Mr. HALL. The remainder will be the difference between that figure and the 356,000,000.

Mr. TABER. You have got to go twice as fast for the rest of the year?

Mr. HALL. Of course the orders will fluctuate during the rest of the year.

The CHAIRMAN. How many did you produce during the fiscal year 1943?

Mr. HALL. 306,911,206 checks.

The CHAIRMAN. What is the status of this original allocation of $9,600,000? How much of that do you have on hand?

Mr. HALL. We will have to figure that out.

The CHAIRMAN. Could you not, out of that, absorb this $252,000? Mr. HALL. No, sir.

The CHAIRMAN. It could not be done?

Mr. HALL. No, sir.

The CHAIRMAN. Then you have committed all of this $9,600,000? Mr. HALL. Yes, sir; on United States currency, revenue stamps, standard Treasury bonds, and other securities.

The CHAIRMAN. Then you have had no change in your program under which this $9,600,000 was first brought to the committee? Mr. HALL. Only on checks.

Mr. TABER. How many of these did you print last year, Mr. Hall? Mr. HALL. The production for the fiscal year 1943 was 306,911,206 checks.

The CHAIRMAN. Thank you, Mr. Hall.

WEDNESDAY, SEPTEMBER 29, 1943.

BUREAU OF THE MINT

STATEMENTS OF MRS. NELLIE TAYLOE ROSS, DIRECTOR; AND LELAND HOWARD, ASSISTANT DIRECTOR

TRANSPORTATION OF BULLION AND COIN, 1944

The CHAIRMAN. Mrs. Ross, we have here from the Bureau of the Budget, in House Document 297, an estimate for a deficiency appropriation of $7,800 for transportation of bullion and coin. You had for this purpose in your original appropriation for the fiscal year 1944, $5,000?

Mrs. Ross. Yes, sir.

The CHAIRMAN. Why this change in the estimate of the amount required?

Mrs. Ross. Mr. Chairman, we have had such a great demand for coin that the facilities of the mint at Philadelphia have not been equal to the task, either in manpower or equipment, of producing enough ingots to keep up a balanced production. We have, as a consequence, had to resort to having ingots made up in the New York Assay Office;

we have not enough money in that fund to pay for shipping them over to Philadelphia.

The CHAIRMAN. What kind of transportation is involved in this shipping of ingots?

Mr. HOWARD. Truck transportation.

The CHAIRMAN. Transportation by truck?

Mr. HOWARD. Yes, sir. They are in boxes.

The CHAIRMAN. Do they carry a special guard?

Mr. HOWARD. The trucking company carries a guard.
Mrs. Ross. There is very little risk to those ingots.
The CHAIRMAN. It is not by Government facilities?
Mr. HOWARD. No, sir.

SALARIES AND EXPENSES, MINTS AND ASSAY OFFICES, 1944

The CHAIRMAN. Then you have here a minting-operation estimate, a deficiency of $1,900,000 in addition to the $3,771,370 provided in your current annual supply bill. Will you give us a general statement on that, Mrs. Ross, please?

Mrs. Ross. Mr. Cannon, our coming before you today is occasioned solely by reason of the fact that the demand for coin has far exceeded that provided for in the estimate.

You may recall that when we came before you last year we told you that it was more or less in the nature of a token estimate, because conditions at that time were so unsettled and uncertain that we could not forecast what the demand for coin would be, and herefore thought it was better to come to you with an extremely conservative budget with the understanding that if need developed for more money we would return asking for a supplemental appropriation. At that time it was quite uncertain what was going to develop with reference to the war; I mean, how the economic conditions would be affected by it. It was the view of some of the members of your committee that the curtailment of civilian purchases would reduce the demand for coin, which seemed a reasonable view at that time. We were unable to arrive at a conclusion as to how much money we were going to need; how great a demand there would be for coin, and for other functions.

The CHAIRMAN. What production did you estimate at that time? Mrs. Ross. 1,400,000,000.

The CHAIRMAN. And how much additional is provided for in this estimate?

Mr. HOWARD. 911,494,000.

PRODUCTION OF COINS FOR 1943 AND 1944

The CHAIRMAN. I wonder, in that connection, if you could give us your month-by-month production since January 1, 1943, and your estimated month-by-month production to the end of the fiscal year 1944? Mrs. Ross. We have that here. Mr. Cannon.

(The statement requested is as follows:)

Coin production Jan. 1, 1943, to June 30, 1944

[Actual production figures January to August 1943; estimated figures thereafter]

Mrs. Ross. I was going to say that when you read these tables you will see that the deliveries of coin in the first 7 months of this calendar year exceeded those of the same period in the last calendar year by about 34 percent, so that instead of there being a material reduction in the call for coin, it has been increasing.

The CHAIRMAN. How do you account for this increasing demand for coin?

Mrs. Ross. My own theory is that incomes are larger now and people are spending freely; practically everybody's income is larger now than it has been in the years past, and while some commodities are unavailable to people who are making good incomes, there are other things they can buy. So long as people have money, apparently, they are going to spend it for one thing or another.

The CHAIRMAN. Has there been a corresponding increase in the use of paper money?

Mrs. Ross. I think there has been, although I have not checked on that. Of course, we have no jurisdiction over paper money.

The CHAIRMAN. I was just wondering if coin and greenbacks would

go along together under the same circumstances.

Mrs. Ross. I think they do. It is my understanding that they do. Mr. HOWARD. I think there is a direct relationship between business activity and the use of both.

