The gold coinage of the British mint during the calendar year 1875 amounted to £258,120, ($1,256,140.98,) and the coinage of silver, £597,540 17s. 1d., ($2,907,932.56.) In relation to the small amount of gold coined, the interesting report of the deputy master of the royal mint for that year (1875) makes the following statement:

"The gold coinage of the year, as will be seen from the above figures, has been inconsiderable, and has been confined to half-sovereigns, which were the coins most required when the Bank of England resumed the importation of gold bullion into the mint in the month of November.

"I may mention, however, in this place, that the importation of gold continued until the close of January last, when the amount sent in for coinage had reached a total of more than £6,250,000. The supension of the gold coinage for a period of more than a year, namely, from September, 1874, to November, 1875, is no doubt mainly attributable to the fact that during the latter year no less a sum than £2,726,000 in Australian gold coin was sent in to the Bank of England, as against £1,972,000 in 1874, and that the issue of this coin, which is equally avail able with English sovereigns for circulation in this country, obviated the necessity for a coinage of a like amount in London."

At the request of the Japanese government, made through the Department of State, and by your instructions, assays have been made at the Philadelphia mint of samples from the reserved or pyx gold and silver pieces, of the coinage of the imperial mint at Osaka for the fiscal year ended June 30, 1876. The results show a close correspondence with the Japanese assays and to the legal standard.

Detailed information in relation to the amount of gold and silver and paper currency, respectively, of various countries will be found in the several documents referring to the same in the appendix.

MINOR COINAGE FOR VENEZUELA.

At the request of the Venezuelan government, and in conformity with an act of Congress entitled "An act authorizing coinage to be executed at the mints of the United States for foreign countries," approved January 29, 1874, preparations are being consummated at the mint in Philadelphia to coin for that government 12,000,000 nickel-copper pieces, amounting to the sum of 150,000 venezolanos, (dollars.) The capacity of the mints of the United States being heavily taxed in manufacturing the large amount of subsidiary coin required to redeem the fractional currency, the planchets for the Venezuelan coin will be prepared by pri vate parties, and received at the mint, subject to assay, ready for the coining presses. This arrangement will prevent any interference with our own coinage, as the capacity of the Philadelphia mint for striking pieces slightly exceeds that of the preparatory operations which the metals undergo before they are ready to be coined.

AUTOMATIC BALANCES.

The subsidiary silver coins not being singly adjusted by hand, as are the gold coins and trade dollars, and as a safeguard against any pieces being made and issued which might be outside the legal tolerance for weight, an appropriation was obtained at the last session of Congress for the purpose of procuring automatic assorting and adjusting balances, to be employed in testing the weight of the subsidiary coin. Arrange ments have been made for importing these balances, and they will be placed in operation at an early day. A new engine has been contracted

for, to supersede the one now furnishing power to the press-room in the mint at Philadelphia, which by long use has become too unreliable to depend upon in meeting the exigencies of the requirements for large amounts of coin. Other improvements in the machinery have been made or are in contemplation; but in order to insure an efficient mechanical working of our mints, and to keep the execution of the national coinage fully on a par with that of the mints of Europe, it would be advisable that an experienced and competent practical machinist should visit the principal European mints, with a view of introducing in our own country any improvements which may have been made in minting operations by foreign governments. Such a visit and inspection in 1834 resulted in the introduction into the mints of this country of many decided and advantageous improvements both in machinery and processes.

PREPARATIONS FOR MELTING AND ASSAYING BULLION AT HELENA AND AT NEW ORLEANS.

At the last session of Congress, appropriations having been made for fitting up the assay-office at Helena, Mont., and conducting the operations of melting and assaying, and also at New Orleans, in the building formerly used as a coinage mint, the necessary preparations for these purposes have been in progress since the approval of the act, and it is expected that assaying will be commenced at New Orleans in the course of a month, and at Helena before the close of the present year.

THE SILVER MARKET AT SAN FRANCISCO.

For nearly three months past there has been an active demand for silver at San Francisco, for export to China and Japan, both on American and British account, and the price realized has been above the London rate. Bullion was formerly shipped from San Francisco to China by way of London; the change has been brought about principally through the facilities afforded by the establishment, a few years since, of steamship communication between San Francisco, Yokohama, and Hong-Kong, by which there is a material saving of time. With respect to oriental markets, the effect has been to place San Francisco quite upon an equality with London.*

DOMESTIC PRODUCTION OF THE PRECIOUS METALS.

From the most authentic sources of information which could be procured, it has been ascertained that the domestic production of gold and silver for the fiscal year was about eighty-five and a quarter million dollars, of which amount forty-six and three-quarter millions were gold, and thirty-eight and a half millions silver.

MONEY STATISTICS.

