Volume 11 — BRANCH MINTS AND COINAGE.

Speech in the Senate, on the Proposition to create a Branch Mint in Oregon, April 29, 1864.

The Senate having under consideration a bill to establish Assay Offices at Carson City, in the Territory of Nevada, and Dalles City, in the State of Oregon, Mr. Nesmith, of Oregon, moved to strike out the section establishing an Assay Office at Dalles City, and insert several sections establishing a Branch Mint there, instead. This was contrary to the recommendation of the Finance Committee, and also to communications from Mr. Pollock, the Director of the Mint at Philadelphia, and Mr. Chase, Secretary of the Treasury, sustained by Mr. Fessenden in the Senate.

April 29th, Mr. Sumner spoke.

MR. PRESIDENT,—When this subject was under consideration before, I voted with the Committee, partly because it is my habit to vote with committees on matters within their special consideration, and partly because at the time I was under the impression that their report was justified by correct principles. Subsequent reflection has induced me to hesitate in this conclusion.

Much dependence has been placed upon the report of the Director of the mint at Philadelphia. Now, Sir, if he had contented himself with giving an opinion against establishing a mint in Oregon, without assigning reasons, I might have respected his opinion; but when he puts forward as his first great objection that the multiplication of mints will tend to “national disintegration,” I confess that I join with the Senator from Oregon [Mr. Nesmith] in distrusting his conclusion. What confidence can anybody have in anything founded on such premises, which experience, if not reason, shows to be false? Why, Sir, the author of this opinion forgets that in the country most centralized in the world, where all the agencies of Government converge in a single capital,—I mean France,—there have been for a long time, even within its comparatively contracted borders, more than half a dozen different mints. Besides a magnificent central mint at Paris, there are, or were very recently, auxiliary mints at Lyons, Marseilles, Bordeaux, Lille, Rouen, and Strasbourg. I never heard that this multiplicity tended toward “national disintegration.” France still continues one and indivisible; and I doubt if there would be any difference in this respect, even if there were a mint in every one of her eighty-six Departments. Really, the Director of the Philadelphia mint ought to have borne in mind the famous instructions of Lord Mansfield to the colonial magistrate, and contented himself with an opinion without assigning reasons.

There is a different consideration, to which I confess that I am not insensible. It is the importance of a correct and finished coinage, which it seems natural to suppose best promoted by a single mint. On this point I am disposed to agree with the Director. But our Government has not acted on this principle.

If circumstances favored the consolidation of the national coinage at a single mint, I can conceive that there would be advantages of an unquestionable character. Indeed, if we repair to France, where the mints have been in times past so numerous, we find that these advantages have not been denied. I suppose that the most authoritative testimony on this subject, whether we look at it in the light of theory or of practice, is found in that country; and if we seek special authorities, there is nothing so instructive or ample as the report of Dumas and De Colmont, made in 1839, under a commission from the French Minister of Finance. This document, with its minute disclosures on the operations of mints, was for some time kept secret in France. I have understood that only twelve copies were printed for the use of the Commission, who were placed under a solemn obligation not to divulge it. But I believe it found its way to publicity at the time of the Parliamentary inquiry into the Mint in 1849, which resulted in a valuable blue-book.

The testimony of Dumas is for a single mint. He dwells especially on two considerations,—economy, and the perfection of the coinage; and these he places above local interests demanding multiplicity of mints. The figures by which he illustrates the superior economy are very striking. These assume that the metal is already delivered at the mint,—a point not to be forgotten on the present occasion. Beyond his own opinion on the question of perfection, Dumas quotes the testimony of Basterrèche, Regent of the Bank of France, who, after an examination of the subject as long ago as 1800, very positively declared that “the perfection of labor which ought to distinguish a great nation imperiously required a single mint, placed under the immediate superintendence of the Government.” And he also quotes the testimony of Humann, Minister of Finance, who, in presenting his budget in 1835, declared that the Paris mint was adequate to do all the coinage required in France,—that the concentration of labor there would promote improvement in the processes of production,—that in this way the Government would be relieved from the expense of different establishments,—that all the money from the same mint would be identical in character, and in proportion as it acquired perfection would be less exposed to counterfeiting,—and, in fine, that the superintendence of the Government would be a guaranty of security, which does not exist where the work is distributed in a large number of establishments. Such was the testimony of the minister, adopted by the illustrious authority in science, Dumas. Perhaps the case could not be stated stronger. Yet it did not prevail in 1800, when it was first given,—nor in 1835, nor in 1839,—even in France, where the tendency to concentration is so active, where the facilities for it are so great, and the disposition to take counsel of science is so confirmed. And surely there must be a reason why it did not prevail.