NEW 1-CENT PIECE

Mr. TABER. Who was it that put that scheme in effect for that new penny?

Mrs. Ross. Oh, Mr. Taber, therein lies a story, which would take a while to tell.

Mr. TABER. You think they are giving you a dime when they give you a penny. That breaks your heart, if they can get it across.

Mrs. Ross. As I say, thereby hangs a tale, which I will gladly relate, if you want to hear it. We deplore as much as anybody can the necessity that caused us to adopt that new material for the penny.

The CHAIRMAN. They are sometimes confused with nickels, and sometimes with dimes. When they get old, they change their color, do they not?

Mrs. Ross. They do. They tarnish.

Mr. LUDLOW. How much metal is used annually for the manufacture of these pennies?

Mrs. Ross. 4,600 tons a year, approximately; somewhat more than that, based on the coinage of recent years.

it?

Mr. LUDLOW. Have you thought of putting a hole in the middle of

Mrs. Ross. We have. Everybody thinks of that. Naturally that idea arises in everybody's mind: "Why don't you put a hole in it?" Mr. LUDLOW. What is the objection to it?

Mrs. Ross. You remember that when you Members of Congress passed the legislation authorizing the adoption of this new material, you specified that consideration should be given to its adaptability to the coin machines, the vending machines; and you remember that the manufacturers and the users of vending machines were very articulate at that time in stressing the importance of that, and the Congress recognized it; and so we, of the Treasury, were enjoined to take that into consideration. Now, if you punch a hole in the coin, you lighten it so that it will not work in the vending machines. The dimensions cannot be changed; the diameter cannot be altered if it is to work in machines. So there is the answer to that.

Suppose we could have done it; had punched a hole in the head of Lincoln, the public would not have liked that. To change the design would have taken weeks or months. There are a great many operations entailed in the changing of a design and, of course, there are delays. We have to collaborate with artists, decide upon a design, get it executed, make dies and that sort of thing. At that time the country was crying for 1-cent pieces. The banks were calling upon us and the Treasurer's office, and we had to get production under way.

Mr. HOWARD. In this story about this hole in the center, the Director failed to mention that there would be a terrific number of operating difficulties. I imagine that we have produced the largest single order of coins with holes in the center. As late as 1941 we made a hundred million coins for the Netherlands Government for the East Indies, with holes in the middle, and we found out then, as we had found out before, that there are quite a few problems which slow down operations. Especially would there be with steel, which is a very hard metal. It is giving us fits now to try to make it even in its present form. If you were to put a hole in the middle, you could not upset the inside of that hole in the upsetting machine; so you would have to bring it up with the die, and if you were to bring it up with the die you would break so many dies in the process that it would be necessary to build a new die department and to hire skilled laborers which are not to be found. As it is, this steel coin breaks as high as 26 pairs of dies some days out of 30 press operations.

Mrs. Ross. They could not meet the requirements with our diemaking facilities, which are now strained.

Mr. HOWARD. You have to center the hole in the punching process, and if it is not exact the blank is rejected and production curtailed.

Mr. LUDLOW. As I remember, the French have a coin with a hole in it that is worth a little less than nothing.

Mrs. Ross. Probably that vending machine problem did not arise when those coins were adopted.

You may be interested to know also that constantly the question is asked of us, "Why don't you darken them?" People send samples to us and say, "Look at these darkened coins; why can't the mint do it if we can do it?" The answer is that anybody who knows anything about chemistry could treat a few coins in a pan or a cup, or on a laboratory scale, successfully; I mean dye them successfully, but on a huge production scale it is an entirely different thing. Of course, the public never thinks of that, naturally they would not think of it.

We process into 1-cent pieces from 15 to 20 tons of metal every day, which precludes any handling except in a mass. The time factor and equipment factor, and safety preclude the kind of handling dyeing would require.

Mr. TABER. Here is what bothers me: You show an increasing demand for coin running up to a peak of 48,000 a month in August. That is the only month where the spread was as big as that, between last year and this year, with the possible exception of April, and in many months there has been a much smaller spread.

Mrs. Ross. May I say, Mr. Chairman, that this estimate is based upon the assumption that we will continue the use of the alloys now going into the 1- and 5-cent pieces, but we do hope that before the year is over, the demand for copper for the armed forces will have been sufficiently reduced that the War Production Board can see its way clear to restore to us the old alloys with which the country is familiar.

The CHAIRMAN. As rapidly as possible you will then retire this present 1-cent piece?

Mrs. Ross. As soon as copper is allotted to us we would at once go right into the production of the old bronze coins.

The CHAIRMAN. It will not be necessary to retire the 1-cent pieces because they retire themselves, automatically?

Mrs. Ross. We would not want them retired because if they were retired we would have to use that much more copper to replace those in circulation. We have used up to date about 1,600 tons of steel in the finished coins. If those we have made were retired and replaced, an impossible burden would be laid upon the mint and upon copper resources. It would mean additional coinage of over 500 million pieces and a levy of 1,812 tons upon the limited copper resources. The copper coin is the heavier. We cannot meet the current demand for 1-cent pieces, much less replace those in circulation.

The CHAIRMAN. By that time they would have become sufficiently corroded so that you would be able to distinguish them.

Mrs. Ross. Yes; undoubtedly.

I want to say, Mr. Chairman, that the War Production Board has indicated to us a sympathetic understanding of our situation in reference to this 1-cent piece and its desire to restore to us the copper as soon as war requirements are sufficiently eased to permit our returning to the old alloy.