire to call up Senate bill No. 859, revising the laws relative to the mints and assay offices. I submit a motion to that effect.
The motion was agreed to; and the Senate, as in Committee of the Whole, proceeded to consider the bill (S. No. 859) revising the laws relative to the mints, assay offices, and coinage of the United States.
The Chief Clerk proceeded to read the bill, but before concluding,
The Vice President [Shuyler Colfax]. The Secretary will suspend. The hour of one o'clock having arrived, the Calendar is now before the Senate.
Mr. Sherman. I move to postpone all other business with a view to continue the consideration of this bill.
The Vice President. The Calendar being before the Senate, the Senator from Ohio moves to postpone its consideration with a view to continuing the consideration of the bill revising the laws relative to the mints.
Mr. Sherman. I hope it will not take long.
The motion was agreed to.
The Vice President. The mint bill is still before the Senate.
The Vice President. The bill (S. No. 859) revising the laws relative to the mints, assay offices, and coinage of the United States, is before the Senate as in Committee of the Whole, and the Secretary will report the first amendment proposed by the Committee on Finance.---[Without concluding the reading of the bill.]
The Chief Clerk. The first amendment is on page 2, section two, commencing at line eight, to strike out the following words:
He [the Director of the Mint] shall appoint the necessary clerks to discharge such duties as he shall direct, whose appointment and rate of compensation shall first be approved by the Secretary of the Treasury. He shall also have charge of all other matters, statistical and otherwise, tending to the development of the mining industry of the precious metals.
And in lieu thereof to insert the following:
And the Secretary of the Treasury shall appoint a number of clerks, classified according to law, necessary to discharge the duties of said bureau.
The amendment was agreed to.
The next amendment of the Committee on Finance was on page 8, section twelve, line six, after the words "San Francisco" to insert the word "each;" so as to read:
To the superintendents of the mints at Philadelphia and San Francisco, each, $5,000.
The amendment was agreed to.
The next amendment was an page 12, section twenty five, after the words "as follows," in the third line, to insert:
For coinage, whether the gold and silver deposited be coined or cast into bars or ingots, in addition to the charge for refining or parting the metals, three tenths of one per cent.
Mr. Sherman. Before that matter is referred to, I wish to have a typographical correction made on page 11, in line thirteen of section nineteen, near the top of the page. The word "on" should be inserted after the word "placed;" so as to read "the Director of the Mint, with the approval of the Secretary of the Treasury, may cause the motto 'In God we trust' to be placed on such coins as shall admit of such legend." The word "on" has been left out by accident in printing.
The Vice President. That correction will be made. The question is on the amendment to section twenty-five, which has been read.
Mr. Cole. I hope this amendment reported by the Committee will not be agreed to by the Senate. The bill as it was presented, and I believe it was prepared very carefully and considerately in the Department, left out what has hitherto been known as the seigniorage, or coinage charge, upon gold brought to the mints to be converted into coin. This charge I believe to be unjust and oppressive to those who are in possession of bullion and wish to convert it into coin. With as much propriety, in my judgment, might any one who receives greenbacks or United States notes from the Treasury be charged a percentage for the printing of those notes. To convert bullion into coin is of no special advantage to the owner of that bullion. It is of advantage, however, to the country at large to have bullion converted into the coin of the United States. I need not go into an argument to show this advantage. The best argument in favor of it is that the mints are established by the United States and carried on at considerable expense to convert the precious metals into coin.
Besides, the Constitution makes it a monopoly on the part of the Government to create coins. No private establishment can convert bullion into the legal coin of the United States. The Government claims this privilege exclusively. It performs it for such as having bullion desire to have it converted into coin, and then charges them for this conversion.
This charge is regarded as exceedingly oppressive, as it really is, to the people of the Pacific coast, where bullion is the result of their labor. The effect of it is to drive a large amount of bullion out of the country. This, to be sure, does not amount to a great deal in comparison to the whole amount that is brought to the mint for coinage, but the percentage is sufficient to present an inducement to those having bullion, to bankers who deal in bullion, to send it out of the country to be converted into the coin of other countries. This one half of one per cent. or three tenths of one per cent., as is proposed in this bill, is a sufficient inducement on the part of those who have bullion to let it go out of the country in the form of bullion in the payment of debts that they may owe abroad. A great deal of gold bullion is thus sent out of the country which would otherwise be converted into American coin. A great proportion of it goes to the great center of money operations of the world, to London, where the gold is converted into coin without any charge to the owner. This is a percentage, therefore, in favor of the British Government's institution, and against our own, and as I have said, it prevents a very large amount of bullion being converted into American coins that would otherwise be so stamped.
It is estimated that the amount that is sent abroad in this way is some ten or twelve millions each year, all of which, in addition to the amount that is already converted into American coins, would be so converted but for this charge of one half or three tenths of one per cent. Perhaps the reduction of the charge from the present amount of one half of one per cent. to three tenths of one per cent. will result in some considerable proportion more of the bullion that has been sent abroad being retained for coinage; but even that charge is unjust. There is no more propriety in making a charge for this coinage than there would be in making a charge for the printing of the United States notes or the bonds of the United States to those who receive them from the Treasury. It is no advantage to the persons owning the gold. It adds no value to their commodity, nor are they in any sense enriched by it.
The people of the Pacific coast are exceedingly anxious on this question. It has been the subject of discussion there for a long time. The people there are, with wonderful unanimity, against this charge, for the reason that it drives gold out of the country which would otherwise remain in the country. It drives it abroad for coinage, whereas if it were coined in our own Mint it would enter into the circulation and business of the country and be retained here.
Without having heard any argument to-day in favor of retaining this charge, I shall not further attempt to present the question at the present time. I hope, however, that the amendment will not be agreed to, and that the bill will be left in the very excellent form in which it stood as presented to the Senate, it having, as I understand, been carefully considered by the Treasury Department, and by the persons most capable of putting it in proper shape.---[it omitted from coinage the $1 silver coin; how excellent is that ? did you not pay attention or was it really your opinion ?]
Mr. Sherman. On a question of this kind, which involves rather a matter of business detail, it is somewhat difficult to secure the attention of the Senate, but I hope I shall secure it sufficiently to show that this amendment is vital to the passage of this bill. Without this amendment I certainly would not vote for the bill, and I imagine that a majority of the Senate would not if they understood the subject as thoroughly and as well as most of the Committee on Finance, who have examined it.---[because the Committee understands it even better than Comptroller of the Currency John Knox, and Secretary of the Treasury Boutwell, and director of the mint Linderman, or anybody else who opposes the coinage charge, or the British government which assumes the cost of coining and considers it a good expenditure]
The original bill, introduced by me at the last session of Congess, retained the old mintage charge of one half of one per cent. on the gold coin of the United States. That bill was submitted to all the experts in the United States on the subject of mintage, and received the hearty approval of nearly every one of them, and generally (I think without any exception but the officers of the mint in San Francisco) they were in favor of retaining the minting charge, as it is called. I have before me the testimony of Mr. Patterson, who, I presume, is regarded as the chief expert and the best expert in the United States in the minting business, and he speaks of the retention of the mintage charge in the bill introduced at the last session of Congress in these words:---[No, section 25 of the original version of Senate bill 859, which you introduced on April 28, 1870, did not contain the old mintage charge !!]
"The present one half per cent. coinage charge is retained. The only mint where coinage is free is the British, and the political economists and statesmen are so unanimous in recommending a seigniorage that the chancellor of the exchequer proposes to introduce it into Great Britain. It would be strange if we, by retrograding, while she is advancing, should become the sole exemplars of an exploded system. It would, in view of an international coinage, be especially inopportune to abandon a seigniorage, for it is recognized on all hands that under such a code there must be a tax, and a uniform tax for coinage. (See section 25 of revised bill; also English coinage act, 1870, section 8, Senate Miscellaneous Document 132, Forty-First Congress, second session, page 34.)"
The theory of the coinage charge is this: that every process of minting should be self-sustaining; that the mints of the United States are established for the benefit of the people, to stamp the coin, and that every process of the manufacture of coin should be self-sustaining; that the owners of the gold which is coined, of the silver which is coined, of the copper which is coined, should pay the expense of minting. That has been the theory upon which the Mint of the United States has always existed, and the theory that has been adopted also in every other country except Great Britain, where they departed from it for a special reason. Therefore, in the original bill that was introduced last session, in that respect my friend from California is in error --the mintage charge was maintained at one half of one per cent.
In the amended bill, which was sent to us by the Department after examination, this mintage charge was omitted; not for the purpose of expressing an opinion against the mintage charge, but for the purpose of submitting that question again to the Committee on Finance and the Senate of the United States. The Committee on Finance, after a careful consideration and examination of the question, decided to restore the mintage charge, but to reduce it to three tenths of one per cent. The reason of that is this: under the old system, when the amount of gold coinage was much less than it is now, the expense of coining gold was about one half of one per cent., and therefore for many years the mintage charge was retained at one half of one per cent.; but now, on account of the largely increased quantity of gold to be manufactured into coin, and also on account of the cheapening of the various processes of the Mint, the cost of minting is much less than formerly. I ascertained as nearly as possible the actual cost of converting standard bars into gold coin, and the concurrent testimony of nearly all is that it is about three tenths of one per cent. At that rate we propose to leave the mintage charge.
Mr. President, there are two questions that must be considered in deciding this matter: first, a question of revenue. It is proposed now by the Senator from California that the whole expense of the Mint, so far as gold coinage is concerned, shall be thrown on the Government of the United States; that the owners of the gold, whose property is to be benefited by its passing through the Mint, shall bear no portion of it, but that the people of the United States shall pay the entire cost of the Mint, without any drawback or without any payment by those whose gold is to be stamped with the insignia of the United States.
As a question of revenue, I submit to you, sir, whether, when we are taxing almost everything that is consumed, when our system of taxation has extended further than ever before, it is now wise to abolish a charge which yields us at the present rate $150,000 a year, and which will yield us at the rate proposed by this amendment about one hundred thousand dollars a year ? Is it worth while for us, when we are seeking objects of taxation, to do this duty without any charge whatever, and thus render it necessary to make up the deficiency of revenue from general sources of taxation ?
But that is not all. It must he viewed as a question of political economy. Now, as a question of political economy, the testimony is overwhelming. I could produce here every writer on political economy in England and in the United States to show that the coinage charge is defensible and maintained by every one of them as proper in itself. The general proposition maybe made that the Government of the United States ought not to do anything conferring additional value upon the property of individuals without receiving compensation. This Government is established not for the purpose of promoting the interests of private individuals purely, and the whole mintage system is not established for the mere purpose of inducing people to go into the manufacture or digging of gold. The mints are established merely for the purpose of securing the coin of the country from debasement and from deterioration, and we charge to those persons whose coin is stamped with our insignia only the mere cost of that process, seeking to make no money out of them, and not seeking to confer upon them an advantage or a benefit at the common expense of all the people of the United States.
No country in the world has ever established a system of free coinage but England, and England has maintained it for one hundred and fifty years against the judgment of every writer on political economy that has existed during that time; and within the last year a proposition has been made in Parliament to restore the charge on coinage, and that proposition was only postponed for the present on the ground that negotiations were going on to establish an international coinage, when all nations would probably adopt a common rule of seigniorage. I have here the debates in Parliament a year ago last summer on this subject. The chancellor of the exchequer, Mr. Lowe, in referring to this peculiar position of England on the subject, quotes the opinions of several well-known writers on political economy; and I will read some of them. Sir Dudley North says:---[Sherman has to rely on "money-talks--theology-walks" class-room theologians who never operated even a lemonade-stand and write as the need arises, to underpin his "lawyerly vindication of his own course" of nefarious policy]
"The free coinage is a perpetual motion found out, whereby to melt and coin without ceasing, and so to feed goldsmiths and coiners at the public charge."
