Whitney Nobiling
ENG 302 S13
04-06-06
Essay 3
According to David Elite-Miller (1983) the author of Historic Tours: The Denver Mint: the story of the mint from the gold rush to today, John Smith was the first person to reside in Denver, Colorado. He and his Indian wife Wappola, built a home in Cherry Creek after gold was discovered in rich beds of placer gold found in the Platte River beds in 1858. One year later the city of Denver was founded. Eventually word of gold in Colorado spread to the East. The U.S. Department of Treasury states that, “when gold was discovered in Colorado, hundreds of merchants, miners and settlers moved in for their stake”, (2006 p.1).
After the supply of gold had been exhausted from the streams, miners turned to
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“lode mining,” uncovering veins of ore with a high percentage of gold and silver, (Department of Treasury, Fact Sheets, Currency and Coins, 2006, p.1).
The Panics of 1854 and 1857 also contributed to the migration West. According to the American Economic Review, the Panic of 1854 began on December 12, “because of news that the Knickerbocker Savings Banks had not produced a weekly statement for the New York Bankers’. On December 13 several savings banks were forced to pay out freely, and on the following day the Bank of Savings on Chambers Street sent $200,000 of it’s government paper to Washington for redemption. The news reduced the demand for deposits and banks continued to experience high rates of account closure“. Morgan Kelly and Cormaco Grada, in their article, Market Contagion: Evidence from Panics of 1854-1857, state that the 1857 Panic started in New York with “news of the failure of the Ohio Life and Trust Company (August 24) and the loss of a steamer en route to New York with $2 million of uninsured bullion (September 17), (2000, p.1112 ). The Panic of 1857 led to a “brief but sharp rise in unemployment in New York, and had a devastating short-term impact on banking systems and stock exchanges” (Edwin G. Burrows and Michael Wallace, 1999 pp.845-46). Immigrants who had not lived in the U.S. for long periods of time withdrew their savings, packed up what little belongings they had, and headed West.
Brothers, Austin M. and Milton E. Clark from Ohio and E. Henry Gruber from Maryland, were also looking to better their fortunes in Denver, Colorado. The men established a partnership in 1857, and the Clark, Gruber Company banking firm was established in Leavenworth, Kansas. According to George Remsburg of the Leavenworth
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Times, they opened a second branch in Denver in 1859, (1943). Albert D. Richardson, a distinguished New York newspaper correspondent, wrote an article on July 10, 1860 about the bank’s construction. “Clark, Gruber and Company, have completed a large brick building and will commence operation in a few days. They have the best of facilities for assaying, and design to have their coin so pure that it will be worth par at the mint. Their machinery for preparing and striking the coin is extensive and excellent, and will enable them to turn out $50,000 per day,” (1860).
Clark, Gruber and Company began issuing coins in Denver on July 20, 1860. Miners in Denver had little coined or paper money, so they brought their gold dust and nuggets to the bank to be melted, assayed and cast into bars stamped with their weight and quality. The bank’s coins became the “major medium of exchange, worth more than the U.S. coins of like issue. Clark and Gruber issued coins with their own stamp on it in denominations of $20, $10, $5 and $2.50. On one side of the coin there is the “ever-prominent American Eagle, and the words, ‘Clark, Gruber & Co.’ On the reverse side is a picture of the ‘Peak’ with the words ‘Pike’s Peak Gold’ above, and ‘Denver’ beneath it,” (Remsburg, Leavenworth Times 1943). They were also the heaviest purchaser of gold dust, $12-$16 per ounce,” (Eite-Miller, 1983).
Shipping the gold to Mints in the East was a slow and expensive process. It usually took anywhere from three weeks up to three months to arrive East. Shipping alone cost them 5% of the value of the dust. Insurance against loss in transit cost them another 5% of the gold. It was this inconvenience that gave Gruber the idea of a Mint in Denver.
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After Gruber shared his vision of turning the bank’s assaying office into a Mint Clark set to work researching laws that prohibited the coining of money by a private citizen. He wanted to make sure that he would not be accused of a crime when he took his plans to Washington D.C. The search did not turn up any such laws, provided that the money was of full weight, (Eite-Miller, 1983).
In 1861 the demand for gold coins dropped due to the Civil War that had started in the East. Denver was appointed it’s first Territorial Governor, William Glipin, who was worried about the damage the drop would do to the territory. At the 1861 Republican Convention Glipin adopted a resolution to have the Assay Office become a Government Mint. Clark and Gruber agree with the resolution because they feared that they were “on the edge of legality,” (Eite-Miller 1983).
