The DeSmet leader. (DeSmet, Kingsbury Co., Dakota [S.D.]) 1883-1891, 1890-11-08
SILVER BULLION.
An Exhaustive Statement BY the nj
rector OF the Mint. Many
Facts Stated.
Silver Is a Commercial Commodity,
and the Price Fluxuates Ac-
c0rding TO Demand.
Government Purchases Silver As II
Does Bonds, the Price Guaged BY
Urgency VI the Case.

/
OF silver bullion and the causes OF the
recent decline in the market prlce OF
silver:
The treasury method of purchasing
silver ~ criticised on these particu-
lars: Flrst-That the large purchases
by the department do not include all
! the silver bought; second, that tie
London price is used as basis ofgov-
ernment purchase; third, that the
| bids TO the government are on deCi-
| NAL system, and tend to taVOrtiSm.
In regard to the first criticism, Isay
the government purchases silver as it
does bonds, or, indeed, any article re-
Quired i'll considerable quantities, by
public competition, the lowest offers
being always accepted, provided they
do not exceed the highest market price.
For the benefit Of small producers,
however, who would otherwise be obhg-
ed to trade through middle men, the
superintendents Of the mlnts are au-
thOrized to purchase small lots at a
price fixed from day to day by the di-
rector OF the mint, corresponding to
the market price OF silver, These pur
Chases average possibly 500, 900 ounc-
es a month, and are reported to the
| treasury weekly.
SeCOnd--It is true that the London
price has been used as basis OF sill
yer purchases under the new law
During the last administration not
only was the London price the only
price used in making purchases, but
the department did not pay the equiv
alent of the London price, as the re-
cords of the mint bureau will show,
but made counter offers to bidders
on the theory that silver was worth
less in New York than in London by
the cost OF transportation and insur-
ance across the water. The present
administration has been governed in
it's purchases by the New York price
and has paid at times in excess OF the
highest price at which certificates sold
in the city the same day. OF course
the government accepts the lowest
bid for the sale of silver, but it does
| not reject a bid for the reason that it
exceeds the London price, and if there
| are no lower bids will accept any with
in the highest New York price. At no
time since the passage of the new sill
| yer law, indeed, for some months be-
fore, has the treasury felt itself limit
ed in its acceptances to the London
price.
Third-In regard to the government
quotations being on a decimal basis,
one of our critics is made to say:
"The suspicious and significant fact
in regard to the government pur-
Chases of late, is that houses offering
large lots have been underbid by the
hundreth part of cent. The govern
ment's quotations are on q decimal
| basis, which is q great advantage to
those who may have advanced in
formation in regard to the price the
government is willing to pay Oh q
given date" Now in regard TO this it
may be said that the government has
no scale OF its own, and bidders use
whatever scale suits them best. Any
person who has silver may offer it at
any price he sees fit. II one house
happenes to bid decimal lower than
another, IS the government to decline
the lower bid because Of the decimal?
The idea of any seller having "ad-
vance information" rs to the price
the government will pay is ridiculous
and impossible.
The offers for the sale OF silver are all
made by telegraph within few min
utes Of l o'clock, and the treasury has
no idea OF whatit will pay until all the
offers are opened, its acceptances be-
ing governed entirely by the offers.
These offers are entered in book, and
the offers are passed on by the direct
or of the mint, who recommends what
ones we accepted or rejected, and the
book is then taken to the secretary of
the treasury, and each offer is passed
on separately and personally by him,
and the bidders notified by telegraph
of the acceptance or rejection of their
bids. The whole business does not oc-
cupy fifteen minutes. The uniform
practice is to accept the lowest bids,
| the only question for the director and
| the secretary to determine being how
much they will buy on given day and
| how favorable the offers are as COM
pared with the market price. II there
can be any fairer method devised for
purchasing silver than by public COM
petition it would be difficult to con-
ceive OF such method. 1t is this
method which has been pursued by the
treasury under all administrations
since 1878.
In regard to the recent decline in the
price OF silver the causes which have
operated to produce it are so appar,
ent that they need only be stated
that their full force may be measured
In the first place the visible stock oI
silver in New York has not sensibly
decreased Notwithstanding the pur.
chase by the government OF 16, ,276,.
47S ounces of silver since Aug. l6. r.
| This large and nudiminished stock
Is a standing menace to the price oi
silver and has OF itself been sufficient
to shake public confidence in silver.
II the large Western retineries had al
lowed their product to take its usual
course, that is, offered it for sale to
the government at current prices and
sold the remainder abroad, this stock
| would not have accumulated; but in
the hopes of realizing a large profit
they held their silver for monthsprio
TO the passage OF the new law, or de-
posted it in New York for certificates
and the result has been the accumula.
ton of visible stock of such magni.
tude as o depreciate the price. 1t is
very unfortunate that the stock was
allowed to accumulate, and espe,
cially that certificates were al
lowed TO be issued on it and guaran.
teed by a national bank and listed on
\ the stock exchange to be dealt in mar,
y gins as other stocks. Ii has made q
: Moot ball OF silver. to be kicked around
suat the pleasure of bulls and bears. In
\ NY Judgment there should he alaw en-
! Eted against dealing in money metals
margins. sE 'As' ~
~ ghe usual demand Tor =
I. =.