The New York herald., 1920-01-18
SEE BIG DEMAND
FOR SILVER To PAY
WORLDS DEBTS
Present Control of Gold Will
Force Shipments to Far
East, Says Review.

Demand for silver during the present
year VIII be even greater than in 1919. ac-
cordinS to the predictions OF the bullion
firm OF Handy & Harman in their annual
review OF the silver situation. In their
review OF 1919 and predictions Of the pres
ent year they say demand for white metal
can be expected to spring up from all
| Parts OF the world. In this connection
they say
That the world demand during the next
twelve months WILL however, continue to
be heavy appears in most quarters to be
foregone conclusion. In support of this
opinion the following economic conditions
are cited
during the war and for many months
atter the start of rehabilitation the Al
lies ana the United States purchased
amazing amounts of raw materials in the
Ear East. Reconstruction in Europe has
not yet progressed far enough to decrease
materially these adverse trade balances
oy the shipment of commodities. Nor is
settlement through bank credits and
bond issues sufficient because Of lack
OF proper banking organization and credit
machinery in these newly developing Sec
tions of the Orient.
Far East to Buy.
Therefore, the only alternative is a set !
tlement by means of the precious metals;
Dut as the United States and the British
Empire. the chief holders of the world S !
gold supply, will most assuredly continue
10 maintain their positions as creditor ma
tons and conserve their reserves of the |
yellow metal. the shipments of silver in !
volume to the Far East will represent a
large snare of the precious metal export |
From the above il is fair to draw the
conclusion that general demand for sill |
Yer can be expected to spring up from |
all parts of the world India. on account |
Oh the enormous amount which she has re |
ceiVed during the last two years and be- |
cause OF EnSlands recent fixing of the !
rupee at an increased value of two shill- |
lngs four pence. may possibly prove an
exception: inasmuch as this action on
England's part. in addition to recogniz-
ing the intrinsic worth of the silver con- !
tents of rupee. is thought to be an at |
tempt to settle India's trade balance in |
sold. Therefore. the effect of this step
py the British government is regarded BY |
some as eliminating India as one of ths !
most important purchasing centres and
reducing the world demand by her normal
consumption.
Such a view however. appears TO he
radical. and our impression Is that India |
Will continue to be buyer. In forecast |
ing future prices from present aIl-around
indications, therefore, there seems to be
sufficient justification for assuming tha
next seasons inquiries will prove-'sur- |
ficiently libei III to ma ntain silver prices |
at level but little, If any. below the
range of the last few months IT will he
| interesting aff
OF the opening OF the Chinese new year
the latter part Of February when the
import season sets in. Whether or not
quotations will continue to touch the high
spots Of our recent market stilI -6epends
on what such purchasing centres as
shahshal and Hong Kong are willing to
bid.
World Silver Shortage
The student of finance who car
prophesy the China demand for the coming
year will be able to foretell the future
trend OF silver bullion values
The worlds output for the past wear
although augmented by 100000 fine
ounces obtained from melted United !
States silver dollars, has by no means
satisfied the demand. Present high prices
TESTIFY to that. In fact il is generally
conceded by those who have given care
ful attention to the matter that there
exists world shortage in silver
I'm the present worldwide state oil
credit initiation the strain in certain
countries is of course more severe thsnl
i'm others: but taken as "A whole the largel
issuance of paper money in Europe has
resulted in general distrust among thel
working classes for promissory forms of
paper currency. Lack of confidence has
brought about the boarding of coins and
in conjunction with the prevailing high
prices OF silver .he actual melting of coin
into bullion and its withdrawal from circu-
lation has occurred This state of affairs
has been acute not only in Europe. but
also i'm Asiatic countries. Evidence of this
character is seen in the dstrust of the
rupee notes in India the same feeling ia
being shown by the natives OF the in
terror Of China, Mancburia and Siberia