SEC. 3. Effective upon the expiration of one year after the date of enactment of this Act, section 2 of the Act of June 4, 1963, as amended (31 U.S.C. 405a-1), is amended to read as follows:

"SEC. 2. The Secretary of the Treasury is authorized to use for coinage, or to sell on such terms and conditions as he may deem appropriate, any silver of the United States (other than silver transferred to the stockpile established pursuant to the Strategic and Critical Materials Stock Piling Act) at a price not less than the monetary value of $1.292929292 per fine troy ounce.

SEC. 4. From and after the date of enactment of this Act, and until transferred to the stockpiles established pursuant to the Strategic and Critical Materials Stock Piling Act in accordance with this Act, the Secretary of the Treasury shall hold as a reserve for purposes of the common defense not less than one hundred and sixty-five million fine troy ounces of silver. Upon the expiration of one year after the date of enactment of this Act, the Secretary of the Treasury shall transfer not less than one hundred and sixty-five million fine troy ounces of silver to the stockpiles established pursuant to the Strategic and Critical Materials Stock Piling Act. For the purposes of that Act, the silver shall be deemed to have been transferred pursuant to that Act.

SEC. 5. The last sentence of section 3517 of the Revised
Statutes (31 U.S.C. 324) is repealed.
Approved June 24, 1967.

Legislative History:

House Report No. 261 accompanying H.R. 7476 (Comm.
on Banking and Currency).

Senate Report No. 232 (Čomm. on Banking and Cur-
rency).

Congressional Record (Vol. 113 (1967)):

June 1: Considered in Senate.

June 5: Considered and passed Senate.

June 12: Considered and passed House, in lieu of
H.R. 7476.

General Services Administration sales of silver on a competitivebid basis ranged from $1.625 to $1.81 per ounce from the time of the initial sales on August 4 through October 23, 1967.

The Treasury Department's announcement regarding the abandonment of silver sales at the fixed price of $1.29 an ounce, and sale of Government silver under a competitive bid procedure as recommended by the Joint Commission on Coinage, follows:

TREASURY DEPARTMENT, Washington, D.C., July 14, 1967. Success of the Treasury Department's coinage program in producing silverless "clad" coins in numbers which can meet any foreseeable needs has led to a decision to halt Treasury sales of silver at $1.29 an ounce.

Future Treasury sales of silver will be at going market prices in amounts up to 2 million ounces a week.

The former price was maintained by Treasury in order to keep silver coins circulating to meet the needs of the national

economy.

The rights of people who hold U.S. Silver Certificates to exchange them for silver at the $1.29 rate will not be affected. Also, the legal prohibition against melting, treatment, or export of U.S. silver coins will remain in effect.

Secretary of the Treasury Henry H. Fowler, acting on a recommendation made today at a meeting of the Joint Commission on the Coinage, has halted all sales of Treasury silver at the $1.29 price, effective immediately, and has stated that the Department will consult with General Services Administration on arrangements for conducting future sales of Treasury silver.

It will be sold, as recommended by the Coinage Commission, under a competitive sealed-bid procedure, with small, as well as large purchasers given the opportunity to bid for it, and in amounts to be determined for each sale by the Secretary of the Treasury. Details of the bidding and selling procedure will be announced as soon as they are worked out. The Secretary will make reports from time to time to the Coinage Commission on Treasury silver supplies and the results of these sales.

Because world demand for silver, which exceeds world supplies, would threaten the U.S. silver coinage, the Treasury, in 1965, obtained enactment of legislation to allow the minting of new dimes and quarters containing no silver, and a half dollar with silver content reduced.

Since then, in 2 years, the mints have worked on expedited schedules, to produce 814 billion of the new, silverless dimes and quarters, as compared to total mint production of 1212 billion dimes and quarters over the prior 25 years.

The Treasury found it necessary, in mid-May of this year, to confine sales at $1.29 an ounce to U.S. buyers normally using silver in their operations and to invoke its legal authority to prohibit melting, treatment, or export of silver coins. This came about because of a rapid rise in purchases of Treasury silver which started in early May and threatened to exhaust existing stocks. Until then, the Treasury had been selling at the $1.29 an ounce price to all comers, in order to keep the world price of silver down until the point could be reached in new coin production at which the supply of the older silver coins would not be a critical factor in maintaining orderly commercial transactions.

At that time, on May 18, the Treasury estimated that by the end of this year, if not earlier, there should be enough of the new coins to meet all U.S. needs. Today's decision represents the conclusion of the Joint Commission on the Coinage, as well as that of Treasury and mint officials, that this point has now been reached.

With an estimated 81/2 billion dimes and quarters in circulation, the Treasury had produced 814 billion new coins of these denominations as of yesterday. Moreover, mint produc

5

tion is planned at a rate of 300 million coins a month for the
balance of this year, and the Treasury has enough of the new
coin blanks on hand to increase this production rate to 700
million a month if necessary.

The attached chart shows how Treasury coinage produc-
tion met the need for new coins over the past 22 years.

Subsequent to the Treasury announcement, GSA issued the following news release regarding the sale of Treasury silver on a competitive bid basis beginning August 4, 1967, and continuing for an indefinite period:

GENERAL SERVICES ADMINISTRATION, Washington, D.C., July 21, 1967. The General Services Administration announced today the offering of silver from the U.S. Treasury stocks for sale on a competitive-bid basis.

