60153_1950-1954

ADMINISTRATIVE REPORTS 111

dealt with legal problems arising in connection with financial, fiscal, and foreign exchange aspects of the European Recovery Program; assisted in formulating the financial and economic aspects of the programs and legislation relating to military assistance, technical cooperation, and measures to encourage American capital to be invested in foreign countries; participated in the meetings of the Contracting Parties to the General Agreement on Tariffs and Trade; and participated in the Transport and Communications Commission of the United Nations.

Technical assistance was given to congressional committees in connection with the drafting of legislation to implement the President's taxation and social security programs. The Legal Division studied proposals for the modification of excise tax laws, the closing of tax loopholes, changes in the estate tax structure, tax changes to implement extension of aid to underdeveloped areas, and changes in the corporate rate structure in connection with the general tax program; other miscellaneous revenue bills were also studied. I t participated in preparing regulations under the Technical Changes Actof 1949 (PublicLaw378, 81st Congress, approved October 25,1949) pertaining to minor changes in the income, estate, and gift tax laws. Assistance was also given in the negotiation of tax conventions with the Governments of the Union of South Africa, Colombia, Venezuela, Cuba, Canada, Uruguay, Mexico, Switzerland, and Argentina; the negotiation of a treaty of friendship, commerce, and navigation with the Argentine Government; and in negotiations with the United Kingdom for the establishment of an agreement for joint government of the Canton and Enderbury Islands.

During the fiscal year 1950, the Legal Division coordinated and assisted in drafting legislation to reform customs procedures, the proposed Customs Simplification Act of 1950; and aided in many other aspects of the Department's program to simplify and modernize customs procedures. I t participated in handling many special problems of importance under the statutes relating to foreign products which are dumped, subsidized, improperly marked, or produced by forced labor. I t assisted in conducting the tripartite talks with Great Britain and Canada, and in following up and implementing decisions.

BUREAU OF THE MINT

The principal functions of the Bureau of the Mint consist of the manufacture of domestic and foreign coins; the acquisition of gold and s-ilver, payments for which are made on the basis of mint assays; the safeguarding of the Government's holdings of the monetary metals, including coins in processing stages until finished and issued; the refining of gold and silver; the administration of regulations pertaining to gold and silver, including the issuance of licenses for the acquisition, ownership, possession, use, and exportation of gold for industrial; professional, and artistic purposes; and the production of medals and other decorations.

907795—51-

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Fiscal Year Ended June 30, 1950

112 195 0 HEPPRT OF THE SECRETARY OF THE TREASURY

The.office of^the^Director of the Mint in\Washington'administers all activities of the Bureau of the Mint. During the fiscal year. 1950 seven field institutions were in operation: Coinage mints in Philadelphia, San Francisco, and Denver; assay offices in New York City and Seattle; the gold bullion depository in Fort Knox, Ky.; and the sUver bullion depository in West Point, N. Y., w-hich operates as an adjunct of the New York Assay Office. Electrolytic refineries are maintained at the San Francisco, Denver, and New York City institutions. The Medal Department is located at the Philadelphia Mint. At the close of the fiscal year 1950 there were 943 persons employed in the departmental and field institutioris compared with 1,272 at the beginning of the year.

The operations of the field institutions durmg the fiscal year 1950 and the report of this Bureau on the production and consumption of gold and silver in the United States dm-ing the calendar year 1949 are summarized herein. Further detailed information is contained in the Annual Report of the Director of the Mint, Fiscal Year Ended June SO, 1950.

Management program.—A management improvement program vigorously projected in 1950 and directed toward continuing improvements in operating procedures has produced revolutionary results in the manufacturing processes of coinage during the'present fiscal year.

The massive melting and rolling equipment in the Denver Mint, , which a year ago was in the experimental stage of operation, has. been brought to a high state of efficiency. In it is processed a 400-pound bronze ingot in place of the 6-pound ingot, formerly processed in small rolling mUls. I t has also eliminated the hand pouring method heretofore used. Coincident with the installation of modern annealing equipment now pending, this equipment wUl be used for nickel and sUver coinage.

A new type water-cooled mold, invented by mint technicians at the PhUadelphia Mint, has resulted in a 23 percent reduction in sUver ingot melting costs during the year. Experiments are now being conducted to utilize this equipment for production of nickel and bronze ingots. Recent realignment of the melting operations and other mechanical changes at the Philadelphia Mint wUl result in important economies.

With the installation of more powerful motors on the rolling mUls at the San Francisco Mint provision will be made for the processing of longer and wider ingots, and as a result an increase can be made of 100 to 300 percent in the production of coin blanks without increasing personnel. The output of 1-cent blanks wUl be doubled and dimes quadrupled; other denominations wUl come within that range.

OPERATIONS OF THE M I N T S , ASSAY OFFICES, AND BULLION DEPOSITORIES

Domestic coinage.—Production of United States coins during the fiscal year 1950 totaled 497,271,759 pieces with a value of $22,107,-498.66. Denominations were as follows:




Denomination Number of

pieces produced Face value

16,118,222 15, 938,994 28, 582i 573 70, 976, 554

365, 656,416

$8. 059, 111. 00 3,984,748.50 2, 858, 257.30 3, 548,827. 70 3, 656,554.16

497, 271„759 22,107, 498. 66

•Half dollars 1 'Quarter dollars Dimes . . 6-cent pieces 1-centpieces.. 1

Total. . . . . . . . . • •

»Includes 636,099 Booker T. Washington commemorative half dollars.

