Purchase of equipment, conversion of space, etc. 16 DOD presses, conversion____ 20 DOD blanking presses, conversion_. 2 DOD blanking annealing and cleaning lines, conversion and installation_____ $240,000 120,000 30,000 100, 000 240,000 340,000 200, 000 60, 000 75,000 45,000 1, 450, 000 200,000 400, 000 150, 000 750,000 2,200,000 Grand total of conversions_. REPORT ON MANUFACTURE OF ADDITIONAL COINS Mr. GARY. I will now read this letter, which is a report on the actions to date insofar as the mint is concerned, of its efforts to manufacture additional coins. (The letter referred to follows:) Hon. J. VAUGHAN GARY, Chairman, House Subcommittee on Appropriations, AUGUST 10, 1964. DEAR MR. CHAIRMAN: This is to inform you that we are making excellent progress in our "crash" program to double coin production. I would like to take this opportunity to inform you of the steps which were taken during the month of July 1964 to increase coinage production. These included the following measures: (1) Both mints began the use of purchased bronze strip in the production of all 1-cent coins, and the use of purchased nickel strip for all 5-cent coins was continued. (2) Initiated action to acquire space and equipment for the production of minor coin blanks in the San Francisco Mint Building. Some space is already being cleared, and equipment is being shipped. (3) Continuing efforts were made to locate adequate available stamping presses and annealing facilities in private industry, without success. (4) Ordered five new stamping presses from the Columbia Machine Worksfor delivery November 1, 1964. (5) Contracted with Department of Defense for conversion of 16 stamping presses and 16 blanking presses. (6) The Bliss Co. began construction of six coining presses previously ordered. These should be delivered in November 1964, and in operation in December 1964. The prototype Bliss press now in Denver has not operated successfully due to failure in the feeding mechanism. Therefore, we are not planning on having the six new Bliss presses in operation before December 1964. (7) Invitations were issued, and bids received, for 15 new coining presses. An order will be placed for these when funds are available for delivery of five in January 1965, five in February 1965, and five in March 1965. (8) Placed order for conversion of one old mint press (from the old San Francisco Mint) which is being delivered to Denver on August 10, 1964, in operating condition. (9) Arranged with the Frankford Arsenal of Philadelphia to anneal and clean bronze blanks. (10) Arranged with GSA to ship an annealing and cleaning line (surplus from DOD) to San Francisco to clean and anneal 1-cent blanks. (11) Since DOD and GSA annealing and cleaning equipment is suitable for 1-cent blanks only, the annealing and cleaning line intended to be installed in the new addition to the Denver Mint is being shipped to San Francisco for use in production of 5-cent blanks. (Coining presses will be installed in the new addition to the Denver Mint upon completion.) (12) Additional employees were hired to conduct coinage operations at Philadelphia and Denver on a three-shift basis, 7 days per week. During the month of July 1964 the 2 mints produced 458 million coins, which is the largest production in any single month in the history of the mint service. During the first half of the fiscal year 1965, our plans now call for production of 3.5 billion pieces. Your continuing interest in our problems, and your cooperation in permitting us to get our "crash" program underway promptly, are appreciated very much. Sincerely, Mr. GARY. Who is to testify? EVA ADAMS, Director of the Mint. Mr. BELIN. Mr. Chairman, my name is G. d'Andelot Belin. I am the General Counsel of the Treasury Department. I am appearing here instead of Miss Adams who, as you know, unfortunately is out of town, as is the Assistant Director, Mr. Tate, and the Assistant Secretary, Mr. Wallace. Unfortunately, we are all caught short. I have several people from the mint here who can help explain as we go along, and I will read Miss Adams' statement, if that is all right. Mr. GARY. We shall be very glad to hear from you at this time, Mr. Belin. GENERAL STATEMENT Mr. BELIN. Mr. Chairman and members of the committee, it is my pleasure to explain the plans of the Bureau of the Mint for increasing the production of domestic coins, in order to alleviate the critical shortages which exist throughout the country. Despite recordbreaking production of domestic coins during each of the last 4 fiscal years, there were no coins in inventory in the mints on June 30, 1964, and inventories in the Federal Reserve banks and branches were at a dangerously low level of only 126 million coins, as compared to 535 million in 1962, and 476 million in 1963. Coins are being shipped from the mints as fast as they are produced, but production has been far short of the needs of the country. We continue to receive many complaints from banks and the public, and referrals from Members of Congress, regarding inability to obtain supplies of coins. The regular appropriation for the fiscal year 1965 provides for the manufacture of 5,015 million domestic coins, a substantial increase over the 4,307 million coins produced in fiscal year 1964. It was anticipated that production of 5 billion coins would be accomplished with existing facilities, plus a minor addition to the Denver Mint expected to completed by the end of December 1964. It soon became apparent that this quantity would be far from adequate to meet the demand, and drastic measures have been taken to effect a very substantial increase in the productive capacity of the mints. It is now estimated that a total of 8 billion coins can be produced during fiscal year 1965, and a supplemental appropriation of $4,500,000 is requested for the production of the additional coins. This includes added costs of pro tection, handling, and shippping, plus acquisition and modification of equipment, and the acquisition and conversion of additional space required for the coinage activity. Actions which have been taken, or are planned, to increase production include the following: 1. The mints at Denver and Philadelphia are now using purchased strip in the production of all 1-cent and 5-cent coins, permitting the entire melting and rolling capacity to be used in silver production. 2. Five new coin stamping presses have been ordered, and an order will be placed for 15 additional presses. 3. Two old mint presses which had been retired from use will be restored and placed in operation. 