From the early days of our independence the United States has used a system of neologism amply equal in quantity and in quality to all the tasks imposed upon it by the Nation ‘s commerce .
We are today using one of the few existing silver medal coinages in the worldly concern. Our coins, in fact, are little change from those first established by the Mint Act of 1792. For 173 years, we have maintained a system of abundant coins that with the exception of pennies and nickels is closely arrant silver .
The retentive custom of our silver coinage is one of the many marks of the extraordinary constancy of our political and economic system.
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continuity, however, is not the alone characteristic of a big state ‘s neologism. We should not hesitate to change our neologism to meet new and growing needs. I am, therefore, proposing certain changes in our neologism arrangement — changes dictated by need-which will help Americans to carry out their daily transactions in the most efficient direction possible .
There has been for some years a worldwide dearth of flatware. The United States is not excuse from that dearth — and we will not be exempt as it worsens. Silver is becoming besides scarce for continue large-scale use in coins. To maintain unchanged our high gear silver medal coinage in the side of this stark reality would only invite a chronic and growing scarcity of coins .
We expect to use more than 300 million troy ounces — over 10 thousand tons — of silver for our neologism this year. That is far more than total new production of silver expected in the entire rid world this year. Although we have a boastfully stock of argent on hand we can not continue indefinitely to make coins of a high flatware capacity — in the want quantity — in the boldness of such an asymmetry in the production of silver and the demand for it .
We must take steps to maintain an adequate supply of coins, or face chaos in the ten thousand transactions of our daily life — from using wage telephones to parking in a meter partition to providing our children with money for lunch at school .
The legislation I am sending to the Congress with this message will ensure a static and dignify neologism, in full adequate in measure and in its particularly designed technical characteristics to the needs of our Twentieth Century animation. It can be maintained indefinitely, however much the demand for mint may grow .
much as we all would prefer to retain the silver coins now in use, there is no virtual option to a newfangled coinage based on materials in adequate issue .
THE NEW COINAGE I propose no change in either the penny or the nickel .
The modern dime bag and the quarter — while remaining the same size and design as the show dime bag and quarter — will be composite coins. They will have faces of the lapp copper-nickel alloy used in our present five cent piece, bonded to a core of pure copper. The new dime and quarter will, therefore, outwardly resemble the nickel, except in size and design, but with the far distinction that their copper kernel will give them a copper edge .
This character of mint was selected because, alone among virtual alternatives, it can be used together with our existing silver coins in the millions of coin-operated devices that Americans nowadays depend upon heavily for many kinds of food and other goods .
THE HALF DOLLAR Our new half dollar will be closely indistinguishable in appearance from the present half dollar .
It will continue to be made of ash grey and copper, but the silver contentedness will be reduced from 90 percentage to 40 percentage. It will be faced with an admixture of 80 percentage silver medal and 20 percentage copper, bonded to a core of 21 percentage silver medal and 79 percentage copper. The raw half dollar will continue to be minted with the image of President Kennedy. Its size will be unchanged .
THE SILVER DOLLAR No change in this celebrated old mint, or plans for extra production, are proposed at this time. It is possible that implementation of the new neologism legislation that I am proposing, greatly reducing the prerequisite for silver in our auxiliary neologism, will actually make feasible the mint of extra flatware dollars in the future. surely, without this change in the silver contentedness of the auxiliary coinage, further mint of the Silver Dollar would be forever foreclosed .
It is our purpose that the new neologism circulate side-by-side with our existing coinage. We plan to continue the mint of our current silver coins while the modern neologism is brought into measure production .
The new coins will be placed in circulation some time in 1966 .
In terms of the present traffic pattern of coin usage, borrowing of the new neologism will permit a save of some 90 percentage of the silver we are now putting into coins per annum .
I want to make it absolutely clear that these changes in our neologism will have no effect on the purchasing office of our coins. The new ones will be exchanged at wax confront value for the composition currentness of the United States. They will be accepted by the Treasury and by the Federal Reserve Banks for any of the fiscal obligations of the United States. The legislation I am proposing expressly recognizes the new coins as legal bid .
It is of primary importance, of course, that our new coins be specifically designed to serve our modern, technical club. In the early days of the Republic, flatware coins served well because the value of a coin could merely be measured by the value of the cherished alloy contained in it. For many decades now the respect of a especial coin has depended not on the value of the metallic in it, but on the grimace value of the mint. today ‘s neologism must chiefly be utilitarian. The new neologism will meet this necessity amply, while dispensing with the idea that it contain valued alloy .
