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under my instructions by Mr. M. V. Davis, of this office, exhibiting in detail and under appropriate heads the cost, including wastage and loss on sale of sweeps, of conducting the mint at Philadelphia, from July 1, 1849, the year in which gold deposits of any magnitude from the then newlydiscovered mines of California commenced to be made, and the mints at San Francisco and Carson, and assay-office, New York, from the date of their organization to the close of the last fiscal year; also statements for the same period, showing the amounts realized from charges, seigniorage, gain on minor coinage, and income from every other source.

These statements are believed to present substantially a correct history of the extensive bullion and coinage operations of the mints in Philadelphia, San Francisco, and Carson, and assay-office, New York, for the periods referred to, compared with which the coinage previously executed was quite insignificant.

The most important features shown by the statistics are—

First. That, placing the earnings and seigniorage against the total expenses, the metallic-money system has been nearly self-sustaining.

Second. That the total wastage incurred has been only 16 per centum of the legal allowance.

Third. A marked reduction in the cost of coinage under the coinage act of 1873 as compared with several preceding years.

The total coinage executed at the three coinage mints from the fiscal year ended June 30, 1850, to the fiscal year ended June 30, 1877, has been:

Gold....
Silver

Minor

Total coirage.

Fine gold bars manufactured, stamped, and issued.
Fine silver bars manufactured, stamped, and issued..

Total bars...

Total expenditures, (including assay-office at New York) .........
Total income...

Excess of expenditures...........

Total wastage, included in above expenditures....
Loss on sale of sweeps, included in above expenditures..

$861, 965, 700 50 113, 181, 141 50 11, 620, 638 81 986, 767, 480 81 32,808, 424 33 7,030,562 90

39, 838, 987 23

25, 177, 251 37 24,754, 589 09

422,662 28

762, 453 00 215,526 75

The loss on sale of sweeps is the difference between their assay value, with which the operative officers returning them are credited, and the amount realized from their sale to private smelters, previous to which disposition they are subjected to such processes for the recovery of bullion as are practicable to use in the mints, and in their sale care is taken to insure competition.

IMPROVED DESIGN OF COINAGE.

The interesting report of Mr. Freemantle, deputy master of the royal mint, for the calendar year 1876, calls attention to the fact that designs of modern coins are in almost all respects decidedly inferior to those of coinages in former times, and that in no respect has this inferiority been more apparent than in the manner in which the important question of portraiture has from time to time been treated. There is much force in Mr. Freemantle's remarks upon this subject, and it is proper to add that a close examination of some foreign gold coins of comparatively

recent issue shows the principal device to have been brought out in such high relief as to leave it unprotected by the outer rim which is intended to prevent the devices from coming in contact when piled face to face, as the coins are liable to be when in circulation, and also to prevent the coins from rocking when piled together. These defects cause a greater loss by abrasion than would otherwise be the case.

In this connection it is proper to observe that for nearly a year past devices and new dies for the improvement of our coinage have been in preparation by skilled artists. Specimen coins from some of these dies will at an early day be submitted for your inspection, and should a silver dollar for circulation be authorized by Congress, the designs for the same can be selected from those above referred to, and considerable time saved in commencing its coinage.

All our coins are mechanically well executed, but the devices can no doubt be improved. Such improvement is important, for the reason, that the finer the engraving and finish of the devices and inscriptions are, the more difficult the coins are to counterfeit. No changes in devices will be recommended, however, until specimen coins showing a decided superiority over those now in use shall have been produced, but everything will be in readiness to make any changes which after due deliberation may be decided upon as soon as Congress finally acts upon the various coinage propositions now before it.

The excellent finish of the trade-dollar has attracted attention and been commended in other countries. So far as is known, it has not been successfully counterfeited either in this country or China.

THE TRADE-DOLLAR.

The trade-dollar continues to grow in favor in China, and the demand at San Francisco for the past fiscal year for export to that empire averaged over $687,000 per month, and in some months more than twice that amount was exported.

