By Roger W. Burdette, special to CoinWeek …..
In a recent CoinWeek column, I mentioned the unusual transfer of gold from the New York Assay Office to the New Orleans Mint, primarily for the purpose of providing work for the mint’s employees. This occurred in early September 1893.
In order to keep your force employed a transfer will be made from the New York Assay Office to you of $1,540,000 in gold bullion which bullion will probably be shipped from New York to-morrow.
From this bullion and that on hand you will proceed to coin eagles and half eagles in equal proportions in addition to such subsidiary silver coinage as you may be able to execute[1].
Later in the same letter, Acting Mint Director Robert Preston expressed concern about the lack of recent experience in coining gold at New Orleans:
As your mint has had comparatively little experience in coining gold, I have to request that you will instruct the operating officers to exercise every care to see that the gold coins comply with the law in every particular as to weight and fineness.
Within a month, Preston’s reservations were to be proven prescient.
On October 17, New Orleans Mint Superintendent Overton Cade[2] was ordered to remelt all of the gold coins struck during September – deliveries No. 2, 3, and 4. The reason? “[T]he metal is not properly mixed.” This amounted to 25,000 New Orleans half eagles valued at $125,000.
It also led to a recalculation in the official journal U.S. Mint – Coinage Executed for September, and an unusual notation[3].
The problem was not, as we might presume, that the fineness was too low or too high; all the coins were within legal tolerance. During his test of Special Assay coins from the New Orleans Mint’s September gold coinage, Mint Bureau Assayer Cabel Whitehead discovered the samples were within tolerance, but that one was very close to the upper limit of gold. A half eagle coin had a legal fineness of 0.900 gold and a tolerance of 0.001, meaning the first coin tested about 0.9009 fine.
I transmit herewith the report of the assayer of the Bureau upon special gold pieces taken during the months of August and September, 1893, and forwarded for test as prescribed by regulations.
While the coins were found to be within the legal limit of tolerance, your attention is specially called to the pieces from delivery No. 2. The first of these is almost on the limit in fineness, so near it in fact that I think it necessary to have a further test made if this delivery before the coins are paid out by you, and hence you were instructed by telegraph yesterday to hold them for the present and to-day to forward five more pieces from this delivery for test. The second piece from this delivery while low in fineness is well within the limit, but it is very light, being within 3/10 of a grain of the limit; which I attribute to carelessness in the adjusting room. You are instructed to call the attention of the Coiner, [Henry G. Morgan –RB] to this matter at once, and to impress upon him the necessity of seeing that all gold coins are properly adjusted[4].
A second coin was low in fineness (probably around 0.8993) but was barely within the weight tolerance of 0.25 grain. The outcome was that Assayer Whitehead wanted more samples to test before approving the September gold coins for release.
It was common for coins to be slightly off the ideal fineness or weight, but having two randomly selected Special Assay pieces showing such large disparities raised concerns by the Bureau’s Assayer about consistency and the possibility of other coins being outside legal limits.
Here’s a typical Special Assay report from the Philadelphia Mint for gold $10 eagles:
When the five additional half eagles were received and tested, it is evident they were also inconsistent. This led acting director Preston to order “Pay out no gold coin, and stop coinage of same until further orders[5],” on September 30.
Preston followed up with this letter on October 5:
October 5, 1893
From the special gold assay coins forwarded by you for test by the Assayer of the Bureau, it would appear that the metal is not properly mixed, or that the Assayer is at fault in taking his granulations. I have directed Mr. Cabell Whitehead, the Assayer of the Bureau, to proceed to New Orleans and to investigate the causes of difference in assay of the individual coins. Yourself and the operative officers will afford Mr. Whitehead every facility for the discharge of his duties devolved upon him by the Bureau. Mr. Whitehead’s traveling and other necessary expenses, will be paid from your appropriation for contingent expenses.
This action is taken in order that the coins of your mint may not be found defective at the meeting of the Annual Assay Commission in any respect[6].
His directions of the same date to Whitehead were a little more expansive:
You are hereby authorized and directed to proceed to New Orleans as early as practicable to make a thorough investigation as to the cause or causes of the difference in the assays of the single pieces of the gold coins executed at that mint during the last month, as shown by the special assays made by you. You will endeavor to ascertain whether this arises from an improper mixture of alloy, which would appear to be the case, or is it the fault of the Assayer in taking his samples for assay. Should your investigation find that it is on account of not evenly mixing the metals, you will recommend such gold coins which during the last month to be set aside to await the decision of the Bureau.
While in New Orleans you will investigate thoroughly the method of melting the deposits of both silver and gold, as well as the ingot making by the Melter and Refiner’s department. You will examine the mode of assaying by the Assayer and his assistant. You will also make an examination of the Coiner’s department to ascertain whether the rolling is properly done, as well as the annealing, and you will make such suggestions to the officers of the Mint as you think will produce better results.
You will exhibit this letter to the Superintendent and the operative officers of the Mint who have been instructed to afford you every facility, for discharging the duties devolved upon you[7].
A week later Whitehead submitted his findings and recommendation. He recommended that all half eagles made in September be melted, and, according to Preston:
I am satisfied with the knowledge now before me, that these bad coins are the result of carelessness or incompetency, or both, on the part of those charged with the melting.
