William G. McAdoo to Pierre Jay
Title
William G. McAdoo to Pierre Jay
Creator
McAdoo, W. G. (William Gibbs), 1863-1941
Identifier
WWP18549
Date
1917 April 3
Description
William G. McAdoo writes to Pierre Jay regarding the gold exchange.
Source
Benjamin Strong Jr. Papers, New York Federal Reserve Bank
Language
English
Text
( C O P Y )
THE SECRETARY OF THE TREASURY
My dear Mr. Jay:
I have taken pleasure in carefully considering the suggestions contained in your letters of March 3 and 14, to amend the regulations gobverning the operations of the New York Assay Office for the purpose of facilitating the dealings of the Federal Reserve Bank of New York in gold. The propositions you submit are as follows:
1. That the Assay Office charge of 50 cents per$1,000 . on gold bars be remitted on the purchases of such bars by the Federal reserve bank .
$1.00 per 1,000 ounces be waived on United States mint gold bars returned by the Federal reserve bank for conversion into gold certificates.
In regard to No. 1: Section 3524, Revised Statutes, provides that a charge be imposed on all gold bars, sufficient to cover the cost of labor, materials, etc., necessary in the manufacture of such bars. The rate charged is fixed by the Director of the Mint with the approval of the Secretary of the Treasury. As these charges are provided by law, they, of course, cannot be waived. I should like to point out, however, that when a depositor deposits gold bullion with a mint or assay office and is willing to receive in payment his identical bullion, after it has been melted and cast into bars best suited to the office to manufacture, he only incurs the charge for melting the bullion at the rate of $1.00 per 1,000 ounces. Bar charges in such cases are imposed only when a depositor requests bars of special sizes. It has always been a rule in the mint service, if requested to do so, to return a depositor’s identical metal in bars without imposing a bar charge. I mention this fact because I take it from your letter that this fact is not fully understood.
In regard to No. 2: I do not beilieve it is necessary to change the regulations in order to meet your wishes in this regard, because I am advised that it is possible to do just what you want under the present practice. United States mint fine bars are now received as deposits without the imposition of a melting charge. Standard gold bars, that is, gold of .900 fine, or over, are not specifically mentioned in the regulation providing for the melting charges, but such bars are now, and have been (since the gold bullion may now represent 2/3 of the gold certificates outstanding) treated in the same manner as fine bars. These bars, as well as fine gold bars, bear numbers, number of melt (which comprises all the bars melted at one time) and the mint or assay office stamp. The fineness of the melt is also stamped upon them. They can be received back by the institution making them, subject to such tests as, in the judgment of the Superintendent, are deemed necessary. Bars are always weighed before they are received back, and may, in the discretion of the Superintendent, be melted and assayed, in order that no doubt shall exist as to the genuineness of the same. No charges for tests are imposed on the redepositor of United States mint bars.
In discussing propositions 1 and 2, I have endeavored to explain the present regulations, and I am quite sure that this clarification will demonstrate that there is no need for modification of the regulations in order to meet your wishes. If this is not so, I shall be glad to go further into the matter if you will advise me.
In regard to No. 3: I do not think it advisable to consider at this time a change or modification of the existing practice.
With best wishes, I am,
Sincerely yours,
THE SECRETARY OF THE TREASURY
My dear Mr. Jay:
I have taken pleasure in carefully considering the suggestions contained in your letters of March 3 and 14, to amend the regulations gobverning the operations of the New York Assay Office for the purpose of facilitating the dealings of the Federal Reserve Bank of New York in gold. The propositions you submit are as follows:
1. That the Assay Office charge of 50 cents per
In regard to No. 1: Section 3524, Revised Statutes, provides that a charge be imposed on all gold bars, sufficient to cover the cost of labor, materials, etc., necessary in the manufacture of such bars. The rate charged is fixed by the Director of the Mint with the approval of the Secretary of the Treasury. As these charges are provided by law, they, of course, cannot be waived. I should like to point out, however, that when a depositor deposits gold bullion with a mint or assay office and is willing to receive in payment his identical bullion, after it has been melted and cast into bars best suited to the office to manufacture, he only incurs the charge for melting the bullion at the rate of $1.00 per 1,000 ounces. Bar charges in such cases are imposed only when a depositor requests bars of special sizes. It has always been a rule in the mint service, if requested to do so, to return a depositor’s identical metal in bars without imposing a bar charge. I mention this fact because I take it from your letter that this fact is not fully understood.
In regard to No. 2: I do not beilieve it is necessary to change the regulations in order to meet your wishes in this regard, because I am advised that it is possible to do just what you want under the present practice. United States mint fine bars are now received as deposits without the imposition of a melting charge. Standard gold bars, that is, gold of .900 fine, or over, are not specifically mentioned in the regulation providing for the melting charges, but such bars are now, and have been (since the gold bullion may now represent 2/3 of the gold certificates outstanding) treated in the same manner as fine bars. These bars, as well as fine gold bars, bear numbers, number of melt (which comprises all the bars melted at one time) and the mint or assay office stamp. The fineness of the melt is also stamped upon them. They can be received back by the institution making them, subject to such tests as, in the judgment of the Superintendent, are deemed necessary. Bars are always weighed before they are received back, and may, in the discretion of the Superintendent, be melted and assayed, in order that no doubt shall exist as to the genuineness of the same. No charges for tests are imposed on the redepositor of United States mint bars.
In discussing propositions 1 and 2, I have endeavored to explain the present regulations, and I am quite sure that this clarification will demonstrate that there is no need for modification of the regulations in order to meet your wishes. If this is not so, I shall be glad to go further into the matter if you will advise me.
In regard to No. 3: I do not think it advisable to consider at this time a change or modification of the existing practice.
With best wishes, I am,
Sincerely yours,
Original Format
Letter
To
Pierre Jay
Files
Collection
Citation
McAdoo, W. G. (William Gibbs), 1863-1941, “William G. McAdoo to Pierre Jay,” 1917 April 3, WWP18549, Benjamin Strong Jr. Papers, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.