Dumas says, in rather contemptuous phrase, that “on one side is a petty local interest, in a great degree imaginary.”[335] But if this “petty local interest” were of sufficient importance to prevail for so long a time in France, against such influences, it must be because there was something of intrinsic strength in its character. I allude thus minutely to this testimony, because I would not keep anything out of the discussion calculated to shed light, and because it seems to me that the long-continued practice of France, in spite of such testimony, must not be disregarded in our endeavors to arrive at a true policy.

Thus far our Government has followed the teachings from the practice of France, rather than from its science on this subject. It renounced, some time ago, the policy of a single mint, acting, it may be supposed, under other considerations of a controlling character. The statute of March 3, 1835, entitled “An Act to establish branches of the Mint of the United States,”[336] provides for mints at New Orleans, Charlotte, in North Carolina, and Dahlonega, in Georgia,—the two latter for coinage of gold only. Since then there has been provision for mints at San Francisco, Denver, and Carson City.

I have not before me the most recent statement of the production at these different mints; but this is not necessary for illustration. If we take the year 1851, we find that the number of pieces, gold, silver, and copper, produced that year, was as follows:—

Philadelphia24,985,736

New Orleans3,527,000

Charlotte105,366

Dahlonega83,856

So that mints were kept up at the two latter places merely to manufacture a very small amount of coin, and the reason assigned was, that gold was produced in the neighborhood.

Looking at the cost of production at these different places, we find that at Philadelphia it was only forty-two hundredths per cent,—at New Orleans, one and eight hundredths per cent,—at Charlotte, three and fifty-five hundredths per cent,—at Dahlonega, three and thirteen hundredths per cent. But, great as was the economy at Philadelphia, compared with that at the other mints, we find that at the Paris mint the same production costs one half less.

If we look further at the mints of Charlotte and Dahlonega, it is easy to see how every consideration of economy was against them. With a single Munich press in the mint at Charlotte, the whole annual coinage there would have been accomplished in thirty-five hours; and with a similar press at Dahlonega, the whole annual coinage there would have been accomplished in less than twenty-eight hours! Experience shows that one Munich press will coin in a day of ten hours, allowing one sixth of the time for stoppages and accidents, thirty thousand pieces. Of course the coinage at these two places must have been at an expense much beyond that of Philadelphia. It would be more economical for the Treasury to pay the cost of transporting the gold from these places to Philadelphia. And doubtless this would be done, if the question of economy were alone involved.

I refer to these instances as illustrations of the policy already adopted. I need not say that they do not commend themselves to my judgment, especially when it is considered that in all probability the coinage at these mints, besides being expensive, was also of an inferior quality.

But the vast products of gold in distant California presented the question in a new form. Unexpectedly, the early prodigies of Mexico and Peru were renewed. Private persons were suddenly enriched. Gold was turned up like clods of earth, or washed from sands deposited by mountain torrents. Where gold so abounded, the currency of the country was naturally in this metal, which thus performed its double function of merchandise and money. Should all this treasure be sent far away to Philadelphia for coinage? The answer of reason, convenience, and commerce was clearly against such enforced transportation. A mint became a necessity. Even assuming that the coinage could be executed with more economy and perfection at Philadelphia, it is evident that the local interests of California were too important to be neglected. The mint was established, and during the last year gold has been coined there to the amount of $17,510,960, while the smaller amount of $3,340,931 was the sum-total of gold coinage during the same time at Philadelphia.

It is now proposed to create another mint in Oregon, and the reasons for it are similar to those which prevailed in the case of California. The region is fruitful in gold, if not to the same extent as California, yet so much so as to require similar facilities for coinage. It seems that the amount received at three private assay-offices in the city of Portland, from January 15th to October 20th of the last year, reached $2,486,496. Compare this sum with the paltry yield at Charlotte or Dahlonega, where mints were established and maintained down to the Rebellion. The mines of Peru have been proverbial for richness; but the sum-total of their product in 1858 was only $6,000,000. That of Chile was $5,000,000; and that of Bolivia was only $2,000,000,—being less than the product of Oregon for nine months.