Clark accompanied Governor Glipin to Washington where he presented his coins to Congress. From there the Secretary of Treasury, Frances Spinner, sent the coins to the Philadelphia Branch Mint to report on their full weight and value. Attorney General, Edwin Stanton, issued a report to President Abraham Lincoln and Congress that Clark, Gruber and Company had not violated any laws. Secretary of Treasury Spinner recommended that “the existing laws be amended to prevent private coinage, that a Branch Mint be established in Denver, Colorado and that the property of Clark, Gruber and Company, along with their equipment be purchased for the new facility,” (Eite-Miller 1983).
Deliberations on the opening of a U.S. Mint in Denver lasted for an unusually long amount of time. The Government was preoccupied with the start of the Civil War,
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among other things. According to Eite-Miller, New York was trying to vote against the Mint because they wanted their own branch in the city, but Philadelphia forced it through because they did not want a Mint built so close to their own, (1983). Another delay on the decision was due to the work commission appointed to ascertain the value of the Clark, Gruber and Company’s property, having trouble with the title to the land. .
The complete Bill, H.R. 287, to establish a branch of mint of the United States at Denver in the Territory of Colorado, states that;
1 Be it enacted by the Senate and House of Represent-
3 That a branch of mint of the United States be located
4 and established at Denver, in the Territory of Colorado, for
5 the coinage of gold.
1 Sec.2 And be it further enacted, That, for carrying on
2 the business of said branch, the following officers shall be
3 appointed as soon as the public interest shall require their
4 service, upon the nomination of the President, by and with
5 the advice and consent of the Senate, namely: one superin-
6 tendent, one assayer, one melter and refiner, and one coiner;
7 and the said superintendent shall employ as many clerks,
8 subordinate workmen, and laborers, under the direction of the
9 Secretary of the Treasury, as may be required.
(Bills and Resolutions, House of Representatives, 37th Congress, 2nd Session, 1862).
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The Territory of Colorado had much to worry about while Congress was deliberating on the outcome of the mint. They had issues with their military establishment, the admission of Colorado as a state, problems with people “jumping” mines and hostile Indians in the area.
A correspondent from the New York Times wrote, “the preservation and growth of timber is a matter of much solicitude in Colorado,” (1874 p.1). Mining districts and pineries purposely set fire to large areas, causing significant damage to the forestry. The Government wanted the penalties for those who preformed those acts of “carelessness and maliciousness,” to be more severe, (New York Times 1874 p.1).
Colorado was also looking for an admission as a State. The territory wanted “a law protecting all of it’s interests,” (New York Times 1874 p.2).
With the war going on in the East, Colorado was concerned that it‘s military was not on a “war footage,” (New York Times 1874p.2). There were only fifty serviceable guns at the militia’s command and only a few boxes of cartridges, with only one out of every five of them able to explode. With Cheyenne and Kiowa Indian raids occurring more often then they used to, the Government felt that “there should be a number of well-organized Militia companies in different parts of the Territory,” (New York Times 1874 p.2).
The practice of “jumping” mines was also a problem in the Territory’s mining districts. Miners would pretend to claim ownership of a mine as soon at it was proven to be valuable. This would lead to “expensive and protracted litigation” and often to bloodshed, (New York Times 1874 p.2). An act of Congress was passed on March 3,
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1873 to safeguard the possession of the mines in the Territory.
The bill was officially introduced on December 19, 1861 and finally passed on April 26, 1862.
After Clark and Gruber Co. sold their facilities to the Government for $25,000 they wrote a report to their Leavenworth, Kansas branch from the Denver branch, stating the total amount that the mint made while in operation. “We submit herewith the following report and history of our mint, closing with the year 1869, and the sale of this establishment to the United States Government. Here is the following statements of our coinage:
From July 16, 1860, to January 1, 1861.$131,220.50
In the year 1861, ending Jan. 1st, 1862.…240,165.00
In the year 1862, ending Jan. 1st, 1863.…222,919.50
Total coinage…………………..$591,305.00
From July 16th, 1860 (the stating of the mint) till the 1st day of January, 1861, we purchased
11,725.38oz. costing $187,601.51
To Jan. 1st 1862.…20,473.03 “ 299,715.43
To Jan. 1st 1863.…61,426.80 “ 975,277.79
Total…………93.269.11oz. “ $1,462,647.75
This statement only includes the dust which we actually purchased, coined and disposed of,” (Chicago Tribune (1860-1872) 1863).
