Q.David Bowers
In the same issue of Alta California on January 26, 1850, an editorial outlined the abuses of private coinage and reiterated the fact that the pieces were not usable at the Custom House or at the Post Office and that many merchants refused to take them in trade, and that bankers would not accept them at face value. It was observed that the coins "are looked upon with suspicion and distrust... they are perfectly illegal, if not absolutely counterfeit coins." The editor went on to say "we cannot countenance a system which, if suffered to exist any longer, will be the cause of defrauding the community to the greatest extent." Moffat & Co. penned a strong reply:
The Resolution offered in the House of Assembly by the Hon. Mr. Woodworth, in regard to the issue of coin by in-dividuals, and your remarks thereon, published in Saturday's edition, have met our observation, and as we are engaged in the manufacture of $5 and $10 we beg leave to use your column through which to offer some vindication of our character and standing from the charge of being counterfeiters and open violators of the laws of the United States, and to assure the public that whenever Congress shall enact laws forbidding the manufacture of gold into pieces representing coin by individuals, we shall bow with the greatest respect to such law.
Private mints have been in operation for many years in the United States, and have been the subject of consideration and complaint by the Director of the Government Mint and his reports to Congress. The establishments for this purpose have been that of Templeton Reid of Georgia, now discontinued, and that of Christopher Bechtler in North Carolina, still in operation. This mint is located at Rutherfordton, North Carolina, and is of considerable importance. Its operations were commenced in 1831, and are still carried on, although there is a Branch Mint of the United States less than eighty miles distant. Mr. Bechtler has stated the amount of his coinage to February, 1840 (nine years), at $2,241,890.
An assay of the coinage of Mr. Bechtler by the Mint of the United States developed the fact that his $5 pieces on the average were worth but $4.84, and this practice is still going on in the United States, not only where the necessity does not exist for the want of a circulating medium, but directly at the portals of the Mint of the United States; and nothing is done to prevent it by the public authorities because no law forbidding it exists. The Director of the Mint, in his Report to Congress for the year 1840, after a brief statement in relation to Mr. Bechtler's coinage, observed: "It seems strange that the privilege of coinage should be carefully confined by law to the General Government, while that of coining gold and silver, though withheld from the States, is freely permitted to individuals, with the single restriction that they must not imitate the coinage established by law." We cannot but believe that had there existed any law against the coining operations of Mr. Bechtler or other individuals, the Director of the Mint, and those upon whom it devolved to see that so important an interest of the United States should be protected, would have enforced it. But we do not place ourselves in the category so designated in the Resolutions referred to. Weaver that we have violated no law of the United States in regard to coining money; that we have defrauded no man of one cent by the issuing of our coin; that we have in no instance refused or failed to redeem in current coin of the United States all of such issues without detention or delay, and we hold ourselves ready now and at all times hereafter to do so. We have too high an opinion of the wisdom and good sense of the Legislature of this State to believe that they will pass any Act in pursuance of the Resolutions referred to, as the subject belongs only to Congress, and is not usurped or interfered with by any of the State Authorities. In regard to the value of our coin, we assert, and submit it to the test of any assaying establishment, that each piece is worth more than it purports to be, and will pay a handsome profit to anyone who will take them to the Government in Bullion.
While upon this subject we beg your permission to say a few words in regard to another source of complaint by some, in connection with our business. We refer to the bars or ingots prepared for merchants, bankers, and others, for export. We have been called on in some instances to redeem such in current coin, because our name, together with the carat, and weight, is stamped thereon; the unreasonableness of this requirement must be manifest to every reflecting person. We receive from a banker, merchant, or miner 62 1/2 ounces ($1000) of dust, with a request to put it into bars, and stamp it with its true value, according to our Government Standard, and for this service we receive fifty cents per ounce. After having performed our labor, delivered the bars, and received our $31.25, the banker modestly demands of us the amount of his bar in current coin. To be sure, we have been benefited, after paying our expenses, perhaps $15, by the patronage of our friend, and with his benefit he asks us to pay him the mint value of his bar, because we have asserted by our stamp that it contains so many ounces, and is of such a carat fine, and is therefore worth at the Mint in dollars and cents so much money. The absurdity of such a demand must be apparent. We hold ourselves responsible for the accuracy of our stamp, whether it be upon bullion or in the form of ingots or coin. If there be error the party aggrieved has his remedy at common law.
If we are counterfeiters the criminal courts are at all times open. Our guilt or punishment cannot be affected by any action of the State Legislature. We shall endeavor to pursue such a course in our intercourse with our fellow-citizens as not to impose on their rights, or outrage laws and good order; and while we thus deport ourselves we claim to be exempt from the unjust charge of being felons and counterfeiters by those who ought not to plead ignorance of the law in extenuation of their acts.
Moffat & Co.
Frederick D. Kohler, State Assayer
In the summer of 1848 it was considered that gold had a value of $18 per ounce. Assays of California gold, depending upon the location from which it was taken, revealed values from about $17.90 to $18.20 per ounce. However, gold was accepted in trade at just $16 per ounce. Metal which had been extracted by the quicksilver or amalgam process would often trade for even less, at $14 per ounce. There were strong complaints about this, for it was felt that many purchasers of gold at $14 per ounce were simply shipping it to the East and gaining a profit of $4 on each ounce sold in this manner. It was believed that the institution of a state assay office of gold would remedy this problem and would enable gold to be exchanged for its true value.
The first movement to establish a state assay office was as early as July 22, 1848, when citizens of San Francisco met and requested Col. Richard B. Mason, Jr., military governor of California, to select one or more assayers to test the quality of gold taken from the various mines. It was requested that the assayer supervise the making of ingots which were to be stamped with the name of the owner of the gold, the weight, and the fineness. Mason did not approve of this, so nothing was accomplished.
In April 1850 there was another meeting of San Francisco businessmen. Concern was voiced over gold which had been extracted by the quicksilver process. The amalgam of metals made adulteration easy. It was believed that official assaying would remedy the problem. The Legislature wasrequested to establish an assay service to make ingots of metal in the same denominations as issued by the United States Mint, charging a 5% commission or discount for the service. It was further suggested that unrefined gold be received at $16 per ounce for this purpose.