Here, again, the considerations of science, so strong in favor of a single mint, seem to lose their applicability, or rather they fail in presence of other considerations not to be neglected. Sir, we cannot forget in legislation that it is no narrow territory that comes within our jurisdiction, but that it is a vast region, washed by two great oceans and separated by intervening mountains. A rule which may be proper in a country like France becomes inapplicable to a country so vast in space. If all our States were huddled together on a single seaboard, perhaps a single mint might suffice. In such a case economy and perfection of coinage might be exclusively consulted. But the interests of business on the Pacific coast must not be sacrificed even to these considerations. Spain still has mints at Madrid and Seville, although at the latter place the coinage is chiefly confined to copper; but in former days, while Mexico was a Spanish province, there was a Spanish mint there,—for the same reason, I suppose, that a mint is now proposed in Oregon.

The consideration from distance alone cannot be disregarded. Oregon is more than five thousand miles from Philadelphia, and seven hundred miles from San Francisco. It is impossible to legislate for such immense spaces as you would legislate for a European kingdom, where every part is within easy distance of the metropolis.

In England a single mint transacts the business of that commercial country. But I need not remind you that all its immense commerce is conducted within a small territory. In Holland, also, there is only a single mint,—although during the days of the Republic there was a mint in each province. Afterwards these were abandoned, and one mint for the whole kingdom was established at Utrecht. But here again I remind you of the narrow space of territory served by this mint.

The whole question is obscured by considering gold, when coined, as exclusively currency, whereas it is also merchandise. In this latter character it comes under the laws governing commerce in other articles. If we go back to Aristotle, we find a definition difficult to improve in our day. “It is agreed,” says this master of thought, “to give and receive in exchange a substance which, useful in itself, is easily managed in the usage of life: as, for example, iron, silver, or such other substance as shall have a determined dimension and weight, and which, in order to avoid the embarrassment of continual weighing, shall be marked by a particular stamp as the sign of its value.”[337] In quoting these words, Michel Chevalier, the political economist and new-made Senator of France, who has given much attention to this subject, rightly says that the whole question is admirably put and at the same time determined.[338] But the same idea has been presented by Adam Smith in his remarkable work on the Wealth of Nations. “The qualities,” he says, “of utility, beauty, and scarcity are the original foundation of the high price of those metals, or of the great quantity of other goods for which they can everywhere be exchanged. This value was antecedent to and independent of their being employed as coin, and was the quality which fitted them for that employment.”[339] Therefore it must not be forgotten that coin is something more than money; it is merchandise also. In this character it plays a conspicuous part in the commerce of the world. It differs in bulk from the lumber of Maine, but it is just as much an article of merchandise.

Regarding gold as merchandise, we see how clearly in certain places and under certain circumstances it escapes from the scientific laws applicable especially to coinage. Gold is unique among articles of commerce. Every other article allows discussion as to its quality. Cloth or wool may be more or less fine; flour more or less bolted, or it may be made from hard or soft wheat. But gold is chemically a simple body, and, when once refined, perfectly homogeneous, whether from California or Siberia, from the sands of Transylvania or the poorer sands of the Upper Rhine. Let it be once brought to any arbitrary standard, as, say, nine tenths, and there is no difference in its character. But this degree of fineness must be established in authentic manner,—otherwise transactions in this article may be arrested at every moment. The delicate agencies necessary for determining its value are not easily accessible. The Government, therefore, as representative of the community, after refining and weighing gold, puts upon it a stamp which guaranties its weight and fineness. Thus, the eagle, with the stamp of ten dollars, is a piece which, according to the Act of Congress of 18th January, 1837,[340] weighs two hundred and fifty-eight grains, with nine tenths of gold and one tenth of alloy. The English sovereign is a stamped piece of gold twenty-two carats fine, and of such weight in proportion to the troy ounce that £3 17s. 10½d. make an ounce. The French franc is a stamped piece of silver weighing exactly five grammes, and nine tenths fine.

But in our country, and now especially in California and on the Pacific coast, gold has become a principal article of production and exportation, like wheat or cotton. Such is its character that it instinctively seeks inspection, in order to secure a guaranty and recommendation. Now every State has its inspectors, for instance, of flour, pot and pearl ashes, fish, beef, and pork. In Massachusetts there are inspectors of sole-leather, although a hide of leather is open on all sides. But, if gold be regarded as merchandise, there is more reason for its inspection. As it is more portable than these other articles, so it is also more valuable, more easily lost, more easily stolen, and more provocative to plunder. Therefore it is entitled to peculiar safeguards.

Here, then, is the case in a nutshell. California is already a large exporter of gold as merchandise. Oregon is now commencing a similar career. But the gold there ought to have every advantage as merchandise which it can derive from the inspection of the Government. Call it protection, if you will; but I beg to submit that an interest so important, so peculiar, and so delicate, deserves this protection.

