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Mr. Wiggen. It will commence immediately. In fact, it has commenced already. Our production for July of this year is much greater than the comparable production of last year.
Last year we produced 259,426,000 coins in July.
This year we have produced 458,401,000. With the additional funds, that kind of increase in production will continue.
Mr. Gary. Do you think you need this entire amount in order to carry out these plans?
Mr. WIGGEN. Yes, I believe we will.
ADDITIONAL PERSONNEL REQUIRED
Mr. Gary. Will this supplemental require that additional personnel be added to the rolls.
Mr. WIGGEN. Yes.
Mr. Wiggen. They will be practically all production employees, that is, per diem employees. Mr. Gary. Pressmen, and such as that?
Mr. WIGGEN. Pressmen, and some guards will be included in that figure.
COIN DEMAND Mr. Gary. Under this so-called crash program, how long do you anticipate it will take to catch up with the coin demand ?
Mr. WIGGEN. That is very difficult to tell because we don't know what the coin demand is. We have not been able to meet the demand for several years.
We hope with the production of 8 billion coins in 1965 we will be able to meet the demand, and maybe the same kind of production will not be necessary in future years. Indications are from a survey we have had and other information the coin demand will continue to increase at a steady rate in future years.
Mr. Belin. It is proper to say, is it not, that we will be well ahead of the projected demand?
Mr. WIGGEN. Yes.
Mr. Gary. My understanding is that even after the new mint in Philadelphia is completed the new facilities will only take care of the increase for 10 years; is that correct?
Mr. WIGGEN. Yes, I believe that is right.
That was based on two-shift production. We could go to a third shift and produce more coins.
Mr. Gary. You could, by making certain adjustments, increase it to take care of even larger increases ?
Mr. WIGGEN. Yes. This production mentioned in the survey was the initial production.
There will be room in that building for expansion so we hope to meet future demands for many years with the Philadelphia Mint.
ACTIVITIES BEFORE AND AFTER SUPPLEMENTAL FUNDS PROVIDED
Mr. Gary. Will you supply a concise tabulation showing the actions proposed to be taken under the regular 1965 bill and under this supplemental for the increase of coinage ?
Mr. WIGGEN. Yes. These actions we have outlined here are based on the hope we will get this supplemental. I believe what has been explained here would really be our program with the supplemental appropriation.
Mr. Gary. Your original request was based, and the amount appropriated by this committee was based, on the thought that you would merely increase production with present facilities.
Mr. WIGGEN. That is right.
Mr. Gary. The supplemental is designed to take care of the additional facilities that you are providing to increase the production beyond that which would be accomplished by the present facilities. Is that correct?
Mr. Wiggen. Yes. It would include conversion of space and acquisition of new equipment.
Mr. CARWILE. It will double the press capacity.
PRESSES FOR MANUFACTURE OF SILVER DOLLARS
Mr. Gary. I noticed the other day that you had resurrected two old presses in some museum which you propose to use for the manufacture of silver dollars. Can you tell us about that?
Mr. Wiggen. Those presses are quite old. They were used in the San Francisco Mint. At the time we closed the mint one of those presses was given to a museum in San Francisco, and the other press which was originally a Carson City press was given to a museum in Carson City.
Mr. Gary. Have you looked around the Smithsonian Institution to see whether they have some there?
Mr. WIGGEN. No. These presses were not considered to be the best presses at that time. At that time they really didn't need them, so we are now having these presses restored to operating condition and they will be used in the Denver Mint.
Mr. Gary. You think they are in good enough condition to be used ?
Mr. Wiggen. Yes. The press itself, the casting of the press, is just as good as it ever was. The question is rebuilding some of the mechanism. The presses will turn out coins comparable to many other presses that we have.
DATES ON COINS
Mr. Gary. What effect will this legislation have that is now pending in Congress to continue the 1964 date on coins?
Mr. WIGGEN. We hope using the same date will produce so many coins with the 1964 date on them that it will not be desirable for collectors to hold them with a view of making a profit on them. In other words, we hope they will not be scarce when we produce the quantity that we will in another year.
Mr. Gary. Instead of continuing the 1964 date-rather than putting a false date on them—wouldn't it be better not to have any dates on them?
Mr. BELIN. Consideration was given to that in the Treasury. I think the decision was made on the ground that putting out a coin with blank date would just provide a new desirable item for the collectors and dealers.
On balance we reluctantly thought this would be most desirable, to continue the 1964 date.
Mr. Gary, I receive one suggestion that on your 45 million new silver dollars you put the 1935 date.
Mr. BELIN. Consideration was given to that, too.
There were some technical problems with that in the mint, I think. Off the record.
(Discussion held off the record.)
Mr. WIGGEN. It seems the collectors always look at the date on the coin. If you produce a coin in any one year in which the date might be slightly different from the date which appears on another coin, the one that is different immediately becomes a collector's item. It is possible that if we were to put 1935 on the coins the date as viewed through a magnifying glass would not be exactly the same as the 1935 date which might be on the coins in circulation.
Mr. Gary. If you put out a 1964 silver dollar, since you have not manufactured any since 1935, that will be a collector's item. Why could you not start right on that one and eliminate the date on that one altogether? It would not make it any more of a collector's item, and then you would not have to continue that date on the silver dollars as you continued to manufacture them in the future.
