The San Francisco call., 1895-11-25
WHY COLD WAS BORROWED
Director of the Mint Preston
Says Our Financial Laws
Are Inconsistent.
Currency Acts of the United States
Congress Discussed in His
Annual Report.

WASHINGTON, D. c., Nov. 2i.-The
director of the Mint has submitted his
report to the Secretary of the Treasury,
covering the operations of the mints and
assay offices of the United States during
the fiscal year 1895, together with the sta
tiatics of foreign countries relative to the
production and coinage of gold and silver
and the monetary condition of each coun-
try.
The value of gold and silver estimated
to have been used in the industrial arts
during the calendar year 1894 was approx
mately S21, ,541 ,652, of which SIC, ,658, ,604 was
gold and $40, 1888 04S was silver. The esti-
mated metallic stock in the United States
on July l. 1895. was gold-$636 ,229, 825 !;
silver, $625 1853, ,949, total of 81, ,262, ,OS4 TIA
The estimated production OF gold and
silver in the United States during the cal
endar year was: Gold, 1,910,S13 fine
ounces. of the value of $39, SOC, 900; silver,
49, 100000 tine ounces, of the commercial
value of $31 ,422 ,000 and of the coming
value of $64 900, 600. The production of
the world for the calendar year was: Gold,
S,737,7S8 fine ounces, of the value of $780,,
626, 100; silver, 167, 1856 fine ounces, of
the coming value of $216, ,S92, ,2O0-commer-
clal value, $l06, $40, 800.
proximate stock of money in the principal
countries of the world. He places the
stock of gold at 81 086, 800 900; the stock of
full legal-tender silver at So, ,439, 800. 900;
stock of limited tender silver at $631 ,2OO,-
600, making total silver stock in the
world OF $4,07o,5o0, coo; the uncovered
notes are placed at s., 1863, 100000.
He reviews in his report the monetary
legislation and monetary system of the
United States, commencing with the
coinage scheme submitted to Congress
by Robert Morris, Superintendent of FL
nance, January II, 1882, making an analy-
sis of the report of Alexander Hamilton,
Secretary of the Treasury, upon the estab
lishment of mint, submitted to the
House of Representatives in 1871, and
upon which the act of April 2, 1892, estab-
fishing mint and coinage system was
based
Mr.. Preston states that the real demone-
tlzation of silver took place in 1858, when
the weight of the divisional coins was re-
duced about per cent. This was not an
accident or oversight 1t was expressly
declared in the House of Representatives
that the intention was to make gold the
sole standard of value" in large transac-
tions, and silver subservient to it in small
ones. The act of 1873 was only nominal,
and conformed the law to the
actual monetary condition as far as the
metalllc currency OF the united states
was concerned. that had existed for nearly
a quarter of a century. He states that the
currency laws of the United States since
1873 are not only inconsistent, but contra
dictory, obstructive of each others opera
ton and mutually destructive.
Mr.. Preston says that on January l, 1879,
the date of the resumption OF specie pay
ments, the only currency, except coin GER
tificates required to be redeemed in gold
coin, was the $346 6S1 ,061 legal tender notes
then outstanding, which the then Secre-
tary of the Treasury was of the opinion
that gold reserve of $10O, 600, 900 would be
sufficient to maintain so long as there was
no increase, but the paper currency re-
deemable on presentation has been In
creased to the extent of $155, $3.50, 900 issued
in payment of the silver bullion purchased
under the act OF July IA, 1890. OF these
notes there were outstanding on the
1st inst. Sal ,092, ,2s0, making the total
Government obligations as money, $751;
773, ,296, redeemable on presentation. Aside
from these there were outstanding Novem-
ber 1, 1895, $685. 456, ,236 in silver certificates
and as the act of July Ia. $780, declared it
'.to be the established policy of the United
States to maintain the two metals at par
ity with each other upon the present legal
ratio, or such ratio as may be provided by
law" there was total of 1921 ,229, ,532, rest
ing on the basis of the gold reserve of
$100,000,000, and in order to maintain the
parity between the two metals the Govern
ment has been compelled to borrow $162.-
OOO, 900 in gold within the past two years.