The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1891-02-26
SILVER SPECULATION.
The Defeat of the Silver Bill Leaves the
Spectators in the Lurch.

NEW YORK, Feb. 25-By the CeIeaI OF
free coinage great speculation n Van
street has come TO an end. Millions nave
been lost in the deal In July last when
it became certain that the bill providing
for the pu' chase by the government OF
4. $50, 900 ounces of silver month would
pass congress and become law, numoer
of pools were made up to buy silver Dull
ion in the expectation that there would DC
great advance in price. The conclusion
reached by the spectators was correct.
When they began their operations silver
was below 81 an ouuce. On the passage
of the bill silver jumped up rapidly untl
it was quoted at $l2lL. To make the sill
yer in the silver dollar worth 81 IN gold 1t
would have to be quoted at 81. ~.
The men in the pools expected that
the price would go to about sl25
The new law went into effect on
Aug. l3. It was calculated that the pro-
duction OF the American mines for the en-
suing year would be $4,000, 900 ounces. Or
this amount the government would be re-
ouired to purchas'. at the ruling market
prices, 54000,00 ounces, and the arts
would use 100000 ounces more. The
surplus therefore. was reckoued at only
1000 600 ounces. America had previously
been a heavy exporter. The preceding
year it had sent abroad about 800 ,o'o
ounces The outlook for the spectators
was good but they had only surface indi-
cations TO go by, and the succeeding events
proved what had been proved many I'm 5
before, tnat il is imposs BILE to corner the
product of the earth It had been tried in
grain, coal and oil, and always with the
same result The mo e the spectators
bought the more there was to sell
Natures bounteous hand could never be
emptied. The pools conducted their
operations entirely in New York. Most OF
them were formed there. There was one
pool, known of the Congressional Pool, !"
made no in WASHINGTON. Its Members
were principally senators and congress
men. The orders of this pool were exc
cuted in New York.
To facilitate operations in silver sort or
silver clearing house WAS tabil>hed. Ihe
Mercantile Safe Deposit com pany received
the bullion on storage and issued for 1t
certificates, which were recognized by the
New York Stock Exchange rs good de-
liveries." Instead of having TO deliver the
silver when sale was made, certificates
represented the amount of the transaction
when transferred. Thus heavy expenses
for cartage and risks of fraud and loss
were obviated The greater part of the
dealings in 81 yer since the new law went
into effect has been tho medium of certlti-
Gates Each certificate represents l.00O
ounces of silver The Mercantile Safe De
post company At first charged 2 cents per
loo ounces day storage. The Gu irge
was subsequently reduced to l cent. The
certificates were guarantee by the West
ern National bunk, which also settled
differences" The silver, OF course, could
not be delivered in amounts OF exactly
1000 ounces, owing to the different
eights of the bars. Sometimes lots OF
silver would run over, and other times
they would fall under. In either case the
Western National bank would receive o.
pay the difference. rs the case might be.
Almost the entire production OF silver
comes to New York, as here was a n tural
market for it.. The government bought
on regular days of the week and at tie
prevailing market prices, but the store IN
the safe deposit vaults kept steadily
mounting up. The reason was easy 10
find. The mines had all increased their
output in anticipation of greater profits.
Many old mines that had been abandoned
on account of the low grade of their ores.
which could not be smelted with n profit,
worked over. AS the accumulation grew
larger the price began to descend and fell
steadily until it was below 81.
Then the agitation for free coinage was
started If it was successful, that would
spectators understood, provide market
for the silver that might be produced, nc
matter how great the amount. The agita-
time destined to be successful, and the
price of silver rose to 81 Is. When the op-
position to the free coinage of silver as
sumed increasing proportions the price Oi
silver took a downward turn again, and
the adverse report of the house committee
on coinage sent it once more below 81. The
| present ouotation is 81 cents There are
| now in the vaults of the Mercantile Safe
| Deposit company 1872 167 ounces. There
! is enough more bullion stored in other
| places, includ ng the vaults of banks and
| safe deposit and trust companies. to make
the total stored in New York ahout 0,000
600 ounces. The production of silver since
| the enactment o. the new law Is calculated
at 40, ,000, 900 ounces in round numbers. The
average cost TO the spectators has beer
about 81 10 an ounce. They have beer
| compelled 10 keep the government sup
| piled in d = TO prevent importation from
| other coui trrs, and their sales have onll
/ realized about 81 05 AN ounce. They are
therefore, ont cents an ounce on theil
| transactions. BY this calculation theil
| total losses on their dealings in the bullior
alone have been 81, 10000 Store charge,
/ and interest on the money required Il
carry the silver brings the total loss up Il
| =, SOC, ,000 The future Of silver specula
! tiou is pro Slematical The speculator,
! think they have a chance TO recoup part o
their losses. There have been practically
| no expectations from this country sinc'
the new law went into effect. Now thai
the free coinage is defeated. they expec
that expectations will be resumed. auC
that they will he sufficient TO advance tt.
! price at least few cents an ounce. Cal
| culatiug on the basis of previous exporta
| tions and the requirements OF the world
| they say the extra stock ought to be wipeC
| out in two or three months. The silver il
the silver doliSr is now worth in the New
! York market a. cents