Q. David Bowers
'SEC. 3. That sales of silver bullion under authority of this Act may be made for the purpose of conserving the existingstock of gold in the United States, of facilitating the settlement in silver of trade balances adverse to the United States, of providing silver for subsidiary coinage and for commercial use, and of assisting foreign governments at war with the enemies of the United States. The allocation of any silver to the director of the Mint for subsidiary coinage shall, for the purposes of this Act, be regarded as a sale or resale.
"SEC. 4. That the secretary of the Treasury is authorized, from any moneys in the Treasury not otherwise appropriated, to reimburse the treasurer of the United States for the difference between the nominal or face value of all standard silver dollars so melted or broken up and the value of the silver bullion, at $1 per ounce of silver one thousand fine, resulting from the melting or breaking up of such standard silver dollars.
"SEC. 5. That in order to prevent contraction of the cur-rency, the Federal Reserve banks may be either permitted or required by the Federal Reserve Board, at the request of the secretary of the Treasury, to issue Federal reserve bank notes, in any denominations (including denominations of $1 and $2) authorized by the Federal Reserve Board, in an aggregate amount not exceeding the amount of standard silver dollars melted or broken up and sold as bullion under authority of this Act, upon deposit as provided by law with the Treasurer of the United States as security therefor, of United States certificates of indebtedness, or of United States one-year gold notes. The secretary of the Treasury may, at his option, extend the time of payment of any maturing United States certificates of indebtedness, deposited for security as such Federal Reserve bank notes for any period not exceeding one year at anyone extension and may, at his option, pay such certificates of indebtedness prior to maturity, whether or not so extended. The deposit of United States certificates of indebtedness by Federal Reserve banks as security for Federal Reserve bank notes under authority of this Act shall be deemed to constitute an agreement on the part of the Federal Reserve bank making such deposit that the secretary of the Treasury may so extend the time of payment of such certifi-cates of indebtedness beyond the original maturity date or beyond any maturity date to which such certificates of indebt-edness may have been extended, and that the secretary of the Treasury may pay such certificates in advance of maturity, whether or not so extended.
"SEC. 6. That as and when standard silver dollars shall be coined out of bullion purchased under authority of this Act, the Federal Reserve banks shall be required by the Federal Reserve Board to retire Federal Reserve bank notes issued under authority of section five of this Act, if then outstanding, in an amount equal to the amount of standard silver dollars so coined, and the secretary of the Treasury shall payoff and cancel any United States certificates of indebtedness deposited as security for Federal Reserve bank notes so retired.
"SEC. 7. That the tax on any Federal Reserve bank notes issued under authority of this Act, secured by the deposit of United States certificates of indebtedness or United States one-year gold notes, shall be so adjusted that the net return on such certificates of indebtedness, or such one-year gold notes, calculated on the face value thereof, shall be equal to the net return on United States 2% bonds, used to secure Federal Reserve bank notes, after deducting the amount of the tax upon such Federal Reserve bank notes so secured.
"SEC. 8. That except as herein provided, Federal Reserve bank notes issued under authority of this Act, shall be subject to all existing provisions of law relating to Federal Reserve bank notes.
"SEC. 9. That the provisions of Title VII of an Act approved June fifteenth, nineteen hundred and seventeen, entitled 'An Act to punish acts of interference with the foreign relations, the neutrality, and the foreign commerce of the United States, to punish espionage, and better to enforce the criminal laws of the United States, and for other purposes,' and the powers conferred upon the president by subsection (b) of section five of an Act approved October sixth, nineteen hundred and seventeen, known as the 'Trading with the Enemy Act,' shall, in so far as applicable to the exportation from or shipment from or taking out of the United States of silver coin or silver bullion, continue until the net amount of silver required by section two of this Act shall have been purchased as therein provided.
"Approved, April 23, 1918."
The Annual Report of the Director of the Mint for the fiscal year ending June 30, 1918 also told of the conversion of silver dollars into bullion under the Pittman Act:
"Silver Dollars Converted to Bullion: An unusual feature of the year was the conversion of over 68 million silver dollars into bullion, this being responsible for much overtime in the melting rooms during April, May, and June, at the Philadelphia and San Francisco Mints and New York Assay Office. This work was materially facilitated by use of the electric furnace installed the previous year at the Philadelphia Mint. The conversion of silver dollars to bullion was in accordance with the Act of April 23, 1918, printed elsewhere in this document. The bullion was used to assist foreign governments at war with the enemies of the United States."
The Report further noted that the 68,752,554 silver dollars converted to bullion under the Act of April 23, 1918 during the fiscal year ended June 30, 1918 came from the following places: Philadelphia Mint 39,434,544 pieces; San Francisco Mint 19,301,000 pieces; New York Assay Office, 10,017,000 pieces.
The Pittman Act (June 1918 Report)
The Numismatist, June 1918, informed readers that the process of melting 350 million silver dollars under the Pittman Act had begun early in May 1918, according to an account, which noted in part:
"It is believed that all, or practically all, were of the standard dollar type, first issued in 1878 .... About 90 million of the dollars in the Sub-Treasury in New York City have been transferred to the Assay Office in New York City for melting, and the work of melting those is expected to keep the Assay Office busy for six weeks. At the Philadelphia and Denver Mints it is expected that the work will be heavier than in New York as larger quantities will probably be handled there .... The experiences of the Philadelphia and San Francisco Mints, of late, it is reported, have shown that it costs from $8,593 to $8,650 to convert $1 million of silver bullion into coin. The reverse process is not expected to cost as much."
The Pittman Act (September 1918 Report)
The Numismatist, September 1918, printed the following:
"Under the authority of the Act of Congress approved April 23, 1918, silver has been sold by the secretary of the Treasury at a price which will permit the Treasury from new purchases of a corresponding amount of silver at the price of $1 per fine ounce to recoin the silver purchased into silver dollars without loss. In order to provide for the various items of expense involved it was found necessary to fix a price for which silver was sold at $1.015 per fine ounce, and it was made a condition of sale that the purchaser should not pay a higher price for silver in other markets than in those of the United States."