Morning journal and courier., 1890-10-29
SILVER BULLION.
Causes of the Recent Decline In
the Market Price-The Method of

Causes of the Recent Decline In
the Market Price-The Method of
Purchasing silver.
WASHINGTON, Oct 28.-E. g. Leech,
director of the mint, makes the following
statement in regard to the treasury pur-
chases of silver bullion and the causes of
the recent decline in the market price of
silver:
The treasury method Of purchasing sill
yer has been criticised in these particu-
lars, first, that the large purchases by the
department do not include all the silver
bought; second, that the London price is
used as basis of government purchase;
third, that the bids to the government are
on q decimal system and tend to favoritism.
In regard to the. first criticism may say
that the government purchases silver as it
does bonds or indeed any article required
in considerable quantities by public COM
petition, the lowest offers being always
accepted, provided they do not exceed the
highest market price. For the benefit of
small producers, however, who would 9TH
erwise be obliged to trade through middle
men, the superintendent of the mints are
authorized to purchase small lots at price
fixed from day to day by the director of
the mint, corresponding to the market
price of silver. Those purchases average
possibly half million ounces a month and
are reported to the treasury weekly.
Second-It is not true that the London
price has been the base of silver purchases
under the new law. During the last ad
ministration not only was the London
but the department did not pay
the equivalent of the London
price, as the records 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 adj
ministration has been governed in its pur-
chases 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 bids for the sale of sill
yer, but it does not reject bid for the
and if there are no lower bids, will accept
any bid within the, highest New York
price. At no time since the passage of the
law, indeed, for some months before, has
the treasury felt itself limited in its ac-
ceptances to the London price.
Third-In regard to the government
quotation Being on decimal basis one of
our critics is made to say "the suspicious
and significant fact in regard to the gov
ernment's purchases of late is that houses
offering large lots have been underbid by
the hundredth part of a cent. The gov
ernment's quotations are on a decimal
basis, which is great advantage to those
who may have advanced information in
regard to the price the government is will
ing to pay on o given date" Now in re-
gard to this it may be said that the gov
eminent has no scale of its own and bid
ders use whatever scale suits them best.
ANY person who has silver may
offer it at any price he sees fit. If one
house happens to bid decimal lower than
another is the government to decline the
lower bid because of the decimals The idea
of any seller having advance informa-
ton" as to the price the government will
pay is ridiculous and impossible. The
telegraph within a few minutes of one
o'clock and the treasury has no idea of
what it will pay until all the offers are
opened. Its acceptances are governed
entirely by the offers. These offers are
entered in book and the offers are
passed on by the director of the mint, who
recommends what ones be accepted or
rejected and the book is then taken to the
secretary and each offer is passed on sepa-
rately and personally by him and the bid
ders notified by telegraph of the accept
ance or rejection of their bids. The whole
business does not occupy fifteen minutes.
The uniform practice, as the records
which are open to public inspection-will
shows to accept the lowest bids, the
only question for the director and the sec
rotary to determine being how much they
will buy on given day and how favorable
the offers are as compared with the market
price The method of purchasing silver
by public competition is the same as has
been pursued by the treasury under all
administrations since 1878.
THE I0IsEERY LAW.