This follows the Treasury Department announcement of July 14 that it was ceasing its policy of maintaining the price of silver at $1.29 an ounce and its sales at that price, and that GSA would carry out sales in the future. It is planned that after a brief initial period the requirements limiting bidders to domestic consumers of silver, or to bidders agreeing to sell to domestic consumers within 30 days will be modified to permit a portion of the sales to be sold to any bidders without restriction on end-use. Timely notice of this planned modification in the bidding procedure will be made by GSA.

The sales program announced by GSA provides for weekly sales under which sealed bids will be opened each Friday at 11 a.m. beginning August 4, 1967, for an indefinite period.

The first weekly offering will consist of 4 million fine troy ounces of silver to cover the period from July 14 through August 4 during which time no sales of silver from Treasury Department stocks were made. Of this quantity, 3,400,000 ounces will be open to bidding by both large and small business concerns and 600,000 ounces will be open only to bidding by small business consumers. Following the first opening on August 4, weekly offerings will be 2 million fine troy ounces of silver of which 1,700,000 ounces will be open to both large and small business concerns and 300,000 ounces will be open only to small business consumers. Quantities of silver not sold in any weekly offering will be added to material offered for sale in subsequent weeks. GSA will announce at the beginning of each week the actual quantities being offered for the week. The Government desires to retain maximum quantities of higher purity material; however, the sale program will begin with initial offerings of both 999 fine silver from the U.S. Assay Office in San Francisco and silver ranging in fineness from 996 to 998 from the West Point, N.Y., silver depository, in order to meet current potential consumer demand. Future sales may be limited to silver ranging in fineness from 996 to 998. The program as announced by GSA will be subject to continuous review by GSA and the Treasury Department and will be modified as market conditions warrant. Any modification of the program will be announced publicly and the invitation for bid will be amended.

Invitation for Bid, PMDS-MET-146, has been issued to provide the terms and conditions of the sale. Offers to purchase must be received no later than 11 a.m., prevailing Washington time each Friday commencing August 4, 1967. At that time they will be publicly opened at the Business Service Center, General Services Administration, 7th and D Streets SW., Washington, D. C. 20407.

The sales program will be open to two categories of bidders. Category A will include both large and small business concerns. Bidders under this category will be certifying that they will either consume the silver in their own plants located in the United States, and that silver of 999 fineness purchased from the Government will be consumed within 90 days after date of award, or if purchased for resale in the form purchased, it will be resold within 30 days after award to domestic consumers who will agree to consume the silver in their own plants located in the United States, provided that silver of 999 fineness purchased from the Government for resale will be consumed within 90 days after the resale. The minimum bid quantities under category A are for multiples of 21,000 fine troy ounces of silver of 999 fineness and 35,000 fine troy ounces of silver of fineness ranging from 996 to 998.

Category B will be open to small business consumers. Firms in this category will not be required to bid for the silver on a price basis.

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Under the procedures set forth in the invitation, small business consumers will submit offers for specific quantities of silver for a minimum of 5,000 fine troy ounces. After GSA has made its decisions on awards to bidders under category A, they will immediately contact all small business firms that have requested a quantity of silver, offering them the opportunity to purchase silver at the lowest price accepted by GSA on that date under category A. Acceptance of this GSA counteroffer by the small business consumer will constitute a contract. Small business consumers will be required to certify that they will consume all the silver in their own plants located in the United States and that silver of 999 fineness purchased from the Government will be consumed within 90 days after award.

Small business purchasers under category B will not be permitted to resell the silver in the form purchased. Any quantity not sold under this category will be made available for sale in category A in subsequent sales.

Each firm on the GSA mailing list will receive several bidding sets and all bidders in the initial and subsequent weekly offering will receive a replacement set each time they bid.

Requests for invitation for bid, PMDS-MET-146, and other inquiries should be directed to: Project Manager, Metals, Stockpile Disposals, Property Management and Disposal Service, General Services Administration, 18th and F Streets NW., Washington, D.C. 20405. Telephone requests should be made to the projects manager, metals, telephone (area code 202) 343-8981.

The figures set forth in the report of the Department of the Interior, and compiled by the Bureau of Mines, shows estimates of U.S. silver requirements for 1967 to be 388 million troy ounces. This total includes 185 million ounces for domestic industrial requirements, 55 million ounces for coinage, 85 million ounces for exports, and 63 million ounces for commercial inventory buildup.

Of the total U.S. silver requirements estimates of 388 million troy ounces for 1967, it is estimated that 241 million ounces will come from Government inventories. The 241 million ounces covers the Treasury drawdown of 55 million ounces for coinage, U.S. Treasury sales of "free" stocks and redemption of silver certificates in the amount of 140 million ounces, and sales of 46 million ounces by the General Services Administration. The remainder of 147 million ounces of the total supply which is from sources other than the Government inventories includes mine production of 44 million ounces, secondary production of 35 million ounces, and imports of 68 million ounces.

These estimates of U.S. silver supply and requirements for 1967 reveal that the total quantity of silver obtained from mine production, secondary production and imports was 38 million ounces less than the estimated domestic industrial requirements for silver in 1967. The U.S. silver requirements for the year 1970, as compiled by the Bureau of Mines, will amount to a total of 233 million troy ounces, none of which requirements are for coinage. Of this total, 190 million ounces will be required for domestic industrial uses, and the remaining