If it be said that all this may be accomplished by an assay office, I reply, that this does only partially what is accomplished by the mint. The gold is delivered back in ingots stamped, so that for certain purposes it is merchandise; but the work is only half done. If the quantity were trivial, as at Charlotte and Dahlonega, then an assay office would suffice; but where the supply is so great as in California or Oregon, it would seem as if no pains ought to be spared by the Government to facilitate the commerce in this article, or to meet the desires of its producers. Now it is obvious that nothing in this respect can equal the stamp upon the national coin. A courtier said to Philip the Second of Spain, “Your golden ducats carry your name and your features over all the countries of Europe, exciting envy and dread.” The time for envy and dread has passed; but our eagles are not idle. There is their inscription, E pluribus unum, an unquestionable stamp of nationality and value, which they carry wherever they go.

Therefore, Sir, while admitting, that, for the sake of the coin, there should be the highest accuracy possible in the operations of the mint, I cannot hesitate to insist, that, regarding gold as merchandise, the mint must be established in such localities as may be required by the interests of commerce.

I do not think there would be any hesitation in this conclusion, if the whole subject of coinage had not been shrouded with a certain mystery, almost like the “black art.” This appears constantly.

says Shakespeare; and Pope says,—

Like other incidents of sovereignty, coinage is reserved rightfully to the Government, and on this account is little appreciated in its true character. People sometimes err in not seeing that the delicate laws applicable to this subject must not be strained to interfere with the proper regulation of the value of gold when it has become a principal article of commerce.

Objection is also made on the ground that a mint is necessarily an expensive structure. But this is a mistake, arising partly from the general mystification on the subject, and partly because the Philadelphia mint, which we have all seen, is an expensive structure. A mint, in plain terms, is nothing but a foundry provided with good locks and keys. If finished elaborately and expensively, it may attract the eye, but does not become more useful. The whole system of coinage has been twice changed during the present generation: first, by the change in assays of Gay-Lussac in 1830; and, secondly, by the introduction of the Munich press worked by steam, instead of the old hand-press with two ponderous balls as flies. And the Munich press itself has been much improved in France by Thonnelier. Now a mint should not be so costly as not to receive easily all improvements. The science of metallurgy is still in progress of development, and it cannot be doubted that the coming generation will witness improvements as important as any during our day. The eminent French authority to whom I have already referred, Dumas, was in the habit of ridiculing the expensive mints constructed in France. He desired that the present mint at Paris should be surrendered to some public office, and the business removed to an open space in the suburbs. In his Report he has furnished estimates showing the small expense of a mint, according to his ideas, adequate to all the coinage of France.

If you would see how the cost of a mint in our country may swell, at least in calculations on paper, if not in reality, I refer you to the memorial of the Board of Trade of Philadelphia in relation to the establishment of a branch mint at New York in 1852. But the mint pictured here is anything but the simple foundry which I have described, or the workshop which the Senator from Oregon asks you to authorize.

Mr. President, I hope that I have not occupied too much time with this statement. I am led to make it in order to show, that, in differing from the Committee on Finance, I have not proceeded without proper consideration. There are topics connected with the subject to which I do not allude, because I desire to confine my remarks to the points in issue. There are also details as to the cost of coinage in a well-regulated mint, involving the question of seigniorage, and the essential difference between the systems of England and France, which I should be glad to present; but I have said enough. There is, however, one practical remark, founded on the example of Spain, which I venture to add. It was the habit of this power to require that the initial letter of the place of coinage should appear on every piece, so that the coin from Madrid bore an M, from Seville an S, and that from Mexico M. This precaution rendered each mint responsible for its own work. In France, also, every mint had its special mark. The coins struck at Paris bear the letter A. Perhaps a similar requirement in our country might stimulate greater care in the several mints, by creating an honorable rivalry.

There is one other remark which I would make before I close. Much stress has been placed upon the opinion of the Director of the mint at Philadelphia. Indeed, the whole case against the proposed mint has been allowed to rest on his letter, which begins so whimsically. I hope that I have not spoken of him too freely; but, since his authority is invoked, I am led to ask if there is anything in his studies or scientific attainments calculated to render him a court without appeal on this question. It is obvious that his position for the time being subjects him to influences hostile to new mints. He naturally seeks to amplify his jurisdiction, and to keep the tide of gold secure so that it shall not ebb from his marble building. Perhaps I do not use too strong language, if I say that he is under inducements to play the pedant for his own mint, and to quote it against every other mint. At all events, I think the Senate will be satisfied that on the present occasion he ought to be overruled.

The amendment creating the Branch Mint was adopted,—Yeas 23, Nays 16,—and the bill passed.