The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-03-21
DUTY On SILVER
A TIMELY ACTION
English Bimetallist Expects No
Checks on the Consumption
of Metal.
MANY VIEWS GIVEN
OF THE SITUATION
Indian Government Was Forced
to Act to Protect the
Rupee.

preston of his views on the recent ac-
ton OF the Indian government increasing
lis silver import duties. Moreton Frewen,
the well known English bimetallist. writes
from the government house at Ottawa.
Canada, under date Of March 10 as fol-
To the editor of the Wall Street Sum-
mary:
"Sir--Replvine to your circular, l think
That the Increase Of the duty on silver
bullion by the government OF India is
| timely. since the dissipation in 1905 Of
INC gold which That government held TO
secure the compatibility Of tho rupee: It
has become clear that every possible
measure must be taken 10 protect their
trade balance and thus make n market
for their silver bills council drafts).
| The enormous imports OF silver bull
| Hon INTO India have OF course reduced
the balance Of their exports over their
imports and thus made It difficult for the
government of India 10 sell It's rupees
| Its council drafts-for the gold IL re-
CURED 10 mako Its remttances of 500
100000 of gold Cels.Oo6. .OoO) annually
home II the new higher duty checks the
! import Of silver bullion Into India. then
| the sales Of rupee exchange by that gov
ernmenL VIII be stimulated and at better
rates.
Probable Effect of Increase.
And. again. if the import OF silver bull
lion, which Is the raw material for so
many industries In India, is not checked
II VIII not be checkedl then the govern
mcnt OF India will secure a very large
addition 10 its revenue from tho duties
and this portion OF the revenue, it is
understood VIII he converted directly in
TO gold and the gold turned over to the
gold standard reserve fund 10 make safer
the convertibilty or the rupee.
The higher duty has been advocated
with much ability for two years past by
The Hon NJ de L. Webb OF Karachi and
has been very carefully considered. As
Il local issue therefore. and at mo-
ment when the exchange crisis is acute.
The higher duty is probably defensible.
But the vast fall In l9o7-S in the silver
ASlatics is still, though little understood
the cause today Of economic unrest all
over the world; nor has that fall at all
lost Its force: and until silver rises very
considerably. il is certain that the finance
Of the United States will be matter for
some anxiety and the improvement in
your trade will continue to hang fire.
The great fall in silver In I907-S just
as was the case in 1893 has cut OFF the
effective demand for our western manu-
family. and has reversed western cx-
changes everywhere In America. direct
trade relations with the Orient being in.
considerable, this exchange trouble is lit
tie noticed But II Europe cannot sell
TO Asia. Europe cannot buy from Amer
lea"
Views of London Brokers.
Pixley, & Abel of London, under date
OF March last discuss the new element
introduced into the silver market by the
Indian government as follows:
The silver market has been unsettled
by the unexpected Increase In the Indian
import duty from per cent to annas
per ounce. equivalent at current rates
TO a rise of nearly IL per cent or 2ld
% 16d, followed by further weakness
I'LL Is S-16d was reached. Since then we
have recovered to q 7-l6d for spot and
yer. the tael falling from IS 42d to IS
81 d, but has given good support all the
way down; In fact the comparative
and there has been a considerable bust
ness In re-saes OF bills by the leading
China banks, and further IL is evident
that the fall in silver has given re-
ncwed stimulus To the export trade. cspe-
cally. at the moment. to silk.
India has been the demoralizcd mar
ket. MS there are disputes there between
the bazaars and the shippers as to the
payment of the duty on the large ship
ment OF e450.000 which arrived there
on the day the duty was raised. For the
time being this silver Is in the hands Of
the customs and business In the bazaars
~ at "A StandStill
"'The up-country demand so far has
been good and stocks are down 500 bars
on the week to 500 bars.
THE future OF the market is largely
dependent on India, as IT remains to be
seen whether the high duty win reduce
consumption or not. and whether a re-
duction OF Id per ounce in the price about
represents the division Of this duty be
tween the producer and the consumer:
this Will take time to prove. Imports
OF silver into India have averaged g.
0o0, 600 ounces for the past three years
and help to adjust the balance of trade
any reduction IN these imports Will have
TO he made up. and the possible ways
OF doing this are: % shipments Of gold
instead Of silver: (2) increased sales OF
council bills. CD reduced exports. and
90 increased imports other than bullion. |
The first is probable to n certain ex-
tent. and as to the second. IL is worth
while pointing out that increased sales |
of council bills mean increased payments |
OF rupees out of the Indian treasury and |
therefore brings nearer the time when
the Indian government will be required |
to buy silver AS TO the third. this is
also probable 10 the extent that any fall |
in silver will injure the Bombay mills |
and their trade with slver-using coun-
tries while the reduction In the exports |
of opium must not he overlooked.
Imports Will Not Diminish.
"On the whole 1t seems probable that |
whether we regard silver as a luxury or |
a necessity. India Will eventually take |
as much as ever, especially when Il Is |
crease I'm the duty. viz. 29d. only brings |
the price TO little more than the neees-
sites of the budget and the real motive |
underlying the policy of the government |
for the View Is held bv some that the
government wishes TO appreciate the
value OF silver in India, and thus lessen |
the difference between the intrinsic and !
The coinage value.
"stocks in London now amount to
about Gl 100000. a shipment OF about |
e250.O00 having been made this week to
China"
Samuel Montagu & Co, also of London
discuss the question as follows;
Thanks to the exceptionally adroit |
manner In which the official secret had |
been kept the information came a
bolt from the blue. and had stunning |
effect on the market. Business came al |
most TO standstill. dealers being by no |
means inclined TO throw silver on an
unwilling and disturbed market. hasty !
action being unwlse in the absence OF
adVices from India and China whose
markets would be most critically affected |
by the new departure. The price OF si-
yer. therefore fell merely from 24d cash |
and % J -16d two months. 10 90 7-l6d for
both positions-say about "a per cent or
less than a quarter OF the duty.
"As to the effect OF the increased duty I
In India. the custom. which has obtained
from hoary antiquity. for the masses In
that empire TO invest their savings In
silver ornaments cannot be abrogated
suddenly by a mere detail such as a
duty. In the case OF so conservative a
people. II is possible that n 10 per
cent rise in the price OF tie commodity
would diminish temporarily the demand
but. as time goes on. silver Will be want
cd irrespective OF price for social Gus