Mr. WIGGEN. At the present time we are required to put the date of coinage on the coins. The bill provides for continuation of the 1964 date.
As Mr. Belin said, consideration was given to leaving the date off the coins.
Mr. Gary. I can understand that as to the small coins. I think your explanation as to the small coins was persuasive as to the immediate problem. In the long run, however, 2 or 3 years from now that would not be true, but we do face an immediate problem. I can see that.
However, on these new dollars they will be collector's items, anyway, because you have had none since 1935.
Mr. BELIN. We have to agree with you on that, Mr. Chairman. I suppose it would have been possible to have blank'dates for the silver dollars. It seemed with this bill going through for the other subsidiary coins that it was reasonable to have it cover all the coins alike. Mr. GARY. Mr. Steed?
HOARDING OF NEW COINS
Mr. STEED. I assume that the 50-cent coins you are now making are still the Kennedy memorial coins!
Mr. WIGGEN. The Kennedy coin is now the coin of regular issue. That same design will be continued for 25 years or until it is changed by an act of Congress.
Mr. STEED. Has anybody tried to figure out how long it will be before these new Kennedy coins actually go into the channels of trade and cease to be hoarded as has been true up to this time?
Mr. WIGGEN. There are a few getting into circulation. Some people have told me they have received them in change.
Mr. STEED. You think circulation of this particular coin will accelerate from now on?
Mr. WIGGEN. I think so. We will continue to produce them in large quantities.
Mr. STEED. I can understand the reason for the coin in the first place, but it did come at a bad time with the coin shortage being what it is and actually accelerated rather than decelerated hoarding.
Mr. WIGGEN. That is right.
Mr. Gary. I understand they are selling for a premium in England as well as the United States.
Mr. STEED. If continuation of the 1964 date on coins is agreed upon, has anyone been able to make any estimate as to whether presently hoarded small coins may come out of hoarding by virtue thereof?
Mr. BELIN. Mr. Wallace, the Assistant Secretary, made an estimate of that in his testimony before the House Banking and Currency Committee.
I believe he went into that in some detail about 2 or 3 weeks ago in his testimony. I don't remember the details, but I believe he estimated they hope perhaps 1 billion coins would come back out of hoarding from this move. I am sure that was only an estimate.
Mr. GARY. I have seen an estimate of 1 billion coins.
Mr. STEED. What has been the acceleration of hoarding of coins by collectors in recent years? Is that a growing thing?
Mr. WIGGEN. We have no way of finding out. We know a lot of coins are being held in bags and rolls.
Mr. STEED. Does anybody hope that this coinage of new silver dollars will cause any of the 300 million presently hoarded to come back into circulation ?
Mr. BELIN. That is hard to estimate.
Mr. STEED. Will the new silver dollars be generally distributed throughout the country!
Mr. WIGGEN. The plan is to distribute the silver dollars where they are actually used in trade, which will be the Western States.
Mr. GARY. Is it true, as I saw somewhere the other day, that the coins are being shipped from that area by the ton back to the East for sale and use?
Mr. WIGGEN. We have no way of knowing that.
Mr. Gary. I saw that statement made somewhere the other day. It seems a Senator made it; I am not certain.
EFFORTS TO MEET SHORTAGE OF COINS
Mr. STEED. How far back are you now on your current orders ?
Mr. WIGGEN. We really don't have firm orders. We try to meet the demands of the Federal Reserve bank on a current basis. We are having to cut back shipments.
Mr. STEED. What percentage?
Mr. Wiggins. Some are cut back as much as 50 percent. Others are cut smaller amounts. The amount we ship to the Federal Reserve bank depends on the amount they have in inventory. We are trying to ship coins in such a way that each bank has an adequate supply to the best of our ability, and to see none of them are oversupplied.
Mr. STEED. If the complaints we are receiving from commercial banks is true, there would be very little current supply in any of the Federal Reserve banks.
Mr. WIGGEN. That is right. There was only about 126 million in the Federal Reserve banks at the end of last month, I believe it was.
Mr. STEED. This changes from day to day?
Mr. STEED. You expect that situation to ease up before the end of this fiscal year?
Mr. WIGGEN. We hope that it will.
COST OF MANUFACTURE OF COINS
Mr. STEED. I notice your tabulation here of projected production under the budget shows an estimated cost per thousand pieces for the various denominations.
Mr. WIGGEN. Yes.
Mr. STEED. And an estimated cost per thousand pieces in the event the additional supplemental funds are made available.
In the case of the 1-cent piece, you go from an estimated cost of 82 cents under the smaller program to an estimated 54 cents under the accelerated program. What is the cause of the variation ?
Mr. WIGGEN. Part of the unit cost here in the original program was based on all the operations being performed in the mint.
Under this program we are purchasing bronze strips from which to make 1-cent coins. The cost of purchasing the bronze strip does not come out of the appropriation, but is paid from the minor coinage metal fund. In actuality, we are relieved of the melting and rolling of the metal to make the coins.
Mr. STEED. This cost change is just in your bookkeeping, then? It has nothing to do with the actual final cost to the Government?
Mr. WIGGEN. It has something to do with it. It costs more to purchase a strip from private industry than if we were to manufacture it ourselves. The only reason we are making the purchase is because we are not in a position to manufacture the strip for this accelerated program.
Mr. STEED. Am I to understand that the saving you show here on your cost will be offset by an extra cost in the other fund?