The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-05-23
THE P|TTMAN SILVER LAW
INCREASE USE OF METAL
IT is A WAR MEASURE AND NOT
STEP TOWARD A DOUBLE
MONETARY STANDARD.
Mining and Scientific Press.)


highly gratifying to the miner, for
silver is established at the dollar
mark. Secretary McAdoo, in his let
ter to Senator Pittman, recited the
main facts: that more silver was re-
quired in order to settle foreign bal
ances, instead of attempting to stab
iize exchange by methods that involv-
ed future adjustment by means of
gold, which Is greatly needed at this
time as base for the huge structure
of credit created by government loans.
Therefore 350,000,000 of the silver dol
lars stored in the treasury will be con-
verted into bullion. The stock of such
dollars is 49O,O0O,O00 containing 375,-
100000 ounces of fine silver, all rep
resented by outstanding silver certi-
ficates. These are to be retired as the
dollars are taken out of the treasury
and in their place federal reserve bank
notes Of various denominations Gin
Guiding those of 81 and $2) will be is
sued. OF these notes only $11,670,000
worth Is in circulation as yet. 1t is in
teresting to note that silver certificates
have disappeared from circulation to a
considerable extent, and it is open to
question whether the necessary guam
tity of these certificates will be avail
able as fast as needed for carrying
out the purpose Of the act Concur
rently the treasury Is authorized to
replace the silver thus used, for ex-
change and export, by the purchase of
bullion on the market at 81 per fine
ounce coming this new metal into
standard dollars. In this way the
large accumulation Of silver, occupy
ing 10000 cubic feet of space in the
treasury and weighing 1880 tons, be-
comes available for war service. 1t is
probable that the governments pur-
chases will absorb the entire output of
silver from mines in the United States
The season of maximum export from
Japan and China is now at hand and
silver will be needed by American i'm
porters to pay their balances to the
Orient; therefore the passage of the
act is timely. In March $9,946,351 in
silver bars was shipped from San
Francisco and in April $7,O0O,OO0 The
advancing price of all commodities
produced in the Orient has given the
people of India and China an enor-
nous increase of purchasing power,
enabling them to convert their sur
pluses into silver as never before
That factor gains in Importance from
the circumstance that freight and in
surance across the Pacific from this
coast are considerably less than by
the usual route from New York and
London by way of the Mediterranean
and the Suez canal, where the sub
marine menace has raised the insur-
ance against war risks to a prohibit
tive figure These abnormal conditions
have called for special legislation. The
Pittman act is war measure, not an
experiment in -metallism; it's object
is to make use of the silver lying inert
in the treasury.
Further data will be timely. No
silver dollars have been coined since
1904. About 100000 ounces was pur-
half dollars. The standard dollar con-
tains 4121s grains of silver, its value
being based on a gold equivalent Of
$12929 per ounce. so that with silver
at 81 the seigniorage is 22.7 cents The
silver value Of subsidiary coins is SAG
per cent less, hence there would be a
seignorage, or profit on minting, even
If silver stood at $1.30 per ounce. In
other countries the seigniorage is even
larger. The United States produced
74,244,50O out of the worlds total pro-
duction of 10000, 900 ounces last year.
The increased demand for silver has
been due to variety of causes. An
appreciation was inevitable when gold
was withdrawn from circulation by the
belligerent nations and silver became
the principal metallic currency in
daily USE In Mexico successive revo-
lutions and persistent disorder caused
a decrease in production from S7,00O,-
900 ounces in 1911 to 100000 in 1917.
Meanwhile India enjoyed a series of
good harvests and accumulated big
credit balance with the warning coun-
tries of Europe. This called for silver,
Exports to India raised the price of
silver. but crop failure would cause
a commensurate drop, upsetting ex-
change. Hence the desire Of British
government to stabilize silver, and
thereby the rupee. The Indian demand
for silver in 1916 was met by heavy
exports from China, causing wild
speculation, with restriction Of trade
In September. 1917. silver rose to los
cents, a large export from San Fran
cisco having developed. Thereupon the
United States placed an embargo on
export to China, except under license
and at the same time the British gov
eminent restricted the shipment OF
silver to the Scandinavian countries
BY that time the entry of the United
States into the war, and the increased
war expenditure of the British govern
ment in Asia, owing to the employ
ment of Indian troops and the cam
paign in Mesopotamia, had intensi'
fled the scarcity of silver, previousl,
induced by the subsidiary coinage re-
= A.,