Adam Smith, the founder of the science of political economy, says:
"When the tax upon a commodity is so moderate as not to encourage smuggling, the merchant who deals in it, though he advances, does not properly pay the tax, as he gets it back in the price of the commodity. The tax is finally paid by the last purchaser or consumer. But money is a commodity with regard to which every man is a merchant. Nobody buys it but in order to sell it again, and with regard to it there is in ordinary cases no last purchaser or consumer. When the tax upon coinage, therefore, so moderate as not to encourage false coining, though everybody advances the tax, nobody finally pays it, because everybody gets it back in the advanced value of the coin."
Our mintage charge is simply and purely the net cost of the process, no more. Again, Adam Smith says:
"The Government, when it defrays the expense of coinage, not only incurs some small expense, but loses some small revenue, which it might get by a proper duty; and neither the bank nor any other private persons are in the smallest degree benefited by this useless piece of public generosity."
So McCulloch, a well-known English writer on political economy, says:
"Coins charged with a seigniorage equal to the expense of coinage do not pass at a higher value than what naturally belongs to them, but at that precise value; whereas if the expense of coinage be defrayed by the State, coins pass at less than their real value."
Because it only passes at the value of bullion.
"A sovereign is of greater utility and value than a piece of pure unfashioned gold bullion of the same weight; because, while it is as well fitted as bullion for being used in the arts, it is, owing to the coinage, better adapted for being used as money, or in the exchange of commodities. On what principle, then, should Government decline to charge a seigniorage or duty on coins equal to the expense of coinage; that is, to the value which it adds to the coins ?"
Ricardo expresses his opinion in still stronger terms. So Mr. Mill, in his Principles of Political Economy, at, great length comments upon it. I will read a short extract from Mr. Mill:
"If Government, however, throws the expense of coinage, as is reasonable, upon the holder, by making a charge to cover the expense, (which is done by giving back rather less in coin than has been received in bullion, and is called levying a seigniorage) the coin will rise to the extent of the seigniorage above the value of the bullion. If the mint kept back one per cent. to pay the expense of coinage, it would be against the interests of the holders of bullion to have it coined until the coin was more valuable than the bullion by at least that fraction. The coin, therefore, would be kept one per cent. higher in value, which could only be by keeping it one per cent. less in quantity than if its coinage were gratuitous."
So I might go on through the whole catalogue. While no nation in the world has ever coined the gold of private individuals at the expense of the public except England, yet every writer on political economy in England has always criticised and denounced this unwise act on the part of the British Government, and Mr. Lowe says that the very moment the subject of international coinage can be approached by the common consent of all nations Great Britain will undoubtedly charge the same seigniorage that is charged by other nations. In France the seigniorage is one fourth of one per cent., in Germany it is rather more than our own; in different countries, varies and is at various rates, depending on the cost of minting; and we propose now to reduce the coinage charge from one half to three tenths of one per cent.
Why, Mr. President, what do we gain by throwing away this revenue ? Nothing whatever. Suppose we do convert all the bullion made in the United States into coin, into twenty-dollar gold pieces, and it is put up in packages and exported in coin instead of in bullion, do we gain anything ? When it reaches Great Britain it at once goes to the mint there and is melted into English sovereigns, and what do we gain ? Nothing; but we lose the labor we have put upon that coin. When you change bullion into coin it does not prevent its exportation; it only makes it more convenient to export; and the very object which the Senator from California wishes now to attain is defeated by his proposition. He says he wishes to prevent our gold coin from being exported. Well, sir, if he makes the gold into coin without cost, so that it represents simply the value of so much bullion, it will be exported in coin and will be remelted in foreign mints; because the coin of one nation never passes current in a foreign nation at precisely its full value in the coin of that foreign nation, and the United States therefore lose the expense that may be put upon this bullion, and it is a dead loss to the Government, without a benefit to any single, solitary soul. The United States, in assaying gold, charge the expense, and so in every process of work done at the Mint the cost of that process is charged upon the gold that is refined or assayed. This very bill provides that from time to time the Secretary of the Treasury shall regulate the amount of these expenses, and shall charge the owners of this gold deposited with the net cost. We apply the same rule to coinage that we do to assaying or any other process in the Mint.
I do not think it is necessary for me to pursue this argument. The subject has been critically examined. The officers of the Mint at Philadelphia, and, so far as I know, the officers connected with this subject generally, with whom it is a specialty, are in favor of retaining this charge, except only the officers of the mint at San Francisco, who desire to enlarge their business at the expense of the people of the United States. That is all there is of it.
If the United States should coin into twenty dollar gold pieces all the product of the gold mines of the United States, and receive nothing for it, who would be benefited ? No one. The Senator says the people would be benefited. How ? Is it of any advantage for us to give additional value to gold coin to be exported abroad and to be remelted in the mints at foreign countries ? Not at all. We get the full value of that gold coin in our foreign commerce when it is exported in the form of bullion, and to convert it into gold coin will not prevent its going abroad. On the contrary, the charge that we make on minting that gold prevents it from going abroad, because it makes the gold coin a little more valuable than the bullion, and therefore the gold coin will not go abroad, and the expense of minting will not be lost.
This bill has been carefully framed. It considerably increases the expense of the mints of the United States; it lowers the amount of the mintage charge. I believe, on the whole, it is a careful, a prudent, and a safe revision of the mintage laws; and if the Senator from California and persons who are interested in this question are not satisfied with the very large benefits that are conferred on their particular region by the terms of this bill I do not think it is wise for the people of the United States to assume more than they have already done, the expense of coinage. The mints are not entirely self-supporting, although nearly so, under the present law, and under this bill they probably will not be quite self-supporting; but we may make enough in the profit of coining the nickel coin and the silver coinage, where the mintage is practically a great deal more than it is on gold coinage, to cover the expenses of the mints. Further than that we should not go.
We do not adopt this principle in any other matter of Government business. We do not carry people's letters for nothing, although that would be a great convenience and would promote the carrying of letters. We do not coin silver without charging for it; on the contrary, we get a profit of about two per cent., and on the nickel coinage we get a much larger profit. We do not propose to do anything for private citizens unless we are reimbursed the expenses of that outlay; and there is no justice, no propriety, in taxing the farmers of the United States, or the merchants of the United States, or the people of the United States generally, this additional expense of one hundred or one hundred and fifty thousand dollars to maintain our mints, merely for the purpose of giving a fancied benefit to the diggers of gold in California. I think it could be easily demonstrated, if time would allow and the interest in the subject would justify the attempt, that the miners themselves would not receive one single particle of benefit from this abolition of the coinage charge, and that the only benefit would be that all the gold of California might be forced into the Mint of the United States, there to go through an expensive process, at the cost of the people of the United States, without conferring on it one single cent's additional value for exportation or use. I think the Senators from the Pacific coast ought to be satisfied with the liberality of the terms of this bill, and I hope they will not press their resistance to this amendment, because I assure them its defeat would transfer to and throw upon the United States the entire cost of minting gold coin, and would unquestionably defeat the bill.
Mr. Corbett. I think the Senator from Ohio has proved, from his own demonstration, that the coinage of gold in this country, will prevent it going abroad, and therefore will retain the coin in this country. As I understand this subject, it is the desire of this country to retain the gold in it and to make the coin as dear for shipment abroad as possible, thus making it an object to ship abroad wheat, cotton, and other products of our country and keep the gold at home in order that we way once more return to specie payments. The more we tax gold here, of course the dearer we make it at home. When you place the alloy in the gold and coin it, you make it so much less desirable to send it abroad. If you send refined bars abroad without this alloy, of course it is cheaper to send them abroad than any other commodity, and therefore you ship your gold abroad instead of wheat and cotton. I think, from the argument of the Senator from Ohio himself, it is very clear that it is for the interest of this Government to retain the gold here and to ship abroad wheat from Ohio and cotton from the southern States.
This charge of three tenths of one per cent. is not a matter of such great importance to the miner of California or of the Pacific coast. It is not upon that ground that I desire the abolition of this coinage charge. I would place it upon the ground of advantage to the United States Government in once more returning to specie payments, to a sound basis which we all so much admire. It is to that point that we have endeavored to legislate. The abolition of this charge is one of the very things that will tend to a return to specie payments. It seems to me that this is a matter in which every State in the Union is interested. We do not ask that the Pacific coast shall be relieved from this paltry sum of $100,000. We ask, in the national interest, that the people be relieved from the charge upon coinage in order that the bullion may be retained in the country. That is the point. What is this small charge of $100,000 to the Pacific coast ? It is not upon that ground that we place our opposition to it. I think it is very conclusively proved, from the remarks of the Senator from Ohio himself, that it would be of great advantage to this country to relieve it from this coinage charge.
What has been the result in England of abolishing the coinage charge altogether ? The result is that all the bullion is flowing to England, where it can be coined without charge, and where it will remain; thus placing their currency upon a sound basis. We wish to make this country the moneyed center of the world; and if we can reduce the coinage charge and retain the coin in our own country, rather than send it abroad, it will tend more than anything else to make us the moneyed center of the world. The coinage charge in France, the Senator says, is about one fourth of one per cent., and of course bullion to a great extent has flown to France and to England, but England is the great center where all the bullion flows.
I hope that the amendment reported by the Committee on Finance will not be adopted. I think this bill was originally prepared and sent to the Senate with a view that it might be to the interest of this country to abolish the coinage charge, thereby retaining the bullion in the country, putting our own stamp upon it, putting our own alloy in the coin, and making it dearer to be shipped abroad. By these means it will be retained here. For these reasons I hope the amendment will not be adopted.
Mr. Williams. Mr. President, I was not able to concur with the Committee an Finance, of which I have the honor to be a member, in reporting this amendment. I think, notwithstanding the authorities cited by the distinguished Senator from Ohio, good reasons can be given for the adoption of the bill as it was presented to the Senate by the Treasury Department. I consider it a sufficient answer to all the English authorities which he has cited upon this point to say that in the year 1870 the British Parliament enacted a law, in the eighth section of which they provided that---
"Where any person brings to the mint any gold bullion, such bullion shall be assayed and coined and delivered onto such person, without any charge for such assay or coinage, or for waste in coinage."
So that in 1870 it was the judgment of the English Parliament, notwithstanding those authorities, that it was expedient to abolish the coinage charge at the mint in that country. By reference to those authorities it will be seen that they do not uphold the position which the honorable Senator has taken; and if they did, it does not necessarily follow that they ought to have weight in the discussion of this question, for the reason that the United States is a gold-producing country. England is not a gold-producing country, and reasons might exist there in favor of a coinage charge which would not exist in or apply to the United States.
It is a mistake to suppose that this bill, as it was originally framed, is for the particular benefit of the people of the Pacific coast, or of any part of the United States. It is a bill that was framed by persons who do not reside upon that coast, and who are not in any way interested in its affairs any further than all the citizens of the country are interested in such affairs. The bill proceeds upon the ground that the abolition of this coinage charge will promote the interests of all the people of the United States. The chief argument against this amendment is in the fact that the imposition of a coinage charge has a tendency to facilitate or increase the exportation of bullion, while the abolition of that charge has a tendency to cause that bullion to be converted into coin in this country.
It is not pretended that coin will not be exported if the charge provided for in this amendment should be abolished; but it will only be exported to meet the balance of trade that may exist against the United States. But now the exportation of bullion is a matter of commerce, for persons can go into the market in the city of San Francisco and elsewhere and buy up bullion, export it to England, and have it converted into coin free of charge, and make money in the operation; so that there is an inducement for the exportation of bullion to Europe for purposes of speculation; and of course the more bullion there is exported to Europe the less will be converted into coin in this country, and to that extent the coin circulation of the United States will be reduced.
It is in vain for any man to put forward his theories or speculations on this subject when actual experience demonstrates the fact that this coinage charge produces these injurious results. Sir, is it not desirable that the volume of coin in the United States should be increased as much as possible ? Is it not wise to legislate in that direction ? Do we not need a more extended basis of coin for our currency ?