Established by an Act of Congress in 1862, the Denver Mint could finally open for business in 1863. Instead of performing coinage of gold under a United States Mint as first intended, operations began as a United States Assay Office, with it’s activities restricted to melting and stamping unrefined bullion brought in by the miners. The bars
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were then returned to the depositors as unparted bars stamped with the weight and fineness of the gold. A journalist for the Washington Post wrote,“ until the mint and assay office at Denver shall become a coinage mint in accordance with the law, the present mint shall be continued as an assay office, and the business now transacted at said mints shall be continued therein and the appropriations heretofore and herein made shall be applicable to such mint,” (1895). The Director of the Mint quoted the reasons to be, “the hostility of the Indian tribes along the routes, doubtless instigated by rebel emissaries (there being a Civil War) and bad white men,” (The Federal Presence 2006 p.1).
The Superintendent of the U.S. Branch Mint in the Denver Colorado Territory, George W. Lane, said that, “Colorado, if protected by the Government from the devastation of the merciless savages that have hung like a millstone about her neck for years, will soon become the brightest and most self-dependent star in the constellation of states,” (Report to the U.S. Mint Philadelphia, 1869).
The reasons for Indian hostility dates back to 1851 when gold was first discovered out west. At that time the western plains were Indian territory under treaty and law. “A stream of emigration flowed through the plains and the tribes were called upon for the purpose of securing the right of peaceful transit over their land,” (p.140) “The Indians granted us the right to establish roads and other posts within their respective territories if we agree to pay the Indians $50,000 per year for 50 years. The money would be distributed to them in proportion to the population,” (p.141). After gold was discovered in Colorado, “thousands of fortune-seekers, who possessed nothing but the right to travel over the land, took possession of it for the purpose of mining. Against the protests of the
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Indians, these men established farms and opened roads,” (p.141). By 1861, the Indians had been driven from their land in Colorado down to Arkansas. The Indians were discontented with the violation of their rights and having to watch their former homes and hunting grounds being overrun with greedy white men that were thirsting for gold. In 1874 a 3,000,000 acre portion of the Cheyenne and Kiowa reservation was ceded the United States government after “an extensive mining location,” was discovered to hold an “inexhaustible supply of precious metals,” (New York Times 1874 p.3).
On July 20, 1867, and act of Congress was approved “to establish peace with certain hostile Indian tribes,” (The American Indian and the U.S. A documentary history volume1 p.134). Commissioners appointed under the act were authorized by said act to call together the chiefs and headmen of such bands of Indians as were then waging war, for the purpose of ascertaining their reasons for hostility, and, if though advisable, to make treaties with them having a view of the following objects:
1st. To remove, if possible, the causes of war;
2nd. To secure, as far as practicable, our frontier settlements and the safe building of our railroads looking to the Pacific;
3rd. To suggest or inaugurate some plan for the civilization of the Indians,” (p.134)
Congress then called for a policy that collected all Indians east of the Rocky
Mountains and put them on one or more reservations. When the act was passed, war was being openly waged by several hostile tribes. Small war parties emerged from the vast extent of unexplored country and would attack border settlements, killing the men and carrying off into captivity the women and children. Indians would also attack companies of men working on the railroads. “Overland mail coaches could not be run without a
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military escort, and railroad and mail stations unguarded by soldiery were in perpetual danger,” (p.135) All safe transit across the plains had ceased. Any gold or coins being shipped to the mints in the east were in danger of being stolen by the Indians.
If peace could not be obtained at these meetings, or should the Indians fail to comply with the transfer to the reservations, the President would call out regiments of mounted troops for the purpose of “conquering desired peace,” (p.135).
Denver was growing and flourishing despite trouble with the Indians. A wealth of precious metal was pouring in to the Assay Office. A correspondent from the New York Times traveled to Denver to see the city for himself. In his article he wrote, “ Referring to the advancement of the mining industry, it is observed that the preparation of new and extensive mining operations in districts both old and new are far greater than at any former period, and not only show established faith in the richness of the mines, but augmented vitality in mining as a permanent and remunerative industry,” (1874 p.2). He wrote about the petition to Congress that had been sent around the Territory and had received thousands of signatures. The petition asked Congress to make the branch mint at Denver a coinage mint. It says that “the expense and risk of shipping our bullion to Eastern markets for coinage and the consequent delay in receiving returns, in an onerous task on our mining industry, and affects injuriously the entire business of the Territory. The power to convert the products of our mines into coins at home would remove this burden, and it’s beneficial effects would be felt in all departments of industrial life,” (1874 p.2).