Foreign coinage.—Coins produced for seven other governments during the fiscal year 1950 totaled 94,267,944 pieces, as follows:

Government

China . . . . . . . El Salvador Ethionia Haiti Honduras

Number of pieces pro

duced

17,640,000 2,000,000

32,000,000 16,000,000 9,000,000

Government

Mexico Venez.uela : . . . .

To ta l . : . . . . .

Number of pieces pro

duced

760,000 17, 877,944

94, 267, 944

Issue of domestic coins.—United States coins issued by the mints duruig the fiscal year totaled 500,914,823 pieces with a value of $31,261,074.82. Denominations were as follows:

Denomination Number of pieces issued Face value

Silver dollars.. Half dollars Quarter dollars Dimes 6-cent pieces 1-cent pieces—

Total

5,961,406 10,674,887 31,210,860 65, 784, 522 44,178,226 343, 214,932

$5,951,406.00 5, 287,443. 50 .7,802,712. 50 6, 578,452. 20 2,208,911.30 3,432,149.32

500,914. 823 ^1,261,074.82

Stock of coins.—The estimated stock of coins in the United States as of June 30, 1950, totaled $1,872,619,658, of which $492,582,858 were silver dollars, $1,001,573,600 were subsijiiary coins, and $378,-463,200 were minor coins.

Medals.—The number of service medals and other distinguishing devices delivered to the Department of Defense and other Government departments and agencies totaled 29,570 during the fiscal year 1950. In addition, there were 6,073 medals sold to the public.

Bullion deposit transactions.—BuUion deposit transactions at the mints and assay offices totaled 10,589, including 16 intermint transfers during the fiscal year 1950. These transactions requhed 17,905 assay determinations, including 638 determinations for intermint transfers.

Acquisitions of gold.—Deposits and purchases of gold during the fiscal year totaled $585,760,504.89, classified as follows:

Value Purchases at $20.67+ per fine ounce $2,412.48 Increment to $35 per fine ounce. " 1, 673. 45 Purchases at $35 per fine ounce 572, 191, 745. 88 Domestic coin transferred (melted) 257, 993. 35 Intermint transfers 13,306, 679. 73

Total value at $35 per ounce : _ _ _ _ _ _ . ^ _ 585, 760, 504. 89



114 195 0 REPORT OF THE SECRETARY OF THE TREASURY

Acquisitions of silver:—During the fiscal year deposits and purchases of silver totaled 107,885,995 fine ounces, classified as follows:

Number of fine ounces

Newly mined domestic silver 38, 228, 805 Silver contained in gold deposits, etc . 95, 326 Silver received in exchange for Government-stamped bars 380, 883 Recoinage bullion from uncurrent subsidiary coin 1, 860, 299 Recoinage bullion from uncurrent silver dollars 205, 400 Intermint transfers of silver 117, 373 Deposits of silver in trust by foreign governments 11, 991, 097 Redeposits i__ 55,006, 812

Total_ 107, 885, 995 J Consists of Treasury stock previously held by certain agencies of the Federal Government.

Refinery production of gold and silver.—During the fiscal year the refineries produced 2,267,708 fine ounces of gold and 2,317,468 fine ounces of silver by the electrolytic process. In addition, 3,078,190 fine ounces of gold and silver were subj ect to fire process only.

Issue bars manufactured.—The mints and assay offices manufactured 79,899 issue bars containing 18,179,815 fine ounces of gold and 1,197 issue bars containing 310,343 fine ounces of silver duririg the fiscal year.

Stock of unrefined bullion.-—At the close of the fiscal year the stock of unrefined bullion at the mints and assay offices, in terms of the assayed fine metal content, amounted to 953 tons of gold and 510 tons of silver.

Monetization of silver buUion.—Silver certificates in the amount of $34,275,555 were issued b}^ the Treasury during the fiscal year against 26,510,000 fine ounces o.f silver bullion, valued at $1.29+ per fine ounce, the statutory monetary value of silver. Seigniorage, representing the difference between the cost and the monetary value of silver, amounted to $11,026,197.04.

Sales^ of gold and silver for industrial use.—Sales of gold bars to licensed purchasers for industrial, professional, and artistic use totaled $82,724,085.89 during the fiscal year. Under the act of July 31, 1946 (60 Stat. 750), whicii authorized sales of silver, there were no transactions during tli,e year.

Stock of monetary bullion.—The United States stock of gold bullion held by the mint institutions totaled 692,304,800 fine oimces valued at $24,230,633,002 on June 30, 1950. On the same date the mint institutions held 1,151,473,202 fine ounces of sUver bullion and, in addition, 180,714,089 fine ounces of silver bullion in a special custody account for the Treasurer of the United States. The silver in this account was formerly held by the Office of Reconstruction Finance Corporation, and is being melted and cast into regular mint bars.