The Senator from Ohio says that the theory is that the Mint should be a self-sustaining institution. But that is not the true theory of the Government, and it never was the theory of the Government until the year 1853. Prior to that year coinage in the United States was free. It was in that year that this coinage charge was imposed, and now, by the abolition of this charge, it is proposed to return to the old theory of the Government, and to abolish this extraordinary tax imposed in consequence of an emergency existing at the time the laws were enacted. The Senator is mistaken, therefore, in supposing that it has been the theory of the Government to compel persons whose bullion was converted into coin to pay a charge so that the business might be maintained without any expense to the Government.
I understand that the chief usefulness of the Mint is to furnish coin to the people of the country. Is it the business of the Mint altogether to take the bullion of a private citizen and to convert it into coin; and is it to be regarded altogether as a transaction for the benefit of that private individual; or is it to be regarded as a transaction on the part of the Government for the purpose of furnishing to the people a circulating medium, one that is safe and reliable for every part of the country ? If there is any kind of business in this country that ought to be conducted free of expense it seems to me it is the conversion of bullion into coin, if the proceeding in that way will tend to increase the amount of coin in this country.
The Senator shows that the abolition of this charge will not, to any considerable extent, reduce the revenues of the country. He says that now this coinage charge produces about the sum of one hundred and fifty thousand dollars, and under the proposed amendment it will produce $100,000. If the abolition of that inconsiderable amount of tax upon bullion will tend to increase the coin circulation of this country, then it seems to me it will be wise and expedient to abolish that charge.---[Mr. Sherman wants to get rid of coin circulation altogether; he wants gold-standard-based bank-paper circulation while actively chasing gold out of the country]
Some American authorities have been referred to by the Senator. He refers to what a Mr. Patterson says, and assumes that Mr. Patterson is an authority upon the subject. That may be true; but many others of equal respectability favor the abolition of this charge, and the bill which was sent to the Senate by the Treasury Department is the result of a deliberate, careful, patient investigation of this question upon all the authorities. After consulting all persons in the United States who were supposed to possess any knowledge upon this subject, those engaged in assaying, refining, and coining, it was the judgment of the Treasury Department that it would be for the benefit of the country to remove this charge for coinage. I will refer to what is said by the officers of the mint in San Francisco; and I do not wish that this question shall be in any way prejudiced by the idea that it is legislation for the particular benefit of that section of the country. Is it for the benefit of the Pacific States alone that the volume of specie in this country should be increased ? Is not that what we all desire ? Is not that the purpose to which much of our legislation is directed ? These officers say:
"It will be observed that the officers of this branch are of the opinion that the seigniorage or coinage charge ought to be entirely repealed, without reducing the weight of the coins; and further, that in the thirty-fourth section of the proposed law (with the exception of the treasurer) they venture with great deference to recommend, on the suggestion of the able and experienced assayer of this branch, that the entire charge for refining bullion deposited for coinage be abolished; or, in other words, that the Government confer upon the mining interests of the country the benefit of a free mint. Some of the general reasons for this recommendation may be briefly stated as follows."
Now, look at the reasons and then judge of the proposition. I think that the value of the authority depends more upon the reasons given for the opinion than upon the names of the individuals expressing them:
"1. It is believed that the policy of our Government should tend to the retention of American bullion at home, rather than allow the difference between the mint charges of our own and foreign countries to operate as a premium to encourage its shipment abroad.
"2. That such a modification of the law would to some extent stimulate mining enterprise, encourage an important but poorly paid branch of industry, and increase our annual product of the precious metals.
"3. That this charge, by raising the mint value of bullion above its market value for shipment, would increase our coinage, swell the volume of specie in circulation, stimulate the exporting of other commodities than gold and silver, to adjust balances of trade, and in some slight degree facilitate the resumption of specie payments.
"4. The entire cost of refining the total bullion product of the country, say $36,000,000, would not exceed $200,000, and we hazard the opinion that the advantages to be derived would many times exceed that sum."
That word "refining" I think means "coining."
That is signed by the superintendent, assayer, coiner, and melter and refiner ---[real life experts, not class-room theologians] of the branch mint at San Francisco; and I undertake to say that they have no interest whatever in this question. The idea that they are prompted to express these opinions for the purpose of enlarging their business is a very extraordinary one. They receive nothing more than their salaries for what they do, and if their business is increased they will be compelled to do more work than they do now for the same sum of money. But, sir, they have a better opportunity of knowing the effect of this coinage charge than any other officers connected with the Treasury Department, because there is where the bullion is produced. They can see with their own eyes Englishmen, Frenchmen, and other Europeans about San Francisco buying up the bullion and exporting it to Europe for purposes of speculation, thus preventing its conversion into the coin of this country; and seeing these things they know that it would be of advantage, that it would increase the coin circulation of the country to prevent, if possible, this exportation of bullion.
Now I will read from a report made by John Jay Knox, which expresses in a more perspicuous manner than I can employ the reasons for the bill which was reported to the Senate without this amendment. He says:
"The coinage charge at the French mint is about one fifth of one per cent.; our present charge is one half of one per cent. Our coinage charge it is now proposed to abolish in order to conform to the practice of our own Mint prior to the act of February 21, 1853, and for the reason that it should be the policy of the Government to hinder rather than to encourage the export of bullion. Our present laws have the effect to induce bankers to ship bullion as a commodity for the purpose of making sterling exchange. A very intelligent gentleman upon the Pacific coast, who is thoroughly familiar with this question, in a recent publication, thus refers to the subject."
I invite attention now to what this gentleman says. I invite the attention of the Senate to the force and conclusiveness of his argument on this point:
"I do not desire to be understood as arguing that any change of our mint laws will put a stop to the export of the precious metals when it becomes necessary for the adjustment of the balance of trade. That is one of those inexorable commercial necessities so well understood that it would be folly to pretend to the discovery of any expedient that would obviate it. My proposition simply is, that when the balance of trade is not against us the precious metals are exported as commodities for the profit on their out-turn above the par of exchange, or may be so exported in excess of what the balance of trade requires. In other words: when the market is abundantly supplied with commercial bills, with which bankers could cover their own exchange, they still prefer to ship bullion, not only as being a safer remittance, but as also furnishing a profit on the out-turn equal to, or perhaps exceeding, the discount on commercial bills. Furthermore, that while the balance may be against us in the aggregate, yet, with reference to particular periods of time and to particular countries, it may be in our favor, and that a nation may become an importer of the precious metals as commodities without reference to the balance of trade. Such, indeed, is our daily experience here.
"While we are exporting our unrefined gold and silver to Europe and our refined metals to China we are importing gold from British Columbia and silver from Mexico. While in the last ten years we have exported $612,000,000 of our native product, we have imported $157,000,000 of foreign treasure, and yet we receive no practical benefit from it as a means of increasing our metallic circulation; for it no sooner reaches our market than it commands a premium above its value in our Mint for re-export, when it is in the form of bullion; and when in [foreign] coins it only entails a loss upon American commerce, as they are received abroad at a greater valuation than they will realize either in our market or at our mints; and we are, therefore, in every event, and under every condition of trade, the loser; that as the commercial value of gold as a commodity is greater than its value in our mints our own production seeks other markets uncoined, and that of other nations avoids ours. While, however, there is a profit in the export of uncoined bullion, taken at its valuation in our mints, there is always a loss on the export of our coins taken at their current value. The result, therefore, of modifying our mint charges so as to conform to those of other nations would be to raise the coining value of gold at home above its commercial value, and thereby make it more valuable for coinage than for export. It would therefore all seek our mints for coinage; and when once coined, would be the very last thing any one would want to ship, and never would be exported except in cases of absolute necessity, and when no other medium of exchange could be procured."
Dr. Linderman, the late Director of the Mint, who is thoroughly posted on this subject, as much so as any man in the country, gives his opinion on this question in the following words:
"My attention was attracted to the very small amount of refining and coinage executed at the branch mint at San Francisco compared with the production of the country, and I was naturally led to inquire for an explanation. A due examination of the subject soon satisfied me as to the cause, which I found to be, that under our present system of mint laws bullion has a higher commercial value for export than for coinage in the Mint, which not only affects the local interests of that coast, but in view of the diminishing product of the precious metals, becomes a question of national importance. The reason for this is, that as gold and silver are chiefly valuable for the purpose of manufacturing money, the cost incidental to coinage necessarily determines the value of the bullion. I find, on comparison, and especially at San Francisco, that the expenses of coinage are much greater than abroad, and hence our metallic product commands a higher price in foreign countries than can be realized by its coinage at home. The principal charge tending to produce this result is that of half of one per cent. for coinage, which is above that of any other nation, and especially France and England, where most of our gold bullion is exported.
"The importance of this subject had presented itself in a measure to me while I was Director of the Mint, and in my annual report for 1868 I recommended its reduction from a half to a quarter of one per cent; but my examination at San Francisco has led me to consider the subject more thoroughly, and I am convinced that it should be abrogated altogether, and that we should return to our uniform practice prior to 1853, which was to coin gold without charge, not only as an expedient for encouraging coinage, but as being more consistent with the theory of money as a universal standard of value. A few examples will demonstrate the fact that bullion is, as I have before stated, of greater commercial value in our markets for export than for coinage at the Mint."
Then he proceeds and gives tables, showing the difference between the value of bullion for purposes of exportation and its value at the Mint, from which it appears mathematically certain that this charge upon the coinage of bullion at our Mint tends to its exportation, and that it can be purchased in San Francisco and shipped to Europe, for the purposes of coinage, at a profit.
These are some of the reasons for the removal of this charge imposed in the year 1853, and therefore is of recent date; and I should like to know if there are not greater reasons existing at this time than there ever were prior to 1853 for increasing our metallic circulation ? Ought not we to do everything in our power to prevent the exportation of our precious metals to foreign countries ? Is not that our true policy ? When this bullion is converted into coin, the coin will not be exported for purposes of speculation. It may be exported in some cases to adjust the balances of trade. But if there be no bullion in the market to purchase, then other products of the country will be purchased upon which a profit can be made. They will purchase our wheat and other products, upon which they can make a profit by their transportation to Europe, and in that way they will meet the balances of exchange, and the tendency of this legislation will be to retain the bullion in the country, to have it made into money at our Mint, and to increase the volume of our metallic circulation.
Now, sir, if the people of the United States cannot afford to pay $100,000 for this result, then it seems to me they cannot afford to do anything whatever tending to the resumption of specie payments.
I think it a very trifling argument to say that the farmers of the country will be taxed if this $100,000 charge is abolished for the purpose of enabling the miners of the country to benefit themselves by having their bullion converted into coin without charge. Is it not the true policy of this country, even if that were true, to encourage the mining interests ? Is there any such interest in the United States of so much consequence as that interest which produces the precious metals ? Is there any so great danger now to the financial affairs of this country as the rapid and constant exportation of the precious metals, removing the foundation upon which our system of currency rests ?
When the coin is taken out of the country, when there are no means left for the redemption of our paper currency, then it will fall into ruin and the nation be involved in a condition of bankruptcy. For these reasons it is manifestly to our advantage as a people to legislate in every way that we can for the purpose of retaining in the United States the precious metals and increasing the amount of our coin currency.
Mr. Stewart. Mr. President, I am opposed to this mint charge, because I believe it to be a discriminating and unjust tax against the producer of gold. I believe it operates in practice very harshly on the producer. He not only has to pay it for what he has coined, but he has to pay it for what he does not have coined. The price of bullion is regulated by its mint value. The Mint charges one half of one per cent. at the present time for coinage. That is not only deducted from the bullion coined, but it is deducted from the bullion exported. The whole product of bullion in the United States, I believe, is sixty millions, of which you coined about twenty-five millions.
Mr. Sherman. Twenty-nine millions.
Mr. Stewart. You coin, then, about one half of it. That whole sixty millions suffers depreciation of one half of one per cent., which makes this charge a tax of one per cent. upon what is really coined, because it all suffers that depreciation and that diminution of its market value. The result is that men establish themselves as agents from Great Britain, and some from France, (though it is not so profitable in that country, because they have a slight mint charge there, about one half what ours is,) for the purpose of buying bullion, and they can make a good business out of that one half of one per cent.