On account of its superior mintage, it is difficult to counterfeit, and its close conformity to standard fineness and weight gives it some advantages over its principal competitor, the Mexican dollar, which it is likely to supplant to a still greater extent, notwithstanding the prestige the latter has long enjoyed as the successor of the Spanish dollar, and also some favoritism in its behalf by local customs authorities at certain Chinese ports.

On the first of October last there were several hundred thousand Mexican dollars held by bankers in San Francisco. One of these bankers telegraphed to London asking the price at which Mexican dollars could be sold in that city, and received an answer that there was no demand for that coin for export, and it was being used for melting purposes. At the same time the Chinese residents in San Francisco were paying for trade-dollars 2 per cent. above the price of Mexican dollars. in London, both coins being very nearly equal in intrinsic value. This shows a decided preference for the trade-dollar.

The testimony of intelligent bankers, thoroughly familiar with the Chinese exchanges, (recently given before the United States Treasury commission in San Francisco,) shows conclusively that the coinage of trade-dollars has been attended with decided advantages both as respects our commercial and mining interests, and there can be no doubt but that it should be continued on a scale equal to the requirements for export to China. It may be added here, that the Japanese Government, desiring to reap the benefits of a coinage manufactured exclusively for

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trade purposes, have followed the example of the United States, and are now coining a trade-dollar of the same weight and fineness as our own, with the evident intention of exporting it to China, where it has been made a legal tender at one or two ports. Its general appearance is similar to the "yen," substituting, however, the English inscription "420 trade-dollar 900," instead of "416 one yen 900."

The trade-dollar has of late entered to some extent into domestic circulation, and this for the reason that, from time to time since United States notes have appreciated nearly to par with gold, holders of silver bullion have been able to have the same manufactured into these coins, and exchange them at par for United States notes with a small profit. This fact, on becoming known, was regarded as indicating that the trade-dollar coinage was, for the time being (October last) in excess of the export demand, and led to the issuing of an order by the Secretary of the Treasury to temporarily intermit the receipt of deposits at the mints for these coins.

There are weighty reasons why the trade-dollar should not be coined for domestic circulation, but it is hardly worth while to state them, since the law provides very clearly that they shall be coined only to meet the export demand, and leaves no discretion as to their coinage for any other purpose.

THE PRESENT AVERAGE

California.

Nevada

Montana

I have availed myself of every facility to procure full information in relation to the product of the gold and silver mines of the United States, for the purpose of estimating approximately the present annual yield, with the following results based upon the production for the first six months of the year and the average monthly out-turn since, so far as it was possible to ascertain the same:

Idaho

Utah

Colorado

Arizona

New Mexico

Oregon..

Washington.

PRODUCTION OF GOLD AND SILVER FROM THE MINES OF THE UNITED STATES.

Dakota

Lake Superior
Virginia..

North Carolina

Georgia

Other sources

Total..

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It is impossible to state with any degree of accuracy how long this large rate of production will be maintained. A gradual increase may be expected in Montana and Arizona, and there is nothing to indicate a decrease in any bullion-producing State or Territory, except in the State of Nevada, and that depends upon coutingencies which to a great extent must be a matter of conjecture only. Several mines in different localities in that State have within the last year or two been opened and are producing considerable bullion, but whether they, and others which in the mean time may be discovered, will yield sufficient

to make up the decrease, which, unless other ore-bodies on the Comstock shall be found, must sooner or later take place, is somewhat doubtful.

The superintendent of the mint at San Francisco has furnished, at my request, a statement, embraced in the appendix, of the yield of about thirty different mines, the bullion from which finds a market in San Francisco.

The yield of bullion from the two mines which embrace the great orechimney discovered in 1874 in the Comstock lode has, according to the official statement of the managers, amounted, up to October 31, 1877, to $78,852,918.48, of which $36,736,347.91 was gold. These mines are now producing at the rate of nearly three million dollars per month.

MONEY STATISTICS.

An estimate of the stock of gold and silver coin and bullion in the United States June 30, 1876, based upon the estimate of the previous year, domestic production, and difference between importation and exportation during the fiscal year ended that date, fixed the amount at $181,678,000, of which $30,113,000 were silver.

Taking the above amount as a basis for an estimate of the stock in this country-June 30, 1877, we have:

Amount of gold coin and bullion on hand June 30, 1876.
Add the product of the mines during the past fiscal year, about............
Importations...

