The morning call., 1890-10-29
DECLINE Of SILVER.
Statement Of Mint Director
LeeCh.
Causes for the Recent Falling OF in the
Market Price.
Adverse Criticisms Of the Governments
Method Of Purchasing Bullion
Satisfactorily Answered.
Special to THE MoRNISG CALL.

the Mint makes lengthy statement in re-
bullion and the causes of the recent decline
in the market price of silver. He says
1.-THE Treasury m ethod of purchasing silver
has been criticized in these particulars
First, that large purchases by the depart
ment do not include all the silver bought.
Second, that the London price is used as
the basis of the Governments purchase.
Third, that bids to the Government are on
the decimal system and tend to favoritism." ="
PURCHASED BY COMPETITION.
In regard to the first criticism he says
the Government purchases silver as it does
bonds, and indeed any article required in
considerable quantities, by public competi-
tlon, the lowest offers being always ac-
cepted, provided they do not exceed the
highest market price. For the benefit of
small producers however, superinte tendents
of mints are authorized to purchase small
lots at price fixed from day to day by the
Director, corresponding TO the market
price. These purchases average possibly
half million ounces month.
A FALSE STATEMENT.
Second-It is not true that the London
price is used as the basis of silver purchases
under the new law. During the last ad-
ministration not only was the London price
the only price used, but the department did
not pay the equivalent Of the London price,
bnt made counter offer to bidders, on the
theory that silver was worth less in New
York than in London, en- account of the
cost Of ira nSportation and the insurance
across the water. The present administra-
tion has been governed in its purchase by
the New York price. At no time since the
passage of the new silver law, and indeed
for some months before, has the Treasury
felt itself limited in acceptance5 to London
prices.
GOVERNMENT QUOTATIONS.
Third-In regard to Government quota
items being on the decimal basis, one of the
critics says: The suspicious and signif-
cant fact in regard to the Governments 5
quotations being on the decimal basis, which
is great advantage to those who may have
advance Information in regard TO the price
the Government is willing to pay on 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 than another, is the Govern
ment 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 ridiculous and i'm
possible. If there can be any fairer method
devised for purchasing silver than by the
ceiye of such n method. 1t is the method
which has been pursued by the Treasury
under all administrations since 1878.
THE DECLINE IN SILVER.
In regard to the recent decline in the
price Of silver, the causes which operated
to produce it are apparent. In the first
place, the visible stock of silver in New
York has not sensibly decreased. notwith-
standing the purchase by the Government
of 1926 AIS ounces of silver since August
18th. This large ana undimnished stock
is q Stnnding menace to the lrlce OF silver
Large Western refnerles, in the hope of
realizing large profit, held their silver for
months prior to the passage Of the new
law, or deposited it in New York for GER
tificates. aud the result has been the accu-
mutation of stock of such magnitude as
to depreciate the price.
SILVER MADE A FOOTBALL OF.
1t is very unfortunate that this stock has
been allowed to accumulate, and especially
that certificates have been allowed to be
issued on ii and guaranteed by national
banks and listed on the Stock Exchange to
ball of silver, TO be kicked around at the
pleasure of the bulls and bears. In my
Judgment there should be law enacted
against dealing in money metals on margins.
The usual demand for silver for export has
almost entirely ceased. Not only is this the
case,sbut large quantities of foreign silver
have been shipped to the United States.
IMPORTS AND EXPORTS.
The imports of silver from May 1st to
September 3Oth of the present year exceeded
the exports by S4,923 10, while for the
corresponding period last year the exports
exceeded the imports by S5,94S,990. This
accounts for the fact that while the Govern
ment has purchased the amount equal to the
current production of our mines the stock
has not diminished. During the same period
the shipments of silver 10 India have not
Sensibly decreased, although latterly they
have been below the usual amount Hence
the supply for India has beer obtained in
Europe, or at least elsewhere than the
United States.
NO SHIPMENTS FROM SAN FRANCISCO.
So, too, in regard to the natural move
ment of silver to China, Japan and points
from San Francisco. Not one ounce of sill
yer bullion has been shipped to the Orient
from San Francisco since May 1st of this
year, while over S4,000,000 worth was
shipped during the same period last year.
These facts of themselves are sufficient to
account for the decline which has taken
place Then, again, all sorts of rO0rbacks
have been telegraphed from London to this
country, the purpose and effect OF which
was to weaken the price of silver.
A PROSPEROUS MINING SEASON.
1t Is well known that we are in the midst
of most active Mining season. Undoubt-
edly the production of silver has been stim-
Il ated by the passage of the new silver law.
But it must be remembered that we are ap-
preaching the period of winter months,
when mining is not 50 active, and moreover,
that the present activity in working mines
naturally results in more rapidly eXhaustng
their l0deS. SO far as my information eX-
tends. there have been no new silver bonan-
zas discovered, and aside from the dis
coveries of valuable silver and lead prop
critics III Australia, | am not aware OF any
large deposits OF silver being discovered
within the last year or two. Certainly there
has been none recently.
SUFFICIENT CAUSE FOR THE DECLINE.
So it is fair to assume that the silver prod
uct for any considerable period, unless
there are new discoveries, will not be mate
rally increased by the present active work
ing of the mines No sensible person likes
to make prophecies, especially on subject
which has proven so ilusive as silver, but
certainly one who ''has made close study of
the silver question" ought to find in the
facts mentioned suffici ent cause for the re-
cent decline without seeking for imaginary
reasons and casting SlurS upon the Treasury
method Of purchases.
ELAMS DENIAL.
He Did Not Say That Harrison Would Not