It seems to me idle for us to quote as authority against free mintage and against the practice of England for the last one hundred and fifty years the opinion of one or two professors. What has been the result of her practice ? It has enabled her agents to buy bullion all over the world. It has made England, which is not a bullion-producing country, the center of the bullion market of the world. It has given her merchants and her bankers the handling of the bullion of the world. It has given her chemists and metallurgists the reduction of the bullion of the world. From this bullion, when brought there, they extract various foreign substances, besides gold and silver, out of which a large amount of money is made. It gives them, as against those engaged in the same business in this country, an advantage of one half of one per cent. besides the advantage they have in cheap labor.---[at the same time England pushes the gold standard upon every country it can (and is successful at it) and lends gold bonds to those countries]
This is a tax that has not always been imposed upon the miners. It was put on, as suggested by the Senator from Oregon, in 1853.
---[Who and what induced those hard-money, independent treasury senators and representatives to enact such modification of the coinage law (of 1837 and 1792) ?]
It is a tax that reduces the value of a very important commodity, a product on which this country relies now more than upon any other; for while the nation is in debt it is important that we should have the largest possible yield of the precious metals. The more of the precious metals that we produce the cheaper they will be, and the less burdensome will be our debt. If you could double the amount of the aggregate of the precious metals in the world, thus depreciating their value nearly one half, you would almost relieve the nation of one half of its present embarrassment on account of the burdens of the public debt. It seems to me extraordinary under such circumstances that, for the purpose of getting the paltry sum of $100,000 a year, we should depreciate the entire product of the bullion of the United States one half of one per cent.
The Constitution provides that the United States shall coin money. It is coined for the convenience of the whole commercial community; and it seems to me that in this country, as in England, that now in this country, as before 1853, the little charge for converting bullion into standard United States gold and silver coin should be borne by the country at large. I do not think we ought to be, as suggested by the Senator from Ohio, searching for sources of revenue, searching for articles to tax. It seems to me that our revenue is such that we need not be searching to increase it particularly. The statement of the Secretary of the Treasury shows, since the 1st of March, 1869, a payment on the public debt of $106,000,000. From the 1st of March, 1869, to the 1st of January, 1871, we have paid off $106,000,000 of debt ! It seems to me we have sources of taxation enough, and this small, unjust, inconvenient, discriminating tax against the production of gold and silver ought not longer to be continued, and I hope it will be abolished.
Mr. Morrill, of Vermont.
---[Of tariff for the sake of monopolies fame; for some reason he does not want to protect this domestic industry, he wants to protect a foreign gold monopoly; two years from now he will be the presiding officer while Sherman pulls a fast one]
Mr. President, I believe that I may be counted "a Hebrew among Hebrews" in relation to the resumption of specie payments, and to an increase of the circulation of the coin of the United States; and I confess my astonishment at the arguments brought forward here by gentlemen in relation to the abolition of this socalled tax, on the ground that the abolition of the coinage charge is to increase the amount of coin in circulation. It seems to me that the arguments of gentlemen must have been prepared for some other bill; certainly they do not seem to be applicable to this.
Mr. Stewart. Right there allow me to ask one question. Will not the reduction enhance the value of bullion just that much ?
Mr. Morrill, of Vermont. No, sir; not at all. The price of bullion is regulated by the markets of the world, not by the coinage stamp of the United States. Suppose, Mr. President, we were at the present moment to coin any amount of United States gold and silver, as long as we keep in circulation an irredeemable currency the coin will not come into circulation. It makes no difference how much we may coin the people will not see a dollar of it, not an eagle, not a dime more in consequence of its manufacture. That fact alone will not increase their ability to buy and hold it.
I was a little astonished that my astute friend from Oregon [Mr. Williams] should have read the argument of Mr. Knox, that by abolishing the tax upon coinage the coin would be "the last thing to leave the country." That is the bar to fence it in. Why, is it not palpable that if we make a charge of three tenths or one half of one per cent. upon coinage, so as to make coin here relatively cost a little more than it otherwise would, or than bullion, then it will be the last thing to leave the country ? But make it just equal to bullion, so that it is of no consequence whether you ship bullion or coin, and, of course, the coin leaves the country with the same facility and at the same cost as bullion.
Mr. President, suppose that we were to adopt a universal system of coinage, so that our coin should circulate when it goes abroad in all countries, and not be recoined, is it not manifest that the United States would be put to the sole expense of making the coinage of the world, if we produced enough to supply the world ? The fact now is that our coin goes abroad and is recoined the same as bullion. It is taken at whatever its value may be as gold; and this has no reference whatever to the value that is put upon it here at our mints.
Of course, then, whenever the exchange is against this country our coin will be bought up at its market price as gold, the same as bullion, and be sent abroad. Whenever the exchanges are one fourth, or even one eighth of one per cent. against us, then it becomes profitable to ship coin or bullion, and it will be shipped as long as the balance of trade is against us; and whenever the balance of trade is in our favor, then we shall retain not only our, coin, but our bullion, and not till then; and it is utterly impossible to prevent the exportation of it, or to prevent the purchase of it by any parties whatever. The idea that mere speculators go to San Francisco to buy up gold, either in the shape of coin or bullion, in consequence of this coinage tax is utterly preposterous, in my judgment. It never will be bought in San Francisco, or in any other port of this country, when there is anything else to buy for exportation, or unless the exchanges are against us; and whenever those are against us it will be bought up as a matter of course, whether you put ten per cent. of alloy into your bullion or fifty per cent.
Mr. President, there is constantly something to be shouldered upon the Government that the United States may carry it on free of expense to any other parties. I therefore regret to see an effort made here to prevent our mints from being reasonably self-sustaining. I had very great doubt whether three tenths of one per cent. would be sufficient to pay the actual cost of coinage. The fact is, in this country we cannot procure our coinage at the same rate that it can be done abroad. Labor here is dearer, and it costs more for us to convert our bullion into coin than it does in France; very much more; probably nearly twice as much. But I was and am willing for one to reduce the rate two tenths and try the rate at three tenths of one per cent.; but anything below that, or anything like the abolition of it, I shall hope will not receive the assent of the Senate.---[Now if you would only use the same argument to remove the high tariff from your protected industries (sugar, iron, wool), to make them self-sustaining, or, if they cannot compete with cheaper labour elsewhere, move the production to foreign countries]
Mr. Casserly. Mr. President, it is with reluctance that I propose to occupy the time of the Senate on the pending amendment. My reluctance is because I shall have to put myself in opposition to the chairman of the Finance Committee [Mr. Sherman] and to the Senator from Vermont [Mr. Morrill] who has just spoken. Both of those Senators are established authorities on the subjects which come before the Finance Committee. I regret that that committee should have recommended an amendment retaining the charge for coinage; and I particularly regret at present that those two Senators should have thrown the weight of their influence on the same side. I regret their course because when I look around at the Senate at this moment nothing is more certain than this, that a majority of the Senators who will vote for the amendment will be controlled by the opinions of the two Senators whom I have named rather than by the merits or the demerits of the question as presented on one side or the other.
I do not speak in any spirit of reproach; but the subject of this coinage charge is a novel one; it is outside of the beaten ways of discussion here. If not very difficult, it is very debatable, and has been made to involve complex questions. On these, what is said on one side is controverted on the other; and the authorities in political economy and statesmanship are appealed to as being conclusive in favor of the committee's amendment. The result is, I greatly fear, that too many Senators will follow the voices of the Senators from Ohio and Vermont as on the whole the safest course. This is not very surprising. It has happened to all or most of us upon questions which we had not been able to examine for ourselves, that we have followed the experienced and competent leaders of committees who had given special study to the subject. In many cases we have to act upon some such theory, because it is impossible for any of us to examine personally all the subjects, even those of leading interest, that come before us.
It is because of that tendency and to guard against it that I wish to say a few words. Before the Senate is carried away by the authority of two leading Senators I desire to array a greater authority against them. I am confident I can show that the weight of authority now before the Senate in favor of the abolition of this coinage charge is far greater than that in favor of retaining it. Against the authority even of the Senator from Ohio, the chairman of the Finance Committee, [Mr. Sherman,] and of the Senator from Vermont, [Mr. Morrill,] I place unhesitatingly the great authority of the fact that this bill, as it first came before the Senate, being then a bill for the abolition of the coinage charge, was a bill from the Treasury Department, sent here as a code for the government of the whole subject, carefully drawn, after months of thorough preparation, as the result of the best judgment of the Department and the country. This is particularly true as to the abolition of the coinage charge. That was, in the first place, recommended by the Secretary of the Treasury in his annual report of 1869. In the next place, very complete, careful, and judicious means were adopted in the Treasury for the purpose of ascertaining what policy was best as to the charge, and most conducive, not only to the interests of the Government, but to the interests of the people, if indeed those two things can ever be separated. I will read what the Secretary of the Treasury says in his report of 1869. It is cited in the report of the Comptroller of the Currency, laid upon our tables in connection with this bill.
"The coinage of the country is diminished in amount by the fact that in England and France the mint expenses are much less than with us. It would no doubt have a tendency to prevent the export of the precious metal in the form af bullion, if the mint charges were to be reduced or altogether abolished."
The Secretary recognizes the cardinal facts that the coinage of the country is injuriously contracted by our mint expenses; that for the same reason the export of bullion is unduly increased; that here are two great evils to be corrected; and that for this purpose the mint charges, being really to create a coinage for the benefit of the whole country, should, if necessary, be thrown upon the whole country by being abolished. That was the judgment of the highest officer we have upon this subject. In another report made by the same officer to the House of Representatives during the last session of Congress, we find what proceedings took place in the Treasury in reference to the recommendation of the Secretary. The communication from which read is also from the Comptroller of the Currency. That officer says:
"In the month of December last, in accordance with your request, a rough draught of a bill was prepared, which contained in a concise form nearly all of the legislation now in force upon these subjects. This was printed, interspersed with interrogations and additional sections, for the purpose of calling forth an expression of an opinion from those persons who were known to be intelligent upon such subjects. The correspondence herewith inclosed, dated prior to April 25, much of which was informal and unofficial, contains various criticisms upon the rough draught of the bill referred to. The notes of different officers of the Treasury Department, of gentlemen in San Francisco and other parts of the country, were written upon printed copies of this bill and returned in that form. These memoranda, which were carefully considered and in many cases adopted, it is impracticable to furnish in an intelligent manner without also transmitting copies of the bill itself."
That was the system of inquiry, of collation and comparison of opinions in the very best quarters, instituted by the Treasury Department. It resulted in this bill, sent here after full examination and revision by the officers of the Treasury Department, as, upon the whole, the best bill which could be framed all through. As we see, this very question, whether the mint charges should be retained, reduced, or abolished, was fully before the minds of those intelligent men, your own officers, to whom this subject is committed as a specialty, who devote all their time to it, consequently much more time than any Senator here can devote to it. I say, as the result of all that system of inquiry instituted by these officers and continued for months in the best quarters in the Treasury and elsewhere, their judgment was that the coinage charges should be wholly abolished, and so they framed and presented this bill, which, in that very particular, the Finance Committee has since undertaken to alter by the amendment before the Senate. Now, I put that great body of official, public, substantial authority on the one side, against the opinions of the Senators from Ohio and Vermont on the other, supported though they are by a divided committee.
It is a mistake to treat this as a local question in California, as the Senator from Ohio has done. It is not a local question; it is not a question that concerns particularly the people of California or the people of the Pacific coast; it is a question which concerns the whole country. When I heard the Senator from Ohio say that the retention of this coinage charge would be the retention of coin in this country, because it would increase the price of the production of coin, I asked myself whether it did not occur to the Senator that such a result, if it were to follow, as to which I say nothing, would not affect the whole country. What is certain is, that the retention of the charge greatly diminishes the volume of the coinage. In that way, if not in the way suggested by the Senator, the question of retention affects the whole country. Why does it affect the whole country ? Because, to take one instance, as you require great sums of money, amounting to at least $120,000,000, to be paid each year for duties in gold, the gold has to be purchased for that purpose. Whatever increases the cost of the production of coin, or diminishes its amount, of course increases the price to the purchasers of gold, of whom but a small part are found in California.