PRODUCTION AND CONSUMPTION OF GOLD AND SILVER IN THE UNITED STATES

During the calendar year 1949 the total production of gold and silver refined from ores mined in the several States and Alaska was as follows: Gold—1,921,949 fine ounces valued at $67,268,215; and sUver—34,944,554 fine ounces.

Gold issued for use in the industrial arts,in the United States during




the calendar year 1949 aggregated $148,975,571, and the return from industrial use of secondary materials, including old jewelry, plate, scrap, etc., amounted to $40,133,100, giving a net consumption of gold of $108,842,471.

Silver issued for use in industry and the arts in the United States during the calendar year 1949 aggregated 110,660,459 fine ounces, and the return from industrial use of secondary materials including old silverware, scrap, etc., amounted to 22,660,459 fine ounces, giving a net consumption of silver of 88,000,000 fine ounces.

BUREAU OF NARCOTICS i

The Bureau of Narcotics is charged with the investigation, detection, and prevention of violations of the Federal narcotic and marihuana laws and of the Opium Poppy Control Act of 1942 (56 Stat. 1045), and related statutes. The scope of its activities is gradually enlarging as additional drugs are made subject to these laws. Under ' the act of March 8, 1946 (60 Stat. 38), eleven new synthetic drugs have been brought under control through findings by the Secretary of the Treasury, proclaimed by the President, that the drugs possessed addiction liabUity similar to morphine. A significant aid to the Bureau in t h e ' discharge of its duties was provided by Public Law 365, 81st Congress, approved October 20, 1949, under which moneys expended from appropriations of the Bureau for the purchase of narcotics, including marihuana, and subsequently recovered are reimbursed to the appropriation for the enforcement of the narcotics and marihuana laws current at the time of the deposit.

The Bureau directs its activities toward the suppression of the illicit traffic in narcotic drugs and marihuana and the control of the legitimate manufacture and distribution of narcotics through the customary channels of trade. I t issues permits for import of the crude narcotic drugs and for export, and in-transit movements of narcotic drugs and preparations. I t supervises the manufacture and distribution of narcotic substances within the country, and has authority to issue licenses for the production of opium poppies to meet the medical needs of the country if and when such production should be found in the public interest. I t cooperates with the 'Department of State in the discharge of the international obligations of the United States concerning the abuse of narcotic drugs and marihuana.

Management was improved throughout the Bureau of Narcotics during the fiscal year 1950. The Bureau made every effort to improve operating methods so that funds thus saved could be used to develop investigations of major violations of the narcotic laws. Arrests for narcotic law violations were 1,048 more than during 1949. These results were achieved without any increase in personnel and with an additional appropriation of only $50,000 avaUable for this activity. The scope of enforcement activities is gradually enlarging to the point where additional money and personnel will be required to combat the increasing illicit narcotic traffic.

During the year procedures were simplffied and forms were revised and consolidated or eliminated, as circumstances warranted, iri order

1 Further information concerning narcotic drugs is available in the separate annual report of the Commissioner of Narcotics.



Digitized for FRASER Federal Reserve Bank of St. Louis






















liibited; takes action to enforce the regulations; and has taken a census of Chinese and Korean assets located in the United States.

Legal Division

The General Counsel is by statute the chief law officer of the Treasury Department, responsible to the Secretary for the legal advice upon which he acts and for all legal work in the Department. In carrying out this responsibUity the General Counsel is assisted b37- the Legal Division, over which he has supervision. The Legal Division is made up of the General Counsel's immediate staff in the Office of the General Counsel, which includes the Tax Legislative Counsel, and the offices of the Chief Counsels in the major bureaus.

As legal adviser to the Secretary the activities of the General Counsel and his staff include consideration of legal problems relating to the broadest aspects of management of the public debt, the administration of the internal revenue laws, international cooperation in the monetary and financial fields, and similar matters with which the Secretary is concerned as chief financial officer of the Government. Other activities of the Legal Division embrace legal matters arising in connection with the duties and functions of every branch of the Department, the scope of whicii is described in the separate administrative report of each organization.

One of the major responsibilities of the General Counsel is the handling and coordination of legislative workin the Department, including appearances before congressional committees, drafting proposed legislation, and preparation of reports on legislative proposals. The most important work in this field during the fiscal year 1952 was in connection with the preparation and presentation of Reorganization Plan No. 1 of 1952, the President's plan for reorganizing the Bureau of Internal Revenue. The work also included preparation and presentation of the President's plan for reorganizing the Bureau of Customs, Reor2:an-ization Plan No. 3 of 1952.

In the field of international finance and aid, the Legal Division assisted in formulating financial and economic aspects of the programs relating to European recovery, military assistance, and teclinical cooperation, and served as counsel to the National Advisory CouncU. I t also dealt with problems arising in connection with international gold and stabilization operations of the Department, and performed legal services in connection with the administration of the Foreign Assets Control which was made necessary by the Korean conflict.

Other signfficant work performed by the Legal Division arose in connection with the study made by the Subcommittee on General Credit Control and Debt Management of the Joint Committee on the Economic Report.