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Total .....

Deduct exportations....

And probable amount used in the arts and manufactures.......

$26, 590, 374
2,500,000

Gives......

Deduct exportations.

And probable amount used in the arts and manufactures...

29,090, 374 192,720, 230

Leaves a net balance of......

as the amount of gold coin and bullion in the country June 30, 1877.

The estimated amount of silver coin and bullion June 30, 1876, was.
Adding the production of the past fiscal year..
Importations....

$30, 113, 000
38, 000, 000
14,486, 991

82,599, 991

$29,464, 363
3,000,000

$151, 565,000

44, 000, 000 26, 245, 604

221, 810, 604

During the quarter of the current fiscal year ended September 30, 1877, the addition to the amount of gold coin and bullion is estimated at.. Silver coin and bullion

Total

Leaves a net balance of................

as the stock of silver coin and bullion in the country June 30, 1877, of a total of gold and silver of $242,855,858, and an increase for the year of $61,177,858.

Adding these items to the amounts estimated to have been in the country June 30, 1877, gives as the total amount of gold coin and bullion October 31, 1877...

Total silver coin and bullion October 31, 1877..

Total coin and bullion ...

32, 464, 363

50, 135, 628

$14,738, 865 3,357, 028

18, 095, 893

$207, 459, 095 53, 492, 656

260, 951, 751

An estimate of the amount of coin in the country is always a matter of uncertainty. One of the obstacles in the way is the impossibility of determining with any degree of accuracy the amount of gold and silver consumed in arts and manufactures, especially as both coin and bars are used for that purpose. It is also quite as difficult to ascertain the amount of coin in private hands.

At the time the issue of silver coins in redemption of fractional currency commenced it was supposed that the amount of silver coins in this country was very inconsiderable, but as soon as it became apparent that the new issue would remain permanently in circulation silver coins of the old standard made their appearance after being hoarded for many years. This circumstance tends to show that the amount of coins in private hands is larger than is generally estimated. I think it is not far out of the way to state the amount of gold coin and bullion now in this country at about $185,000,000, and silver coin and bullion at about $50,000,000.

CHANGES IN THE RELATIVE VALUE OF GOLD AND SILVER.

In my reports for the fiscal years 1872, 1873, and 1874, the causes operating to produce an important change in the relative value of gold and silver were fully stated and discussed. Chief among them was the change from the silver to the gold standard by the German Empire, the limitation placed upon the coinage of legal-tender silver money by the countries of the double standard, diminished demand for export to the Indies, and increased production of silver from the mines of the United States. Attention was also called to the opportunity which the change in relative value would afford for substituting on advantageous terms, and in advance of specie resumption, fractional silver coins for the fractional notes then in circulation, and the practicability of such a measure demonstrated.

The substitution has since been substantially accomplished on terms not only as favorable as were expected, but more so than could be probably done hereafter.

Since the change in the relative value of the metals occurred and assumed a somewhat stable character, the causes which produced the same have been the subject of careful, intelligent, and exhaustive examination and report by two commissions—one in Great Britain, appointed by Parliament, and the other in the United States, constituted by au act of Congress. Both of these commissions substantially agreed in assigning the change in the German money system and limitation placed on the legal-tender silver coinage in France and some other countries of the double standard as the principal causes of the change in relative value referred to. The British commission regarded the change as due to depreciation of silver, while the majority report of the American commission appears to hold that the change is due as much to an appreciation of gold as it is to a depreciation of silver, as the following extract will show:

Changes in the relative value of the two metals are entirely different from changes in their absolute value, or, in other words, their value as compared with all other things. Thus, one metal may have fallen greatly, as compared with the other, and at the same time not only may not have lost, but may even have increased in purchasing power. In describing a divergence in the relative value of the metals, without reference to the purchasing power of either, it is as correct to say that one has risen in value as to say that the other has fallen. In fact, looking only to the relation of the metals, both things have occurred; one has fallen and one has risen, each relatively to the other to the full extent of the divergence. In order to ascertain whether silver has fallen or gold risen since 1873, not relatively to each other but relatively to all

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