In compliance with a resolution of the Senate of the 23d instant, information relative to a proposed change in the mint laws of the United States upon the subject of the refining of gold and silver.

MARCH 26, 1867.-Read, referred to the Committee on Finance and ordered to be printed, and that 500 additional copies be printed for the use of the Treasury Department.

TREASURY DEPARTMENT, March 25, 1867.

SIR: I have the honor to acknowledge the receipt of a resolution of the Senate ander date of the 23d instant, requesting the Secretary of the Treasury to communicate to the Senate any information he may have relative to a proposed change in the mint laws of the United States upon the subject of the refining of gold and silver, and public policies incident thereto.

The act supplementary to the act establishing a mint and regulating the coins of the United States was passed more than thirty years ago, and the suggestion of a revision of the mint laws is well worthy of consideration, there being many particulars in which the existing laws are not adapted to the requirements of commerce and the great increase in the production of bullion. Many amendments have recently been proposed, among which are propositions for the mint to relinquish the refining of gold and silver, and leave that business wholly to private enterprise, and the repeal of the coinage charge.

Without expressing any opinion upon these subjects at the present time, I transmit herewith, for the information of the Senate, a very interesting communication which has recently been received from Louis A. Garnett, esq., of San Francisco, who was formerly an officer of the branch mint in that city, and is now connected with a very extensive silver refinery, which communication was prepared at the suggestion of John Jay Knox of this department during his late visit in California upon official business, and is addressed to him. I am, very respectfully, your obedient servant,

Hon. B. F. WADE,

H. McCULLOCH, Secretary of the Treasury.

President pro tempore Senate of the United States.

SAN FRANCISCO, November 13, 1866. DEAR SIR: In compliance with your request I hereby submit to you in writing a statement of such facts connected with our mining and minting opera · tions as, in my opinion, are necessary to a clear understanding of the important interests to which they are germain, and without which no intelligent action can be taken.

I may be permitted to refer to the recent instructions of the Secretary of the

Treasury to Mr. J. Ross Browne, the special agent of the department, as embodying succinctly the whole field of inquiry upon these important subjects. The Secretary justly observes that "whatever tends to develop the vast resources of our new States and Territories must add to the wealth of the whole country;" and he desires Mr. Browne to ascertain "what financial facilities may tend to develop the country and enhance its products."

Having yourself visited several of our mining districts, it will be only neces sary to refer to your own sources of information upon many points of inquiry connected with these subjects.

As an indication of the magnitude of our mining interests, I will here merely premise that it would be an underestimate to say that the mines of this State, and the adjacent Territories which are tributary to it, have for the past seventeen years produced an average of $60,000,000 per annum, or an aggregate of $1,000,000,000. And yet so unremunerative are mining operations as a whole, that it would be difficult to-day to find in this State one man for each $100,000,000 produced who has grown rich by working the mines. There is no subject upon which there exists such widely diffused error in the public mind as this; and perhaps there can be no more overwhelming refutation of the fallacy of these impressions than the simple statement of the fact, which is within the knowl edge of every one having any personal acquaintance with the history of our mining operations. In early days, when the bars and beds of our mountain streams glittered with gold, and our surface diggings offered rich rewards to individual labor, there were, doubtless, many who reaped golden harvests with but little labor and no capital. But these have long since been exhausted, and mining now can only be carried on successfully by a combination of labor and abundant capital. Indeed, mining here is not essentially different from what it has always proven the world over-a fascinating illusion, in which the exceptional instances of success seem alone to be remembered, and to supply the incentive which still lures on its votaries, regardless of the overwhelming preponderance of the disastrous experience of others. And yet, while it involves nine out of ten in heavy pecuniary loss, if not absolute ruin, its result and effect is to "enhance the product" and "add to the wealth of the whole country."

The development, therefore, of this important element of national wealth should receive every encouragement at the hands of the government, rather than be repressed by a system of taxation, which practically amounts to the taxing the privilege of a man's spending his own money for the public good. However, many of the evils under which this important interest has heretofore labored will doubtless be remedied by the mineral land law of last Congress. There still exists the high mint charges and the interual revenue tax of one-half of one per cent., which resulted from the various propositions to tax our mines. From the discussions in Congress, this tax seems to have originated in the idea that individuals were reaping private fortunes from the public domain without any return. Apart from what I have already said upon this subject, you can judge yourself how much foundation there is for this belief. But what I more particularly desire to draw your attention to is, its unjust application to foreign mines as well as domestic, the effect being to repel the products of Mexico and British Columbia, and force them into other channels. This is the result of making assayers the commissioners for the collection of the tax, and compelling them to collect it upon all bullion which they assay. It seems to me that if this matter was properly represented to the Commissioner of the Internal Revenue, he would at once authorize assayers and refiners, upon proper evidence of the foreign origin of bullion being produced to them, to stamp it as such, instead of imposing upon it a tax which was clearly never intended.

In reply, therefore, to the inquiry of the Secretary, "What financial facilities may tend to the development of the country and enhance its products?" I should unhesitatingly reply, a complete abrogation of all taxes and restrictions upon mining enterprises and a radical change in our whole system of mining laws.

If it be true that gold alone is the true measure of value, and that the metallic wealth of a country is the only safeguard to national and individual credit or solvency in periods of financial disturbance, it would seem to follow as a very simple principle of political economy that all legislation upon such a subject should be directed to the encouragement of its importation from abroad and the retention in circulation of our own production, or as the representative of other mediums of exchange, and into which they are at all times convertible. Yet, strange as it may appear, all of our legislation upon this important subject has a directly opposite tendency. By imposing high mint charges upon the recoinage of foreign currency and exorbitant refining and revenue charges upon foreign and domestic bullion, it deters the one from seeking our markets and compels our own to seek the cheaper markets of other nations, or, rather, where the smaller charges make its commercial value greater than its minting value at home.