Bureau of the Mint

The Bureau of the Mint is charged primaril3^ with responsibility for the manufacture of domestic coins as well as the acquisition of monetar37^ metals for coinage purposes. I t has direct responsibility for receiving deposits of gold and silver, for assaying, for refining, and for the sale and custod3^ of gold and silver bullion. I t administers and, with the Secret Service and Customs Bureau, enforces regulations



^ ADMINISTRATIVE REPORTS ' 1 6 5

pertaining to gold and silver. With respect to gold, it issues licenses relative to theâcc[uisition, ownersSp, possession, use, and exportation' for industrial, professional,_^nd artistic purposesToales of goITHars for such purposesâmounted to $577868,845 during the fiscal year. In addition, the Bureau of the Mint produces medals as well as other decorations and, b37̂ contract with foreign countries, manufactures coins for other governments.

The Office of the Director of the Mint exercises supervisory control over all the activities of the Bureau. I t is a headquarters establishment located in Washington, D. C , which establishes general policies and directs as well as coordinates the activities of the entire organization throughout the United States. During the fiscal year 1952, there were seven field institutions in operation: Coinage mints in Philadelphia, Pa.; San Francisco, Calif.; and Denver, Colo.; assay olfices in New York, N. Y., and Seattle, Wash.; a gold bullion depository in Fort Knox, Ky.; and a silver bullion depository in West Point, N. Y., which is an adjunct of the New York Assa37̂ Office.

The coinage mints receive, process, assay, move, and store gold and silver. They also issue gold licenses, sell gold for legitimate Indus-, trial, professional, and artistic uses and sell silver for industrial use. In addition to coinage, medals, medal dies, other decorations, and proof coins are manufactured at the Philadelphia Mint. During the fiscal year 1952, the Philadelphia Mint delivered to the Department of Defense and other Federal agencies a total of 62,155 service medals and other distinguishing decorations. In addition, 3,289 medals of a national character were sold to the public. At the mints located in San Francisco and Denver and at the assay office in New York, electrolytic refineries are maintained for refining gold and silver. During the fiscal year 1952, the refineries produced by the electrolytic process 1,040,198 fine ounces (36 tons) of gold and 1,262,800 fine ounces (43 tons) of silver.

•With the exception of manufacturing coins, the assay offices perform functions similar to the coinage mints. The mints and assay offices manufactured a total of 12,539 issue bars containing 4,003,146 fine ounces (137 tons) of gold and a total of 1,769 issue bars containing 377,071 fine ounces (13 tons) of silver during the fiscal year. The Seattle .Assay Office makes commercial assays of gold, silver, lead, zinc, and copper ores, and the New York Assay Office makes assays of platinum group metals.

The mints and assay offices processed 9,308 deposit transactions and 17,329 assay determinations in connection with deposits and purchases of gold valued at $1,745,864,861, and silver amounting to 81,273,745 fine ounces during the fiscal year 1952. Included were 17 deposit transactions and 544 assay determinations for intermint transfers of gold valued at $10,003,758, and silver amounting to 279,521 fine ounces.

The bullion depositories are maintained solely for the storage of bullion. The Bureau of the Mint held 667,040,273 fine ounces of gold bullion valued at $23,346,409,526.73 on June 30, 1952; and on the same date 1,323,621,448.92 fine ounces of silver bullion, of which 1,281,109,243.41 fine ounces were held in regular account, and 42,512,245.51 fine ounces were held in special account,



166 1952 REPORT OF THE SECRETARY OF THE TREASURY

The Government's holdings of gold, silver, coins, and other items are protected by modern protective devices and armed guards twenty-four hours per day, every day of the year.

As of June 30, 1952, there were 60 persons on the roll of the Bureau of the Mint in the headquarters office in Washington, D. C , and 960 in the field, making a total personnel of 1,020 which compared with a total of 966 for the preceding fiscal year.

For further detailed information, refer to the Annual Report oj the Director oj The Mint, Fiscal Year ending June SO, 1952. Production during fiscal year.1952

The major activity of the Bureau of the Mint is to produce coins to supply the business needs of the country. Generally, the demand for coins follows the trend of business activity. The variations in coinage requirements are therefore unpredictable; if business activity is at a peak, the demand is great; if otherwise, the demand slacks off. As an illustration of one of the variants, the outbreak of the conflict in Korea in June 1950 precipitated a wave of scare buying which drastically increased demands on the Bureau for coins. During the first six months following the outbreak in Korea, the Bureau sent into circulation over a bUlion coins, mostly pennies. Coin demand mounted from a half billion in fiscal 1950 to about \ji billion in fiscal 1951 and 1952. Total production during the fiscal year 1952 amounted to 1,551,096,448 pieces of all denominations with a total value of $92,412,255.99. Production of this vast quantity of coins during this period consumed 1,933 tons of silver, 3,994 tons of copper, 106 tons of nickel, and 182 tons of zinc and tin, with a grand total of 6,215 tons avoirdupois.

Of the billion and one-half pieces produced by the several mints during this fiscal year, a total of 1,370,986,996 pieces was issued. The pieces in greatest demand were: Dimes, 246,869,831 pieces, face value $24, 686, 983. 10 Nickels, 89,824,824 pieces, face value . 4, 491, 241. 20 Pennies, 875,211,968 pieces, face value.__-_ 8,752, 119. 68

At the beginning of this fiscal year, there was practically no inventory reserve of finished coins or work in process. Demand for coins ran far ahead of production. For the first six months of fiscal 1952, production faUed to meet requirements. At the end of December 1951, the mints were practically out of coins. During this period, the mints had produced and delivered 920,000,000 coins.

