Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-03-03
MILLIONS LOST In 1T.
Facts and Figures on the Recent
Speculation in Silver.
THERE WAS 0VER-PRODUCTION,
And Free Coinage. Was to Make the Sur
plus Yield Big Profit.
VAULTS NOW FILLED WITH BULLION

NEW YORK, March 2.-There are manv
mourners in Wall street and elsewhere in
the financial haunts of the city. By the
downfall of free coinage. which is now con-
ceded even by its most sanguine friends, q
great speculation has come to an end. Mill
ions have been lost in the deal. In July
last. when 1t became certain that the bill
providing for the purchase by the Govern
ment of 4. 500, 900 ounces Of silver per month
would pass Congress and become a law, 8
number of pools were made up to buy silver
bullion in the expectation that there would
be great advance in price.
The conclusion reached by the spectators
was correct. When they began their opera
tions silver was below 81 an ounce. On the
passage of the bill 1t jumped up rapidly un-
til it reached 81 21I. To make the silver
in the silver dollar worth 81 in gold it
would have to be quoted at 81 1929. The
men in the pools expected that the price
would go to about 81 %. The new law went
into effect on August 13. 1t was calculated
that the production of the American mines
for the ensuing year would be $1,000, 600
ounces.
Calculations of the Experts.
Of this amount the Government would be
required to purchase, at the ruling market
prices, 81, ,000 900 ounces, and the arts would
use 100000 ounces more. The surplus.
therefore, was reckoned at only 100000
ounces. America had previously been a
heavy exporter. The preceding year it had
sent abroad about %, 600, 900 ounces.
The outlook for the spectators was good,
but they had only surface indications to go
by, and the succeeding events proved what
had been proved many times before, that it
is impossible to corner the products of the
earth. 1t had been tried in grain, coal and
oil, and always with the same result. The
more the spectators bought the more there
was to sell. Natures bounteous hand could
never be emptied.
The pools conducted their operations en-
tirely In New York. Most of them were
formed here. There was one pool, known
as the Congressional pool, made up in
w ashington. Its members were principally
Senators and Congressmen. The orders of
this pool were executed in New York. To
operations in silver sort of silver
clearing house was established. The Mer-
camille Safe Deposit Company received the
bullion on storage and issued for it certi-
hcates which were recognized by the New
York Stock Exchange as good deliveries"
Instead of having to deliver the silver when
l sale was made certificates representing the
amount of the transaction were transferred.
Thus heavy expense for carriage and risks of
'raud and loss were obviated.
Nearly All Transactions In Certificates.
The greater part of the dealings in silver
'ince the new law went into effect has been
through the medium of certificates. Each
certificate represents ], 200 ounces of silver.
Fhe Mercantile Safe Deposit Company at
lrst charged cents per ], 900 ounces day
torage. The charge was subsequently, re-
luced to cent. The certificates were guar
Inteed by the Western National Bank,
which also settled differences" The silver,
If course, could not be delivered in amounts
Vt exactly 1, 600 ounces, owing to the differ
mt weights of the bars. Sometimes lots of
hlver would run over and other times they
would fall under. In either case the West |
'rn National Bank would receive or pay the |
Inference, as the case might be.
Almost the entire production of silver |
anne to New York, as here was the natural |
market for it. The Government bought on
egular days Of each week at the prevailing
market prices, but the store in the safe |
leposit vaults kept steadily mounting up. |
The reason was easy to find. The mines |
ion of greater profits. Many old mines
hat had been abandoned Oh account of the |
ow grade of their ores, which could not be |
melted with q profit, were reopened and |
ven refuse heaps were worked over. As |
be accumulation grew larger the price |
'egan to descend and fell steadily until it |
Fas below 81. Then the agitation for free |
olnage was started. If successful that |
Vould, spectators understood, provide
market for all the silver that might be pro-
uced, no matter how great the amount.
he agitation was so energetic that it seemed
t one time destined to be successful, and the
rice of silver rose to 81 13.
100000 Ounces In New York Alone.
When the opposition to the free coinage
I silver assumed increasing proportions the
rice of silver took downward turn again
nd the adverse report of the House Com
1ittee on Coinage sent it once more below +
Thepresent quotation is 81 cents. There
re now in the vaults of the Mercantile Safe
Deposit Company 7,332,S67 ounces. There
, enough more bullion stored in other
laces, including the vaults of banks and
afe deposit and trust companies, to make
ne total amount stored in New York about
O,UUU, UUU ounces.
The production Of silver since the enact
tent of the new law is calculated at 40, ,OOO,-
DO ounces in round numbers. The average
ost to the spectators has been about 81 10
n ounce. They have been compelled to
eep the Government supplied in order to
revent importations from other countries,
nd their sales have realized only about
05 an ounce. They are, therefore, out
cents an ounce on their transactions By
lis calculation their total losses on their
ealings in the bullion alone have been
|, 100000. Storage charges and interest on
,e money required to carry the silver
rings the total loss up to So, 10000
The fnture of silver speculations Is prob
matical. The speculators think they
ave chance to recoup part of their loss.
here have been practically no exBorta.
ons from this country since the new law
ent into effect. Now that free coinage is
sfeated they expect that expectations will
; resumed and that they will be sufficient
advance the price at least few cents an
lnce. Calculating on the previous expor-
tions and the requirements of the world
ley say the extra stock ought to be wiped
1t in two or three mouths
The silver in the silver dollar is now
orth in the New York market IS cents.