Los Angeles herald., 1890-10-29
SILVER A FOOTBALL
Kicked at the Pleasure of
Bulls and Bears.
The Market Glutted With the
White Metal.
Prices Depreciating III Spite of Re-
publican Promises.
The Director of the Mint Finds it
Necessary to Bolster Up His
Party's Policy.
Associated Press Dispatches.

WASHINGTON, Oct. 2S.-DirectOr of the
Mint Leech makes a long statement in
regard to the treasury purchases of
silver bullion, and the causes of the re-
cent decline in the market price of sill
yer. lie says the treasury method of
purchasing silver has been criticized in
these particulars:
First-That the large purchases by the
department do not include all the silver
bought.
Second-That the London price is used
as the basis of government purchase.
Third-That bids to the government
are on the decimal system, and tend to
favoritism.
Answers to Criticisms.
In regard to the first criticism he says:
The government purchases silver as it
does bonds-and indeed any article re-
quired in considerable quantities-by
public competition, the lowest off fers be-
ing always accepted, provided they do
not exceed the highest market price.
For the benefit of small producers, how
ever, the superintendent 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 possi-
bly, hall million ounces a month.
Second-W is not true that the Lon
don price is used as the basis of silver
purchases under the new law. During
the last administration, not only was
the London price the only price used,
but the department. did not pay the
equivalent of the London price, but
made counter offer to bidders, on the
theory that silver was worth less in
New York than in London, on account
of the cost of transportation and in
surance across the water. The present
administration has been governed in
it's purchase by the New York price.
At no time since the passage of the new
silver law-indeed for some months be
fore-has the treasury felt itself limited
in acceptances to London prices.
Third-In regard ITO the government
quotations being on the decimal basis,
one of the articles says sit is sus.
piciousand significant fact that the gov
ernment's quotations are on the decimal
basis, which is great advantage to
those who may have advance informa-
ton in regard to the price the govern
lIlcuJ lS WlliluS W pay OiI q gwen
The government has no scale of its
own, and bidders use whatever scale
suits them BEST Ii one house happens
to bid decimal lower than another, is
the government 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 impossible. Ii there
can be any fairer method devised for
purchasing silver than by public competi-
ton, it would be difficult to conceive
of such method. It. is the method
which has been pursued by the treasury
under all administrations since 1878.
Causes of the Decline.
In regard to the recent decline in the
price of silver, the causes which oper-
ated to produce it are apparent In the
first place, the visible stock of silver in
New York has not sensibly decreased,
notwithstanding the purchase by the
government of 12,276,47S ounces of sill
yer since August 18th. This large and
undiminished stock is standing men
ace to the price of silver. Large west
ern refneries, in hopes of realizing a
large profit, held silver for months
prior to the passage of the new law, or
deposited it in New York for certificates,
and the result has been the accumula-
tion of visible stock of such magni-
tude as to depreciate prices. 1t is very
unfortunate that this stock has been
allowed to accumulate, and especially
that certificates have been 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
n hon Of ctl To no l. nlya
e, the pleasure of the bulls and bears.
In my Judgment, there should be law
enacted against dealing in money
metals on margins.
Exports Almost Entirely Ceased.
The usual demand for silver for ex-
port has almost entirely ceased. Not
only is this the case, but large quanti-
ties of foreign silver have been shipped
to the United States.
The imports OF silver from May 1st to
September 30th, the present year, ex-
ceeded the exports by "a 1923, It's, while
for the corresponding period Of last
year, the exports exceeded the imports
by $5,o4o, 800. This accounts for the
fact that while the government pur-
chased an amount equal to the current
production of our mines, the stock has
not diminished. During the same
period the shipments of silver to
India have not sensibly decreased,
although latterly they have been
the usual amount; hence the sup
ply FOR India has been obtained in Eu-
rope, or at least elsewhere than in the
United States. So, too, in regard to the
natural movement of silver to Japan,
China id the straits from San Francisco.
Not an ounce of silver bullion has been
shipped to the orient from San Francisco
since May 1st, this year, while over
$4,0O0,00O worth was shipped during the
same period last year. These facts of
themselves are sufficient to account for
the decline which has taken place.
All Sorts of Roorbacks.
Then again all sorts of roorbacks have
been telegraphed from London to this
country, the.purpose and effect OF which
was to weaken the price of silver. 1t is
well known that we are IN the midst OF
most active mining season. Undoubt
edly the production OF silver has been
N a3a ne NJ " &, y. .,ls N eD u ~ Y.