As I have indicated earlier in my testimony, the presence of that mint mark is important to the maintenance of internal control procedures of the mint. There is another extremely important aspect to this, however. That has to do with frauds perpetrated on the public through alteration of U.S. coins subsequent to issue, offering them for sale at premium prices, representing them to be "mint errors."

In many cases involving fraudulent dealings in alleged mint errors and other numismatic items, the presence of a valid mint mark immediately reduces the cost of the Department's investigation by restricting it to only one mint. A recent Federal case clearly demonstrated the usefulness of the mint mark in that the coins in question were of a year in which mint marks were in use. It was at once obvious that any question regarding the production of the subject coins was confined to one mint, in this case that at Philadelphia.

If I may digress from my statement, may I suggest to you that we have many billions of coins in inventory, of which we are very proud. However, one day in the future when these coins are taken out, it is going to be very, very difficult, if not impossible, to know from which mint they came, because they do not have a mint mark.

In the years which lie ahead, the mints will be turning out millions and millions of coins. With the restoration of the mint marks on them, the Director of the U.S. Secret Service, Mr. James J. Rowley, is in agreement with the mint that we will have an additional security tool in our efforts to protect the integrity of this coinage.

I have one further exhibit which I would like to present, sir, which tells specifically of the mints and the mint marks.

As I close, Mr. Chairman, I would like to thank you and your members for their indulgence in bearing with me in presenting the practicalities involved in mint marking, as well as some of the historical sentiment which also attaches to this very interesting subject.

Senator PROXMIRE. Thank you very much for a fascinating presentation.

As I understand it, this mint marking was stopped in 1965 by the 1965 act. One reason for it was because of the shortage of coins. Miss ADAMS. That is right.

Senator PROXMIRE. Because of the feeling that mint marks tended to encourage hoarding, tended at least to encourage taking coins out of circulation. What is the present situation on the availability of coins? As I recall, hearings in this committee disclosed that there was a very annoying and serious shortage of coins particularly because of the terrific increase in coin machines and widespread use of coins, and the problems connected with the Kennedy half dollar which was so popular, which people would keep as a collector's item. What is the present situation in each of the categories from one penny to 50 cents? Miss ADAMS. I think I can tell you with assurance, Mr. Proxmire, that the United States is in quite good shape now in regard to its coinage supply.

Senator PROXMIRE. Can you give us a breakdown, for the record, on precisely what the availability is?

Miss ADAMS. Yes. If you wish, we can give you details as to the coin inventories of the mint and of the Federal Reserve banks and branches, in addition to our coinage production.

Senator PROXMIRE. I can recall getting a great deal of complaint from businessmen, bankers, and others, saying they didn't have the coins available. It was a matter of real concern to these businessmen.

They weren't able to make change for their customers, or have the right kind of coinage available. This was a reasonably short period of time. Also, it seemed that the Treasury had not made full allowance for the impact of coin machines at that time. And it was necessary to run the mints night and day, 24 hours a day, 7 days a week, and so forth, to begin to try to catch up, and construction of the new mints was somewhat

Miss ADAMS. There were many reasons, sir, for what amounted almost to a coinage crisis when small businesses, in some instances, had to close because they could not make change. I trust this will never happen again.

Senator PROXMIRE. If you can give us the statistics on the availability of the coins

Miss ADAMS. We will be happy to submit them for the record. (The material referred to will be found at page 31).

Senator PROXMIRE. You can show us how this does provide for availability of coins and should eliminate any real danger of the coin shortage in the future.

Miss ADAMS. I can assure you that placing the mint marks, if it did take a few more coins out of circulation, would not in any way endanger our supply.

Senator PROXMIRE. Have you found any evidence of hoarding of the coins?

Miss ADAMS. That question is a bit hard to answer, sir. I know of individual instances where people are, with the thought that perhaps the price of silver will go up.

Senator PROXMIRE. Has it been increasing?

Miss ADAMS. That I cannot tell you, because there is no way of telling except by samples, which have been taken in connection with a survey. There are indications that the silver coins are going out. We trust they will not suddenly go out overnight. But, if they do, we are trying to be prepared.