In my last annual report an estimate was made of the stock of gold and silver coin in the United States. This estimate was based upon

*The bullion shipments from San Francisco to China from January 1 to October 26, 1876, have been as follows:

Trade-dollars

Mexican dollars

Fine silver bars

Gold coin...

Total

$4, 255, 378 1,820, 040 2,055, 575 191, 093

8,322,086

information derived from the best attainable sources, and fixed the amount as about $142,000,000, of which some $12,000,000 was probably silver. Taking this estimate as a basis, we have: amount of gold coin June 30, 1875, $130,000,000; adding to this the product of the mines for 1876, $46,750,000, and importations, $7,992,000, furnishes $184,742,000; deducting the exports, $31,177,000, and about $2,000,000 consumed in the arts and manufactures, leaves a net balance of about $151,565,000 gold in the country at the close of the fiscal year, June 30, 1876. The estimated amount of silver coin June 30, 1875, was about $12,000,000; importations during 1876, $7,942,000; product of the mines, $38,500,000; giving a gross amount of $58,442,000, from which deduct exportations, $25,329,000, and amount employed in manufactures, $3,000,000, leaves $30,113,000 as our stock of silver coin and bullion June 30, 1876-a total amount of both gold and silver coin and bullion of $181,678,000. This increase during the year of about $39,000,000 in the national coin is gratifying, in view of the future resumption of specie payments and the fulfillment of the laws in relation to the same.

CHANGE IN THE RELATIVE VALUE OF GOLD AND SILVER.

0

The average relative value of gold and silver from the establishment of the money-system of the United States in 1792 down to the year 1870 was about as 1 to 153, from which ratio there were no important variations, except that in 1859 silver appreciated nearly five per cent., as compared with its relative value to gold in 1843. In 1760 the rela tive value of gold and silver was as 1 to 14.29; in 1781, 1 to 13.33; and in 1809, 1 to 16.25; or a change of 21 per cent. Taking 1781 as the 1 year of the highest relative value of silver since 1760, and the average of the first seven months of 1876 as the lowest within a period of 95 years, shows a change of 34 per cent. in the relative value of the two metals. In 1849 the ratio was as 1 to 15.78, and in 1859, 1 to 15.19, representing a change of 3 per cent. This covered the period of an extraordinary addition to the world's supply of gold from the mines of California and Australia. That the change in relative value was not greater than this appears to be conclusive that either there existed a vacuum for the absorption of gold or that it is naturally more unvarying in value than silver. Evidences of an approaching important alteration became apparent in 1872, or immediately after a change from a silver to a gold standard by the German Empire had been definitely determined upon. This change progressed very gradually during the years 1872, 1873, and 1874, became marked in 1875, and during the first seven months of 1876 was so great as to be without a parallel in modern times. At one time in July of this year, the commercial relation of the two metals was as 1 to 20.17.* Since the last-named date there has been a gradual recovery, the price at present, October 20, 1876, being 1035 cents per standard ounce, corresponding to a ratio of 1 to 17.96. The large purchases of silver by the United States no doubt had a very decided effect in arresting the decline and also in promoting the recov ery in price which has since taken place. If the substitution of silver coin for the fractional currency had not been undertaken in this country, the price of silver would no doubt have fallen lower than it did in July last, and its appreciation since then been less than it has been.

100

*This temporary and exceptional ratio of 1 to 20.17 in July, 1876, compared with that of 1 to 13.33, the average during 1781, showed a change in relative value of 51 per cent. in a period of 96 years, during which there were various fluctuations.

The change in the relative value of the precious metals is not, however, due altogether to the depreciation of silver, there evidently having been during the same period, 1871 to 1876, an appreciation of gold; but it is slight compared with the depreciation of silver. In making this statement in reference to gold, I am aware that nearly all the promi nent authorities in Europe, including the highly intelligent British commission which recently examined and reported on this subject, treat the change in the relative valuation of gold and silver as being solely a depreciation of silver. The new gold coinage of Germany, which commenced in 1872, now amounts to more than $337,000,000 in our money terms. While this coinage has been in progress, Austria and the Netherlands, countries of the silver standard, have each coined gold for the purpose of regulating and conducting foreign exchanges, and France has largely increased her stock of that metal. I cannot but think that the demand for gold by these countries and the Scandinavian States, in which there has been recently a change to the gold standard, exceeded the supply available for coinage from the mines of the world, and to a sufficient extent to produce a slight advance in its value.

The dividing line between the depreciation of silver and the appreci ation of gold cannot be accurately determined; but it is very clear that the change in the relative value of the two metals, has been principally caused by depreciation of silver. The causes which effected this unexampled change were stated and discussed in my previous reports; but they may be summarized in the order of their importance in producing the decline, as follows: First, the change from the silver to the gold standard by the German Empire and the Scandinavian States; second, the use of a forced paper currency in Russia, Austria, and some other countries; third, diminished demand for export to the Indies and China; fourth, the limitation placed on the coinage of silver by countries of the double standard; fifth and last, increased production of that metal.

