Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1878-11-21
THE oTHUNDERER" ON SILVER.
It Predicts a Reaction In Silver With a
Reaction In Trade.

Reaction In Trade.
In a recently published article the
London Times discusses the latest fall
in the price of silver in the face of
facts that would seem to be suf-
fcient to raise it. London is the
silver market of the world, and
the imports of silver for the first
nine months of this year from
all countries have been only f9,0S3,
900, while in the corresponding period
of 1877, the Importation was Ell, IT,
900. The Times says;
IF other circumstances were now
the same as in 1877, this diminution
of supply would almost certainly have
produced a considerable change in
some other direction to account for
the actual facts. 1t is suggested that
there is such a change in the greatly
increased amount of Indian Council
Bills which have been offered this
year but the increase, though impor-
tant in consequence of the diminution
of the borrowings necessitated by the
famines, is still a good deal less than
the falling off of the supply Of silver.
Another explanation must be sought,
and that explanation is the inactivity
Of the Indian trade, especially of the
export trade from India, as compared
with last year.
"The prices of cotton and other
raw materials are less than they were,
so that India has had less to draw for,
and until lately there was no CORE
spending cessation in the exports to
India. More recently another cause
has co-operated-the stringency of our
own money market. Early in August
the bank rate here was raised to five
per cent, and for more than a fort
night the rate has been six per cent,
with the open market all through
closely following or anticipating the
bank. Such a state of our money
market tends to check remittances
abroad, and consequently to reduce
the demand for silver, which is one of
the e of remittance to silver
using countries. This is much the
same thing as saying that as astringent
money market tends to make all com
modities fall in price, and silver in
this country is only a commodity,
therefore, if money is dear, silver is
likely to be less in demand than ii
would otherwise be. We should as
sign, then, as the main cause of the
fall in silver the dull state of the In
dian trade and the stringency of our
own money market. Ever since the
limitation of their silver coinage by
the countries Of the Latin Convention,
silver has been a commodity like others,
and the circumstances are now such
that that commodity is likely to be
lower in price than it will be at other
times.
If this account of the fall in silver
be at all correct, the conclusion must
be that another reaction in the price,
such as happened after the fall of 1876.
will probably occur. That the present
fall is over we should not venture to
say, but it seems certain we have only
to do with temporary causes of depres.
sion in price. A rebound in the
worlds trade from the present ex-
IRENE depression must sooner or later
occur, and according to common expe-
rience, the Indian trade, as well as
others, will participate in the improve
ment. The present stringency in the
money market will also pass away, and
seems likely to pass away very soon
Silver, Ike other commodities, viii
accordingly come more into demand
Permanently, too, unless some Other
great change is made, silver seems
likely enough to recover in price, as
the sales of the German surplus will
probably not weigh on the market fol
more than a year or two longer
and the demands of the silyer-usinl
countries are not to be measured BY
what they are in dull times like these
The future action Of the United States
is the most %incalculable element il
the problem but if the Bland silye.
bill should be repealed and the United
States annual product Of silver b,
again thrown on the market-thl
worst contingency as regards thisQues
ton for the future-we should be in
clined to think the silver-using coun
tries and the gold countries in thei
coinage will be able to absorb the sup
ply. What injury to trade, then, cal
be done by the fall in silver Is proba
bly, only temporary"