WEST POINT, N.Y. -- Residents near the U.S. Military Academy have good reason to say: 'There's gold in them there hills.'
About 60 million ounces of pure gold owned by the U.S. government, worth about $25 billion, is stored in the U.S. Bullion Depository at West Point, a well-guarded building surrounded by the military academy.
The depository also is used as a mint. Every day, a tractor-trailer loaded with 8.5 million freshly minted pennies leaves the depository, headed for New York City, Boston, Buffalo and other northeast Federal Reserve banks.
The larger Philadelphia and Denver mints produce 45 million additional pennies each day. Butunless you work for the U.S. Bureau of the Mint, you won't know whether the pennies in your pocket came from West Point.
'We've kept it a good secret,' joked Donna Pope, director of the U.S. Mint, during a recent visit to the depository.
'We don't want the publicity,' said Cliff Barber, depository superintendent.
The gold in the depository used to be stored at the U.S. Assay Office in New York City, but last year it was transferred to the more tranquil West Point location.
The stash is second only to the main gold depository at Fort Knox, Ky., where nearly 150 million ounces, worth about $61 billion, is stored.
The West Point depository was a well-kept secret until Sept. 13, when top government officials, coin collectors and the press descended on the small depository for the ceremonial striking of the first U.S. gold coin in nearly 50 years.
Treasury Secretary Donald Regan was on hand to strike the first commemorative coin, which will be sold to raise money for U.S. Olympic committees.
Before then, the depository had operated in virtual anonymity since it was built in 1936 at a cost of $500,000 to store the nation's silver bullion.
It was used only for storage until 1973, when increased need for coins and an anticipated increase in collector demand for Bicentennial coins prompted the government to designate the West Point site as an auxiliary to mint coins.
The windowless building was remodeled to accommodate 20 coin presses and to make space for preparing coin blanks, striking the coins and storing daily production until shipment.
West Point stamps the one-cent images of Abraham Lincoln and the Lincoln Memorial on copper blanks which are produced elsewhere and are shipped to West Point, officials said.
Coins produced at West Point lack any special mark showing where the coin was made. For example, coins stamped at the large mint in Denver carry a 'D' and coins minted at the former San Franciscio mint carried an 'S.'
If the West Point coins carried a 'W' mark, its limited production compared with the 53.5 million produced every day would make the coins immediate collectors items. The U.S. produces about 15 billion pennies a year, with about 3.1 billion minted at West Point.
'It would be a major ordeal to find a penny with a 'W,' Pope said. 'Collectors would hoard the 'W' pennies.'
As for the gold, it was transferred from the Assay Office in lower Manhattan as an economy measure, Barber said. It was trucked to West Point and placed in highly secure vaults on the grounds of the famous military academy.
Nearly 165 people work at the depository, including 90 full-time workers, keeping watch over the gold and working to strike pennies in round-the-clock shifts, five days a week.
Barber declined to discuss security arrangements at the depository.
But it's :lear from just one look that the place is like a fortress. It sits at the bottom of a small hill surrounded by a high chain-link fence topped with barbed wire, giving it the appearance of a prison.
Large wrought-iron gates block the road leading into the depository. Each time the gate is closed, a uniformed officer from a small turret-like guard house slides an iron beam to keep the gates closed.
Closed-circuit television cameras peer down at the entrance, recording the comings and goings of workers and trucks.
Government officials appear pleased with the operation. Pope said the West Point mint's record of performance made it the only logical site to strike the nearly 2 million gold coins authorized by the Congress.
'This was a secure facility and it had an excellent record with striking gold medallions,' Pope said. 'In all of the striking, there was no problem of accountability. They lost nothing.'
