The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1890-10-29
The PRICE OF SILVER
Director Of the Mint Leech on
the Cause of its Decline.
PURCHASES BY THE TREASURY.
The Methods Employed Defended-The Super
Abundance of the Metal at Present.
The Foreign Market.

regard 10 the treasury, silver bullion and
the cause of the recent decline in market
price Of silver. He. says: 1.-THE treasury
method OF purchasing has been criticised
IN these particulars: THAT the large pur-
chases by the department do not include
all the silver bought. 2-That the London
price is used as the basis of the govern
ment purchase. 3-That bids to the gov
eminent are on the decimal system and
tend to favoritism.n
In regard to the first criticism he says
the government purchases silver as
1t does bonds and indeed any ar
ticie required in considerable quaint
ties by public competition, the low
est offers being always accepted provided
they do not exceed the highest market
prices. For the benefit of small producers
the superintendent of minis are author
! lied to purchase small lots at price fixed
from day to day by the director correspond
ing to the market price. These purchases
average possibly half million ounces
month.
lit is not true that the London price is
used as the basis of silver purchases under
the new law. During the last administra-
ton not only were London prices only used
put the department did not pay the equiva-
lent OF the London price, buts made counter
offers to bidders on the theory that silver
was worth less in New York than London
by the cost of transportation and insurance
across the water. The present administra-
ton mas been governe,t IN it's purchases by
the New York price At any time since
the passage of the new silver law, indeed
for same months before, has the treasury
telt itself limited in acceptances to the
London prices
3-ln regard to government quotations
being on decimal basis one of the critics
iniO -
facts In regard to governments quotations
are on the decimal basis. which is a great
advantage to those who may have ad-
vanced 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
decimal lower than another, is the govern
ment to decliue the lower BID because of
the decimal! the idea of any seller hav-
ing advance information as to the price
| government will pay is ridiculous and i'm
possible. II there can be any fairer
method devised for purchasing silver than
by comp etition, it would be difficult to con-
celve of such method. This is the 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 operated to
produce 1t are apparent. In the tirst place
the visible stock OF silver in New York has
not sensibly decreased, notwiths tanding
the purchase by the government OF Il. 2f6.
4fS ounces of silver since August Is. This
large and undiminished stock is standing
menace to the price of silver Large west
ern ret1neries, in the hope of realizing a
large profit held their silver for months
prior to the passage of the new law
or deposited 1t in New York fol-. certificates
and the result then is the accumulation of
visible stock of such magnitude as to
depreciate the price. 1t is very unfortu-
nate that this stock has been allowed to ac-
cumulate, 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 football 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 metals on
margins.
The usual demand for silver for export
has almost entirely ceased. Not only is this
the case, hut large quantities of foreign
silver nave been shipped to the United
States. Imports of silver from Nav l to
September 30 of the present year exceeded
the exports by 81, 923, 175, while for the
corresponding period last year the exports
exceeded the imports by So, GAS, 800. This
accounts for the fact that while
the government does purchase an
amount equal to the current
production of our mines the stock has not
diminished. During the same period ship
ments of silver to India have not sensibiv
decreased although latterly they have been
below the usual amount, hence the supply
for India has been obtained IN Europe or
at least elsewhere than the United States.
So, too, in regard to the natural move
of Gil RI
straits from San Francisco. Not one ounce
OF silver bullion has been shipped to. the
orient from San Francisco since Nav
l of this year while over four
million dollars worth was shipped
during the same period last year. Those
facts OF themselves are sufficient to ac-
count for the decline which has taken
place. Then again all sorts of rumors have
been telegraphed from London to this
country on purpose, and the effect of which
was to weaken the prices of silver. 1t is
well Known that we are in the midst of
most active mining season. Undoubtedly
the production of silver has been stimu-
lated by the passage of the new silver law.
but 1T must be remembered we are
approaching the period of winter months
when mining is not so active, and more
over, that the present activity in working
mines naturally resulted in more rapidlv
exhausting the lodes. So far as nv infor1
nation extends, there has been no new
bonanza discovered, and aside from dis
coVerleS OF valuable silver and lead proper
ties in Australia, / am not aware of anv
large deposits of silver discovered within
the last year or two, certainly none
recently. So it is fair to assume
that the silver product for any con-
siderable period, unless there are new
discoveries, will not be materially increased
by the present active working of mines.
No sensible person likes to make pro-
phecies especially on subject which has
proved SO Elusive as silver, but certaini0
one who "has made close study of the
silver question" ought to find in the facts
mentioned sufficient causes for the recent
decline without seeking for imaginary rea-
sons and casting slurs upon the treasury
method of purchases.