It is true, as the Senator from Vermont said, as a general rule, that the price of bullion or any other article is regulated by the price at the principal market for that article. But this also must be admitted, that whatever tends to reduce the market price of a product in the place of its production, and to drive it away to a foreign market, does diminish its home value to the producer. In California we know too well, I think, that the result of this coinage charge is to drive away great amounts of bullion, year after year, from San Francisco and from the United States to Europe, to London, because there, coinage being free, our bullion bears a higher market price.
Why is London the great center for the exchanges of the world ? Because one of the great elements which enter into the basis of exchange is bullion, and because London to-day gives better prices for bullion than any other city in the world, for the simple reason that there is no seigniorage in the English mint. Which is best, in the minds of Senators, that America should have a great center of exchange for herself, or that she, like the rest of the world, should remain tributary to London as a center of exchange ? If it is desirable and best that we should have our own great center of exchanges, one of the very first steps is to make the turning of our bullion into our coin as prompt and as free as possible.
Why should there be an impost upon the gold which is the product of the United States ? Who would not scout as unworthy of a moment's consideration a proposition whereby the Government should so manage as to prevent any other staple of the country from being put to its most profitable uses without first paying a toll ?
For one, sir, on general principles, I am in favor of making production throughout the country as free as possible. I am in favor of removing, as soon as may be, all charges, taxes, and restrictions which molest or impede the products of the country in the processes of turning them into money. I refer specially to the great staples of the country, upon which we have to rely so much for our prosperity at home and for our commercial and business relations abroad. I am against whatever hinders the producer, farmer or miner, from putting them to the most advantageous use. Gold is to day one of the great staples of this country. Why not relieve it from this impost of mint charges ? Why not return now to the old policy of the country down to 1853 ? What we advocate is no new thing, Mr. President, it is simply a restoration of the American system as it existed previous to 1853.
The Senator from Ohio laid great stress upon the opinions of Mr. Lowe, a leading English minister, as stated by him in Parliament, backed up by the authority of writers on political economy. It seemed to me, as far as he English view of it was concerned, that the answer suggested by the Senator of Oregon [Mr. Williams] was perfectly conclusive. That Senator read from one of the documents, the one now in my hand, a section from the act of Parliament, passed in 1870, continuing free coinage. So that the outcome of all the discussion in the British Parliament, and of all arguments and authorities of the chancellor of the exchequer, Mr. Lowe, was that Parliament, as the best thing to be done under the circumstances for the general interests, legislated over again, and once mcon in favor of free coinage.
Mr. Casserly. The Senator has read the speech of Mr. Lowe. I have not. Of course he states it correctly. But it seems to me that if the system was as evil as is here represented by the Senator from Ohio it is not conceivable that the British Parliament would again, in 1870, reënact its system of laws making the coinage free in the mints of the Government. Notwithstanding the intimations from so high an authority as the English chancellor of the exchequer, I have no idea, not the least, that the British Government will soon or ever change its policy in that respect. England has become, like the United States, a gold-producing country. The Australian product is now one of the chief elements in the gold production of the world; London is the great center of exchanges. For both those reasons I do not think there is the least ground for apprehending any change of policy on the part of England. But however that may be; what is the objection now to our returning to our own policy, to our own system, in force as lately as 1853 ?
I scarcely know how to discuss some of the arguments of the Senator from Ohio, [Mr. Sherman] The Senator seemed to consider that the highest duty which he owed to the country was to find out new subjects of taxation, to find out something else to be taxed. There was a great financier once who divided mankind into two classes, those who paid taxes and those who paid none. Undoubtedly that is the tendency of those who have to provide for the finances of a country. I do not propose to criticise too sharply the position of the Senator from Ohio on this or any subject of the kind.
I agree that great allowances must be made for one in his situation, but I confess my surprise that any gentleman of his authority in the dominant party should consider it his duty at this day to hunt up new taxes, or needlessly to retain old ones, in a country staggering under such a load of taxation as probably never has been seen under the same circumstances, a taxation more remarkable, perhaps, for the multiplicity of the subjects which it embraces than even for its burdensome character. I confess myself surprised that, after all, the Senator from Ohio is at work looking out for fresh subjects of taxation, holding on at least to those that exist, merely because they exist, fearing to relinquish them lest some great evil should befall the finances. And yet, all the while the Senator knows, and we all know, that the Treasury has been gorged for the last few years with the most enormous and inexcusable balances in money ever heard of in financial history; balances which have cost the country from three to five million dollars yearly in interest alone. Under these circumstances, with more money coming in than we know what to do with, with great surpluses all the time rising up like mountains about us, the Senator from Ohio is struggling here to prevent the abolition of a tax that, in my judgment, is contrary to all sound principles of finance or government, that interferes with full freedom in the use of one of our greatest products, in order that we may save one hundred or one hundred and fifty thousand dollars to the Treasury ! He does that against the concurrent judgment of the Treasury Department, and of the intelligent and experienced gentlemen connected with the that department, and those others, at least as intelligent and experienced, whom they have consulted throughout the country ! It is the judgment of that Department and of that body of practical and scientific authorities in and out of that Department, throughout the country, that this tax has lasted too long and ought to be abolished. I appeal to that great mass of authority before this Senate with entire confidence against the authority even of the Senator from Ohio and the Senator from Vermont, and I am sure no one is more ready than I am to acknowledge their weight in this discussion.
Mr. Sherman. Mr. President, I have but very few observations to make in reply to the arguments that have been made for the abolition of the coinage charge. The Senator from California, [Mr. Casserly,] in common with his colleague, [Mr. Cole,] has fallen upon the idea that the coinage charge is a tax. Nothing is more absurd than this. The coinage charge is simply a charge by the Government of the United States for the service actually performed to a particular citizen. The Government of the United States should not undertake to do this service for nothing, and it simply asks a reimbursement of the cost. This coinage tax, as gentlemen now call it, was imposed in the administration of Mr. Pierce, in 1853, when it was no object to seek new sources of taxation. It was then put at one half of one per cent., not for the purpose of taxation, but for the purpose of reimbursing to the United States the expense of coinage. Up to 1848 the United States produced no considerable amount of gold or silver bullion. We were then the importers of the precious metals, instead of the exporters. In 1853, however, after several years working of the mines in California, this matter was fully discussed by some of the most eminent men then members of the Senate of the United States; among the rest by Mr. Hunter. [March 29, 1852.]---[So, as soon as we didn't have to buy or borrow the unit of exchange (and between 1790 and 1848 there was a serious shortage of coin in the united States, that is how printing-press money corporations became rampant); and we could produce our own units of measure, in sufficient amount to facilitate our transactions, something immediately had to be done to take these units of measure away from the people, into the hands of bankers (and the Record gives the impression that it was a strange process which put through that strange bill.
Why was this one half of one per cent. tax, as it is now called, or charge, put upon coinage ? It was simply done to prevent the exportation of the gold coin of the United states. That was the main and leading object. It was argued, with a great deal of force, by eminent gentlemen then in this Chamber, that if a charge was put upon the coinage, as was done by all the nations of the world except England, the gold coin, which would then be more valuable as coin than as bullion, would not be exported until the balances of trade were settled by our commodities; that until bullion was exported, until wheat was exported, until cotton was exported, until all the other products of nature were exported, gold and silver coin would not be exported; because they were more valuable, made so by their greater cost. This, and not the imposition of a tax, was the object of levying a charge of one half of one per cent. upon gold coinage. A much higher rate is levied on silver and other coinage, but one half of one per cent. was the tax levied on gold coinage, for this reason, a reason of political economy, justified by the history of other nations.---[But practice has shown that the theory advanced in favour of the nefarious policy was wrong; real life experience is against you, Mr. lawyerly vindicator.]
My friend from Oregon [Mr. Williams] speaks of Great Britain as having derived a great advantage from free coinage. On the other hand, it can be demonstrated, by the clearest figures that Great Britain has lost largely. Whenever money is coined in France, where the seigniorage is only one fifth of one per cent., it retains its locus in quo, or habitation, in France, and never leaves it, because when it leaves France that one fifth of one per cent. is dead capital; it cannot be exported to England for recoining, and therefore there is now more than five times as much French coin in existence in the world as there is of English coin; the statistics show something between five and six times as much. The reason is that the very first thing that is exported to England is the British sovereign, because the British Government insists upon putting labor on gold bullion without any charge, and the result is that the most convenient form to export gold from Great Britain is in British sovereigns. They go off to different nations, and are melted and remelted by other Governments, which charge a seigniorage for stamping their insignia on this gold; and it remains as currency in the countries where it is thus stamped, while the English sovereign, like bullion, passes from hand to hand, and is remelted at different mints. The result is that there is now less than one fifth as much English coin in existence in the world as there is of French coin. The coin of Germany in existence in the world also, I believe, largely exceeds the amount of English coin.
Now, Mr. President, I say that as a question of political economy it is not wise for us to put additional labor upon bullion and convert it into coin free of charge without regard to the revenue question at all; because the unavoidable effect of thus bestowing labor on gold bullion, and putting the bullion in a more convenient shape for exportation, is, at the very first reversal of trade, to cause our coin to flow abroad, instead of other commodities. That is the experience of nations, and has been for more than a hundred years.
But it is said that notwithstanding all the arguments and opinions of political economists [pay-as-you-go, class-room theologians] England has insisted upon free coinage. I have already sufficiently explained the reason of that. They adopted it, I believe, in the reign of King William III; and having adopted the idea of free coinage, they have kept to it with the natural tenacity of the English people, while their writers have condemned the policy. I read here from Adam Smith, from McCulloch, from Mill, from nearly all those men who are recognized authorities the world over on questions of political economy, who have said over and over again that this was a false and foolish system. Here is the opinion of the present chancellor of the exchequer, a man of great ability, who quotes these authorities, reads them to the British Parliament, and says that England has persisted in this thing too long, and to her injury. It is true that he also said that at that time, when they were codifying the mint laws, it was better to postpone a change until the question of international coinage should be discussed and considered.
Now, there is one thing to be considered by our friends from the Pacific coast. This is a bill to codify the mintage laws of the United States. It does not adopt any new principles; it makes but very few changes in the general laws, except to transferring the head of the Minting Bureau to Washington, instead of leaving the system in the incongruous position of having the Director of the Mint in Philadelphia, and making him superintendent of all the mints in the United States. This bill is rather a codification of the existing laws; and the Committee on Finance have therefore refused to ingraft on it many ideas that they have developed and would like very well to see in the form of law. For instance, we are strongly in favor of an international coinage, of assimilating our coinage to the coinage of other nations of the world, and making a common metric standard of international coins by which the gold dollar, the sovereign, and the franc may be changeable and interchangeable without recoinage, all over the world. We have not ventured to put our opinion on that point into this bill, because that is not a codification of the existing law, but a great and important and radical change of the law.---[this bill does adopt a brand-new principle, of changing the unit of measure from silver to gold (at the same time encouraging the exportation of gold from the country), and the brand-new principle of omitting the $1 silver coin from coinage]
Now, I ask Senators whether it is wise on this bill to repeal the existing law which, for reasons of political economy, has fixed a mintage charge upon gold coin, and make the effort to make this codification bill carry such important changes ? I agree with the Senator from California, that it is not necessary to look to this matter as a question of tax, but the law now levies upon this labor done for the miner of California the small and trifling charge of one half of one per cent., a little more than the cost. We charge the national banks one per cent. for printing their bank notes; we charge every citizen three cents for carrying his letter in our mails; and we levy taxes in every form upon various articles of consumption --on tea, coffee, sugar, and all the necessaries of life. Now, I say that if we were about to throw off these charges, whether you call them taxes or not, we ought not to throw of first, that which is not a tax at all, but is only a charge for a service actually rendered.