4. Arrangements have been made with the Department of Defense for the loan of blanking presses, stamping presses, annealing equipment, maintenance equipment, and handling equipment to be used in the production of coins. We have contracted for the conversion of 16 stamping presses and 16 blanking presses. 5. Arrangements have been made with the Frankford Arsenal in Philadelphia to anneal and clean, on a reimbursable basis, bronze blanks to be used in the production of 1-cent coins. 6. Space is being acquired in the San Francisco Mint Building, and equipment will be installed at that location, for the production of minor coin blanks to be stamped into finished coins at the Denver Mint. 7. Employees are being added at the mints in Philadelphia and Denver, to conduct coinage operations on a three-shift basis, 7 days per week, holding overtime at a minimum. 8. The manufacture of proof coins at the Philadelphia Mint will be temporarily suspended as soon as existing orders for 1964 proof coins have been filled, thus providing space and equipment for use in the manufacture of coins for circulation. 9. Space at the Denver Mint which is now assigned for other purposes will be used for the installation and operation of coin manufacturing equipment. COINAGE ACTIVITY The production of additional coins from the actions listed above will result in greatly increased costs, as compared with the cost if all work were performed in the mints with modern efficient equipment. However, it is imperative that production be increased as soon as possible, and normal operations will be resumed when the new mint in Philadelphia is completed. Seigniorage arising from the increased production will amount to approximately $40 million. An increase of $1,676,000 is requested for the coinage activity. DEPOSIT ACTIVITY Production of 8 billion domestic coins will necessitate keeping shipping entrances open on a multishift basis, and will require additional personnel for handling and shipping the increased volume. An increase of $363,000 is requested for the deposit activity. PROTECTION ACTIVITY The manufacture of coins on a round-the-clock basis, 7 days per week, and the keeping of shipping entrances open on a multishift basis, will require additional guards. An increase of $261,000 is requested for the protection activity. ACQUISITION OF EQUIPMENT AND CONVERSION OF SPACE An increase of $2,200,000 is requested, of which $1,450,000 will be required for the purchase of new equipment, and the conversion of equipment to be obtained from the Department of Defense on a loan basis. The remaining $750,000 will cover the conversion of space at Philadelphia, Denver, and San Francisco. That is the prepared statement, Mr. Chairman, and we shall be glad to try to answer your questions. Mr. PILLION. Mr. Chairman, I have an important conference at 2:30, but before I leave I would like to express my commendation of this program to increase the coin production to somewhere around 8 billion coins, which is just about doubling our last year's production. I will go along with the good judgment of the committee on any of these matters. (Off the record.) NEW BLISS PRESSES Mr. GARY. Mr. Carwile, in the letter that Miss Adams addressed to me I notice in item 6 it states: The Bliss Co. began construction of six coining presses previously ordered. These should be delivered in November of 1964, and in operation in December of 1964. The prototype Bliss press now in Denver has not operated successfully due to failure in the feeding mechanism. Therefore we are not planning on getting the six new Bliss presses in operation before December 1964. Would you give us some explanation of that item? Surely since you have one press that is not working you are not ordering six more that will not work? I wonder if you could explain that situation to us. Mr. CARWILE. We ordered the one prototype press which is a very fast press. Before that was in operation we ordered additional presses. We have told the Bliss people not to proceed until they have perfected the one press. They are going ahead on their own, at their own risk, to make the six additional. We hope by December we will have all these presses in operation. Mr. GARY. In other words, you think the defect in the press you now have can be corrected? Mr. CARWILE. Yes. Mr. GARY. And it is the responsibility of the Bliss Co. to correct it? Mr. CARWILE. There is a responsibility to correct it; yes. Mr. GARY. The six presses will not be accepted by the mint until this defect has been corrected and they operate successfully. Is that correct? Mr. CARWILE. That is correct; yes. Mr. BELIN. That is what keeps the Director of the Mint from being here today. They are in Detroit today working with General Motors and the Bliss Co. on development of more efficient stamping presses. Mr. GARY. Trying to work out the solution to that problem? Mr. BELIN. Yes, sir. Mr. GARY. Are both mints, the one in Philadelphia and the one in Denver, now working 24 hours a day, 7 days a week? Mr. BELIN. Yes, sir. EXPANSION OF DENVER MINT Mr. GARY. What is the present status of the expansion project at the Denver Mint? Mr. WIGGEN. The extension is now expected to be completed at the end of December. Mr. GARY. Of this year? Mr. WIGGEN. Yes, 1964. Mr. GARY. Does that mean that it will be in operation by that time? Mr. WIGGEN. No. We will have to install the equipment after that, although we hope to install some of the equipment while the construction work is in progress. Mr. GARY. The building will be completed in December? Mr. WIGGEN. Yes. Mr. GARY. I believe it was stated, in the opening statement read by Mr. Belin, that you are making some changes in the equipment there. Mr. WIGGEN. Originally it was planned to install an annealing furnace in that addition to the building. However, with the change in our program we have decided to install the coin presses in that part of the building. The annealing furnace will be sent to San Francisco. Mr. GARY. So you are sending the annealing equipment to San Francisco and putting presses in this new portion? Mr. WIGGEN. That is right. Mr. GARY. Does that mean that no coins will be stamped in San Francisco? Mr. WIGGEN. No coins will be stamped at San Francisco at this time. because we are not authorized to stamp coins in San Francisco. It does not have status of a mint at the present time. PRODUCTION FIGURES Mr. GARY. Will you provide for the record the monthly production figures at both mints for the past 12 months? Mr. WIGGEN. Yes; we shall. (The information requested follows:) Domestic coin production for past 12 months (pieces) Mr. GARY. In the event this supplemental request is approved, when do you anticipate that additional production will commence? |