Owing to the inadequate supply of coins, the Treasurer of the United States and the Federal Reserve Banks and branches found it necessary to ration coins in the early months of fiscal 1952. Wide appeals to the public, by radio, the press, and television, to return idle coins to normal channels of trade were helpful.

While the demand for coins centered on pennies, primarily because of the sales tax imposed by nearly every State, the introduction of vending machines and parking meters accounted for the demand for other coins of smaU denominations. The almost universal need for pennies, however, was stimulated also by the cash and carry system of merchandising wherein odd-cent prices are charged.

Although it was ^'touch and go" during the early months of this fiscal year and despite the fact that the mints had practically no




beginning inventory, nevertheless, the demand was satiated by the end of the year, and began to slacken with the result that as of June 30, 1952, the stock of coins on band amounted to 242,593,334 subsidiary silver and minor coins.

Management improvement An active management improvement program has-been in effect

during the fiscal year 1952. Program techniques include periodic surveys and inspections of operations in the mint plants, conferences of operating officials and appointment of special committees, comparisons of operating costs in each mint, motion picture training programs, periodic progress reporting by individual management committees in each plant, and similar methods. t P^P^^^-^-^îi^'î^^'--

A large number of improved methods and procedures has been adopted in connection with the nianagement program in recent years, resulting in substantial reductions in coinage production costs. Although salary costs have increased approximately 75 percent during the past several years, coinage costs are actually 19 percent lower today than they were several years ago. Reductions in coinage unit costs during the past year, resulting from perfection and extension of technical improvements instaUed during previous years, and improvements adopted in fiscal 1952, are shown in the following table.

Coinage production posts—per

Fiscal year

1961 - ---1952

l-cent

$1.21 1.10

1,000 pieces

6-cent

$3.22 2.99

10-cent

$2.10 1.71

26-cent

$4.61 3.49

60-cent

$7.59 6 79

Estimated savings on an annual basis from management projects completed during the past year, explained later in this report, amount to $82,00D.

Modernization oj Philadelphia Mint.—Technicians from several prominent rolling mUl coinpanies have surveyed and studied the available space at the PhUadelphia Mint to determine if more efficient equipment can be utilized in the present building. The plan selected by the mint caUs for the revamping of present machinery with minimum building alterations. Efforts will be made to provide for mechanization of operations in the melting and rolling division to permit processing of a 400-pound bronze ingot in place of the present 30-pound size. This will bring the Philadelphia operations in line with those at the Denver Mint. Estimated savings would pay for equipment costs in about four years.

Construction oj. electronic weighing machine.—In collaboration with technicians from the Bureau of the Mint, the Bureau of Standards has undertaken construction of an electronic automatic coin-blank weighing machine. A working model has been completed successfully during the past year. I t is expected that a complete weighing machine will be constructed within the next several months and it is anticipated that this type of equipment wiU reduce coin-blank weighing costs when funds become avaUable for the purchase of additional units.

Increased production jrom dies and collars.—As the result of long and careful study of steel used in the production of coinage dies and



168 1952 REPORT OF THE SECRETARY OF THE TREASURY

collars, together with research as to heat treating and hardness penetration, there has been an increase in average coinage production from individual dies and collars. Savings were also realized from lower die production costs. (Estimated annual savings, $20,000.)

Increasing thickness oj bronze ingot.—At the Philadelphia Mint in 1951, a wider bronze ingot was adopted. The thiclaiess of this ingot has now been increased from )^-inch to %-inch, resulting in the production of longer strips and a reduction in the number of discarded blanks from strip ends. Further savings were accomplished in rolling operations following an intensive study of procedures which permitted the elimination of a number of passes through the rolling mills, resulting in a rolling production increase without additional labor. (Estimated annual savings, $12,000.)

Improved operation and maintenarice oj coin presses.—rA program has been adopted for training coinage press operators and die setters to do a more efficient job in. caring for their machines, thereby preventing unnecessary lost time from improper machine functioning or mechanical failure. An improved method for feeding coinage blanks to coin presses has reduced the number of press shut-do^^ms. Press operating speeds have been increased for all denominations, which together with other improvements has resulted in increased press output. (Estimated annual savings, $14,000.)

Installation oj overhead conveyors in Coining Division:—Overhead conveyors have been installed in the operating divisions at the San Francisco Mint, permitting mechanical handling of coinage blanks in 10,000-ounce containers as contrasted with the former practice of handling 800-ounce containers manuall3^ Work stoppage at frequent intervals to empt3^ the small containers has been eliminated and operators can now devote more time to their machines. (Estimated annual savings, $11,000.)

Installation oj second vibrating riddle.-—The original vibrating riddle installed at the Philadelphia Mint proved to be very satisfactory, warranting acquisition of additional equipment of this type. This new equipment, which replaces the old st3de rocldng-type riddle, screens out imperfect coin blanks, chips, crescents, half-moons, etc. Vibratory feeders have also been installed to feed blanks to the riddle, permitting a more even fiow of blanks across the riddle screen and reducing manpower requhements. (Estimated annual savings, $8,500.)