Senator PROXMIRE. Are the new coins proving as satisfactory as anticipated?

Miss ADAMS. They are certainly satisfactory in that they work in every vending machine. We have communications with the vending machine people verifying this.

(The communication referred to follows:)

Miss EVA ADAMS,

Director of the Mint,

NATIONAL AUTOMATIC MERCHANDISING ASSOCIATION,

U.S. Department of the Treasury, Washington, D.C.

Chicago, Ill., April 28, 1967.

DEAR MISS ADAMS: From time to time since the new clad quarters and dimes were put into circulation, I have surveyed the manufacturers of coin mechanisms to determine if any problems have developed with these coins by operators of vending or other coin-operated equipment. The latest survey was completed today.

The four manufacturers of coin mechanisms report unanimously that the clad coins are working perfectly in their equipment, and that they have received no complaints from their customers. I might also add that at our Association office we have not received a single complaint from any member.

This re-confirms the information I sent a year ago (on April 27, 1966) to Mr. Dante B. Fascell, Chairman of the House Legal and Monetary Affairs Subcommittee. In my letter to Mr. Fascell I also said:

"When the clad quarters were first put into circulation, there were a few newspaper reports that they 'did not work in vending machines'. Every story was

investigated. In each case it was found that the coin mechanism either was not properly adjusted or was dirty. . .

...

"Because of production burrs, newly minted coins (whether silver or clad) have always given our industry some trouble. The burrs cause the coin to 'hang up' in the mechanism, and the customer thinks they 'don't work'. Fortunately the burrs wear off quickly and we have no further trouble."

As the clad coins have been in circulation for a long enough period, and in sufficient quantity, to be thoroughly "field tested" in coin-operated devices, I doubt that it is necessary to continue this periodic check. We can now say with confidence that the clad coins are a complete success.

I shudder to think of the utter confusion the public would be going through today if the more than 99 million coins inserted every 24 hours in merchandise vending machines alone, would not "work".

Sincerely yours,

THOS. B. Hungerford,
Executive Director

Miss ADAMS. Furthermore, no person I know has refused to use them. We do get some grumbles because they aren't so shiny as the silver coins which we all love so much. But, they are working practically and they are working well in the coinage system of the country. Senator PROXMIRE. How many mints do we have in operation at the present time?

Miss ADAMS. We have now the Philadelphia Mint, which is the so-called mother mint, whose coins-with one exception-have no mint mark. We have the fine Denver Mint, a beautiful mint doing a superb job. And we have the U.S. Assay Office at San Francisco, which under the Coinage Act of 1965, is permitted to be used for coinage for a temporary period, because we were so badly in need of additional facilities.

Senator PROXMIRE. Are you referring to the new Philadelphia Mint?

Is there a new Philadelphia Mint in operation as yet?

Miss ADAMS. No, sir. The new Philadelphia Mint we trust will be in operation next spring.

Senator PROXMIRE. Will you give us a list of all the members of the Commission on Coinage?

Miss ADAMS. Yes, sir.

Senator PROXMIRE. You may do that for the record.

JOINT COMMISSION ON THE COINAGE

The eight public members named by the President to the 24-member Commission

are:

Julian Braden Baird, St. Paul, Minnesota, former Under Secretary of the Treasury;

Amon G. Carter, Jr., Forth Worth, Texas, publisher of the Fort Worth Star Telegram;

William C. Decker, New York, New York, business executive, former president of Corning Glass Works;

Samuel M. Fleming, Nashville, Tennessee, president 3rd National Bank of Nashville, former president of American Bankers Association;

Edward H. Foley, Washington, D.C., attorney, former Under Secretary of the Treasury;

Harry Harrington, St. Louis, Missouri, chairman of the board and president of the Boatmen's National Bank of St. Louis;

H. E. Rainbolt, Shawnee, Oklahoma, president of the Federal National Bank and Trust Company of Shawnee; and

Eugene Smith Pulliam, Indianapolis, Ind., assistant publisher of the Indianapolis Star and Indianapolis News.

