Q.David Bowers
The amount of American gold in circulation has always been very limited; for a considerable time past its exportation has exceeded its influx, owing to the demand by our increasing emigration and the stringent condition of the eastern money market. If the present rate of drainage be continued it will very soon exhaust our supply of national gold currency. Of silver coin also the supply is too small to meet the wants of the community. This, to be sure, partially arises from the fact that the gold is being absorbed or shipped away, as we have just stated. But even though there were the same amount of silver coin in the State now that there was a year since, it would not be found sufficient to supply the vacuum in the convenient currency created by the withdrawal of the smaller gold coin. The great bulk of our silver currency has been composed of Mexican and Peruvian silver dollars, with a considerable sprinkling of five-franc pieces. For smaller trade we have had a most varied assortment of fractional silver, comprising representations of the currency of well nigh every nation in the world. Mexican dollars have always stood first in favor, because of their well known purity of standards, their convenience for all, and their necessity for some of our Pacific Trade. Therefore we find that this coin has for a long time commanded 2 percent premium for the China and East India trade. The supply at the same time has continued to diminish. Like the doubloon, they can now be more profitably invested elsewhere. Instead of being shipped here for the purchase of gold dust they are sent direct to the Atlantic states and Europe, where there exists a pressing demand, and they at present command high rates of premium.
This monthly inconvenience, now in fact almost amounting to a currency crisis, will not probably continue much longer. Only the prospect of speedy relief, and the fact of the recent increase in the value of gold dust has hindered the recommencernent of private coinage, notwithstanding the existence of the statute prohibiting the same, and the knowledge of the evils certain in the end to result from it. But we entertain no doubt that relief of a satisfactory and durable nature will soon be afforded. Several months since, we believe, a request was forwarded to the Treasury Department by the United States Assay Office in this city asking for authority to issue gold coins of all the federal denominations. It is probable that such power will be granted him, and that so far as gold currency is concerned a full supply of the desired denominations will be introduced.
Within another year we anticipate seeing a regularly organized United States Mint in operation here, receiving our twin staples, gold and silver, and issuing coins sufficient not only to supply our own State, but to rule the currency and trade of the Pacific.
Up to the end of 1851 the situation continued to be acute, with 4% often charged to change $50 slugs into small denominations. This was no improvement on the earlier situation when the coins of Dubosq, Shultz, and others were accepted in commerce at a slight discount from face value.
Finally, relief came in a letter dated December 9, 1851, from acting Secretary of the Treasury William 1. Hodge, addressed to Joseph R. Curtis:
In reply to your letter of the 6th instant suggesting the expediency of authorizing the United States Assayer in California to affix the United States stamp to ingots or bars of gold of denominations and values under fifty dollars, I have to inform you that the Department has under this date authorized Mr. Augustus Humbert, the United States Assayer in California, to stamp ingots or bars of gold of the denomination and value of twenty and ten dollars respectively, and has so informed Messrs. Moffat & Co. of San Francisco, the contractors of the Treasury Department.
Unfortunately, the expected relief did not occur, for the next day, December 10, 1851, Hodge wrote to Moffat:
As a bill has been introduced into Congress in connection with a Mint and Assay Office at San Francisco, you will, until further instructed on the subject, suspend any action under the authority in the letter of the Department of the 9th Inst. relative to the stamping of ingots of twenty and ten dollars.
Around the same time the partnership interests in Moffat & Co. were changed. On December 24, 1851, the Daily Alta California carried this notice:
Co-partnership noted. The firm heretofore known and existing under the name and style of Moffat & Co. is this day dissolved by mutual consent, the entire interest of the special partner, John L. Moffat, having been purchased by the remaining partners, who have the right to use the name of Moffat & Co.
The Declaration was signed by John 1. Moffat, Joseph R. Curtis, Samuel Ward, and Philo H. Perry. It was further stated that "the firm will hereafter consist of the undersigned remaining partners, and its business until further notice will be conducted under the name and style of Moffat & Co." The addendum was signed by Curtis, Perry, and Ward. On December 31, 1851, Augustus Humbert, the United States Assayer in California, without having seen the correspondence earlier in December, wrote to Hon. Thomas H. Corwin, secretary of the Treasury, in Washington, D.C. and noted that the situation demanding smaller denominations was becoming acute.
Accompanying this Messrs. Moffat & Co. send you the monthly report of the transactions of this office, showing a sad falling off in its business, not to say its usefulness; it is an incontestible fact that the great scarcity of small coin (say, 5s, 10s, and 20s) has its influence, for in the greater portion of the transactions of the country the $50 ingots are too large, even the bankers have to restrict their depositors to checking for round amounts, or submit to a serious loss, as they are obliged to pay from 1 1/2 to 2% premium on the small coin necessary for their daily transactions, thus showing the urgent necessity existing for the issue of ingots of smaller denomination than 50s from this office.
Several of our most influential merchants and bankers as a matter of absolute necessity, not choice, have been urging somebody to make small coin with a private stamp, and I understand the dies are already in the hands of the engraver; whether or not these dies will be used will probably depend on the decision you may have taken with regard to the application presented to you by Mr. J. R. Curtis, etc. I sincerely hope it will be favorable and soon at hand, as I am well satisfied that if private coin again resumes the place it once had among us, the door will be open for greater frauds than was before perpetrated.