Blanks for the American Eagle program made in Australia for the U.S. Mint was a topic raised by Domestic Monetary Policy and Technology Subcommittee Chairman Melvin Watt and Rep. Ron Paul Tuesday at the subcommittee’s hearing.
Watt asked U.S. Mint Director Ed Moy if it was efficient to send American gold to Australia to make blanks.
Moy’s reply was that “this is the easiest way to get blanks to our specifications.”
Rep. Paul wondered why the Mint can’t make its own planchets. He asked what a businessman would do.
Moy explained that it was a matter of capital investment. He noted that an average year’s output was eight million ounces of production. Last year was 28 million and this year it will be 32 million. These totals are for silver blanks as silver American Eagles also entered the discussion.
Even private blank fabricators are leery of adding production capacity in the present market. Moy said they want guaranteed future purchases if they would agree to undertake the investment to expand.
As general background Moy said the Mint got out of the planchet making business a decade ago.
Rep. Frank Lucas of Oklahoma said there are manufacturers in the United States who would like to get into the business and he also noted what he called the cavernous Mint building in Philadelphia and wondered if it wouldn’t be more effective for the Mint to produce blanks.
He suggested a study of the question.
Moy said this issue would be explored.
It seems to me that Moy has sound financial reasoning on his side, but that isn’t the whole of the issue.
If it is believed that current American Eagle production is unusually high, installing productive capacity to meet current demand would prove costly should much of it then become idle as output reverts to a level closer to the 8 million ounce average.
However, at a time of high unemployment, the idea of adding some jobs to the Mint has great appeal. Why do federal make-work programs when a genuine need can be addressed? However, making the silver blanks could reduce private domestic employment.
What to do? This is an issue worth watching.