Inefficency of U.S. Mints 1 1

[RWB]

This note from 1882 illustrates the inefficiency of coining at the Philadelphia Mint. The other mints were worse except for SF double eagles. Tabu;ations similar to this appear in some of the Annual Reports.

[VKurtB]

On 7/20/2023 at 2:54 PM, RWB said:

This note from 1882 illustrates the inefficiency of coining at the Philadelphia Mint. The other mints were worse except for SF double eagles. Tabu;ations similar to this appear in some of the Annual Reports.

Grubby 1882 hands in the cookie jar perhaps? Hey, the Old West was a time of rampant lawlessness. Do you really think it was caused by Mississippi River water? Or was lawlessness the Order of the Day? I think it was the latter. Kinda like in major cities today.

Edited July 20, 2023 by VKurtB

[RWB]

The "value operated on" begins with refined gold, which is melted and alloyed with copper, then cast into coinage ingots. These were rolled into strips suitable for cutting blanks of correct diameter, thickness, and weight for the scheduled coin denomination. Most waste occurred here: small amounts in each mechanical or melting step, and a large proportion in scissel remaining from cutting blanks.

The "amount of coin produced" includes only coin accepted and delivered by the Coiner. This excludes underweight, or damaged pieces, plus good pieces withheld to make a delivery in even dollars (simplified calculations). (Alternatively, using preformed blanks has a low rate of wastage - almost all of which is mechanical byproduct.

There were lots of laws. Enforcement  & apprehension were difficult, but courts were usually quick. In mining areas the miners normally formed extra-judicial  "associations" to enforce behavior and punish offenders. These lasted only until there was sufficient permanent population to support a more regular government. The least law abiding region was the old south, where plantation owners did as they pleased, actively suppressed the "Horatio Alger" idea self advancement through industry, supported a caste system, and answered to no one.

Edited July 20, 2023 by RWB

[GoldFinger1969]

Wait a second, are you or that letter saying that UNDER 50% of the metal got made into coins ?  That seems suspiciously low....even back then, they had controls and security practices. 

What was the figure for the SanFran Mint, overall or for Liberty Head DEs (I recall them being very prodigious in minting the DEs but didn't realize that may have meant theft from other mints) ?

Edited July 20, 2023 by GoldFinger1969

[zadok]

On 7/20/2023 at 5:01 PM, RWB said:

The "value operated on" begins with refined gold, which is melted and alloyed with copper, then cast into coinage ingots. These were rolled into strips suitable for cutting blanks of correct diameter, thickness, and weight for the scheduled coin denomination. Most waste occurred here: small amounts in each mechanical or melting step, and a large proportion in scissel remaining from cutting blanks.

The "amount of coin produced" includes only coin accepted and delivered by the Coiner. This excludes underweight, or damaged pieces, plus good pieces withheld to make a delivery in even dollars (simplified calculations). (Alternatively, using preformed blanks has a low rate of wastage - almost all of which is mechanical byproduct.

There were lots of laws. Enforcement  & apprehension were difficult, but courts were usually quick. In mining areas the miners normally formed extra-judicial  "associations" to enforce behavior and punish offenders. These lasted only until there was sufficient permanent population to support a more regular government. The least law abiding region was the old south, where plantation owners did as they pleased, actively suppressed the "Horatio Alger" idea self advancement through industry, supported a caste system, and answered to no one.

...and had zero tolerance for carpetbaggers n scalawags....

[RWB]

The annual reports have some of this data.

...a large proportion in scissel remaining from cutting blanks. This went back to M&R for recasting.

[RWB]

On 7/20/2023 at 6:06 PM, GoldFinger1969 said:

theft from other mints)

Huh ....? Not understood.

[GoldFinger1969]

On 7/20/2023 at 9:48 PM, RWB said:

Huh ....? Not understood.

Is that letter implying that over half of the gold was stolen since it never got made into coins ?  I can't believe that....nothing I've read elsewhere implies anywhere near that level of theft or waste.

[J P M]

On 7/21/2023 at 12:15 AM, GoldFinger1969 said:

Is that letter implying that over half of the gold was stolen since it never got made into coins ?  I can't believe that....nothing I've read elsewhere implies anywhere near that level of theft or waste.

 

On 7/20/2023 at 9:47 PM, RWB said:

The annual reports have some of this data.

...a large proportion in scissel remaining from cutting blanks. This went back to M&R for recasting.

I think what it means is the leftover slag  or scissel from cutting the planchets was used again. I wonder if it was weighed and subtracted from the original? that would change the totals a bit. 

