The United States Assay Office under Moffat & Co. with Augustus Humbert as Assayer (1851-1852)
Most Californians were not satisfied with merely a State Assay Office and demanded a United States branch mint, which could after all make real coins in lower denominations. Throughout 1849 and 1850, several proposals were introduced in the California Legislature and United States Congress providing for the establishment of a branch mint in California.
Champions of this cause in the Thirty-first Congress were Missouri Senator Thomas Hard Benton and Senator William M. Gwin of California, who made several speeches and wrote many letters in support of a San Francisco branch mint. In one such letter (November 20, 1850) to Treasury Secretary Thomas Corwin, Gwin stated that “some Four Millions of dollars monthly or about 250,000 ounces of dust,” are extracted from the California mines. “Half of this is sent abroad at a loss of two dollars an ounce ($16 vs $18 at the U. S. Mint).”
Both Benton and Gwin’s attempts were thwarted by the insistence of the New York delegation, which felt equally entitled to their own mint. This proposal in turn was vigorously fought by the jealous and powerful Pennsylvania delegation that believed both proposed mints, especially New York’s, would be a threat to their established Philadelphia mint. Similarly, the delegations from Georgia, North Carolina, and Louisiana were not happy with the prospects of more competition to their respective United States branch mints.
A compromise bill, therefore, was passed on September 30, 1850, providing for a United States Assay Office to be established in San Francisco. This Office would have the authority to assay gold and stamp it with an appropriate seal to show its value. The California delegation agreed to the compromise bill only after being convinced that a branch mint would be authorized for California at the next session of Congress.
The original bill provided for issuances in denominations of $50 to $10,000; “They are to be struck of refined gold, of uniform fineness, and with appropriate legends and devices, similar to those upon our smaller coins, with their value conspicuously marked, and the inscriptions LIBERTY and UNITED STATES OF AMERICA.” A letter which reposes in the National Archives has “C. C. Wright” written in the upper right-hand corner. Wright was a contract engraver to the U.S. Mint at this time, and designer of the first U. S. Assay Office $50 gold coins. The letter displays the original design (later adopted) for the $50 gold coins of the U. S. Assay Office:
"50 – 100 – 250 – 500 – 1000
On the Ingots and on the bars, The Stamp will represent and Eagle in an attitude of defiance with the usual United Stated Shield resting upon a rock representing the Constitution – In the claws of the Eagle are the Olive Branch and the Arrows.
The words, “United States of America,” as in the coins of the U. S. Mint, surround the Eagle – In a scroll held in the beak the word “Liberty” – immediately over the Eagle the word "Thousandths” with a space to stamp the “degree of fineness” (see #) Upon the ingot, without the circle, the weight in pennyweights and grams – thus [. . . Dwts . . .Grs].
Around the edges of the Octagon the words Augustus Humbert United States Assayer of Gold California 1851.
The reverse side of the Octagon ingots will present an embossed surface known to mechanics as “Engine Turning” and similar to the web-like engraving of the vignette of Bank notes. The Die that produced this effect cannot be easily imitated and the machine that executes or engraves the Die is the only one in the United States."
A similar description appeared in the financial newspaper Prices Current after the first coins were issued on February 14, 1851: The larger ones of one and two hundred dollars are exactly similar to the $50 denominations except they are proportionately thicker. The reverse< side bears an impression of rayed work, without any inscription. Upon the edge is the following: “Augustus Humbert, U. S. Assayer – California Gold 1851.” Those of Five Hundred and One Thousand Dollars are in the form of parallelograms, about five inches in length, and one and three-quarters in breadth and varying in thickness, the small being about three-tenths of an inch, and larger six-tenths.
These are interesting statements since they reveal that specimens of $100, $200, $500, and $1,000 ingots were made or at least planned. The Alta Californiaof February 21 also mentions the proposed $100 and $200 coins. Records compiled by Augustus Humbert indicate, however, that only $50, $500, and $1,000 ingots were issued for general use. Only one specimen exits today of a $200 ingot evidently made for experimental purposes. The Alta Californiareport indicates that 300 pieces were struck on February 20, all bearing “50 DOLLS” at the bottom. However, there are no coins known today bearing that description. Instead, they bear the figures “50 D. C.”
The ingots of the U. S. Assay Office were accepted for all customs duties by customs officer T. Butler King upon authorization from the President, but unfortunately Congress stopped short of according them full legal tender status. As a matter of fact, Mint Director George N. Eckert clarified his office’s position on this issue by stating that, “Even these are not money, or a legal tender, and the government is under no obligation to receive them.” This was intended to evade the provisions of the Act of January 18, 1837, which prescribed fixed alloy ratios for coins.
