The Topeka state journal., 1919-12-13
TOPEKA STATE JOURNAL
Information Bureau
FREDERIC j. IIAskIN, Director.
Washington, d. C.
SILVER COMES BACK.

a
s1.3O an ounce
This fact, means very little to the
! average American. Even when he is
told that silver was worth but forty
eight cents back in 1914 and that the
present price is nearly three timesthat
figure he is not perturbed.
| But there is an unusual element in
| this case. The silver dollar which is
used as currency in this country is
worth more as metal than as money
When silver goes above 129. When an
individual may take a hundred silver
dollars and melt them and sell the re-
sulting metal for more than a hundred
| dollars there are sure to be people here
apd there who will so into the dollar
melting business. As a matter of fact,
there is no law to interfere with the
melting of silver coin. Anybody who
has dollar and wants to melt it may
do so.
So it appears that if silver goes
much higher, there will be the danger
of large industry growing out of
dollar-melti1g. If such an industry
develops it is obvious that silver coin
will rapidly disappear from circula-
i ton If the government attempts to
replace it, the result will be but to
| increase the material from which the
meters may make a profit Sooner or
/ later the end of the reserve silver sup
ply of the United States would be
reached and then. when the coin was
melted, there would be none to take
its place.
This is theoretically what would
happen when silver goes above $3.50
an ounce, or $1.29 to be exact. OF
| course the price would need to be
| several cents over that amount to pay
for the melting and to yield a profit
that is worth the effort. The dollars
must be new. also. for old dollars have
lost some of their weight. So it is
apparent that the metal must be up to
| $1.35 or better before there will be
much melting. 1t has not quite reach
| ed that figure yet.
| The government would not worry
much if the silver dollars should be
melted. 1t has not coined silver dol
lars for a long time. 1t may never
coin them again. 1t is about convert
ed to the belief that only. subsidiary
coins, those of the fractions of the
dollar, should be of metal. Unless
policy changes, the old iron man is
destined to take his place with those
who have gone before.
But the subsidiary coin we must
have. Dimes and quarters and half
dollars are Indispensable. Were there
danger of the silver melters getting
busy on subsidiary coins there would
be occasion for real worry.
| 1t happens. however, that the coin
makers, in the very beginning. took a
precaution which fits exactly into the
present situation. 1t would be inter
! esting to know if that action was from
foresight or by accident. Anyway
they put less silver in proportion to
their value into the subsidiary coins
than they did into the silver dollars.
Ten dimes. four quarters. or two
halves, cigh exactly the same amount
when they come from the mint But
a dollar in any of these subsidiary
coins weighs less than does a dollar
coin. While silver must be worth
more than $1-29 an ounce to affect
the dollar coinage. it must be worth
| more than S1.3S to endanger subsid-
iary coinage.
AS a matter of fact it will have to
be around $1.45 or/s1.50 to pay for
the trouble, take care of abrasion and
pay anything like a worth while profit
on the melting business.
So the government is not yet worry
ing about having it's dimes and quar-
ters melted When the point of dan
ger is reached, there are several lines
of. government action possible. Dur
ing the war there was an embargo on
silver. If this embargo were put
back. the demand would be cut off and
the price might tumble. Then there
is the possibility of prohibiting the
melting of subsidiary coin. This would
discourage the industry. The treasury
has many million of dollars worth of
silver and could readily replace lesser
Hoses. There is much silver in treas
ury vaults in bullion. There are vaults
in New York, Philadelphia. Denver
in which gold and silver is stacked up
like sacks in a granary. 1t is meas
ured in tons, in carloads, even in ship
loads.
To appreciate the present silver
situation one must go back to that
4S cents an ounce in 1914. He must
follow the record back and find that
| the price has played back and forth
| from fifty cents to seventy-five cents
for thirty years. Never before since
1890 has silver gone above a dollar
an ounce Not since 1866 has it been
up to its present price. Until this war
came, the decline had been constant
since the Civil war. Before the Civil
war silver ranged regularly around a
dollar thirty to dollar thirty five. 1t
was probably in those days that the
present amount of it came to be put
! into our coins, thus giving them an
| actual intrinsic value about equal to
their face value.
The present boom in the silver mar
ket is due principally to the demand
for the metal in the far east. There
| is likewise a demand from several of
the European nations that have issued
large amounts of paper money and are
= anxious to get metal back of it to
{ steady that currency. But the chief
! demand is from India, China and ia
pan, ali of which are on silver mon
etary basis.
The big run on American silver
I came when. in. the T1idst of the war,
Great, Britain came to us in such per-
turbation. The trouble was in India.
The situation there is unique. The
East Indian has an Unsuitable appe-
D tite for the precious metals. India
is known as the sinkhole of the world
for gold and silver. These metals &c
: to India in shiploads, are absorbed
: and disappear There is no coinage
with (which to transact business and
the outside world sends more gold and
silver. 1t is Indifferent. II India wants
S to bull, the precious metal markef
the producers are glad of the fact,
But in the midst of the war there
O. was no coin in India London had
!, always been the silver market of the