[RWB]

On 7/21/2023 at 6:42 AM, J P M said:

 

I think what it means is the leftover slag  or scissel from cutting the planchets was used again. I wonder if it was weighed and subtracted from the original? that would change the totals a bit. 

All silver and gold was tracked internally only by weight, so yes. The starting weight was of the alloy ingots and the ending weight was struck pieces of alloy as accepted by the coiner. At delivery to the Superintendent, these pieces became legal money.

The letter uses monetary values because that is what Treasury used for its accounts.

Edited July 21, 2023 by RWB

[RWB]

On 7/21/2023 at 12:15 AM, GoldFinger1969 said:

Is that letter implying that over half of the gold was stolen since it never got made into coins ?  I can't believe that....nothing I've read elsewhere implies anywhere near that level of theft or waste.

No. The letter is about efficiency of the coining process.

[VKurtB]

On 7/21/2023 at 12:48 PM, RWB said:

No. The letter is about efficiency of the coining process.

Think how more "efficient" it would have been to have square coins.

[RWB]

Side Bar ---

When gold bullion was deposited at one mint, then transferred to a different mint it was called a "redeposit." This avoided the error of counting the same deposit twice. Treasury/Mints used "transfer orders" to ship bullion or coins from one location to another.

Also, the New York Assay Office was the only AO with active refining capability. They acted as an adjunct to the Philadelphia Mint. NYAO accepted deposits of gold and silver, did the refining, and shipped the bars to Philadelphia. The Mint paid for the bars in coins which NYAO then used to pay depositors or sell for Gold Certificates. The Bullion Fund at each facility held enough coin to moderate most transactions so that depositors were paid immediately.

[VKurtB]

On 7/22/2023 at 10:25 AM, RWB said:

Side Bar ---

When gold bullion was deposited at one mint, then transferred to a different mint it was called a "redeposit." This avoided the error of counting the same deposit twice. Treasury/Mints used "transfer orders" to ship bullion or coins from one location to another.

Also, the New York Assay Office was the only AO with active refining capability. They acted as an adjunct to the Philadelphia Mint. NYAO accepted deposits of gold and silver, did the refining, and shipped the bars to Philadelphia. The Mint paid for the bars in coins which NYAO then used to pay depositors or sell for Gold Certificates. The Bullion Fund at each facility held enough coin to moderate most transactions so that depositors were paid immediately.

Yes. All this. The ANS (not ANA) related ALL of this when they were located downtown near the World Trade Center. I didn't need to sit in a NARA to have learned this. The bookkeeping interchanges involving the New York Fed, West Point, and Philadelphia Mint are well-known.

[GoldFinger1969]

On 7/22/2023 at 11:25 AM, RWB said:

Side Bar ---When gold bullion was deposited at one mint, then transferred to a different mint it was called a "redeposit." This avoided the error of counting the same deposit twice. Treasury/Mints used "transfer orders" to ship bullion or coins from one location to another.Also, the New York Assay Office was the only AO with active refining capability. They acted as an adjunct to the Philadelphia Mint. NYAO accepted deposits of gold and silver, did the refining, and shipped the bars to Philadelphia. The Mint paid for the bars in coins which NYAO then used to pay depositors or sell for Gold Certificates. The Bullion Fund at each facility held enough coin to moderate most transactions so that depositors were paid immediately.

I see news articles in your book and Bowers LH DE book that gold was sent to Europe/London by Wall Street firms (secrecy regarding location and amount, interesting !).  I would guess the NY AO played a roll here ?  

Not sure if gold went directly from Philadelphia to Europe/London ?

[VKurtB]

On 7/22/2023 at 11:42 AM, GoldFinger1969 said:

I see news articles in your book and Bowers LH DE book that gold was sent to Europe/London by Wall Street firms (secrecy regarding location and amount, interesting !).  I would guess the NY AO played a roll here ?  

Not sure if gold went directly from Philadelphia to Europe/London ?

After physical custody is achieved, anyone can smuggle anything. The key is to not get caught. It's not too much of an exaggeration to say that nearly all pre-1934 U.S.gold coins that exist today are the result of illicit activity. Yes, I'm aware of the 1933 "exceptions", but that is a TINY percentage. The rest exist by means of smuggling at least. The massive majority are in Fort Knox bars, and I don't mean taverns, either.

Edited July 22, 2023 by VKurtB

[RWB]

On 7/22/2023 at 12:42 PM, GoldFinger1969 said:

I see news articles in your book and Bowers LH DE book that gold was sent to Europe/London by Wall Street firms (secrecy regarding location and amount, interesting !).  I would guess the NY AO played a roll here ?  

Not sure if gold went directly from Philadelphia to Europe/London ?