I trust that this effort to force through this proposition to abolish the mintage charge, on a bill to codify the mint laws, to simplify and make consistent the laws which regulate the various mints of the United States, will be abandoned; because Senators must perceive that the attempt to make any radical or vital changes of the existing system in this bill will only endanger the bill. It is necessary to pass the bill promptly in the Senate in order that it may receive the necessary attention in the other House before the adjournment of the present Congress. It is perfectly manifest that the attempt to make this bill carry an utter change of our policy on the question of the mintage charge, and to follow the example of Great Britain, the only nation in the world that has done it, and that, too, when Great Britain is sick and tired of her policy --an attempt to do it here would simply defeat this bill, which has already been so long delayed; to mix it up with doubts and difficulties, so that the only object which I seek to accomplish by this bill, a simplification and codification of the mintage laws, is likely to be lost.---[Why is John Sherman so adamant in saving the government this $100,000 ? Why is $100,000 revenue is so important to Sherman that he will vote against this bill ?
Mr. Stewart. Mr. President, I cannot comprehend how this charge is to be treated otherwise than as a tax. Certainly coining money is for the benefit of the whole country. I do not know why the producer of gold should pay the expense of coining it for the rest of the community, unless you intend to tax his gold. The community generally are benefited by it, and my objection to the tax is that it falls on every producer, whether he has his bullion coined or not. If you were simply making a charge for doing a service for a particular person, and he need not have it done if he chose, and if he did not have it done he would not have to pay for it, that would be like a tax; but that is not the truth. He has to pay for it whether he has it done or not. This I can demonstrate to the Senator from Ohio, if he will give me his attention.---[The point is not the tax, not the tax-burden of the gold-digger; the point is it induces and facilitates the removal of gold from the country at the time when the country is borrowing gold bonds and has to pay gold interest; while we are attempting to enforce gold standard and gold payment on demand; while this bill is discontinuing the minting of $1 silver coins
Mr. Sherman. He can put it in the form of bullion without a tax.
Mr. Stewart. Yes, but when he gets his bar in bullion in any place in this country the price of that bar of bullion is regulated where he sells it by the market value there, and the market value is always the mint value. Take it in San Francisco. You have a given number of ounces of bullion. You can get for it for shipment only the mint value, or perhaps a trifle more that somebody may give in order to get it. Bullion commonly sells at the mint value; that regulates its price. You charge one half of one per cent. for coinage, and that reduces the value of the bullion in that market one half of one per cent., and the man who sells his bar and does not have it coined has to pay that tax as much as the man who has his bullion coined.
What the Government of the United States realizes from this charge the Senator from Ohio tells us is $150,000 a year. That would be the charge on a coinage of $30,000,000. I think the actual coinage last year was about twenty-nine millions. The whole product is about sixty millions per annum. The whole of that $60,000,000 suffers the same depreciation, and yet the Government receives but $150,000. The tax upon the producer is $300,000. To whom is the other $150,000 paid ? It is paid to speculators in our bullion; it is a bonus to those residing in London and doing business there, which they are enabled to avail themselves of from the fact that there is no mintage charge there. You are paying this money to them to help them carry on business. That amount is deducted from the value of the whole bullion of the country, and so I say it is an unjust taxation. The Government of the United States only gets one half of what is practically charged on the bullion of the country.---[Ten years earlier the per capita medium of exchange was $3.50 !! and business functioned well; $60million production a year is ~2$ coin addition to the per capita circulation !!!.... the number of national-bank notes in existence is ~$270million -- just from the production between 1865 and 1870, could have more than replaced every banknotes with coin !!! (and greenbacks would have been as good as gold)]
I have seen the operation of this. Go anywhere; go to San Francisco with bullion for sale; test the value of it, and you will find the touch-stone to be its value at the mint, and you will find when you go to the mint that one half of one per cent. is deducted. You can, of course, take your choice whether to leave it at the mint or not. If you have plenty of time, and they haven bullion fund on hand, you will leave it there and get its mint value. Otherwise you will sell it for export. In either event, however, the market value being fixed by the mint value, the miners lose by its operation $300,000 a year and the Government gains only $150,000. The producer is taxed that much for the convenience of the whole community who have the use of this gold. It seems to me that it is an unjust taxation, falling hard upon a particular class for the benefit of the whole community, and in order to do a little good to that whole community it doubles the burdens upon that particular class.
Mr. Williams. Mr. President, I wish to add one or two suggestions to what I have already said, in answer to the last speech of the gentleman from Ohio.
He objects to the removal of the charge upon coinage, because this is a bill, he says, to codify the mint laws, and therefore it ought not to contain an amendment. Now, this bill does propose several amendments to the existing laws, and it is a codification that has been submitted to Congress by the Treasury Department, and I propose to adhere to the codification as it was made at the Treasury Department, and not change, mar, and destroy its harmony and its consistency. So that argument does not avail anything for the position taken by the Senator; but it would be very proper for us to argue, who support this bill as it was made at the Treasury Department, that it is a complete codification, founded upon correct principles from beginning to end, and that it ought, therefore, to be adopted.
Now, the Senator argues that it will make no difference in the exportation of the precious metals whether or not this coinage charge is abolished, and he insists that coin is a form of the precious metals more convenient for exportation than bullion. I should like to submit this question to the Senator: suppose a million dollars is to be taken from San Francisco to London, would it not be more profitable for a man to transport a million dollars bullion than it would a million dollars coin ? Is he not compelled in the exportation of the million dollars of coin to export one tenth alloy, because when our gold is coined there is one tenth alloy mixed up with the bullion ? That is to be transported as well as the real gold which the coin contains; and when it reaches England this million of coin must be reminted in England at a great loss to the man who exports it from the United States. But if he takes the million dollars in bullion from San Francisco he takes the pure metal, the gold, and he takes it to England, and it is converted into coin there at a profit; because when it is converted into coin by the mint of England, without any charge to him, it is worth more in coin there than it is in bullion.
So it is perfectly manifest that if it becomes necessary to export from the United States a million dollars for any purpose, under existing circumstances, the exporter would always take the bullion and not take the coin. How is it that coin is in a more convenient form for exportation than bullion ? Does the Senator mean to say that it is less in bulk ? Does he mean to say that the same bulk of twenty-dollar gold pieces will amount to as much as the same bulk in gold bullion ? Nothing of the kind. Everybody knows that bullion is the most convenient and is the safest form for exportation. So that he is mistaken, upon that point.
Sir, it is in vain for Senators to theorize when there are thousands of men in this country who have seen with their own eyes the bankers of Europe in the markets of this country buying up the gold bullion for exportation to Europe, for the purpose of making money in the transaction, and not for the purpose of meeting the demands of trade. When these facts are perfectly obvious, how can it be said, in answer to such stubborn, real, incontrovertible facts, that some philosopher of England, Mr. Mill for instance, or some other man, has undertaken, upon his theory of political economy, to argue that it is advisable for a country to impose a coinage charge ? And why should the honorable Senator from Vermont say that it is absurd in his opinion that such should be the case, when the officers whose business it is to manage this matter testify, of their own personal knowledge, that such is the fact, and that there is a constant and growing trade in the exportation of bullion from the United States, which is sapping day by day the foundations of our financial system, and bringing us every day nearer and nearer to bankruptcy, and carrying us further and further from the redemption of our irredeemable currency of which the Senator speaks ?
He says it makes no difference as to the amount of coin in the United States so long as there is an irredeemable currency in circulation, so long as we have greenbacks for a currency. Sir, it may make no difference to the people of Vermont, where they have no money except greenbacks or national bank notes, but it makes a vast difference to that portion of the United States where the circulating medium is coin, and where, of course, it will be of advantage to business to have three dollars in coin in circulation where there is now one. It is unnecessary to say, because everybody knows it, that the greater the amount of coin in circulation the greater the advantages to trade and commerce, and the greater the facilities for the transaction of all sorts of business; and the way we are to reach the resumption of specie payments in this country, if we ever reach it at all, is to pursue that policy which will increase the amount of coin until the currency and the coin are brought to a par value.
Any sort of policy that tends to turn the precious metals into a channel that will carry them to foreign countries is a policy that takes as away from the resumption of specie payments. Everything that we can do to retain coin in this country is an effort made in the direction in which the honorable Senator is going, and in which we all wish to go, the resumption of specie payments and the return to a sound circulating medium.
So I think, Mr. President, that the argument the Senator from Ohio made in his last speech does not avail anything in his favor, and that the position taken by those who advocate this bill without amendment is sustained. I know how easy it is to influence Senator's minds with an idea that there is some local advantage in what we propose; and I have noticed, I am sorry to say, that sometimes when it has been suggested that a proposed piece of legislation was for the Pacific coast a little feeling has been aroused, as though Congress was asked to confer some special favors upon that coast at the instance of its Representatives.
But, sir, I see nothing of that kind here. I say it is equally for the benefit of the people of this country everywhere that we should endeavor, as far as possible, by our legislation to convert the production of our mines into coin and put it into the circulation of the country. That, I say, is an argument which no one can answer; and if this policy will produce that result --and I have no doubt it will-- it is a policy that does not benefit alone the Pacific coast but every State and every part of the United States.
Mr. Casserly. Mr. President, I should desire every Senator, before voting upon this issue, to ask himself whether he regards it as desirable at all, in any point of view, that the gold produced in the United States should go as largely as possible into the gold coin of the United States ? If he does think so, I call his attention to the very significant and, indeed, serious fact, that out of about forty millions of gold produced on the Pacific coast not more than seven or eight millions go into the mint for coinage. That is a fact calculated to arrest attention. It is one that all business men and all thinking persons would naturally pause upon and consider
Mr. Sherman. Allow me to correct my friend. The amount of gold coined in California last year was $19,216,000, and the total amount of coinage in the United States was $30,103,000. The whole product of the country is between forty and sixty millions. I have here the last Treasury report on the subject.
Mr. Casserly. The figures I stated were derived from the report of the Committee on Retrenchment.
Mr. Sherman. I think about three fifths of the gold produced is coined.
Mr. Casserly. No; I think not so much as that. I relied on the testimony contained in the report of the Committee on Retrenchment, which sat in San Francisco, as most members are aware, and took a great deal of testimony upon several questions, including this one, as to the propriety of retaining this charge; and I saw that one of the most experienced men on this subject upon that coast testified, at page 276 of the report, that out of a product of about forty millions of gold not more than six or seven millions went to the United States mint, and that principally from remote districts, far in the interior, where the relative commercial value of bullion and its minting value were not at all understood.
Mr. Sherman. That is a mistake; the amount was nineteen millions.
Mr. Casserly. So it seems; but at all events that is only fifty per cent. of the entire bullion of the country that remains in the country as coin. I do not enter into the discussion, which has so many sides to it, as to whether it is an advantage, or the contrary, under ordinary normal circumstances, for a country to retain its gold coin at home; but under existing circumstances, with a constant demand for gold coin to pay duties required by your own laws, with a necessity for the resumption of specie payments at some period in the future, it seems to me that a state of facts, where for every dollar of your own gold which goes into the coin of the country another dollar goes out of it, is well calculated to excite attention and anxiety. And what is the cause expressed as the reason why so large a portion of the bullion produced in the country goes out of the country ? The cause, as assigned by those best qualified to speak, is that the coinage charge at the mint and the cost of refining produce that result. That is the cause as assigned by them; and I believe I shall be stating what nearly all my associates from the Pacific coast are aware of, and what is an uncontested fact, when I say that for two or three years past bullion has been worth considerably more in the markets of San Francisco for export than for coinage at the mint.
I rose merely to place that single point of view before the Senate, as I omitted to do so when I was last up.
