Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1890-10-29
SILVER BULLION.
Director Of the Mint Makes
Stitenent on The Subject,
Denying That Aly flIoitisn is Shown
In likil6 Purchases
Or That Il IL Done On ANY But a
Business Msshcd.


Business Method.
WAsHiseroS. Oct. 2s.-E. o. Leeeh.
Director Of the Mint, makes the following
statement in regard TO Treasury purchases
of silver bullion. and the causes Of the re-
cent decline in the market price Of silver
"The Treasury method of purchasing
silver has been criticised in these psrtieu-
lsrs--ihst the large purchases of silver by
the Department do rot include oil the silver
bought; that the London price is used as
the basis Of government purchases; that
bids to the government are on the decimal
system snd tend to fav ori,ism.
In regard 10 the fret criticism. | must
say the government purchases silver as il
does bonds or indeed any srticles required
10 considerable quanti'ies, by public eowpe-
tition. the lowest offers always aecepts Il,
provided they do not exceed the highest
market price. For the benefit Of small
producers, however. who would Otherwise
be obliged to trade through miillemen.
snperinte ndenis Of mints are authorized to
purchase small lots at . price fxed BY the
director Of the mint, corresponding to the
mar ket price of silver. These purchases
average possibly half million ounces =
month, are reported to the treasury weekly.
II is not true that the London price has
been used as the basis of silver purchases
under the new Law. During the last ad-
ministraiion not only was the London price
the only price used in making purchases,
but the department did not pay equivalent
Of the London price, but made counter Of
fers to bidders on the theory that silver
was worth less In New York than in Lon
don by the cost of transportation and insur-
ance across tbs watef.
The present administration has been gov
erned in purchases by the New York price,
and has paid at times in excess of the high
est price at which certificates we're sold in
this city the same day. The government
accepts lower ids for the sale of silver.
but does not re ject bid for the reason
that it exceeds the London price, and il
there arc n, lower bids will accep. any bid
within the highest New York price. A, no
time since the passage of the new silver
law, indeed, for some months before
has the treasury felt itself limited
in acceptance to London prices
In regard to the government quotations be-
ing on the decimal basis, one of our critics
is made to say: "A suspicious and slsnif-
cant fact in regard to the governments
purchases of late, is that houses offering
large lois have been under bid by hun
d'edth part of cent The govs rnmer,'s
quotations are on the decimal basis, which
is q great advantage to those who may
have advanced information in regard to the
price the government is willing to pay on a
given date. 1t may be said that the gov
h. of its AMI tho
bidders use whatever scale suits them best
Any person who has silver may Offer it at
any price be sees fit. If one house hap
pc ms to bid declmsl lower than another is
the government to dec inc the lower bid
because Of the decimal. The idea of any
perfon having any advance information as
to the price the government will pay is ri
diculous aud impossible.
Offers foF the sale of silver are made by
telegraph With, few minutes of | o'clock,
the treasury has no idea of what they will
will pay until offers are made, its lsc-
ceptaEces being governed entirely BY Of
fers. These offers are entered in the book ,
offers passed on by the director of mint,
who recommends what ones will be sccept-
cd or rejected, the book is then taken to
the secretary of the treasury, each offer is
passed on separately snd personally by
him, bidders are notified by telegraph Of
the acceptance or rejection Of their bids.
The whole business does not occupy II
minutes. The Uniform practice is to sc-
cept the lowest bids, the only question for
director snd secretary to determine being
how much they will buy on given day,
how favorable offers are, compared with
the market price. The method of purchas
ing silver by public competition is the same
a. has been pursued by The treasury under
all administrations since 1878.
The causes for the recent decline in the
price of silver is obvious. II 10 visible
that the stock of silver in New York has
not sensibly decreased, notwithstanding the
purchase by the government Of 12,276 AS
ounce since August l3. This large and
undiminirhed stock 10 a standing menace to
the price of silver and has of itse.f been
sufficient TO shake public confidence in
silver. II the large western r. fioeries had
offered their product for sale to the gov
erpmert at current prices and sold the re-
mainder abroad this stock would not have
accumulated. In hopes of realizing larger
profits they held their silver for months
prior to the passage of the new law, or
lie posted it in New York for certificates.
II was very unfortunate that this stock
was allowed to accumulate. sspet i,iv thst
certificates were allowed to be i'sucd on it,
guaranteed By the National Bank ard list
ed on the stock exchange to be dealt in on
margins rs other stocks. In my Judgment
here should be . law enacted against dc al
ing in money metals on margins.
The usual demand for silver for the ex
port has almost entirely ceased, as large
quantities OF foreign silver 10 shipped to
The United States. TIE imports of silver
into the United from May lst to Sept 3oth
of the present year, exceeded exports by
81 .923,l75 for the corresponding period of
last year. The exro't, exceeded imports
by s., 3is 800. 1hi. ts for the fact
that the .toek was not diminished. During
the same pc Rod the shipments of silver to
India vas rot considerably decreased, al
though latter has been below the usual
amount The supply for India has been
obta nsd elsewhere than the United States.
so, too. in regard to the natural moveme mt
Of 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 sioce May Is: of thi, year,
and over ~ ,0C0 GOO worth was shipped
during the same period last year. Al sorts
Of reports have been telegraphed from
Lerdon to this country. The purpos and
feet of this was to weaken the prize of
silver. 1t is we'll known that we are in The
midst of most active mining season. In
doabtedly the production of silver has been
st mulstsd By the passage Of the new silver
law. 1t must b. remembered that We are
approaching winter, when mining will not
be so active. and, moreover, tba; the pres
ent scIiv.ty in working silver mines natur-
ally results in more rapidly exhaus,iDg
their lcdes. Aside from discoveries
of valuable silver and lead prop
critics in Australia. | am rot aware
of any large deposit Of silver heing
discovered within the lss, year or two, GER
taiply none recently. 1. is fair to assume
that the silver pso'uct for any considerable
period, unless there are new discoveries,
will not be materially increased by the
present active working of the mines. The
new silver Law has been executed by the
treasury department in the utmost good
faith and in same friendly spirit towards
,iiver which characterized the passage Of
the act, ard the manner Of its execution
has not had the most remote bearing upon
the recent decline in the price"
tn, Lottery War to bs Pushed.