The establishment of this new U. S. Assay Office by Congress was met with skepticism, or guarded optimism at best, by the California journalists. The editors of the Courier felt that Senator Gwin’s original bill for issuing rectangular gold coins or ingots of $100, $250, $500, $1,000, $5,000, and $10,000 to be of 980 parts gold to 20 of alloy, “may be all right – but if it is we cannot see it.” The Alta California, disappointed in Congress not authorizing a mint, said of the proposed assay office ingots:
"These ingots [actually, octagonal-shaped coins], with the U. S. authorized stamp of fineness, weight, and value, will so far have an advantage over the others, as men’s confidence in its officers exceed what they have been willing to yield to the state assayer and private companies. For our own part we do not consider that as any advantage whatsoever."
The paper went on to prognosticate that although the Assay Office coins would be accepted for custom duties, “”If these ingots and bars are not received by merchants and others in exchange for commodities, it will be a failure.” The fact is that the new issues under the auspices of the U. S. Assayer were generally received by merchants and eventually proved very successful, for the local price of gold rose two dollars to eighteen dollars – a level almost equal to gold received at the Philadelphia Mint.
Moffat & Company petitioned for and received the contract for coining the new issues of the U. S. Assay Office and, in a letter to Treasury Secretary Corwin, Moffat made the dubious statement that his company alone was then (September 30, 1850) operating a mint in California. Augustus Humbert, a watchmaker in New York, was appointed United States Assayer with a salary of $5,000 a year, while sculptor and medalist Charles C. Wright was commissioned to engrave in New York the original dies which Humbert was to bring with him to California.
Moffat & Company immediately ceased their own operation and prepared for the increased business under their federal contract by moving from Clay and Dupont Streets to larger offices on Montgomery Street between Clay and Commercial. On January 22 the following notice appeared in the Herald:
"United States Assayer’s Office – we give notice that on or about the lst February ensuing we will be prepared to receive Gold Dust for SMELTING AND ASSAYING and forming the same into ingots and bars in accordance with our recent contract with the Secretary of the Treasury, authorized by an act of Congress approved 30th September, 1850, “under the supervision of the United States Assayer” AUGUSTUS HUMBERT, Esq., who will cause the United States stamp to be affixed to the same.
Moffat & Co.
We also announce our intention of erecting forthwith extensive Reverberatory Smelting Furnaces for the purpose of reducing ores and gold-bearing black sand.
Due notice will be given of the removal of the U. S. Assayer’s Office to Montgomery Street.
Moffat & Co."
Humbert arrived in San Francisco with the dies on January 30, 1851, and the first coins of his office were produced on January 31. A representative of the Pacific News saw a specimen the next day. Production of ingots began February 14. These first $50 specimens (i.e., coins) were made so that their value could be stamped after the die was used, by leaving space between the “D” for dollars and the “C” for cents.
The unique $50 octagonal shape soon became a symbol of California coinage and was known as a “slug.” Their reverse is an example of what machinists call engine-turning – a design of several concentric circles used on watches of that period. Wright only designed the first issues, with all later issues apparently engraved locally by Albert Kuner.
Reactions to these first pieces were mixed. A wealth of comments, both pro and con, appeared in virtually every newspaper in the area. Many of them pointed out that several immediate benefits resulted from the issuance of these Assay Office ingots. The new “government” issues forced most of the inferior privately issued gold pieces out of circulation, although the private coiners did not cease operations until March. The Mormon and Pacific Company coins especially were received at their true intrinsic value and remelted into $50 slugs. This sufficiently cleansed the business world of debased coins formerly tolerated because of necessity.
A second advantage of the new $50 gold pieces was their receivability for custom duties. Customs collector T. Butler King, after having been authorized by President Fillmore on December 2, 1850, to receive these ingots, announced in the Alta Californiathat he was “authorized to receive those bars and ingots at the Custom House.”
Because of these first two advantages, a committee of businessmen gave tacit approval to the new issues. Still, they looked upon them “as a temporary measure only, which the necessities of the country require” until a United States Mint was established. The Pacific News hailed this development as an immense public benefit. The paper acknowledged, however, that an additional resolution by the bankers agreeing not to accept any private mint issues except Moffat & Co. would cause inconveniences and losses to holders.
However, there also was dissatisfaction with the new issues. The Herald printed a series of articles condemning the Assay Office for charging citizens too high a seigniorage. The editors claimed that Moffat & Co. held a virtual monopoly on coin production, with their charge of 2 ¾ percent being excessive.
