CASHING THE WARRANT THAT PAID FOR ALASKA

Regarding the $7.2 million Warrant that paid for Alaska (that was mentioned in this week's issue of The E-Sylum), nothing in my research has indicated that, at that time, the Treasury provided custody services for gold for entities other than the US Government. Even today, it's the Federal Reserve Banks rather than the Treasury that provide this service for foreign governments.

Presuming that this transaction would have followed the same pattern as any similar transaction, most likely, a representative of the Russian government would have presented the Warrant to the sub-Treasury in New York and received the $7.2 million in gold.

I speculate that the Russians would have received the gold in "fine bars" (bars of essentially pure gold worth about $5,000 each) as these were preferred for export over coin (as they were easier to count than bags of double eagles and didn't suffer from abrasion in transit). The bars would have been produced at the New York Assay Office and would, most likely, have been composed mostly of gold from California, as that was where most of our domestic gold was produced.

Certainly, the bars could have contained some gold from Colorado. However, at this time the Denver Mint was only producing "unparted bars" that contained both gold and silver, which were often shipped to the Philadelphia Mint (to be refined and minted into coins) or the New York Assay Office (to be refined into fine bars).

Upon receipt, the gold would, most likely, been shipped to somewhere where the Russians needed to pay off a debt or make one or more substantial purchase(s). Therefore, the gold could have been deposited into a New York bank (which could then have sent one or more drafts to creditors in, say, London or Paris) or the gold could have been shipped directly to banks in London or Paris. Upon arrival in London or Paris, the value of the gold would have credited to the Russian government and/or paid to creditors. The physical gold could have been placed into storage (awaiting further shipment) or deposited into the London or Paris mints, to be turned into sovereigns or 20 Franc pieces.

It's possible that the gold could have been shipped to Russia, if the Russians had a greater use for it at home than in New York or a western European banking and commercial center. A researcher would have to look at the appropriate records to see if the Russians were paying off debts or buying railroad equipment or battleships or making some other major purchases at the time. As we know from the Krause Standard Catalog of World Coins, Russian mintages of gold coins were fairly modest at this time, so I think it's more likely that the gold stayed in a Western banking center.

Details about deposits and production of the various US Mints and Assay Offices are contained in the Annual Reports of the Director of the Mint and most of the reports from this period are available via Google Books. In addition, there's a wonderful (and very detailed) article about the New York Assay Office in the November 1861 issue of Harper's New Monthly Magazine, which is available in the Making of America section of the Cornell University Library's website.

Darryl Atchison adds:

To read the earlier E-Sylum article, see: QUERY: HOW WAS THE ALASKA PURCHASE CHECK REDEEMED? (www.coinbooks.org/esylum_v16n01a17.html)

Wayne Homren, Editor

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