The alteration in the relative value of the two metals shows conclusively that their exchange or purchasing power is due, in a greater degree, to their use as money, than has heretofore been generally conceded, and this point must not be lost sight of in considering their probable future relative value.

REVIEW OF THE SEVERAL PROPOSITIONS FOR THE COINAGE OF LEGAL TENDER SILVER DOLLARS UNDER A DOUBLE STANDARD, &C.

The decline in the value of silver and the approach of the time fixed by law for specie resumption has led to a proposition for the restoration of the silver dollar of 4123 grains, with unrestricted coinage and unlimited legal-tender.

This proposition, if adopted, would make the relative value of gold to silver in the coinage as 1 to 15.9884, or very nearly 1 to 16. A dollar of 412.8 grains, which would correspond exactly to the relation of 1 to 16, and one based on the ratio of 1 to 151, have also been proposed.

In the discussion of some of these propositions it has been intimated, if not directly charged, that the repeal by the coinage act of 1873 of what may properly be termed the remnant of the silver standard left by the demonetizing legislation of 1853, was done without due consideration or in the interest of certain creditors of the United States and to insure payment of the latter in gold coin. An examination of the public records will show that the discussion and consideration of the act referred to covered a period of more than two years, that there was no

concealment as to any of its provisions, and that all proper care was exercised to render the measure as perfect as possible. The Director was frequently consulted in relation to the various provisions of the act, from its incipiency to its final passage, and he is able to state that, from first to last, there was no desire or effort on the part of any one advocating the measure to favor either debtors or creditors, or to do any thing other than what they believed to be, from the best of their knowledge, entirely in the interests of the public service and of the people of the country at large.

The original draft of the bill revising the laws relative to the mints, assay-offices, and coinage of the United States was prepared in 1869 and 1870, under the supervision of John Jay Knox, then deputy and now Comptroller of the Currency, and was transmitted to the Senate by the Secretary of the Treasury April 25, 1870, the views and criticisms of the Mint and Treasury officers and other gentlemen conversaut with metallurgical and coinage subjects having been previously requested, received, and published, in compliance with a resolution of the House of Representatives.

The report of Mr. Knox, which accompanied the bill, explained in detail the proposed amendments, and referred specifically to the silver dollar and its discontinuance as a standard. The bill, after discussion, passed the Senate January 10, 1871, and on the 27th of May of the following year, 1872, passed the House of Representatives. Having been amended by the House, it was returned to the Senate, and passed that body January 17, 1873. It next came before a conference committee of the two houses, and subsequently, February 12, 1873, became a law, nearly three years after its introduction in the Senate. It appears from the official documents that only one or two of the numerous experts who examined the bill recommended the retention of the silver dollar, and that not a single member of Congress in debate opposed its abandonment.

The following extracts from the speeches of different members of the House of Representatives on the coinage bill prove beyond question that the proposed abolition of the silver dollar was well understood at the time that measure was pending. Mr. Hooper, who had the bill in charge and explained its provisions in detail, said:

Section fourteen declares what the gold coins shall be, and their respective weights, and makes them a legal tender in all payments at their normal value, when not below the standard weight and limit of tolerance prescribed, and at a valuation proportioned to their actual weight when below the standard weight and tolerance. Thus far the section is a re-enactment of existing laws. In addition, it declares the gold dollar of twenty-five and eight-tenths grains of standard gold to be the unit of value. Gold practically having been in this country for many years the standard or measure of value, as it is legally in Great Britain and most of the European countries, the silver dollar, which by law is now the legally declared unit of value, does not bear a correct relative proportion to the gold dollar. Being worth intrinsically about one dollar and three cents in gold, it cannot circulate concurrently with the gold coins. The law of 1792, now in force, provided for the coinage of “dollars or units, each to be of the value of a Spanish milled dollar, as the same is now current, and to contain three hundred and seventy-one and four-sixteenths grains of pure or four hundred and sixteen grains of standard silver.

The Spanish dollar of full weight then in circulation contained three hundred and seventy-four and seven-eighths grains of pure silver, but the variation or error in fixing the weight of the American dollar is said to have arisen from assuming the average instead of the highest weight of any one of the number of pieces assayed for that purpose. As the value of the silver dollar depends on the market-price of silver, which varies according to the demand and supply, it is now intrinsically worth, as above stated, about three cents more than the gold dollar. By the act of January 18, 1837, the standard of the silver coins was increased to nine hundred thousandths fine, which reduced the weight of the dollar from four hundred and sixteen to four hundred and twelve and a half grains; the amount of pure silver, however, remained the same,