Evening star., 1918-01-14
THE SILVER SITUATION.
Rise and Fall of the White Metal.
Reasons for Its Recovery.


In the evolution of intercontinentaI
trade silver must always play an i'm
portant part. 1t is both the metal for
ornaments among eastern nations and for
the monetary subdivisions, so essential
in countries where the wages are small
and the earners many. These two facts
are the credentials which have won it
favor in Asatic countries and have main
tanned for 1t permanent place in finance
and economics
The course of silver for the last fifty
years has been very erratic; up to 1870
the price in London was sod or over Then
a sudden change came over the relative
value OF silver and gold, bulk for bulk,
with downward tendency for the former.
Primarily it was caused by the action of
Germany going from a silver to a gold
basis. Victorious in the Franco-German
war. receiving a huge gold indemnity
from France, the German government, by
means OF heavy sales of the demonetized
silver thaler. forced down the price to
unpreeedented figures This decline was
accentuated by the coincidence of the great
increase in the production of the precious
metals in our own country-the output of
the Comstock lode was almost fabulous
for a while
eter-which in 1870 was quoted at
6o Ed. In 1885 was down to 46Md I'm
der the economic distress revealed in
our western mining camps by the cheap
closfng-Congress came to the rescue,
and in 1890 passed the Sherman act
authorizing the purchase each month
or 100000 ounces of silver at the mar
ket price. The operation of this act
was a temporary tonic for silver. caus-
ing rise to 54%d. but this figure could
not be maintained by an artificial stim-
u!ation. and so Congress saw the error
or Its ways and repealed the law in
1893. This decision was followed by the
,j,,fr FN,,
coinage OF rupees. with the result that
the silver price dropped to 311ad It is
a matter of record that the fuctua tions
involved in the decline of the metal to
very closely related to, and in sym
pathy with, many changed conditions
In the east. such as the famine in India
in 1877, and the China-Japan war in
1884. Thus. in the last half century, we
have range of price from 601ad down
to 22d or under and back to aid, the
current price.
After a series of efforts to revive the
waning values of silver, such as the
monetary conference in Brussels in
India mint in 1904 and succeeding
years, we come down to 1914 and the
european war. which caused the prac-
tlcal communicating of all the gold in
sight by the various governments and
the purchase of silver for mintaee on
an enormous scale. This was done to
fill the vacuum created by the boarding
of gold by the leading European ma
tions as well as of silver coins by mil
lions of their people. The demand for
silver coinage has been so urgent that
never before have the mints been so
busy in providing shillings, francs, ru-
pees and piastres, The English, Aus
tralian and Indian mints, more espe-
cially. have been active in the last two
years supplying the British possessions
Viscount Miner of the Bank of British
West Africa, has stated:
"1t has taxed the banks power to
supply not the credit. but the actual
coin, by means of which trade can he
carried on. The effects of the shortage
of silver were mitigated to some ex-
tent by the introduction of currency
notes. but it takes time to establish
confidence in paper among the native
population. and, therefore, we must be
prepared for those sudden demands for
larger quantities. of silver"
1t has been sta9ed, on good authority.
that Germany and Austria, deprived of
the usual importations of silver bullion.
have been hard pressed to find a metal
lie basis suitable for small change. To
meet the stringency, these countries
have adopted iron tokens, and to pre-
vent rust, they are plated with a thin
layer of zinc. which, under low tempera-
ture is absorbed by the baser metal and
forms surface similar to nickel