It is, above all, virtual. It has been specifically designed to function, without causing delays or disruptions of service, in coin-operated selling machines .
furthermore, it is composed of materials low adequate in value and readily enough available to insure that we can have a many coins as we need .
The legislation I am proposing besides contains these extra recommendations :
OTHER AUTHORITY REQUESTED First — As a utilitarian precautionary meter, I request stand-by authority to institute controls over the melt and export of coins to assist the auspices of our existing and our new silver neologism .
moment — I request authority to purchase domestically mined silver at not less than $ 1 .25 per snow leopard .
Third — I am asking for authority to reactivate minting operations temporarily at the San Francisco Assay Office .
Fourth — As a safeguard for see handiness of the new neologism, I am asking for modern contracting authority for the procurement of materials and facilities related to it .
Fifth — I propose the establishment of a joint Commission on the Coinage, composed of certain members of the Congress, the Public and the Executive Branch of the Government, to report to me later the advance made in the facility of the new coinage and to review any new technological developments and to suggest any promote modifications which may be needed .
WHY THE SILVER CONTENT OF THE COINAGE MUST BE REDUCED AT THIS SESSION These recommendations for revision of our argent neologism rest upon extensive discipline of the silver medal position, and of alternatives to our present coinage, by both governmental and private specialists. The Treasury Department ‘s comprehensive report, known as the Treasury Staff Silver and Coinage Study, is being released today as background to my recommendations. Its principal finding was that the supply of argent in the Free World has become increasingly ill-sorted with the alimony of silver medal in all our auxiliary coins .
On the average, in the five years from 1949 through 1953, new silver production in the Free World amounted to about 175 million troy ounces per year, while consumption amounted to more than 235 million ounces. There was an average deficit in those five post-war years of more than 60 million ounces of argent per year .
In the latest complete five years, 1960 through 1964, Free World pulmonary tuberculosis of argent has averaged 410 million ounces per annum, but modern output has averaged a little less than 210 million ounces a year. The resultant role has been an average annual deficit of about 200 million ounces. That is three times the modal annual deficit in the five years from 1949 through 1953 .
If no flatware at all had been used for coinage there would have been a deficit in new product in Free World silver during the last five years averaging over 40 million troy ounces, or some 1,370 tons, a year .
The gap between the production of silver and silver consumption is continuing to increase. In 1964 the silver output deficit swelled to over 300 million ounces-half again the 1963 figure. And in 1964, the use of flatware in neologism, and the use of silver for the arts and diligence of the unblock World were each — taken individually — greater than newly output .
There is no dependable or likely expectation that new, economically feasible sources of argent may be found that could appreciably narrow the break between silver supply and demand. The optimistic lookout is for an increase in production of about 20 percentage over the adjacent four years. This would be of little help. further, because ash grey is produced chiefly as a by-product of the mining of copper, lead and zinc, even a identical large increase in the price of silver would not stimulate silver output sufficiently to change the expectation.
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Short of controls that are undesirable in a peacetime loose company, there is no way to diminish the restrict growth of private demand for argent for use in jewelry, silverware, photographic film and industrial processes. The one part of the demand for ash grey that can be reduced is governmental requirement for practice in coinage .
Most barren World countries no longer use eloquent in their coins. A few — as we now propose — continue to make limited use of it. It is true that United States coinage does not presently depend upon new argent production, because for many years we have supplied ash grey for our coinage out of large Treasury stocks, which still amount to 1 billion troy ounces .
But — and this is the crux of the matter-at the salute yard, this standard can not concluding even equally much as three years. We would then be shorn of our ability to maintain the neologism, and, if there were no alternative to our deliver eloquent neologism, the nation would be faced with a chronic coin dearth. That is why authoritative action is necessity at this session of the Congress .
PROTECTION OF THE COINAGE It is necessary for the United States government to have large stocks of silver medal in addition to the quantity needed for neologism .
We need these stocks because our silver coins in circulation must be protected from hoarding or destruction. protection of the silver neologism will continue to be a necessity since we plan for it to continue to circulate alongside the new coins. Our silver coins are protected by the fact that the government stands ready to sell silver bullion from its stocks at $ 1.29 a troy ounce. This keeps the price of silver, as a commodity, from rising above the face value of our coins. This, in turn, makes hoarding or liquescent of the argent coinage unprofitable .
It is as extra protection for the existing neologism that I am requesting stand-by assurance to institute controls over the mellow, treating or export of United States coins .
It may be asked why we seek stand-by control authority since we retain a large stock of eloquent with which to protect our eloquent coins through operations in the silver market .