While this subject has been engaging the attention of the first statesmen of Europe for the last three hundred years, and they have been constantly modifying their laws upon the subject and adapting them to the changes in domestic and international commerce, it has been almost entirely neglected by our government. About the only thing it has done since the discovery of gold in this State, and the magnitude and importance which the subject thereby acquired, was to pass the act of March 4, 1863, looking to the exclusion of refining from the mint, and making the retrograde movement of creating, in addition to other deductions, a coinage charge, by the acts of February 21 and March 3, 1853. The practical result of all this is very apparent. These mint and revenue charges now amount to about 12 per cent. on gold deposits and 24 per cent. on silver. By collecting these charges directly from the owner of the bullion, as a deduction from its value, the minting or net coining value per ounce of our bullion is reduced considerably below its commercial value, which is governed by the foreign markets, where no such tax or extortionate rate exists, and where minting expenses are defrayed from the public treasury, or by some special tax upon some article of general consumption, and not by a deduction from the value of the bullion.

The theory is a perfectly just one. The making of money is a necessity of government and a benefit to the entire community, and its expense should be borne by them equally, and not solely by the few who produced the material which enables the government to supply its own prime necessities. There is no more justice in doing so than there would be to charge the manufacturer who with his own capital and labor produces the parchment or paper of which your currency is made with the cost of engraving, printing, and other expenses of converting it into money. It is immaterial to the government how the expenses of its mints are defrayed, so it is done, yet it is very apparent that the particular mode by which it is done may lead to the most important results, for it cannot be denied that by raising the minting value of our bullion at home we not only retain a much larger portion of it in circulation, but we at the same time attract the products of foreign mines, for the same reasons that ours now goes abroad. The policy, therefore, of trying to make our mints self-supporting at the expense of the mining interests only has not only been a signal failure as a public measure, but is not sustained by the usages of any other nation, and is opposed to every just principle of political economy. The remedy is apparent and easy. The annual expenses of our mints are a mere bagatelle in the general disbursements of the government, and it could well afford to throw them entirely upon the general treasury without its being felt. They are now principally owing to the fact that, while other governments have long since restricted their mints to the more legitimate operations of coining money only, our government still adheres to the expensive practice of also refining the gold and silver necessary for this purpose. And while these charges are very high

and operate as a very oppressive tax upon the miner, they altogether fail to cover the cost. This is, however, in a great measure owing to the fact that our mint officials have always exercised an authority in this particular matter that the law does not seem to sanction. It is very clear and mandatory upon the point, and says positively that the charge shall cover the cost, including material, labor, wastage, &c., and the authority which it subsequently gives to change these charges from time to time clearly means such changes only as are necessary to make these charges conform to the changes which from time to time may take place in the cost of material, labor, &c.

Acting on their own interpretation of the law, they have adopted a tariff of charges quite as remarkable as their construction of the law itself, and have made their charges in an inverse ratio to the cost. This not only makes it necessary for the government to make large appropriations every year to cover the deficiency, but establishes an unjust tariff, to which private refiners must conform, while it is clearly the desire of the government that they should be encouraged, so as to relieve it entirely of this expensive operation. I have no doubt that, upon examination, the appropriations which the government makes annually to cover the deficiencies of the mints, growing out of their refining operations, will be found to exceed what it makes from its coinage charges; and, hence, could they get rid of the cost of refining, they could readily forego the small profit they make from coinage, and be better off for doing so, while they, at the same time, relieve the mining interests of the country from the oppressive tax. Again, by the mint's not making any difference between deposits of refined and unrefined bullion in the time of payment, the private refiner is not only compelled to conform to the unjust tariff of the mint, but his bullion, after it is refined, is used by the government to pay depositors whose gold is not refined for several days subsequent, and all because the law simply says that deposits shall be paid in the order in which they are made. To accomplish all that the government desires, the private refiners only want common justice, and they will soon so far outstrip the government in the advantages they will offer the miner as soon to relieve it entirely of the expense of refining. The govern ment uses the tedious and expensive process of refining by nitric acid, (which alone can be used in the heart of the city,) while private refiners employ the more expeditious and economical process of sulphuric acid.

There are a number of ways in which the government can aid and facilitate the consummation of this end if it so desires. The one which seems to me best adapted to this country, where the people are so deeply interested in the efficiency of the mint, and are so jealous of everything touching their peculiar interests, would be to have Congress give to the Secretary of the Treasury authority to contract with private refiners for an exchange of the crude bullion deposited at the mint for bullion fit for coinage or for gold coin, less such charges as might be agreed upon. This course has the advantage of relieving the government of all risk on the one hand, while it secures to the miner the benefit of the government assay and the government responsibility. When this is once accomplished the coining value of our bullion would at once become greater than its commercial value, and the result would be that the entire produce of our moneys would be coined at home, and here, at least, we would be relieved of those constantly recurring periods of stringency in the money matters growing out of the demand for, and shipment abroad of, our bullion.

During your sojourn here you doubtless learnt enough of our peculiar system of exchange with the interior to understand that while the coinage of about $20,000,000 per annum seems to answer all of our wants as a circulating medium, yet nearly our entire product is made to answer the purpose of coin, being remitted from the interior in payment of merchandise sold by our merchants.

It is clear to my mind that if the government would repeal the coinage and internal revenue tax upon all bullion, and give such encouragament to private