Moffat replied to these charges by stating that labor prices were higher in California than in Philadelphia and their charges reflected this. The Courier (June 28, 1851) also had a number of unfavorable comments to make concerning the United States Assay Office:
"It is no other than a huge, legalized swindling shop. The establishment of this institution, for the benefit of a few persons, who expect to make a fortune and then return home, is such a monster-atrocity that we do not see how those who aided and abetted in imposing it upon us can look an honest man in the face."
Accusations that Moffat & Co. did not redeem their coins in the then more valuable silver without a discount were even uttered on the State Senate floor, but specific charges are vague.
Another powerful vested interest that was not altogether happy with the U. S. Assay Office was the banks. As previously stated, the value of gold rose dramatically after the Government Assay Office commenced operations. The bankers were soon compelled to increase their offering price on gold dust, thus lowering their profits. In addition, the U. S. Assay Office compelled the abandonment of the private mints to which the bankers had been selling gold dust. On the whole, the charges made against Moffat & Co. were petty, vague, or unfounded and soon dissipated as a major crisis arose – an acute shortage of coins under the $50 denomination.
On March 25, 1851, the State Legislature repealed its act preventing individuals from minting coins and modified the law so that the coins could be issued if regulated by the state. But the new law insisted that issuers redeem their own coins in U. S. gold or silver upon presentation.
Although this new statute was not readily enforced, an unfavorable assay report on private gold coinage appeared three days later in the California press and, coupled with the new law and the establishment of the United States Assay Office, effectively led again to the disappearance of all private gold issues except the cumbersome United States Assay Office $50 gold pieces. On the 14th of April, Moffat submitted his March report to Treasury Secretary Thomas Corwin indicating the effects of the published assay report:
The effect was instantaneous and overwhelming; the private mints were at once compelled to suspend operations, and their issues amounting, we have reasons to believe, to a million and a half, have since been purchased at a discount of from 5 to 10 percent, and it is not at all likely that another private coin will ever be struck in California.
Moffat added that his U. S. Assay Office coins were popular and there had been a steady increase in business. But he also pointed out that the “sudden withdrawal from circulation of so large amount of private coin” of smaller denominations – almost $3 million worth – necessitated the granting of authority to issue coins of denominations less that $50.
It was three months before Moffat received a reply. On July 9, acting Secretary of Treasury William L. Hodge responded to Moffat’s pleas for minting smaller denomination coinage by flatly stating, “It is not deemed expedient at this time to authorize the assay and stamping of ingots of less denomination or value than fifty dollars.” There seems to be no apparent reason for this lack of foresight by the Treasury Department.
Upon being subjected to such cavalier treatment, the press and general public once again began decrying the sorry economic state of the area. The Alta California, calling the $50 pieces “monstrous chunks” and “a decided nuisance,” related how citizens purchased small articles just to get the large fifties changed into smaller denominations. The Alta California itself was required to change one for the sale of a twenty-five cent issue of its own paper.
The Picayune (October 21, 1851) printed the story that foreign coins (which circulated until the Coinage Act of February 21, 1857) were being used for small change and the resulting demand for silver coins had caused them to become scarce. A correspondent for the New York Journal of Commerce reported in the October issue of the Bankers Magazine that the $50 slugs were discounted by bankers by 2 percent and five-franc pieces were given as change at the rate of one dollar each (about 120 percent of their face value).
In addition, small American gold coins were being purchased at a premium of ½ to 1 percent as the situation continued to deteriorate. Sloat’s San Francisco Prices Current substantiated this report, and in December 1851 the Herald announced that the $50 slugs were being discounted from 2to 4 percent or as low as $48 each – not much of an improvement over the undervalued private coinage of several months just past.
In December, Moffat once again urged Secretary Corwin to authorize his company to issue small denomination gold coins. Business for November was only one-half that of October, Moffat explained, and the cause was “attributable to the great scarcity of coin denominations of 20 Dollars and lower,” Moffat pointed out that a 3 percent premium was now being paid for small American coins and, in his strongest statement, Moffat exclaimed that, “The inconvenience, annoyance, and actual loss the community is suffering from this state of things, brings odium upon the Assay Office.”
Accompanying this letter was a similar one from Humbert adding that bankers were restricting their depositors to writing checks for round amounts or suffering a discount. As a further encouragement for granting the new authority to issue smaller denominations, both Moffat and Humbert informed Corwin that another private coiner (Wass, Molitor & Co.) had already engraved dies for a new, smaller denomination issue.
