Bullion shortage at Carson Mint in 1879 0

[RWB]

The following letter provides a clear explanation for the shortage of silver bullion for coinage in 1879 at the Carson, Nevada Mint. The few 1879-CC silver dollars produced that year are highly prized by collectors. [Source: NARA RG104 E-235 Vol 17, p483. Original available at Newman Numismatic Portal - NNP.]

James Crawford, Esq., Superintendent

U.S. Mint

Carson, Nevada

 

January 14, 1879

 

Sir:

Referring to your telegram of the 9^th stating that you require an additional supply of silver, I have to state that the department finds great difficulty in procuring silver on satisfactory terms, for delivery at your Mint, notwithstanding the fact that it is located in the principal silver mining region of the country, sellers ask, as a general thing, higher rates for silver to be delivered at Carson that at San Francisco.

            In addition to this, the cost of transportation is grater, as is the cost of the necessary supplies which as a matter of fact, increases the expenses of coinage.

            The Secretary is of the opinion that the Department would not be justified in paying higher rates for silver for delivery at your Mint, and for transportation of the resulting coins, than from San Francisco, and has therefore decided that purchases of silver for delivery at your Mint will only be made when the price asked is such as will enable the department to pay the additional cost of transportation [of coins] from Carson.

            I can assure you that there is no disposition to discriminate against the Carson Mint, but under the law, the Secretary must procure bullion at the lowest market rates; and when it is offered in sufficient quantities to meet our requirements at lower rates for delivery at San Francisco, we would not be justified in paying the increased price asked for delivery at your Mint.

            Should the Department be unable to procure sufficient bullion to keep your mint employed, it will be necessary for you to furlough your force until such time as we can procure the necessary supplies of bullion at reasonable rates.

Respectfully,

Robert E. Preston, Acting Director

[Just Bob]

5 hours ago, RWB said:

            Should the Department be unable to procure sufficient bullion to keep your mint employed, it will be necessary for you to furlough your force until such time as we can procure the necessary supplies of bullion at reasonable rates.

Ouch! That could not have been good news, especially considering that the US was finally climbing out of a recession, following the Panic of 1873.

[RWB]

38 minutes ago, Just Bob said:

Ouch! That could not have been good news, especially considering that the US was finally climbing out of a recession, following the Panic of 1873.

Happened frequently in US Mint history. Most workers were "laborers" and expendable/interchangeable. Rarely were officers or foremen furloughed or terminated.

[kbbpll]

Double ouch, they opened the CC mint because of the Comstock lode, and by 1879 there apparently wasn't a cost-effective amount left for coins.

[RWB]

It was cheaper to ship from the silver mining region to San Francisco that to Carson. Also, mining companies could obtain checks drawn on San Francisco, Chicago or New York, whereas Carson only paid for silver bullion in silver dollars (which few wanted) or checks drawn on New York. Paying for bullion was also a problem for the smaller assay offices. The US Treasurer tried to limit the cities were government checks were paid, but depositors wanted more convenient locations and less time wasted in mailing checks back east. (Chicago and later St. Louis were only added with great reluctance. Absence of a "Federal Reserve"-type system was a major impediment to commerce and nationwide cash movement.