The coins selected from these deliveries for the Annual Assay, should be removed from the pyx by the assayer and yourself, in the presence of Mr. Whitehead[8].
Preston also warned Superintended Cade about potentially serious consequences:
Had the irregularity not been detected by the assayer of the Bureau, but by the Annual Assay Commission, it would have resulted in the removal of the officer or officers responsible for the same[9].
On October 26, Preston wrote to Superintendent Cade granting permission to again coin gold. He also mentioned Whitehead’s suggestions for changes in the M&R Department, but left implementation to Cade’s discretion:
I am in receipt of a letter from Mr. Whitehead, the Assayer of the Bureau, who is now at your Mint, stating that the coinage of gold can be resumed. You are, therefore, authorized to resume this coinage. Mr. Whitehead has made certain suggestions in regard to the force in the Melting and Refining department, but as the Melter and Refiner will be strictly responsible for any errors or any short comings in the manufacture of his gold ingots hereafter, I do not deem it proper at this time to insist upon the changes recommended by Mr. Whitehead.
Mr. Whitehead recommended that the present assistant Melter and Refiner be made foreman of Melting, and that Mr. Bernard Magruder, formerly Melter and Refiner, be appointed Assistant Melter and Refiner. While these changes would be acceptable to the Bureau, I shall leave the matter entirely in the hands of yourself and the Melter and Refiner, but I believe it would be for the best interest of the service that they should be made[10].
This should have been the end of gold problems for the New Orleans Mint. Yet on December 16, Robert Preston–now Director of the Mint–wrote again about excess gold in coins:
Referring to the report of the assayer of the Bureau upon special test gold coins, your attention is called to the fact that they average about .0002 above standard and fineness. This is very unusual with coins issued from the Philadelphia Mint, and it occurs to me that it may be due to the ingot melts having been made up on the assays of the U.S. Assay Office at New York, from which institution the gold now being coined was received. I believe this gold was bought as unparted bars, and the assays, therefore, not reported to .0001. As there is a considerable loss of gold arising from the high fineness of these coins, I would suggest that the Assayer furnish the Melter and Refiner with assays of the remaining transfer bars, reported to .0001[11].
The nearly out-of-tolerance high fineness of gold continued and coins from Delivery No. 8 were suspended December 28 pending additional testing.
Your attention is called to the very high fineness of the two Half-eagles, from delivery No. 8; one of these pieces is dangerously near the limit of tolerance[12].
Delivery No. 8 was 7,000 half eagles. At nominal fineness of 0.900, half eagles contained 129 grains of alloy – including 116.1 grains of pure gold. In a delivery of 7,000 pieces at 0.900 fine, the pure gold weight was 812,700 grains or 1,693.125 Troy ounces. By allowing all the coins to have an average fineness of 0.9002, the pure gold consumed would have been 812,880.6 grains or 1,693.501, which is a waste of 0.376 T. oz. Although not a lot of gold by itself, if extended to the New Orleans Mint’s 1893 half eagle coinage of 110,000 pieces, we could have had a cumulative loss of almost six ounces.
Preston’s concern was not that some coins were at the high end of tolerance, but that the average was above 0.900 fine, which amounted to the mint giving away gold.
Nothing more appears in available correspondence on this subject in 1893. The report of the Annual Assay Commission that met on February 14-15, 1894, was satisfactory.
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Notes
[1] RG104 E-235 Vol 69, 135. Letters dated September 1, 1893 to Overton Cade from Robert Preston.
[2] Overton Cade took office July 24, 1893 succeeding Dr. A. W Smyth. In turn, Cade was replaced by Charles W. Boothby on August 1, 1898.
[3] RG104 E-217 Vol 4. “Coinage by month 1887-1896.” Table for September 1893.
[4] RG104 E-235 Vol 68, 235. Letter dated September 22, 1893 to Cade from Preston.
[5] RG104 E-235 Vol 68, 235. Letter dated September 30, 1893 to Cade from Preston.
[6] RG104 E-235 Vol 69. Letters dated October 5, 1893 to Cade from Preston.
[7] RG104 E-235 Vol 69. Letters dated October 5, 1893 to Whitehead from Preston.
[8] RG104 E-235 Vol 69. Letter dated October 17, 1893 to Cade from Preston.
[9] Ibid.
[10] RG104 E-235 Vol 69. Letter dated October 26, 1893 to Cade from Preston.
[11] RG104 E-235 Vol 70. Letter dated December 16,1893 to Cade from Preston. The New York Assay Office gold referred to was sent to New Orleans in early September so that employees would not have to be fired. Preston is suggesting that the assay reports for this gold might have been incorrect.
[12] RG104 E-235 Vol 70. Letter dated December 29, 1893 to Cade from Preston.
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Great Article Mr.Burdette ! I do have a half Eagle Gold piece, and in comparing it with the (P) issue the color is remarkably different. This is also the case in comparison with some other coins. In fact it seems unnaturally yellow. I have often wondered about how Au was sourced for the New Orleans mint. Your article cleared up this mystery. Thanks.