New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-10-20
Government Buys
Mexican Pesos,
Paying in Gold
Officials Say Recent Rise of
Silver Was Unwarranted;
Investigation Started

WASHINGTON, Oct. 1s.-Six million
Mexican silver pesos have been bought
by the Treasury Department at sSA
cants an ounce for minting into half
dollars. dimes and quarters. The Treas
ury acted when faced with the neces-
sIty OF buying silver for coinage at
steadily increasing prices, which re-
Gently threatened to bring the metal
close TO the point at which dollars
would b. worth moro as bullion than
as currency.
Now the price of silver in this eoun-
try has dropped precipitately' Inc
swift collapse from sl.OSh to So cents
per ounce. decline OF 23ls cents
within three weeks, has resulted in an
investigation to determine whether the
market had been manipulated. Inc
high prices recently prevailing are re-
garded as wholly unwarranted by ON
cials here.
A Record Purchase
The purchase of the great volume OF
Mexican dollars, the pargest purchase
bv the government Of the minted silver
coin of another ever recorded, places
the limited States in possession OF a
sufficient quantity OF silver to run tho
mints for two or three months ana
w,tbdraws from the silver market here
the largest single buyer. -.
Negotiations have been proceeolhs
between representatives OF the Gar
ra,za government and Director BAKER
Of the Mint for some time past for the
hic sale. Ii is understood that the
Mexican dollars are to be deiiVers e,
soon and Federal Reserve Board ON
ciols who have been in touch with the
various phases OF the negotiations
have indicated their willingness TO per-
NIT the expectation TO Mexico OF ap-
nroximately s500O,000 in gold as pay
ment.
VIII Lift Embargo
In return the Carranze government -
understood TO have lifted It's virtual
erbarco on the expectation TO TINS
country Of silver and copper, and that
tbese and other commodities needea
here soon will be crossing the lnterha-
tional line freely.
Mexico needs the gold badly to IN,
crease its scanty store OF mlnteo goIu
coin The importation by that coun-
trv % $4,000. 900 for this purpose, II
"a assumed. also will tend to relieve
the diflculties OF American operators
in the oil fields there in paying thelr
heavy burden Of taxes, which, unoer
tne Mexican law. must be paid III MeNl-
can minted gold.
The net results Of the transaction, as
viewed by officials here, is that the
danger OF par silver for mintage mas
Rev avertcd. That Mexico will be IN
= stranger position financially than
befo~a that The somewhat strained
Snsrc;al relations between the two
countries will be eased percepuoly ana
49, Nfevican copper and silver, needed
here. will b. available in the future
Causes of Decline
The imposition by the American
Government Of virtual embargo on
the expectation Of silver contributed
Iargelv 10 the sudden lowering OF silver
nrices in the domestic market. Inc
withdrawal OF China from the market
was another important factor in the
decline. For some time past the gov
eminent has been compelled to buy
silver sparingly IN the face of soar
ing market to meet its immedlaVe
needs. the heaviest ever known. FROM
approximately 81 cents an ounce, IN
1si4, silver quotations went steadily
upward, uatil they touched 20 CENTS
about two months ago.
Thereafter quotations began 10
eyince symptoms of an utterly deranged
market Prices advanced spasmodlcal-
lv. sometimes as much as several cents
a dav. until the top was reached, al
s10si2. At that time the market quo
tation was only 20s4 cents below the
minted vaule per ounce, as the mlntS
turn out s1.2929 in small coins FOR
every ounce purchased.
Had the minted value been reached
il would have been without precedent
and might have resulted in the cessa-
ton Of silver coinage at time when
such coinage was imperatively needed
Efforts TO meet the situation by chang
inc the standard Of silver bullion pur-
chased and throwing open the doors TO
the entry Of low grade silver bullion
failed to check the upward movement
but a report that negotiations were
under way for the governmental pur-
chase Of large quantity OF minteo
silver from foreign government
brought an immediate response. Prices