Secretary of the Treasury Henry H. Fowler is Chairman of the Coinage Commission. The three other members from the Executive Branch are Acting Secretary of Commerce Alexander B. Trowbridge; Mr. Charles Schultze, Director, Bureau of the Budget; and Miss Eva Adams, Director, Bureau of the Mint.

Congressional members are Senator John Sparkman, Chairman of the Senate Banking and Currency Committee; Senator Wallace F. Bennett, ranking minority member, Senate Banking and Currency Committee; Represenative Wright Patman, Chairman, House Banking and Currency Committee; Representative William B. Widnall, ranking minority member, House Banking and Currency Committee; Senators John O. Pastore, Alan Bible, Thomas H. Kuchel, and Peter H. Dominick, and Representatives Ed Edmondson, Robert N. Giaimo, Silvio O. Conte, and James F. Battin.

Senator PROXMIRE. What are you doing about staffing the Commission?

Miss ADAMS. That is a matter which I assume will be taken care of by those responsible for the organization of the Commission. But, the mint has some feeling that perhaps it will be necessary for us to provide much of the information. Hence, some of our staff has been working on compiling information and so forth, which will be made available to the Commission. The Treasury is also in the process of requesting some funds for that purpose.

Senator PROXMIRE. When will the first meeting of the Commission be held?

Miss ADAMS. This I cannot answer. Mr. Fowler is the Chairman, and I think perhaps if he has made up his mind, the question might more properly be directed to him.

Senator PROXMIRE. Has he indicated how often it will meet?

Miss ADAMS. No. I know none of those details. I assume it will meet soon and fairly frequently due to the nature of the problems which will come before it under the law.

Senator PROXMIRE. Are the mints still operating on a 7-day week, 24-hours-a-day basis?

Miss ADAMS. We are very happy that last Thanksgiving we were able to stop the 7-day operation, which caused us such a headache. And in San Francisco, we have stopped the third shift. We anticipate, certainly at the end of this fiscal year, going back to a two-shift, 5-day operation, which is more efficient.

Senator PROXMIRE. More efficient, and less costly per coin.

Miss ADAMS. It is less costly per coin. More than that, it is simply better from many viewpoints. A good operating commercial establishment normally would work two shifts rather than three.

Senator PROXMIRE. Senator Brooke?

Senator BROOKE. Thank you.

Miss Adams, unfortunately Senator Bennett had to leave. He left some questions he would like me to ask for the record.

The first suggestion: I think it would be desirable to include in the hearing record, the inventory of coins by the denominations held by the Treasury and the Federal Reserve banks. Also, the schedule of production for 1968.

Miss ADAMS. We will be delighted to do that.

(The following tables were submitted for the record:)

Mint production schedule, fiscal year 1968

Bureau of the Mint-Domestic coinage executed during March 1967

Coinage executed for foreign governments at San Francisco assay office

Senator BROOKE. How much do you expect the return of mint marks will increase the collection of coins for numismatic purposes? Will it be three times?

Miss ADAMS. Perhaps. No one knows just how many coin collectors there are. But certainly, it would not mean more than, if there are 8 million coin collectors, which is putting it perhaps high at this point, and each were to take out three coins instead of one of each denomination, you can see it would not make a vast difference when in these days we make billions of coins of each denomination each year. Senator BROOKE. How much would this add to the profit of the mint from seigniorage?

Miss ADAMS. This would not add a great deal. We would not make additional coins, sir, because we would put the mint marks back on. We have enough coins.

Senator BROOKE. You have enough?

Miss ADAMS. Yes. We have no fear at this point that there would be any problem in that connection.

I might add one other thing, which I think would be of interest to the committee. We have been making the half dollar only at the Denver Mint. It is presently our intention to continue making it only at the Denver Mint. That is one coin which is not yet in circulation to the satisfaction of everyone concerned. Adding mint marks might be a little difficult in that connection, but inasmuch as we are going to continue making them just at the Denver Mint, that will present no problem.

Senator BROOKE. If this mint mark prohibition is repealed, when do you expect the mint to return to mint marks?

Miss ADAMS. We have no definite plan, sir, because we never try to anticipate what your will will be. However, we had hoped to get this legislation passed this session of Congress. We will certainly return to mint marks, if possible, and if so authorized, by next January.