, 1890-10-29
Director Lsecb, of the Mint, At
tempts an Explanation.
Prices are Not Based on the
London Standard.
He Looks for a Falling Off in
the Supply.

these particulars: First, that large pur-
chases by tie department do not include
all the silver bought; second, that the
London price is used as a basis of govern
ment purchase; third, that bids to the
government are on the decimal system and
tend to favoritism In regard to
the first criticism, he says the government
purchases silver as 1t does bonds, and in
ceed any article required in considerable
quantities, by public competition, the low
est offers being always accepted provided
they do not exceed the highest market
price. For the benefit OF small producers,
however, the superintendents of mints are
authorized to purchase small lots at a price
liked from day to day by the director.
corresponding to the market price. These
purchases average possibly half a million
ounces a month.
Second-IU is not true that the London
price is used as the basis of silver pur-
chases under the new law. During the
last administration not only was the Lon
don price the only price used, but the de
partment did not pay an equivalent of the
London price. but made counter offers to
bidders on the theory that silver was
worth less in New York than London by
the cost of transportation and insurance
across the water. The present admins
tration has been governed in purchases by
the New York price. At no time since
the passage of the law, indeed Tor some
months before, has the treasury felt itself
limited in acc%eptances to London prices.
Third-ln regard to the government
quotations being on a decimal basis, one
of the critics says: The suspicious and
significant fact IN regard to the govern
ments quotations are on a decimal basis,
which Is a great advantage to those who
may have advanced information in regard
to the price the government is willing to
pay on a given date.
The government has no scale of its own.
and bidders use whatever scale suits them
best. If one house happens to bid a
decimal lower han another, is the gov
eminent to decline the lower bid because
of the decimal? The idea OF any seller
having advance information as to the
price the government will pay is ridicu-
lous Inc impossible. If there can be any
fairer method devised for purchasing sill
yer than by public competition it would
be diiicnlt to conceive of such a method.
Ii is the method which has been pursued
by the treasury, under all administrations
since 1878. In regard to the recent de-
blbS III Tue pIlCG VI sllNeTs the causes
which operated to produce il are apparent.
In the first place. the visible stock OF sill
yer in New York has not sensibly de-
creased, notwithstanding the purchase by
the government of l2,276,47S ounces OF
silver since Aug. ID. This large and I'M
diminished stock is a standing menace to
the price of silver. The large Western
refineries, in the hope of realizing a large
profit, held their silver for months prior
to tie passage of the new law or deposited
it in New York for certificates, and the
result has been accumulation of a visible
stock of such magnitude as to depreciate
the price.
1t is very unfortunate hat this stock
has been allowed to accumulate. and es-
pecially that certificates are allowed to be
issued on it and guaranteed by national
banks and listed on the stock exchange to
be dealt in on margins. 1t has made a
football of silver, to be kicked around at
the pleasure ofthe bulls and bears. In
my Judgment there should be a law en
acted against dealing IN money metals on
margins. The usual demand for silver
for export has almost entirely ceased.
Not only is this the case, but large guam
titles OF foreign silver have been shipped
to the United States. The imports of sill
Z lAOm Nid9 L " pGDttIuDtT ~ OF inc
present year exceeded exports by So,
IT'S, while for the corresponding period of
last year the exports exceeded the imports
by s., 94S, 900. This accounts for the fact
that while the government purchased an
amount equal to the current production of
our mines, the stock was not diminished.
During the same period the shipments of
silver to India has not sensibly decreased.
although latterly they have been below
the usual amount. Hence the supply for
India has been obtained in Europe or at
least elsewhere han the United States.
So, too, in regard to the natural move
ment of the silver to China, Japan and
the Straits from San Francisco. Not one
ounce of silver bullion has been shipped
to the Orient from San Francisco since
Nav ! of this year, while over 81, 600, 900
worth was shipped during the same per
iod last year.
These facts, of themselves, are sufficient
to account for the decline which has taken
place. Then, again. all sorts of roorbacks
have been telegraphed from London to
this country, IT, purpose and effect of
whict waS Ia " ken the prices of silver.
They well Auc@ that we are in the midst
OF a most active mining season. I'm
doubtedly the production of silver has
Dttn sllululdleu NY the paSsaEe OF the new
silver law. But it must be remembered
we are approaching a period of winter
months, when mining is not so active, and
moreover that the present activity in
working mines naturally results in more
rapidly exhausting their lodes. So far as
my information extends, there have been
nc new silver bonanzas discovered, and
aside from the discoveries of valuable sill
ver-lead properties in Australia, | am not
aware of any large deposits Of silver dis
covered within the last year or two, Ger.
tainly none recently. So it is fair to as
sumo that the silver product for any
considerable period, unless there are new
discoveries, will not be materially increased
by the present active working of the
mines. No sensible person likes to make
prophecies, especially on a subject which
has proved so Elusive as silver, but GER
tainly one who has made a close study of
the silver question ought to find 10 the
facts mentioned sufficient causes for the
recent decline without seeking for imag-
mary reasons and casting slurs upon the
method Of purchases.
Annual Meeting.
The annual meeting of the Eonr Law