Meanwhile, it seems that Moffat & Co. was ready to take action on its own. In January 1852, it solicited and received a favorable legal opinion from its attorney, J. H. Clay Mudd, on the question of whether “Moffat & Co.” could issue $300,000 of its own (smaller denomination) coin, independent of its government contract, to comply with an appeal to it from the principal bankers and merchants of San Francisco. There is an important endorsement at the end of this legal opinion from Customs Collector T. Butler King stating that he concurs with Mr. Mudd’s view and arguments. On or about January 12, Moffat & Co. privately issued its 1852 $10 gold pieces.
On December 9, 1851, Secretary Corwin had written to Humbert finally authorizing Moffat & Co. to issue $10 and $20 gold coins under the auspices of the U. S. Assay Office. This letter had been enthusiastically received by Humbert on January 10, 1852. Dies for $5, $10, and $20 gold coins under the auspices of the U. S. prepared in 1851 in anticipation of a favorable Treasury response were probably in the process of being altered to read “1852” when two days later, Humbert received a second letter from Corwin suspending the earlier authority.
Corwin’s explanation, dated December 10, was the introduction into Congress of a bill, “connected with a Mint and Assay Office in San Francisco.” Mentioning the limited circulation of Wass, Molitor & Co. coins (although not by name), an incensed Humbert urged Corwin to reconsider his latest position.
The next day Moffat wrote a letter similar to Humbert’s, adding that the coins of Wass, Molitor & Co. pass at a 2 percent premium to those of the Assay Office and the business of Moffat’s office had nearly ceased, not having been able to pay its expenses for the last thirty days. In this letter to Corwin, Moffat mentioned the petition sent him by several leading merchants and bankers urging him to issue $300,000 worth of private coinage of under $50 denomination.
He also included the Mudd opinion, stating that his company had not yet commenced the issue (of $10 and $20 coins) but “shall do so in a few days and will, of course, discontinue it, should the instruction of the Department of the 9th Dec. ult. (and countermanded by those of the following day) be confirmed.” This communication refers to the “Moffat & Co.” issues dated 1852 and not the Assay Office issues inscribed “1852/1.”
Either Moffat was mistaken in his dates or he deliberately misled the Treasury Secretary, for the day before he wrote Corwin that his company had not yet commenced issuing coins, the Prices Current announced, “that Messrs. Moffat & Co. and Wass, Molitor & Co. have again commenced to issue small coins.”
The inclusion of Moffat & Co. in this announcement may also have been a mistake, but that is doubtful since in its reply to the merchant’s petition, Moffat & Co. promised delivery of the new coin by “Monday next,” which was the 12th. The firm in all probability issued its 1852 $10 pieces between January 12 and January 27, 1852, with a total of $86,500 in $10 “Moffat & Co.” coins being struck within this two-week period.
On February 11, 1852, the U. S. Assay Office received a letter dated January 7 from Secretary Corwin, this time nullifying the December 10 order and again authorizing the striking of $10 and $20 gold pieces. The next day the Alta California ran an announcement to this effect, and in a letter to Corwin, Moffat & Co. principal Curtis stated, “On the same day we made our first five and ten dollar pieces for the United States Assay Office.”
While the press reported three days later the circulation of a United States Assay Office $10 piece, no mention ever was made of a $5 specimen. It is evident that the Assay Office anticipated this permission in 1851, for there is a known $5 pattern dated 1851 that survives today. In addition, $10 and $20 specimens are known which were struck from dies whose dates visibly were altered from “1851” to “1852.” The $20 specimens were issued February 28.
It is during this time that the firm of Moffat & Co. came to an end. An announcement appeared in the Alta California on December 24, 1851, that John L. Moffat had sold out his interest to Curtis, Perry and Ward who still retained the right to use the name of Moffat & Co. On January 7, Curtis wrote to Secretary Corwin on the impending change in the partnership of Moffat & Co. effective February 14, 1852, and requested that Curtis, Perry and Ward be authorized to continue the Government contract. In a revealing paragraph, Curtis explains the reasons for the dissolution of the former partnership:
"From the commencement of the performance of the contract, January last, M. Moffat has employed himself exclusively in other pursuits, and totally neglected every duty at the Assay Office, having been chiefly engaged in Mining."
On February 11, 1852, Curtis received official authority for Curtis, Perry and Ward to continue the Assay Office contract as of February 14, 1852. Hereafter, what had been Moffat & Co. was known as the United States Assay Office of Gold, though the new partnership retained the rights to use the Moffat & Co. name. Prior to the change in ownership, this U. S. Assay Office contractor had coined $10,766,889 worth of gold for the U. S. government, with as much as $2,000,000 worth being struck in one month (approximately $65,000 a day).
--Reprinted with permission of the author from Donald H. Kagin's, "Private Gold Coins and Patterns of the United States", copyright 1981, Arco Publishing, Inc. of New York.