The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1920-12-03
GOVERNMENT took
A TERRIFIC Loss
ON SILVER SALES
Melting Good American
Silver Dollars to Help
Foreign Markets
Costly

WASHINGTON, Dec. 3.-The
United States government has lost q
vast sum estimated at between one
and two hundred million dollars in
an endeavor to hold up the deprecia.
ted currency of Great Britain and
other countries with which she was
allied in the. war, treasury Officials
revealed today. For this loss she has
neither been reimbursed nor even
officially thanked.
The extent to which the United
States supported European and far
eastern currency is shown by the
fact that when the armistice was
signed and this support was largely
withdrawn 1.-THE bottom fell OUT OF
the exchange market, as one treasury
official expressed it.
How vast have been the losses OF
the United States is revealed by the
following incident:
On April IL, 1918, severe panic
occurred in India owing to the dis
appearance of silver, which is the
basis of her currency. and flood Of
paper rupees issued by the British
government. Within ten days the run
on silver supporting the paper mon
ey reduced the reserve by 100000
900.
In this extremity the British gov
eminent appealed to the United
States for relief, representing that
situation which started in financial
panic threatens to develop into q re-
volt that would sweep away every
vestige of British authority in India.
Melt Silver Dollars
Thereupon President wills n
against advice of many congressional
leaders, rushed through congress a
bill now known as the Pittman act
1t provided for the melting down of
$3.50, 100000 Of American silver dol
lars and the sale of the bullion
abroad at the fixed price Of 81 an
ounce. OF this amount 2O7 900, 900
ounces were sold to the British gov
eminent for use in India. The remain
der went to France and other Euro
pean countries. The price of silver
was at that time well above the fixed
price of 81, and ultimately reached
around $1.35 per ounce.
The Pittman act provides that the
$35O,O00,000 in silver should be re-
placed by purchases from American
producers at the same price Of 81 an
ounce. In the meantime the price of
silver had fallen lower and lower I'M
til recently at IS cents an ounce.
Nevertheless, the government is re-
CURED by law to pay 81 per ounce
until the purchase of $50, 100000
ounces is completed.
In practically all oriental countries
silver Is the basis of currency and
during the war nearly all the silver
in circulation quickly disappeared
into secret, hiding places of the baz-
aars of jewellers.
So acute had the question become
before the United States generously
solved the difficulty by pouring mil
lions of dollars in silver into the lap
OF Great Britain that commercial
were reduced to barter,
because no one wanted to accept the
deprecated paper money that was the
only currency available.
Loss Is Admitted
Officials close to the president
when questioned concerning the sill
yer policy Of the government, espe-
,ially the Indian transaction, admit |
ed the huge cost to this government,
but declared that the summary ac-
ion of President Wilson was entirely
Justified by the critical position in
which our ally, Great Britain, was
It the time placed.
They pointed out that nothing less
lrastic than the Pittman act could |
lave saved Great Britain collapse and |
! series of colonial revolts that would |
lave wrecked her empire.
1t was admitted that the Pittman
!ct carries no provision by which the
United States can be compensated for |
Ter beneficent and timely action on |
'ehalf Of Great Britain. i