Assay Office and Sub Treasury
Assay Office and Sub Treasury

Gold coins, rather than bars, were preferred by South American countries where they were used as general circulation currency and investment. Gold coin shipments to South American countries were the rule rather than the exception; bar exports to South America were virtually non-existent.

Although most South American countries have (nominally) gold coins, these are but rarely seen in circulation. In most of these countries any gold coin will do; each particular coin having its set value in the currency of the country in which it is tendered. Thus in the Argentine, for instance, you may meet with all kinds of gold coins except an Argentina. [Original emphases.]

Bank Notes, February, 1909, 23:3.

However, the foreign gold coins which found their way into European countries would either be melted into bars (for use in subsequent international exchange or in the production of their own gold currency) or maintained as a reserve for possible future export to the country of origin.

WANT FOREIGN COINS
IN OUR BANK RESERVE

Financiers Here Seek Permission
to Adopt a Custom Long
Permitted Abroad

APPEAL TO U. S. TREASURY

Change Would Enable Bankers to Re-
ship the Coins Instead of Melting
Them Into Bars for Exchange.

A movement to permit National Banks to hold in their reserve foreign gold coins which are imported into this country is likely to follow the gold export movement which has ... exhausted the supply of gold bars available for export and led to the taking of United States gold coin from the Sub-Treasury for shipment to Europe [emphasis supplied]. Supt. Foster of the Assay Office has under consideration a recommendation to the Government that the National Banks in this country be enabled to hold foreign gold coins in their reserve, as the banks in foreign countries now hold the gold of other countries on the same basis, so far as its use as reserve goes, as domestic gold coin.

In making such a recommendation to the Secretary of the Treasury, Supt. Foster, it was said, will have the support of some of the leading National banks in this city, whose officers are of the opinion that the best interests of this money market will be served by the adoption of the custom pursued by the European banks. When United States gold coin is shipped to France or Germany or other European countries it is kept intact and is held by the banks in Europe as they hold their own gold. Thus it serves as reserve, and in case of gold export movement it is available for reshipment to the country from which it came.

On the other hand any foreign gold coin consigned to the banks here is melted down and made over into bars, with some incidental loss, and frequently these bars are recoined into United States goldpieces.

One result of this system, apart from the cost of handling it in this fashion, is that when the tide of gold sets in the other direction and we are forced to export gold we first exhaust the supply of bars at the Assay Office, and then resort to shipments of our own coin [from the Sub-Treasury] [emphasis supplied].

The inclusion of foreign gold coins in the reserves of our National banks would be in keeping with the custom of the Bank of France, the Bank of England, the Bank of Germany, and of Russia, and, in fact, of the banks of practically all European countries.

Many millions of American gold coin has been held by the Bank of Russia [emphasis supplied], and much of our gold coin has been included in the reserves of the Bank of France and the Bank of England. We frequently get back from Europe our own coin, but the banks here are never in a position to reexport foreign coin, for this is melted down the moment it finds its way to New York.

New York Times, May 22, 08, 10:1

Many millions of American gold coin had been held by the Bank of Russia. This fact, too, will enter into our discussion.