Mr. President, I shall not waste many words on the criticism of my friend, the Senator from Ohio, as to my employment of the word "tax" in reference to this seigniorage. I desire always to be correct and fair in discussion. I do not propose to employ a false argument under the guise of a false word; but was I wrong in employing the term "tax" in reference to this charge ? The argument of the Senator, himself was that if these expenses of coinage were not paid by this charge they would go into the mass of money to be raised by taxes; in other words, the people would have to pay for this reduction into coin in the shape of taxes if the charges were not paid by the owner of the bullion. Now, sir, it seems to me quite plain that it is a tax in one aspect as well as in the other. It is a tax if the owner of the bullion pays it. It is a tax if the people at large pay it. Whatever charge the Government requires for the exercise of its functions, in whatever way it is imposed or levied, is a tax in the ultimate resolution of it. It is neither more nor less. Postage has been pronounced a tax by so competent a writer as Mr. McCulloch, and I believe he includes it in his book on taxation as one of the subjects that properly come under that head; and why is it not ? If postage was not paid upon letters the expense of carrying those letters would be discharged by a tax at large; but, instead of a tax at large, you levy the cost of carrying those letters by a tax on the individuals who deliver the letters to be carried. I think the use of the word "tax" was not open to criticism, but was a just and accurate application of the word.
Mr. Nye. Mr. President, I do not rise for the purpose of detaining the Senate. A year ago I had the honor of addressing the Senate on this same question, and the remarks I then made, though not very well considered, I find by experience that I am ready to indorse now. But there were two or three suggestions made by the honorable Senator from Ohio which, it strikes me, will not bear the criticism of an enlightened people.
One half of this continent in extent is gold and silver producing, and I think in in more than one half of the continent, here and there, are found gold and silver producing mines. Therefore, because I chance to live upon the sunset side of the continent, it is hardly fair to say that the opposition to this coinage charge is local in the representation from that coast when I speak as well for North Carolina and Virginia as I do for the Pacific coast. I speak as well for Kansas and Dakota as for Nevada and California.
Sir, gold and silver coin is the constitutional currency of this country. It is called the Government money, emphatically. Paper is different. Coin is the currency that the Constitution demands, the standard of which regulates the value of every product of the country. Therefore, when I go into the mountain and toil and produce the bullion I bring it into the lap of my country to be coined; and whom for ? Not for myself, but for the country. I must bring to the Mint, to the very bosom and lap of my country, my production; and how does the law as it stands now, and as it has stood since 1853, treat me ? It says to me, "Notwithstanding you bring this most essential element upon which the Government feeds, we charge you one half of one per cent. for putting the stamp of the Government upon it." The honorable Senator from Ohio may call it by any other name he pleases, it is a tax upon me as a producer. I bring you the bullion; you demand it of me for the exigency and wants of your country, and you pay me no more than its value, less what it costs to coin. Now, sir, I undertake to say that in principle such a charge cannot be maintained. It is not sound; it is not wise; it a not just; it is a piece of injustice. You tax the productions of one portion of your country unequally.
I always listen to the honorable Senator from Vermont when he asserts theory and experience with the greatest interest. The great product of his State is wool. Suppose they had to dispose of their wool, as against the wool of the world, at a discount of one half of one per cent., great as is Vermont, great as her product in wool is, he and his constituents would find themselves greatly crippled in that regard.
The Senator says it is the demand that controls the price. I answer, it is the circumstances around that demand which control the price.
Mr. President, my mind is so constituted that I always doubt when I hear men theorize when I know to the contrary. I stood less than two years ago in the streets of San Francisco, in California, and in the dark day of a financial crisis there I saw cartloads of American bullion sacrificed to British buyers because they could pay one half of one per cent. more than we could, as their coinage was all free. The profits that day to the English bankers was double what the profits of this whole coinage is for twelve months to this nation. You give them one eighth of one per cent. advantage over the bullion buyers of our own country, and they can glean our own markets of the product. What is the use of interposing a theory against fact ? We know it; we have seen it done; the fact exists --and why ? Because they can get the bullion, in coin, a half per cent. cheaper than we can. That is an advantage they should not have. I repeat that it is unjust on the part of the Government to impose upon this commodity, the most important and essential to the existence of the Government, one half of one per cent. for the purpose of making it its coin and its currency.
Mr. President, according to to-day's report there is now $125,000,000 of coin locked up in the vaults of the Treasury. That money is there, and it is considered as important to keep it there as is the pulsation of the heart to human existence. You have taxed my constituents for producing the element out of which it is made one half one per cent. If upon any principle of public policy or any principle of political economy you can demonstrate to me that it is better that the individual should bear that tax than the Government then I will yield the point, but not till then.
The honorable Senator from Ohio inquires, with a great deal of emphasis, if you take off this charge of $100,000 a year where are you to look to make up the deficit ? Well, sir, I will go to Ohio's greatest production, whisky, and put it on that. If men are fools enough to drink whisky let them pay for it. Whisky is not important to the circulation or the existence of the Government, but is destructive to human circulation; and yet my friend would squirm like a worm that was trod upon if you should talk of putting one cent more tax on Ohio whisky. Make the tax on whisky a dollar instead of fifty cents, and we can take off other taxes under which the people groan. If you do not want to put it on the honorable Senator's whisky, put it on another great product, tobacco. I can find ample means from which to raise this amount; means that do not cripple producers, and means that are protective in their character to humanity; and yet the honorable Senator pursues the product of one half of the continent, with as much avidity as the dog pursues the track that is scented with blood, for three tenths of a penny for coinage; and my friend from Vermont backs him with a placidity that is interesting and instructive; he indorses it. Where else shall we look for this $100,000 ? Look to whisky, Ohio's greatest production; look to the manufacturing interests of Vermont that my friend never fails to look after with great care; look anywhere else, but do not lay a tax upon the toil of those who produce what your Government requires, and who come and lay it in your lap --a tax of one half of one per cent. for putting that commodity into coin so that you can use it. The honorable Senator from Ohio will fail to convince the people of this great nation that there is no other place to look for this $l00,000.
Sir, we know by experience what the result of this coinage is. It makes our money more abundant. On the Pacific coast we have no other coin. I know the answer may be that we could have had greenbacks; but when we got so that we could have them we found the most of them taken up for Ohio and the eastern States, and the field was all occupied. My friend from Ohio says you charge a penny for printing the notes for those banks. Yes, and you pay them interest on the capital with which they buy them. You pay me no interest on the bullion that I produce, but you pay interest to the banker for the very capital that he uses; ay, more, the very capital he uses is the credit of the Government. That is the difference. If I had the power I would charge them two or three or four per cent., for they have the advantage in dealing in the commodity that the man in bullion does not have. Let my honorable friend look to that banking system of which he is so great a defender, and see if he cannot squeeze $100,000 out of them and not make them poor. Go there and make up your deficit of $100,000, but when the honest, toiling miner brings in his bullion, which constitutes the life-blood of your country, do not tax him one half of one per cent. or three tenths of one per cent. for making it available, not to him, but to the Government whose Constitution requires it.
Mr. Morrill, of Vermont. I think this debate is nearly exhausted, and I shall add but a word more. The Senators from the Pacific coast seem to make such an opposition to this amendment that I must suppose they believe they have some interest in abolishing this seigniorage charge. I confess, with all the information I possess on the subject, (which is not very much,) I am unable to see how it is going to benefit the Pacific coast or the miners. I agree that the Pacific coast has not been well used in relation to one thing: the Government of the United States has not created a demand and use for coinage except for the payment of duties on imports. If we could create a demand and use for coinage on the part of all the people, then I agree the Pacific coast would be somewhat benefited. But the idea seems to underlie the argument of these distinguished Senators that the Government of the United States is bound to take all the gold that is produced in this country and give it an additional value of three tenths of one per cent. for their benefit.
Mr. Nye. If the honorable Senator will permit me, it is the farthest from that possible. I speak as well for Vermont as for California and Nevada. The Pacific coast are making no complaint about this tax as a coast at all. They are speaking for the whole people, come from where this bullion may.
Mr. Morrill, of Vermont. I only allude to the fact because no Senators except those from that section of the country have appeared in opposition to this so-called tax.
Now, Mr. President, it is manifest that the Government in making this coinage does add to its value for local purposes, when circulated in this country, at least three tenths of one per cent. if not one half of one per cent. Shall the Government be compelled to buy the entire product of the country and add to that the three tenths of one per cent., when the whole of it, while we are in a state of non-resumption, is to be exported abroad, a total loss to the Government and a benefit to nobody. No considerable part of it will or can be retained in this country so long as the suspension of specie payment shall exist, and even when we resume, the exportation of bullion and of coin will continue. We produce more gold and silver than we can use in the shape of coin. At least eighty per cent. of it, after we shall have resumed, will go abroad as soon as the ordinary channels of business shall be filled with the amount that may be required for the common purposes of business. So long as this country is a gold and silver producing country we must treat bullion as a commodity, as a thing to be exported; and it will be bought not only in San Francisco, but in Now York, and every other place where they require it to settle the balances of trade.
Sir, why should not the miners of nickel and of copper come here and demand that we shall take all their nickel and copper and give them nickel coinage or copper coinage without any charge for seigniorage ? As soon as you apply this upon any general principle I think it will be seen that I did not use too strong an epithet in denouncing it as an absurdity.
This is not a tax in any sense of the word. We merely raise the local value of the gold and silver by coinage, and charge exactly the cost of our labor in doing it; and so far as the coin circulates in the country it will pass at the value put upon it by the United States. But, as I before stated, until we resume specie payments it matters not whether we coin much or little; all or nearly all of our gold product will go abroad. It is a mere commodity of bargain and sale.
Mr. Corbett. I simply wish to say that this is a practical question. We have the evidence before us that bullion in bars, refined bullion stamped by numbers simply, the pure gold, goes abroad sooner than the coin does. There is a tax upon it as coin, and therefore it is the last thing that goes abroad. Take off the tax on this coinage, and then there is no object in shipping the bullion abroad, unless they pay a premium over and above so as to bring it up to the price of coin. If we put the alloy in the coin, we make it less desirable to send abroad, and make it more expensive far England to coin it. She cannot put her own alloy in it, for we have already placed the alloy in it which makes it less desirable than the pure gold to send abroad. This tax upon the coin does make it less desirable for the producers to put it into coin than it would be if there was no tax upon it, and consequently it is not put into coin except for the immediate uses of the Government. Now, because we have not resumed specie payments shall we not coin any more money in order to resume specie payments ?
This coinage charge, of course, is a tax to a certain extent upon the mining community; but I do not urge its abolition upon that principle alone. I do not regard it as simply a tax of $100,000 a year upon the miners; but I look upon it as extremely pernicious in its effect upon the system that we propose to adopt; that is, a return to specie payments. As long as this tax is imposed upon the bullion it will not be coined for our use at home, but it will go abroad in the shape of bars, refined bullion, or dust, instead of being retained here. The simple question is, whether we desire to retain the gold here and send something else abroad in its place.
Senators talk about favoring the Pacific coast. Do we not pay to Pennsylvania seven dollars a ton to protect her iron interest ? Is not that a tax upon the Pacific coast as well as upon every other portion of the country ? We do not complain of that. I am in favor of it. Let us protect our own industries, let us stimulate them. I say stimulate the production of gold, and then keep it at home. I desire that and nothing more. It is a production of the Pacific coast. Let us so legislate that we shall produce the greatest quantity of it, and retain the greatest quantity of it in our own country. By relieving bullion from this coinage tax we shall retain a greater quantity of coin in the country, as is shown by the practical effect of the present system, which is, that all the bars go out of the country first, and then simply the amount of coin that is required to make up the necessary balances, for which they have to pay a higher price.
Mr. Casserly. I am very loth to detain the Senate further; but I have just found in the report of the Committee on Retrenchment the testimony of an extremely well-informed and capable gentleman in San Francisco. That testimony serves to clear up entirely the argument upon which the Senator from Ohio laid so much stress, namely, the argument of the English chancellor of the exchequer. It shows what the meaning of that argument was and the new policy to which it looked. It shows that the meaning of it was that the English Government was beginning to be alarmed by the constant drain of gold which that country was suffering in favor of France; and for the purpose of arresting that drain, and keeping the English gold coin at home, he proposed to resort to this method of a seigniorage, the seigniorage to be in the shape, not so much of a tax or charge upon coin of full weight, but in the shape of a deduction from the value of the coin itself.
