The islander. [volume] (Friday Harbor, Wash.) 1891-1899, 1896-08-06
WHY SILVER HAS FALLEN.

In reply to correspondents inqulring
AS to the cause of the decline in the
value of silver bullion during the past
twenty years, the New York Herald,
(Democratic), says:
'The free coinage advocates cannot
deny the obvious fact that the quantity
of bullion in dollar, which was worth
more than one hundred cents when free
coinage was suspended in 1873, is now
worth only fifty-three and One-half
cents. They boldly allege, however,
that this fall was caused by the United
States and the other great nations all
closing their minis to unlimited coin
age. The fact, however, is that it was
the fall in silver that compelled the
closing of the minis, and there was
nothing mysterious about the cause of
the fall. 1t was due to increased pro-
duction. In 1873 the worlds output of
silver was in round numbers sixty-three
million ounces. In 1888 it was eighty
three million ounces, while the output
of gold was unchanged. By 1898 the
production of silver had increased to
one hundred and sixty-six million
ounces. The silverites mislead their
followers by juggling with the coinage
price Of the white metal when dealing
with production, but the common sense
way of stating the output of both gold
and silver is by the number of ounces
produced.
Taking the output of the two
metals, then, we find that in 1873 the
ratio of production of silver compared
with gold was 1851 to /, and ten years
later was 1882 to l, while in 1898 it
was 2l.S3 to /. During these twenty
years, the worlds coinage systems
having previously been saturated with
silver and its commerce having out
grown the use of the white metal for
large transactions, the demand had
greatly decreased. With an increase
jim the supply that more than doubled
in twenty years and a coincident de-
crease in demand, it is not difficult to
account for the fall in the price"
The same paper in reply to a ques-
ton as to whether the election of
Bryan and Sewall, and of course
congressional majority holding the
same financial views, also says:
eff the minis were thrown open for
the free coinage of all the silver any,
body in the world desired to have made
into dollars at the ratio of sixteen to
one, it is certain that these dollars
would have to circulate at their actual
bullion value. The commercial price
of silver today is about 50 cents all
ounce, and the 37ll grains of pure
metal in dollar are worth about SO
cents. The government has some diff
ficulty in keeping the present large
but limited amount of silver currency
at an equality with gold. Take off
the limit and coin into a new dollar
every fifty-three cents worth of silver
that anybody chose to send to the
minis and the government could not
keep silver dollars at the artificial level:
they would pass only at their intrinsic
value.
eff it became apparent that this
country were going to adopt free coin
age there might be a PRELIMINARY
boarding of silver to be delivered at
the minis when opened, and this tenn
porary scarcity in the market supply
might stimulate a brief speculative
rise in price until it was nullified by
the increased production which would
attend the advance. History demon
strates that the market value of the
mass of existing bullion would fix the
value of the coins. The overlooking
pf the country with silver currency
would be very rapid, because the own
ers of bullion would not wait for its
coinage, but would provide for the
issue of circulating certificates in :
mediately upon delivery of the bullion
ut the mints.p