The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-04-04
An American Policy Regarding Silver---
How London Manages to Fix the Price

that amount to Japan, and Britain
owes Japan forty millions instead OF
the United States owing 1t.
= Great Britain desires to continue in
control Of the silver market for the
following reasons:
First, to get cheap silver for her
coinage in linda. and for other uses
there. She has fixed the gold ex-
change value Of the Indian rupee cor
responding to a silver value Of 9437c
per troy ounce, and by getting silver
for less than that price the Indian
mint has made a seignorage profit Of
$51, 100000. II silver goes above that
price, the Indian mint must lose, in
stead of profiting by its coinage, and
IL bullion were allowed to be shipped
out Of India, price above about ~
per uonce would cover the costs of
transportation, insurance. refining and
exchange, and would cause the rupee
TO disappear from circulation. 1t may
be remarked that the Indian silver ru-
pee Is now also circulated in Mesopo-
tamia and Egypt.
Second, to maintain low price and
therefore favorable rate of exchange
for her purposes in China. The Chi
nese tael is not a government coin but
merely weight of silver, and is equiv
alent to LIZ troy ounces 93l.5 fine.
Britain would rather buy eight taels
worth of goods in China for a pound
sterling than only three taels worth,
Third, to control the Oriental trade.
BY being on the inside Of the silver
market Britain has been able to op-
crate to the advantage Of her own in
terests, and to the disadvantage Of her
rivals. The fluctuations in the price
of silver may more than offset fai-
commercial profit. One who has not
actually lived in the Orient has little
conception of the vast amount Of daily
speculation In silver and exchange.
II Is not only common form Of gamb-
ling, but 1t Is a necessary part Of every
commercial transaction with gold
standard country. With the British
In control of the silver market. Am
erican firms have about as much
chance to compete with the British as
lamb has to survive on Wall street.
This means that American firms must
confine themselves to American spe-
cialties. Otherwise, sooner or later,
the insiders will win.
Prior to our Civil war; the Ameri-
can tonnage on the oceans was almost
as great as the British, and the Am
orleans were a considerable factor in
the Chinese trade The last of tho
great American firms In China was
Russell & Co., of Canton, and they
had a large number of steamers in
the Chinese coastwise trade About
20 years ago they sold their fleet and
retired from business. On being ask
ed the reason for this their manager
replied IF l were to name one rea-
son / would say that it was the diff
Guilty Of handling the silver ex-
change" We have seen the price Of
silver fluctuate by "a per cent in tho
last few months, and the effect on a
company that, for example. is hand
ling a million dollars worth of silk
and guesses wrong on the silver mar
ket needs no comment
Fourth to make profits from the
oriental exchange. All Of the British
oriental banks are known as exchange
banks, and expect to make their prin-
cipal profit, not from deposits and
loans, but from exchange transac-
tons. In an uncertain market nat
urally the charges are all the higher.
Not long ago the price asked for ex-
change from New York to India was
so great that Williams, Wigmore &
Co., refused to pay it. They found 1t
profitable to charter ship and trans
port their own silver to linda.
We should have an American poll
icy in regard to silver, for the follow
ing reasons: First, to obtain an ade-
quate remuneration for American la
Dor and American investment, and for
the wasting of our natural resources.
1t can be pointed out here that, in
spite Of the increased price for silver
during the past year, profits have not
increased and the production of the
state of Nevada in 1917 was 2,443,O00
ounces less than in 1916.
Second, for the development and
continued existence of an oriental
trade. AS matters now stand it would
appear to be necessary to establish
efficient American banking agencies
throughout the orient, but II the price
Of silver is stabilized Americans could
then safely use the established Brit
ish banks until such time as Ameri-
can trade was developed TO larger
The effect of good and stable price
for silver acts both directly and indi-
rectly to assist the government of
silver standard country. Last Sep
TENDER when silver was $1.1O per
ounce, the following letter was mailed
to the London times from its speciai