New-York tribune., 1917-07-19
Silver Exports to
India Stopped by
Great Britain
American Exporters Are
Forced to Ship Gold
to Far East

Bankers doing business with the Far
East received word by cable yesterday
that Great Britain has taken steps TO
check the shipment of silver from the
United States to India. The movement
has reached unusually large proper
tions in recent months, as American
merchants have found it the only
method by which they could make pay
ment for raw materials bought IN In
dia. Incidentally, it is learned that
gold shipments from this country to
India are being permitted under license
of the British government, and that
approximately s1,5OO,OOO in gold has
already been exported to that country
in lieu of silver. The price of silver
declined q cents to s0h cents an ounce
Yesterday. Early in the week the meta.
sold at S1A cents.
High Price Responsible
Apprehension in London over the
steady climb in silver prices, which are
now at the highest level in twenty-five
years, is understood to be responsible
for the step taken by the British Treas
ury. Local bankers placed little cred
ence in the suggestion made yesterday
that Great Britain was jealous of her
control of the worlds silver market
and was for this reason checking the
direct shipment of silver from the
United States to India. Before the war
practically all the silver that went to
India passed through London. which
for years has had almost absolute con-
troll of the worlds silver market. II
is believed here that inasmuch as Eng
land and the other Allies have been
very heavy buyers of the metal since
the war began, the move TO check the
flow of silver to India is an attempt
to stop that particular drain on the
worlds supply.
Indians Want Hard Money
The announcement received from In
dia Yesterday regarding the change
said that "the Indian government will
acquire all silver shipments on arrival
against payment in London
This means that the Indian govern
ment will take the silver imported from
the United States and give the shipper
or his representative in India sterling
drafts on London. In normal times this
would be acceptable to the American
shipper of the silver, who could con-
vert the sterling drafts into rupees
with which to pay the Indian merchant,
but in recent months the Indian ex-
change market has become so demoral-
lied that sterling drafts and dollar
drafts are not wanted in India.
This is the reason why American
houses importing hides, Jute and other
raw materials from India have since
the first of the year resorted TO paying
in hard money-that is to say, silver,
which they would sell on its arrival In
India, thereby converting 1t into rupees
and paying off the Indian merchant,
thus completing the business transac-
tion. Now. however, with the new ar
rangement in force, whereby the Indian
government takes the silver and gives
sterling drafts in exchange, there is no
purpose in chipping silver. 1t is be-
lieved that exports of the metal from
the United States to India. will be ef-
fectually stopped as result.
Now Shipping Gold
There remains to the American i'm
porter of Indian raw materials one
method by which he can pay the Ind
ian merchant, and that is through the
costly expedient of shipping gold. This
is already being done on fair scale,
and the movement is likely to increase
if the war continues. Under the new
arrangement gold imports into India
are permitted under license of the gov
ernment, which acquires all gold on
arrival. giving in exchange 15 rupees
to the English sovereign, and in the
case of bullion one rupee for 7.53344
grains of fine gold.
Such gold as is being shipped TO In
dia from the United States at the pres
ent time to settle the trade balance
is in the form of ten-ounce bars, which
are most acceptable in the Indian mar
kets. The gold is being shipped from
San Francisco, and goes to lndla VIA
Hang Kong The insurance and freight