Most went through NYAO to a NY Bank for shipment. (The bullion fund value was often changed to allow NYAO to have sufficient gold coin on hand for a planned export.) Shipment data was split between NYAO and the correspondent bank. (Reports were made by NYAO and Customs, but they were only as reliable as amounts supplied by gold shippers/owners.) Reports were given to newspapers by banks. It was commonplace to distribute false and misleading public info. or to delay announcing shipments until after arrival in London. But NYAO and Customs  used official declarations. Ship gold vaults were usually under the Captain's quarters accessible only by the Captain and Chief Purser.

Each Mint could also supply export gold and silver.

[GoldFinger1969]

On 7/22/2023 at 2:45 PM, VKurtB said:

It's not too much of an exaggeration to say that nearly all pre-1934 U.S.gold coins that exist today are the result of illicit activity. Yes, I'm aware of the 1933 "exceptions", but that is a TINY percentage. 

FDR's edicts did not say that foreign banks or foreign citizens had an obligation to turn in American gold coins.  The prohibition applied to U.S. citizens.

I'd say, off the top of my head, that of the nearly 4 MM Saint-Gaudens Double Eagles, probably 90% or more were repatriated from foreign countries.  I have never read anything that says that wealthy Americans stored large gold holdings overseas.  In fact, the "Eliasberg Exception" -- collecting numismatic coins as a way to hold gold -- was far easier and simpler than storing in a foreign bank you knew nothing about and might not be able to visit for months or years.

Edited July 22, 2023 by GoldFinger1969

[GoldFinger1969]

On 7/22/2023 at 4:16 PM, RWB said:

Reports were given to newspapers by banks. It was commonplace to distribute false and misleading public info. or to delay announcing shipments until after arrival in London.

Was that to prevent theft or attempted robberies by disclosing confidential shipping information...or because it was sensitive information as to who was losing/gaining gold in the financial markets?

[RWB]

On 7/22/2023 at 4:36 PM, GoldFinger1969 said:

Was that to prevent theft or attempted robberies by disclosing confidential shipping information...or because it was sensitive information as to who was losing/gaining gold in the financial markets?

Mostly the first. Bankers, brokers and others in the financial markets had their own internal sources and got that well before shipments were made or received.

Edited July 23, 2023 by RWB

[GoldFinger1969]

On 7/22/2023 at 8:02 PM, RWB said:

Mostly the first. 

You know.....$1 MM in gold was 1.5 tons or thereabouts....you put that all in a steel safe or container, it's gonna be REAL TOUGH to steal that !!

Anybody can make off with a few bags of gold, if you evade security and the guns. Who's getting a 2-ton safe with the goods loaded into a horse-and-buggy or a Model T ? 

[Henri Charriere]

[Some takeaways...

Inefficiency does not equal theft. (Whether the unauthorized seizure of scissel, after scisson, should result in scissure, I leave to others.)

The last "pirate". to be executed by hanging occurred in 1860 on Bedloe's (now Liberty) Island in New York harbor.

The New York Assay Office, 30 Wall Street --hard by Federal Hall where George Washington was sworn in as President directly across the street from J. P. Morgan Bank (which still bears damage to its facade from the still unsolved "Wall Street Bomb Explosion" of 1920) -- in operation from 1854 to 1982.  It, and the other six assay offices around the country are all closed.

[VKurtB]

Based on pure geometry, there is a maximum efficiency that is possible when punching out circular blanks from metal strip. Theoretically, with exactly perfect edge to edge punching, with no excess between adjacent blanks, the efficiency is already quite low. Anyone who has examined post-blanking webbing will see that the efficiency is quite low.

That maximum theoretical efficiency for round coins is (pi) divided by 4. 

Edited July 26, 2023 by VKurtB

[RWB]

On 7/23/2023 at 1:45 AM, GoldFinger1969 said:

You know.....$1 MM in gold was 1.5 tons or thereabouts....you put that all in a steel safe or container, it's gonna be REAL TOUGH to steal that !!

For delivery/shipment, gold coin was packed in kegs or wood boxes (mostly domestic shipment) containing $40,000. This was the largest size that could be easily handed by Teamsters and Post Office workers. An article by Jim Bruns, the SI Curator who got the Postal Museum started, explains the boxes; keg packing info is in Mint archives. (I worked with Bruns during the early 1970s. His father was once Postmaster General, if I recall correctly.)

Edited July 23, 2023 by RWB

[RWB]

Here's a photo of kegs being loaded on a wagon for transport from a New York bank to a ship. The bank assumed the expense of making and packing kegs, transfer to a ship, loading, and insurance. The men wearing white straw hats (back right, front right) are Pinkerton guards.