Increased mold lije jor water-cooled unit.—Original castings for the water-cooled molds gave poor service as a result of both warping and cracking. A new type of casting made of gray iron has been adopted, which has received special treatment to overcome porosity. The gray iron castings are showing a longer life, with less warping, than the old type. (Estimated annual savings, $4,000.)

Improvement oj upsetting operations.—Coinage blanks are processed in a milling machine for the purpose of obtaining a slightly upset edge before feeding to the coinage press. Upsetting operations have been improved by changing the shape of the groove in the disc and segment on the milling machine, eliminating jamming of blanks in the machines and yielding greater production. (Estimated annual savings, $2,500.)

Sajety program.-T-'Eeich operating division in the several mints has a safety committee, composed of supervisors, foremen, and workmen,




which meets once each month to discuss potential accident hazards in the division and reports in writing to the superintendent's safety committee. The latter committee meets monthly, inspects the entire plant, and makes recommendations for changes to the superintendent. Copies of safety committee reports, and reports of all accidents, are analyzed in the Director's office and suggestions for improving the safety program are rela3êd to the mints. The following comparison indicates the substantial progress made in the safet37̂ program.

Comparison of accident records

Frequency ra te ' Severity rate 2

Fiscal year 1952

16.10' .46

Fiscal year 1951

46.45 .88

1 The number of disabling injuries per 1,000,000 man-hours worked. 2 The number of days lost per 1,000 man-hours worked.

Motion picture training program.—Motion pictures of mechanical operations in each mint are used, in connection with comparative cost statements, to demonstrate the most efficient coinage methods to officials, supervisors, and workers. As new procedures are developed at any plant, motion pictures are taken of each improvement so that it may also be adopted at the other plants, if feasible. These films of mint operations are also shown to mint personnel to develop a spirit of competition and a thorough cost consciousness. FUms of operations in outside industry similar to the mint are reviewed, for improved procedures or new ideas which could be adopted in the mint, and. films on shop safet37̂ are shown to emplo3êes periodically.

Incentive awards program.—Continuing publicity was given to the incentive awards program during the past 3êar through the use of various methods. Total awards under this program in 1952 amounted to $4,715, including one group award for efficiency, under Title X of the act approved October 28, 1949 (63 Stat. 971). This award was made for recommended changes, most of which were put in effect in 1951, providing estimated annual savings of $720,400.

Accounting improvement program.—Additional progress has been made in the accounting improvement program during the past year, particularly in the fields of bullion and monetary accounting, and cost accounting. Revised bullion accounting procedures have been adopted, including a new journal and improved general ledgers, and the Bullion Accounting Manual has been completed. Cost accounting forms have been revised to conform with budget activity classifications, and progress has been made on revision of the Cost /Accounting Manual. Attention is also being given to revision of the General Accounting Manual and necessary changes are being made in accordance with instructions issued in connection with the Joint Accounting Improvement Program, or to reflect the adoption of new or revised accounting procedures more suitable to the mint's operations.

Miscellaneous projects.—Miscellaneous improvement, projects include: (a) Decreases of clerical personnel, (b) increased capacity of feeding system for 18-inch breakdown miU, and (c) greater utilization of supervisory personnel on a production basis. (Estimated annual savings, $10,000.)




Bureau of the Mint ^

The two major functions of the Bureau of the Mint are the manufacture of coins and physical custody of the United States monetary stocks of gold and silver, including their purchase and sale.

All United States coins are manufactured by the Bureau of the Mint. Foreign coins are also manufactured at cost for other governments without minting facilities, when orders can be met without impeding the required coinage of the United States.

An important function and also accompaniment to all work engaged in by the Bureau of the Mint is the continuous safeguarding and protection of values which total many billions of dollars. Custody of gold and silver involves a number of essential operations. Included are assaying, melting, refining, other treatment, and movement of the various forms of metals received; storage, and such processing and handling as are required when gold and silver are sold or otherwise withdrawn.

Approximately 1,000 employees are engaged in these and various other related functions of the Bureau of the Mint in eight locations, as follows: Coinage mints in Philadelphia, Pa., San Francisco, Calif., and Denver, Colo.; assay offices in New York, N. Y., and Seattle, Wash.; a gold bullion depository in Fort Knox, Ky.; a silver bullion depository in West Point, N. Y., which operates as an adjunct of the New York Assay Office; and the Office of the Director of the Mint in Washington, D. C. The Washington office establishes general policies, directs and coordinates operations of the field institutions, and maintains requisite controls.

Coinage

The number of coins manufactured during the fiscal year 1953 totaled 1,810 million pieces consisting of 1,620 million United States coins with a face value of nearly $94 million, and 191 million foreign coins. This was an increase of 14 percent over the previous fiscal year's production of 1,582 mUlion pieces consisting of 1,551 million United States coins and 31 million foreign coins. Coins were manufactured for the following countries.

Country

Cuba _ . _ El Salvador Ethiopia Haiti .„ : Honduras _ • . .