I was not at all prepared for this discussion to-day. I had no idea this bill was coming up, and I came here entirely unprepared, entirely unprovided with arguments or authorities. In that point of view, and indeed in a great many others, the Senator from Ohio had vast advantage of me. And hence I am obliged to repair, as the discussion proceeds, the omissions in the few words which I undertook originally to present. I ask the Clerk if he will be so kind as to read so much of the testimony of Mr. Garnett, from the report of the committee, as I have marked ? The subject is an interesting and difficult one, and I am sure what I offer to be read will not be without benefit to every gentleman who hears it.
The Chief Clerk read as follows:
Question. What is your opinion in respect to the charges the Government ought to impose for coining ?
Answer. They now charge one half of one per cent. My opinion is that the charge ought to be abrogated altogether; it should be free.
Question. State your reasons for that opinion.
Answer. That is a question which has been very fully discussed in Europe during the last two hundred or three hundred years; and more recently in England again, growing out of the monetary convention of Paris. I see that the chancellor of the exchequer has made a very astonishing proposition in relation to the English sovereign, to impose a seigniorage or coinage charge of a one per cent. The English has been the only Government which has had an absolutely free coinage system. They are now getting a little apprehensive about their stock of bullion and coin. France has seemed to accumulate almost all the gold of the world; and as a means of checking the export abroad, the English propose levying a seigniorage on their coin by reducing its weight. The technical part of the question is very little understood by the ablest politico-economic writers, and they are very apt to confound two distinct modes of levying a seigniorage or coinage charge, the effects of which are very different.
One is such as ours and in France, where you coin the whole amount of a man's deposit into coin of full weight, and deduct a proportion of those coins as a seigniorage. The other is where you take from him a portion of the metal he brings in, and coin the balance into the same number of coins of less weight that the whole deposit would make of full coins. For instance, if I were to take 537.5 ounces of standard gold to our Mint, which is exactly one thousand eagles, the Government would coin that into one thousand eagles, or $10,000; and they would reserve five eagles, which is fifty dollars, or one half of one per cent., for this, making two and sixty-eight hundredths ounces; and they would deliver to me 534.81 ounces, or nine hundred and ninety five eagles, being $9,950. That is, they have taken fifty dollars out of me, individually, when all the world is as much interested in coinage as I am. That is the direct mode; that is the mode used by us and by France.
The other mode is to take the two and sixty-eight hundredths ounces of bullion from me and then turn my 534.81 ounces into one thousand eagles, and give them to me as $10,000. There the coin passes for a greater value than the amount of bullion it contains. That is the mode of seigniorage which prevents the export of coin, and retains the coin in circulation; because it contains less bullion than its current value, and therefore nobody will take it at ten dollars and export it abroad and only get $9.95 for it. That system is a prevention of the export of the coins of a country; and in that view the chancellor of the exchequer has recommended that the sovereign be reduced one percent. But it would have this effect: it would lead at once to the recoinage of all the old coin in existence; because there would be a clear profit of at least three fourths of one per cent. in doing so. It would deplete France of its coinage, which is of full weight, because there would be a profit of three fourths per cent., and the gold coin of France would go to England and be converted into sovereigns. He evidently does not see that part of the effect it would have.
The English idea of money, which is a universal equivalent of values, with a certain fixed unit, beyond arbitrary caprice or cupidity, which shall at all times represent a certain value, is the real idea of money. I think. In accordance with that, for two hundred years, after having been discussed by the ablest men in England, they have had, ever since Charles II's day, a free gold coinage; and only now have they suggested this idea of a seigniorage, because of the fact that her coinage being of full weight, a stamped ingot like ours is apt to be melted down or go abroad.
Question. What is the charge in France ?
Answer. The charge France is six francs seventy centimes per kilogram, which is thirty-two and one sixth ounces; it is about one fifth of one per cent. The charge with us is one half of one per cent., and nothing in England. If we take off our coinage charge, with the low rate of refining that the private refiner refines at, the whole of our metallic product here at once becomes more valuable for coinage here than for export abroad. That would be the immediate effect.
Question. Your idea is that whatever lessens the cost of the coined metal to the public has a tendency to prevent the export of bullion ?
Answer. Yes; because it makes the value greater at home for coinage than it does for export abroad. The result would be that our whole $40,000,000 would be refined here, and go into coin and into circulation.
Question. But when the balance of trade is against us, coin will go abroad, will it not ?
Answer. That is something we cannot avoid. We have to settle the balance of trade against us with gold in some sort; but now there is a constant incentive to send gold abroad when the balance of trade is not against us, but simply as a commodity which pays for its export abroad and a profit above the par of exchange. That is what is ruining us here. Besides, even when the balance of trade is against us, while we are exporting gold to one country we are importing it as a commodity from another. Take our own case: when we are exporting our fine silver to China and our unrefined metal to Europe, we are importing unrefined metal from British Columbia above us and unrefined metal from Mexico below us; and yet the exchange in the aggregate, taking the entire country, is against us. Therefore we are importers of bullion as a commodity, while the balance of trade may be against us. In proof of this, we constantly find the fact in New York and the eastern markets and in ours, that when the market is well supplied with commercial bills in abundance, which the banker can cover his own exchanges with, he will not do it because the out-run on his bullion abroad will pay him a better profit than the discount of commercial bills, besides having a specie remittance, so that there is a constant tendency to export our bullion without reference to the balance of trade.
When the bullion is once converted into coin, nobody will export coin except as an absolute necessity, because the ordinary wear and tear of our Mint which results in the new coin being under the exact standard, which the imperfectness of manipulation and mechanics has never enabled us to obtain, is always a drawback on the export of coin. For instance, a twenty-dollar piece should weigh exactly five hundred and sixteen grains, but knowing it to be impossible to get exact weight the law allows a deviation of half a grain either way; it may weigh five hundred and sixteen and a half or five hundred and fifteen and a half grains. They generally try to keep it under that half a grain. Then there is the wear and tear of coin in use. Inasmuch as foreign coins when exported are treated as mere bullion, this is always a check against the export of our coins, and therefore our coins will never go abroad if we can once convert our bullion into coin, unless as an absolute necessity. On our silver coin the wear and tear amounts to as much as five per cent. now.
The Presiding Officer, (Mr. Scott in the Chair. [who is in support of Sherman's ideas]) The question is on the amendment of the Committee on Finance to the twenty-fifth section of the bill.
Mr. Casserly. I ask the Clerk to read, for the information of the Senate, the amendment which it is proposed to act upon.
The Chief Clerk read the amendment:
to insert in the twenty-fifth section, after the words "as follows," in line three, the words "for coinage, whether the gold and silver deposited be coined or cast into bars or ingots, in addition to the charge for refining or parting the metals, three tenths of one per cent."
Mr. Sherman. I will state to Senators that is precisely the law as it now stands, except that the rate is made three tenths of one per cent. instead of one half of one per cent.
Mr. Thurman. I ask my colleague if this bill repeals the law as it stands ?
Mr. Sherman. The general repealing clause repeals the law as it now stands.
Mr. Thurman. Then, if the amendment of the committee should be voted down, and the bill should pass without that amendment, the coinage charge will be abolished by the repealing clause of the bill ?
Mr. Sherman. Yes, sir.
Mr. Thurman. That is all I want to know.
Mr. Sherman. This amendment reduces it from one half of one per cent. to three tenths of one per cent.
Mr. Stewart called for the yeas and nays; and they were ordered.
Mr. Stewart. I hope it is understood now that a vote "yea" retains the coinage charge, and a vote "nay" abolishes the coinage charge.
The question being taken by yeas and nays, resulted--- yeas 25; nays 22; as follows:
Yeas--- Messrs, Abbott, Ames, Bayard, Boreman, Buckingham, Carpenter, Chandler, Edmunds, Fenton, Flanagan, Gilbert, Hamilton of Texas, Harlan, Harris, Howell, Jewett, Morrill of Vermont, Pratt, Revels, Sawyer, Schurz, Scott, Sherman, Warner, and Willey ---25.
Nays--- Messrs. Casserly, Cole, Roscoe Conkling, Corbett, Davis, Fowler, Johnston, McCreery, Morton, Nye, Pool, Rice, Ross, Saulsbury, Stewart, Stockton, Thurman, Tipton, Vickers, Williams, Wilson and Yates ---22.
Absent--- Messrs. Anthony, Brownlow, Camoron, Cattell, Cragin, Ferry, Hamilton of Maryland, Hamlin, Howard, Howe, Kellog, Lewis, McDonald, Morrill of Maine, Osborn, Patterson, Pomeroy, Ramsey, Robertson, Spencer, Sprague, Sumner, Thayer, Trumbull, and Windom ---25.
So the amendment was agreed to.
The next amendment of the Committee on Finance was in the twenty-fifth section, line twelve, after the word "charges," to insert the words "other than for coinage;" so as to read:
And the rate of these charges, other than for coinage, shall be fixed, from time to time, by the Director, with the concurrence of the Secretary of the Treasury, so as to "equal, but not to exceed in their judgment, the actual average expense to each mint of the material and labor employed in each of the cases aforementioned.
The amendment,was agreed to.
The next amendment of the Committee on Finance was in section sixty-seven, line ten, after the word "mints," to insert the words "or assay offices;" so as to read:
Or if any of the weights used at any of the mints or assay offices of the United States shall be defaced, increased, or diminished, through the default or connivance of any of the officers or persons who shall be employed at the said mints or assay offices, with a fraudulent intent.
The amendment was agreed to.
The next amendment of the Committee on Finance was to insert as an additional section:
Sec. 69. And be it further enacted, That the mints and assay offices authorized by this act shall be known as the Mint of the United States at Philadelphia, the mint of the United States at San Francisco, the mint of the United States at Carson; the United States assay office at New York, the United States assay office at Denver, and the United States assay office at Boisé City, Idaho; and all unexpended appropriations heretofore authorized by law for the use of the Mint of the United States at Philadelphia, the branch mint of the United States in California, the branch Mint of the United States at Denver, the United States assay office in New York, and the United States assay office at Boisé City, Idaho, are hereby authorized to be transferred for the account and use of the institutions established and located respectively at the places designated by this act.
The amendment was agreed to.
The next amendment of the Committee on Finance was to insert as an additional section.
Sec. 70. And be it further enacted, That the Secretary of the Treasury be, and is hereby, authorized at his discretion to remove the whole or any part of the Machinery, apparatus, and fixtures of the branch mints of the United States at New Orleans, Charlotte, and Dahlonega, to any other institution authorized by this act, or at his discretion to sell, at public sale, all the real estate, buildings, machinery, apparatus, and fixtures belonging thereto.
The amendment was agreed to.
The next amendment of the Committee on Finance was to insert the following as an additional section:
Sec. 71. And be it further enacted, That this act may be cited as the "coinage act, 1870;" and all other acts and parts of acts pertaining to the mints, assay offices, and coinage of the United States are hereby repealed: Provided, That this act shall not we construed to affect any act done, right accrued, or penalty incurred, under former acts; but every such right is hereby saved; and all suits and prosecutions for acts already done in violation of any former act or acts of Congress relating to the subjects embraced in this act may be commenced or proceeded with in like manner as if this act had not been passed; and all penal clauses and provisions in existing laws relating to the subjects embraced in this act shall be deemed applicable thereto.
The Vice President. The Chair will call the attention of the Senator from Ohio to the language here used, "that this act may be cited as the coinage act, 1870," It should be the "coinage act, 1871."
Mr. Sherman. Certainly that should be changed, the date of the passage being postponed.
The Vice President. The amendment will be so corrected.
The amendment was agreed to.
The Vice President. All the amendments reported by the committee are disposed of. If no further amendment be proposed the bill will be reported to the Senate.