The answer is clear. Given the magnitudes by which demand for argent is outrunning new production, we must consider the hypothesis, however unlikely, that the silver stock we possess could itself require the digest and protection that would be afforded by authority to forbid thaw and export of our coins .
We believe our present stocks of flatware to be adequate, once the big award drains from neologism are greatly reduced, to meet any foreseeable requirements for an indefinite period. however, prompt action on a modern neologism will help us protect the silver medal coinage by freeing our silver medal reserves for redemption of silver certificates at $ 1.29 per snow leopard. thus, we can assure that no incentive will be created for hoarding our stage coins in anticipation of a higher price for their silver contentedness .
There is the opposite, although in all likelihood short-run, possibility that a fall in the price of ash grey might result from the enactment of this legislation largely removing argent from our subsidiary company coin. It is for the aim of protecting eloquent producers from a hasty dribble in the price of argent resulting from the military action of the government that I am requesting authority for the Secretary of the Treasury to purchase any newly mined domestic silver offered to him, at the price of $ 1.25 per troy snow leopard .
THE SAN FRANCISCO ASSAY OFFICE Coinage operations at the San Francisco Mint were ended in 1955. legislation converting the Mint to the San Francisco Assay Office was passed in 1962. As partially of our efforts to overcome the coin deficit of the past year, coin blanks have been cut and annealed at the San Francisco Assay Office. Present law forbids broad mint there. however, we will temporarily need the facilities of this plant to move into large quantity production of the newly neologism and to continue production of existing coins until enough newly small money is made to make certain we have adequate supplies. consequently, I am asking for authority to reactivate mint operations at San Francisco on a temp footing .
A newfangled, fully mod mint is to be built in Philadelphia. however, it can not be completed and in mathematical process before late 1967. It is our expectation that when the new Philadelphia Mint ‘s capacity is added to that of the Denver Mint, our neologism requirements can be met efficiently and economically. Consequently, no more than impermanent agency to mint coins in San Francisco is recommended in the draft legislation I am sending to you .
WHY complex coin ARE RECOMMENDED We have no choice but to eliminate silver, for the most region, from our subordinate neologism. The wonder was : What would be the best option ? After very exhaustive consideration of all aspects of this highly building complex problem, we have settled upon the two types of composite, or dress, coins I have already described. These are 10-cent and 25-cent
pieces with cupronickel alloy faces bonded to a upstanding copper core, and a new half dollar with forbidden and inner layers of differing silver-copper alloys .
This type of coin was found to be necessary if the raw coinage is to be compatible with the existing silver coinage in all the 12 million mint operated devices in use in the United States .
The convenience of using coins in automatic rifle selling and servicing devices is a fact that, like the coins in our pockets and in our shop tills, we take for granted. But if our coinage were on the spur of the moment to be such that it would not work in coin-operated devices, the public would be subjected to very capital inconvenience and serious losses would occur to business with harmful effects upon use .
The automatic pistol trade diligence is a large and growing separate of our national economy. last class, $ 3 1/2 billion worth of consumer items were sold through 3 1/2 million of these machines. On more than 30 billion distinguish occasions a consumer made a leverage by putting a coin in a machine. In growing numbers, factories, hospitals and other places now depend upon automatic rifle peddle for the serve of goods. A million and a half people now rely upon coin controlled rending for at least one meal a day. The use of coin engage devices is expanding quickly, not only in trade vending, but besides in a number of other services .
Six million of our coin-operated devices, including closely all peddle machines, have selectors set to reject coins or imitations of coins that do not have the electric properties of our existing silver money. Highly selective rejectors are a necessity in these machines if they are to be a low-cost source of food and other goods and services. otherwise, deceitful use would soon make them costly .
The sensors in these machines are set to accept or reject coins on the basis of the electrical properties of our traditional coins, which have a high proportion of silver. To be compatible in operation with our existing coinage, consequently, our modern coins must duplicate the electrical properties of a mint that is 90 percentage silver. No single acceptable metallic or debase does so. The composite coins, made of layers of differing metals and alloys, that I am asking the Congress to approve, are coins made to arrange to duplicate the electric properties of coins with a eminent argent content. They are the lone hardheaded alternatives we have discovered to our present coinage .
Selectors exist that can handle coins with the wide varying electrical properties of, say, about arrant ash grey and closely pure nickel. But that is not enough. When the selectors are set to accept coins with greatly differing electric properties, the selectivity of the mechanism declines and they will accept wrong coins and imitations. Unless the coins in use have identical exchangeable electric properties, the coin-operated machines become subject to a high degree of deceitful use. This would be costly to all concerned .