Total . . . . . . _

Number (In millions)

71.0 12.7

100.0 4.5 2.5

190.7

Over 7,400 avoirdupois tons of metals including silver, copper, zinc, nickel, and tin were required for the 1953 coinage, of which approximately 6,500 tons were used in United States coins and 900 tons in foreign coins.

The demand for coins in the United States continued at a high level throughout the year, as in the past several years. Shipments

1 More detailed information concerning the Bureau of the Mint is contained in the annual report of the Director of the Mint.




of the six denominations totaled 1,732 million pieces during 1953, exceeding the previous year's shipments by 26 percent. Minor coins-were in greatest demand, and the 1-cent denomination comprised 71 percent of total shipments in 1953. Scarce nickel supplies in this fiscal year, as in 1952, limited production of 5-cent pieces and, therefore, restricted the number available for circulation. Details of shipments are shown in the following statement.

Shipments of United States coins for circulation hy the Bureau of ihe Mint during-ihe fiscal year 1953

Denomina t ion

Silver dollars ". Half dollars . . Q"ar te r dollars. D imes . . . . . . _ . 6-cent pieces __. 1-cent pieces

Tota l -

N u m b e r of coins sh ipped

9, 783,079 41,191, 799 95, 584, 257

237, 227,442 112, 647, 021

1, 235, 582, 022

1,732,015,620

Face value

$9, 783, 079.00 20, 595, 899. 50 23. 896, 064. 25 23, 722, 744. 20

5, 632, 351. 05 12, 355, 820. 22

95, 985, 958. 22

Gross weight in short tons

288-568" 659-664 621

4, 2.36̂

7,026'

The stock of coins in the United States, including coins held in the Treasury, in banks, and in circulation, is estimated at over $2 billion asof June 30, 1953.

Gold

Gold transactions at the mint institutions during the fiscal year 1953 totaled 34 million fine ounces ($1,188 million in value), including^ receipts and withdrawals of gold for purposes authorized or permitted by law. Receipts amounted to 4.3 million fine ounces ($152 million in value), of which 1.5 million fine ounces ($51 million in value) were-from newly mined domestic production. Withdrawals amounted to 30 million fine ounces ($1,036 million in value) including 2.1 mUlion fine ounces ($73 million in value) issued for domestic industrial, professional, or artistic purposes. Other withdrawals were principally in connection with the United States' settlement of international balances.

Total gold holdings at the mint institutions at the beginning of the fiscal year 1953 amounted to 667 million fine ounces (or 22,870' short tons) valued at $23 billion, and at the close of the year 642 million fine ounces (or 22,004 short tons) valued at $22 billion, a net-decrease in holdings during the year of 25 million fine ounces valued at $884 mUlion.

Silver

Silver transactions at the mint institutions totaled 302 million-fine ounces during the fiscal year 1953, effecting a net increase in bullion holdings of 58 million fine ounces. A total of 56 million fine-ounces of silver was manufactured into United States subsidiary > sUver coins, 1.1 million fine ounces of which were provided from uncurrent coins unfit for further circulation which had been returned to the mints and melted during the year. The mints and assay offices received 36 mUlion fine ounces of silver from newly mined domestic production during the year, and 26 miUion fine ounces were monetized as security for silver certfficates. A total of 75 million fine




ounces of Treasury silver returned from defense use by other agencies of the Federal Government was reprocessed into regular mint bars durhig the year. No sales of silver were made during the year under the act of July 31, 1946 (60 Stat. 750), and none has been leased under this legislation since its enactment. Year-end holdings of silver bullion, amounted to 1,339 million in fine ounces valued at $1,685 million.

Revenues deposited into the general fund of the Treasury by the Bureau of the Mint during the fiscal year 1953 totaled $56 million of which $55.3 million was composed of seigniorage, divided as follows: Seigniorage on subsidiary silver coinage, $32.5 million; seigniorage on minor coinage, $12.8 mUlion; and seigniorage on sUver bullion, the difference between cost value and monetary value, $10.0 million.

inventory

A final settlement of accounts, with physical inventory of all bullion, coin, currency, and other values is made annually during the month of June in the coinage mints and assay offices. Special settlements and examinations are made also as required.

On January 9, 1953, a committee" was appointed jointly by the outgoing Secretary of the Treasury and the Secretary-designate of the incoming administration to develop plans for verifying and transferring the Government's vast stock of gold, silver, and other assets in custody of the Treasur}^ to officials of the incoming, administration. This committee, which was comprised of four outstanding members of the banking profession, made recommendations which they deemed necessary to provide complete assurance as to the existence of Treasury assets and the proper statement thereof in the Treasury's records. The monetary assets of the mint were verified in accordance with the procedures recommended by the committee, and all holdings were found to be as represented in the mint's accounts. An account of this audit appears on page 27.

Management improvement

The management improvement program of the Bureau of the Mint was continued on an active basis throughout the fiscal year 1953. A number of innovations, resulting in reduced operating costs, were adopted during the year.

