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Coinage Commission Director Kenneth M. Failor

By Joe Holley
Washington Post Staff Writer
Tuesday, April 19, 2005; Page B06

Kenneth Merle Failor, 95, a man who watched over the nation's nickels and dimes for many years as an official with the U.S. Mint, died March 26 at the Life Care Center in Scottsdale, Ariz. A resident of Rockville and Annapolis before moving to Scottsdale in 1991, he had chronic obstructive pulmonary disease.

In fall 1941, shortly before receiving his commission in the Navy, Mr. Failor was dispatched by the Treasury on a confidential mission to Nome, Alaska, to take delivery of gold from the Russians as part of President Franklin Roosevelt's lend-lease arrangement. Earlier, the Russian government had tried to ship the $6 million worth of gold on a British cruiser from Murmansk, but the Nazis sunk the cruiser. The Russians asked for an additional 90 days to get the gold to the United States via Alaska.

Kenneth M. Failor was assigned to the Domestic Intelligence Branch of the Office of Naval Intelligence.

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When the Russian ship docked at Nome, as Lowell Thomas reported in 1945, "not a man on board could speak English. But they had the gold on the ship. It was up in the bow, covered over with a lot of garbage."

Mr. Failor took possession of the precious cargo and arranged for three planes to fly it to Washington; only he knew what was in the unmarked boxes. When the planes had trouble taking off because of the gold's great weight, the pilots suggested dumping some of the boxes overboard. Mr. Failor suggested not.

He received a letter of commendation for the successful completion of his mission.

Mr. Failor was born in Chicago and graduated from high school in Detroit. Proficient in shorthand and typing, thanks to his father's insistence, he worked for two years at Continental Motors Corp. in Detroit before entering the University of Michigan in 1930. He left school four years later, just short of an undergraduate degree in liberal arts.

In the middle of winter 1934, three of his college fraternity brothers drove him in an open-air Ford roadster to Washington to begin work in government service. He started out as an aide with the National Recovery Administration and later became secretary to the Code Authority Policy Board, which worked out labor-management agreements and fair practice codes for various industries.

In 1937, Mr. Failor took a job as an auditor with the Mint, where his first assignment was to administer the government's purchase of newly mined domestic silver at premium prices ranging from 64 cents to 77 cents an ounce.

Mr. Failor received his undergraduate degree from George Washington University in 1937 and began preparing for medical school, but World War II intervened.

Receiving his Navy commission, he was assigned to the Domestic Intelligence Branch of the Office of Naval Intelligence in Washington. His first duty was to oversee security for crews of neutral vessels docking in the United States.

Later, he represented the Navy on a State Department board that controlled the issuance of visas to war refugees. His last active-duty assignment was with the Office of the U.S. Naval Attache in New Delhi. He served as a Naval Reserve officer until 1965, when he retired as a captain.

Returning to the Mint in 1945, his initial postwar assignment was to head the Treasury's licensing program. The Gold Reserve Act of 1934 had limited the use of gold to industrial, professional and artistic use, so his duties involved oversight of an elaborate system of reporting, as well as investigations to prevent gold hoarding by the general public.

He told The Washington Post in 1959 that New York always had more 50-cent pieces in circulation and Baltimore more nickels. Washingtonians, he said, favored pennies.

In 1964, it was Mr. Failor's task to work out an equitable system of distributing coins to the Federal Reserve banks and branches and to the commercial banking system when the Treasury phased out the use of gold in the monetary system. The Mint's production facilities at the time were not up to the task of keeping enough coins in circulation. After lawmakers conducted hearings and chided the Treasury for its handling of the problem, Mr. Failor was appointed a liaison between the Treasury Department and Congress.

After the Coin Shortage Hearings, Mr. Failor was deeply involved in congressional hearings leading to enactment of the Coinage Act of 1965. The act called for abandoning solid-silver coins in favor of coins clad in silver-on-copper. From 1965 until his retirement in 1968, he was executive director of the Joint Commission on the Coinage.

Mr. Failor's wife, Margaret Eleanor McMullen Failor, died in 1971.

Survivors include his daughter, Jane Crook of Scottsdale; six grandchildren; and two great-grandchildren.

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