New-York tribune., 1918-04-10
Propose Melting
Down 250,000,000
Silver Dollars
Congress Asked to Fix the
Price for Metal at ST
an Ounce

WASHINGTON, April 9.-Melting
into bullion of not more than 50,000,-
600 silver dollars now in the Treasury
for sale and export to pay trade bal
anccs, and rcpurchase of silver at 81
an ounce, is proposed in an Admins
tration bill introduced to-day by Sen
ator Pittman as an emergency war
measure. Silver certificates would be
Withdrawn from circulation as the dol
lars are taken from the Treasury, and
Federal Reserve bank notes Of new 81
and 81 denominations substituted.
If enacted, the measure virtually
would fix a standard price for silver at
81 All ounce, several cents above the
present market, and stabilize the world
market, since the United States pro-
duces almost half of the total. The
bill also is intended to stimulate silver
production and to use the treasury's
of gold, to settle this country's COM
mcrcal trade balances in the Orient
and elsewhere.
In anticipation of action by Con-
gress, Raymond T. Baker, Director of
the Mint, has formulated an agreement
with silver producers and dealers to
sell to the government at the 81 rate.
The probable result would be for the
government to absorb the country's en-
tire output, about 74,OO0,OOO ounces
last year. Officials have stated they
would make arrangements to supply
quantities Of silver to jewellers and
manufacturers requiring it.
The bill would permit the Secretary
of the Treasury to fix the selling price
Of the governments silver, but it is
assumed this would be not less than
81. India, China and japan need
silver most for coinage. and ouan
t'tles also might be exported to South
American countries and F.uronean neu
trals whose trade balances are against
the United States. India's requirements
would be negotiated through Great
Britain.
The Silver Hoard
The Treasury now holds 491 900 900
s
100000 ounces of silver. In withdraw
ing silver certificates based on this
com, effort probably would be made to
take bllls of denominations of SIS and
more, leaving the 81 and So bills, which
are now in great demand. To guard
against contracting circulation. how
ever, Senator Pittman's bill would pro-
vide tor issuance of Federal Reserve
pank notes of which only s11 $4,000
are IN clrculatlon, III smaller dcnomi-
mations than the present s. minimum.
redGral Reserve bank notes are vir-
Sually the same as national bank notes.
o';, pGu me ne special notes would have
s,hghtly different basis, consisting Of
reasury certificates Of Indebtedness or
one-year gold notes. Arrangements
would be made for the Federal Re.
serve Board to force withdrawal of
these when the silver is replaced in
the Treasury. No more could he ;s-
sued at any time than the face value of
SILVER taken from the Treasury.
~ Secretary McAdoo wrote to Senator
fl'tman supporting the bill as q wa
measure, although he suggested there
aleht De wide difference of opinion
sort;t oi t'ee pese method OF replacing silver
I'm this way" the Secretary ox-
plained, the large mass of silver which
is serving no useful active purpose
now can be made available for a direct
war purpose. There is no intention of
making any permanent change in tho
status of the silver certificates. Tho
proposition is, in brief, to retire silver
certificates; to borrow from the Treas.
ury the silver for use for war NM
poses; and then, as silver from time to
time IN tho future comes on the mar.
ket, to replace the silver so borrowed
by purchase in the market at the fixed
price of 81 per fine ounce and 10 70.
place the borrowed silver by coinino
the new silver acquired for that nur,
pose into standard silver dollars. There
is no limit to which this must be done y
No silver dollars have been coined
since 1904 For half dollars. quarters
and dimes, the government this vear
needs about 21,0OO.0OO ounces of silver
Determination of the part of Treas
ury officials to urge the fixing of =
SILVER price resulted from the erratic
huctuatlons Of the silver market. A
conference Of Western Senators sill
Yer producers and Treasury officials
recently discussed the subject ri
length, with the idea of 81 an ounce
as 4 fair price