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Many complained the old Clark and Gruber Co. building was inadequate to do business in. Horatio C. Burchard, Director of the Mint wrote, “The mint is located in the midst of a prosperous and rapidly growing community. Being at the railroad center of connecting lines from the principle mining sections of the State, as well as from New Mexico, the wealth of precious metals pouring in should be treated there, and settlement made with depositors. I estimate the production of Colorado alone to be at the rate of at least $15,000,000 of gold and silver per annum, and the present facilities at the Denver mint for operating upon this amount of bullion are totally inadequate, (1879). On February 20, 1895, Congress provided for the establishment of a mint at Denver for gold and silver production. With the Mint Director’s approval, a new site for the mint, West Colfax and Delaware streets, was purchased on April 22, 1896 for $60,000, and construction began in 1897,” (Department of Treasury, Fact Sheets: Currency and Coins 2006). The extended time between the commencement of construction and the opening of the facility was due to two factors. “First, Congressional appropriations for construction and the purchase of minting equipment were slow and often at sums less than required. The second factor is that Supervising Architect Taylor, having only received one bid for interior finishing, was told to come up for new proposals for the erection of the structure,” (The Federal Presence, 2006 p.3). Transfer of assaying operations to the new building were delayed until September 1, 1904. Coinage operations finally began in February 1906, advancing the status of the Denver facility to a Branch Mint. For the first time in forty-six years gold coins were produced in Denver, and for
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the first time ever, silver coins were produced, (Department of Treasury, Fact Sheets, Currency and Coins 2006). In it’s first year of operation the Denver Mint produced 167,371,035 gold and silver coins valued at $27 million.
The Denver mint had a long infancy as an assay office before becoming an adult Branch Mint. Despite all of the Colorado Territory’s problems that delayed the production of the mint, it turned out to be on of the “best located coin shops the government has,” (The Washington Post 1905). It is in the heart of the richest gold and silver country in the United States, and is easily accessible to both the East and the West. It will always have a continuous supply of precious metal at a low cost of transportation. The Denver Mint will continue to prosper in Colorado for many years to come.
Bibliography
Primary Sources:
1. The United States Department of the Treasury, (2006). The United States Mint Facilities: Denver Mint Facility.
www.usmint.gov
2. The United States Department of the Treasury, (2006). Fact Sheets: Currency and Coins. History of the Denver Mint.
www.ustreas.gov
3. The Federal Presence, (2006). U.S. Mint Buildings Across the Nation. Denver Mint.
www.ustreas.gov/offices/management/curator/exhibitions/mintbldgs/denver
4. The Washington Post (1877-1954). Silver Put to Sleep.(1895 p.3).
5. The Library of Congress. A Century of Lawmaking for a New Nation: U.S. Congressional Documents and Debates, 1774-1875. Bills and Resolutions, House of Representatives, 40th Congress, 3rd Session (1869).
6. The Washington Post. (1887-1954). Too Many Coinage Mints. (1905 pg TP4).
7. The New York Times. (1857-current file). Colorado. (1874 p.2).
8. Remsburg, George. Leavenworth Times, Pioneer Leavenworth Bankers had Private Mint in Denver. (1943).
9. Clark, Gruber & Co. Chicago Tribune (1860-1872) Denver Mint. (1863).
10. Report of the Superintendent of the U.S. Branch Mint, Denver Co. Territory for the Fiscal Year ending June 30, 1869.
Secondary Sources:
1. Morgan, Kelly and Grada, Cormaco. Market Contagion: Evidence from Panics of 1854 and 1857. (1999 pp. 114-21).
2. Eite-Miller, David. Historic Tours: The Denver Mint: the story from the gold rush to today. (1983).
3. The American Indian and the U.S. A documentary History, Volume 1. (pp134-41)
The United States is home to five Mints operating in five different cities around the country. All of these buildings are of great significance to the history of our country, and each one played a huge role in the development of the cities that housed them. The Denver Mint was one of the first government buildings out West and Colorado’s oldest institutions. It was established in 1863 as an Assay Office but was not converted in to a working Mint until 1906. Why did it take the government almost fifty years to make this conversion and what was the facilities functions during this period? According to my research, the delay in the Mint’s operation was due to hostile Indians in the Territory, a Civil War in the East, and problems with the local mines and their miners.
David, your writing is very exciting, but I am confused about what you are writing about. Is the Virginian a chapter out of our text or is it a personal book? Your blog was very vauge but it had the potential to be very interesting