The future may bring selectors of a different kind able to accept coins of wide varying electric properties while at the same time rejecting imitations and incorrect coins. They are not available nowadays. When and if they become available, our new neologism will work in them. On the other hand, if we nowadays chose an uncongenial coinage, there would be delays and interruptions lasting a year to three years in the services of these machines. This would impose heavy inconveniences upon the public and would cause business and use losses in a large and growing diligence .
In scene of these considerations of public sake, we have concluded that our new neologism must without fail be able to carry out the technical trade functions of a mod neologism, working aboard our existing silver neologism. The raw coins that I am recommending to you do this, and do it well, because they were specifically designed for the tax .
The raw one-half dollar was designed with the potent hope in mind of many Americans to retain some silver in our every-day neologism. We believe that by eliminating silver from use in the dime and the quarter, we will have adequate flatware to carry out market operations in auspices of our existing silver neologism — and to make a half dollar of 40 percentage silver content. It is clear and apparent that we would not have adequate argent to extend this to the dime and draw : they are heavily used, essential coins that we must have at all times in large quantity. We are convinced that we can include a 40 percentage ash grey half dollar in the new coinage, but we can not safely go beyond that. As a precaution, we intend to concentrate at first gear on getting out large quantities of the new quarter and dime bag before we embark upon quantity product of the fresh half dollar .
THE JOINT COMMISSION ON THE COINAGE We believe the recommendations being made for a raw coinage are sound and durable and in the best public interest. however, the installation of a raw neologism is a matter so well affecting the life of every citizen, and so finely related to the nation ‘s commerce, that it is impossible to be certain in advance that all problems have been envision, even by such a long and arduous process of inquiry as has gone into the choice of the proposed modern coins .
consequently, I am including among my recommendations the proposal for a joint Commission on the coinage. It will be composed of the four officers of the Executive Branch most directly concerned with matters affected by the coinage — the Secretary of the Treasury, the Secretary of Commerce, the Director of the Budget Bureau and the Director of the Mint ; of four members representing the populace interest, to be appointed by the President ; of the Chairmen and ranking members of the Banking and Currency committees of the House and the Senate ; of one extremity each from the two houses of the Congress, to be appointed by the Vice President and the Speaker of the House. The Commission will be appointed soon after the new neologism is issued. It will study such matters as raw technological developments, the provision of versatile metals, and the future of the silver dollar. It will report as to the time and circumstances in which the government should cease to maintain the monetary value of silver. It will be directed to advise the President, the Congress and the Secretary of the Treasury on the results of its studies .
THE COINAGE — CURRENT AND PROSPECTIVE I am pleased to report to the Congress substantial progress toward overcoming the coin shortage the Nation has been experiencing. greatly increased mint has eliminated the dearth of pennies and of nickels. We are distillery reasonably on the short circuit side of the demand for dimes and quarters, but this deficit is quickly being overtaken. A severe deficit of the half dollar continues, due to the popularity of the fresh 50 penny pieces bearing the double of President Kennedy .
I want to emphasize that we will continue to make the existing coins while the newfangled ones come into fully production, and that we contemplate side-by-side circulation of the old and new coins for the indefinite future. There is no reason for hoarding the silver neologism we now use, because there is no argue for it to disappear .
We are gearing up for utmost production of the modern coins a soon as they are authorized by the Congress. supply of the materials for them is assured. Both copper and nickel are economic and available in North America. Their custom in coins will not add enough to overall employment of these metals to create issue or price problems .
In the first year after fresh coins are authorized, we expect to make 3 1/2 billion pieces of the newfangled subordinate coins. That is a billion and a half more pieces than will be made of the comparable silver coins in the current fiscal year .
In the second year after mandate of the new coinage, we expect to be able to double the first gear year ‘s output of the modern coins, reaching a production total of 7 billion pieces .
We expect in this means to avoid any newly coin deficit in the passage to production of the modern coins, and within a menstruation of less than three years to reach a point at which we could if necessary meet total coinage needs out of production of the fresh coins.
I am satisfy that, taking into report all of the diverse factors involved in this complex problem, the recommendations that I am making to you are sound and right. Your early and favorable action upon the proposed legislation will make it possible to produce and issue to the populace a coinage that will be acceptable, provide the maximal convenience, and serve all the purposes-financial and technical — of modern department of commerce. In considering this trouble the needs of the economy and the public toilet of the public have been placed ahead of all other considerations. They are the factors that have resulted in my recommendations to the Congress. I urge their approval at the earliest possible date .
LYNDON B. JOHNSON
The White House
June 3, 1965
Category : Finance
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