New improvements and mechanisms devised during the past year for more efficient production of coins, together with extension and perfection of projects adopted in previous years, resulted in further reductions in coinage unit costs. Although salary costs have increased approximately 75 percent during the past several years, coinage costs are actually 25 percent lower today than they were several years ago. Coinage unit costs for the fiscal years 1946, 1952, and 1953 are listed, as follows: ^

Coinage production costs per 1,000 pieces, hy denomination

Fiscal year

1946 -1952 - . . . . 1953

1-cent

$1.59 1.10 1.03

5-cent

$2.81 2.99 2.72

10-cent'

$2.12 1.71 1.54

25-cent

$5.10 3.49 3.23

50-cent

$8.25 6.79 5.99-




r Representative accomplishments, with savings on an annual basis amounting to $84,000, and other program actions are described in the following paragraphs.

An especially designed folding conveyor which can be moved into small vault compartments was successfully utilized at the West Point Depository during the year to stack 75-pound silver bars. This resulted in annual savings of $14,000.

Present coin-blank reviewing operations have been extensively mechanized by overhead cranes which feed blanks to reviewing belts, and remove inspected material in 500-pound lots in place of 50-pound lots formerly handled manually. New vibratory feeders assure a constant flow of material across the reviewing belt. These improvements have not only reduced operating costs but have eliminated possible injuries to employees from constantly lifting and feeding heavy quantities of materials. Annual savings are estimated at $12,000.

Handling of coin blanks from blanking presses by using larger containers with a capacity of about 350 pounds and handled with overhead cranes to empty the container permits the operator to spend a much greater portion of his time feeding strips into the press, and relieves him of the physical strain of constantly lifting 50-pound boxes of material. I t is estimated that resulting annual savings will amount to $11,000.

Coin counting machines at Philadelphia have been rearranged so that one counting machine is located directly over a second machine, and the coins flow automatically from the first machine, after counting, into the second one where they are counted again. Automatic vibratory feeders provide a continuous flow of coins to the machines. The adciitional output per employee and the increased accuracy of counting operations permit the elimination of weighing silver coins before sacking. I t is estimated that annual savings will amount to $16,000.

Milling machines used to form a slightly upset edge on coinage blanks prior to stamping operations have been equipped with dual disc feeds. This innovation doubles the output of each machine. Annual savings are estimated at $4,000.

Installation of automatic feeders on weighing machines at Denver for weighing individual coin blanks permits semiautomatic operation of such equipment with consequent reduction in operating costs. These feeders were previously used for 25-cent pieces only, but additional feeding equipment has now been made which utilizes automatic feeders for 50-cent pieces also. Savings are estimated to amount to $4,000 annually.

New streamlined procedures have been effected in counting and reviewing uncurrent coins, and sorting out counterfeit pieces, foreign coins, slugs, etc., thereby eliminating much of the tedious labor formerly expended; and spot checking and test counting veriflcation methods have been substituted. Wartime steel pennies and silver nickels are picked out mechanically by unique mechanisms constructed for that purpose. Annual savings are estimated at $11,000.



;ADMESnSTRATIVE REPORTS) : 145;

Coining presses at San Francisco have been equipped with large containers which hold a sufficient quantity of blanks to operate a press several hours. Overhead cranes'are used to fill the containers, eliminating hand feeding, and each worker now operates additional presses; Personnel changes, resulting in more effective utUization of supervisory and die setting employees, have also increased press output. Savings are estimated to total $12,000 annually.

A formal internal audit program was established for the Mint Service during the year, and its broad policies and scope were outlined in a special mint accounting procedures letter issued for that purpose. This audit program, functioning as a part of the mint's general system of internal control, wUl provide manageinent with the auditor's findings on the effectiveness of financial control throughout the Mint Service; objective views as to the manner in which financial policies and operating procedures have been carried out; and recommendations for improvements in areas with which the audit may be concerned. A special management-audit survey of the Denver Mint was completedi

Bureau of Narcotics^

The Bureau of Narcotics administers a program designed to deal with the control of sources of the illicit supply of drugs on international,-national, and local levels.

Nationally, the Bureau is charged with the investigation, detection, and prevention of violations of the Federal narcotic and marihuana laws and of the Opium Poppy Control Act of 1942, and related statutes. The scope of the Bureau's operations is enlarging graduaUy as additional drugs are made subject to these laws. Opium and coca leaves and their derivatives have been under national control since 1915; marihuana has been under control since 1937; isonipecaine was brought under control in 1944; and under the act of March 8, 1946 (26 U. S. C. 3228 (f)), 16 recently developed synthetic narcotics have been brought under control through findings by the Secretary of the Treasury, proclaimed by the President, that the drugs possessed addiction liability similar to morphine. Of the last, five were included during 1953.

Internationally, opium,- coca leaves, marihuana, and their more important derivatives have been under control by reason of the Opium Conventions of 1912, 1925, and 1931. Under the International Protocol of November. 19, 1948, two additional opium derivatives, isonipecaine, and twelve synthetic drugs were found to have addicting qualities similar to morphine or cocaine and have been brought under international control by a procedure similar to that provided in our national legislation. An agreement to limit the production of opium to world medical and scientific needs was signed at the United Nations on June 23, 1953, after forty-four years of effort on the part of the United States to accomplish such an agreement. If the Protocol

J Further information concerning the Bureau of Narcotics is available in the separate report of the Commissioner of Narcotics.

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