New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-01-04
England Averts
Threatened Famine
OF Hard Currency
Protective Measures Prevent
Hoarding or Melting of
Silver Coins; Worth More
: as Bullion Than Money

- 40 DUAAAOA neSu WxUW0y
Nss York Tyibwms
Ewrcpean Bureus
LONDON. Dec. 15.-The price Of sill
yer in England has crept up to above
$1.50, moro than 20 cents above par,
| and the market position continues to
cause anxiety to the authorities. Cont
mental domestic trade has been greatly
hampered by the premium on silver
metal and the consequent boarding Of
fractional coins.
1t is some months now since evil
dences Of an Unsuitable demand for sill
YER from China and the East mani
Tested itself. The British Treasury au-
thorities recognized the probability Of
the continued growth of this demand,
coupled with the clog on production in
Mexico and elsewhere, and that it
would lead to exceptionally high prices
for the metal and that some prepara-
ton must be made to meet a probable
silver emergency.
Prepare for Emergency
The Chancellor of the Exehecuer
| therefore, caused an issue of 5-shiflinr
paper notes to be prepared in advance.
Inc price OF silver continued to rise.
an acute famine existed on the CONT
nent, and an issue of half-crown notes
iabout 90 cents, par vaiue} was also
struck off. Neither Of these issues has
been circulated
The famine in small change has been
severe on the. Continent; England. It
mas 80 turned out, has not been ~
seriously affected az had been feared.
tor this country has always been the
center OF the silver mart, and has
provided enough silver for trade here
Defore passing the balance Of the avail
able supply along to the Continent.
France has been compelled to resor<
to extraordinary measures. such az
the use Of brass and aluminium checks.
assued by private business houses and
accepted by them at face value IN cx.
change for merchandise. England has
taken precautions, but so far has not
felt the shortage as severely as her
neighbor.
Little Meltang In England
Theoretically. when the price Of
silver reaches s132 an ounce in the
London market, it becomes profitable
to melt down silver coin; when this
quotation was reached about the list
Of November considerable excitement
was caused; rumors Of great hoardings
and MEETINGS were freely circulated.
and. trades-people tried their best to
avoid giving silver change. Obviously.
The melting of coin, in actual fact
would not be a paying proposition
until the price Of silver reached at
least $1.40. This latter quotation was
reached, and passed. Silver went
above s1.5o. Reports were received
daily from the Continent of the arrest
OF travellers who were fiaeing with
silver for the Swiss border and a pri-
vate smelling works. But nothing OF
the kind occurred in England; there
coins, nor did boarding take place ia
, the anticipated extent. The shortage
is apparent to the financial expert: fo
the man in the street it is not.
The reasons for Britain's successful
avoidance of silver crisis are many
Efficient government handling of the
proposition and failure to give way
to hysteria are two Of them. The gov
eminent issued regulation making It
down coins; the metal In forms and
half crown pieces, as well as in the
smaller coins, is now worth consider
ably more than the face value Of those
pieces; with n premium Of about 20
per cent on silver it would have been
highly profitable to melt large uuan-
titles of coins and sell the metal in the
open market. The regulation has ef-
fectively stopped such practice in Eng
land. On the Continent more difficulty
was experienced in preventing the
melting Of silver coinage, because Of
the greater premium on silver due to
the greater depreciation in exchange
rates. 1t became necessary In France
to prohibit travellers from taking more
than stipulated sum in silver coins
when they crossed the border.
Another way in which the public can
embarrass the government during a sill
yer shortage is by boarding coins. This
always he's been done on the Continent.
The French peasant is an insatiable
hoarder Yet even in the present crisis
in this country there has been no
boarding on an injurious scale. A little
there probably is, but the Englishman
is not hoarder by nature, and this as
pect Of the question is not taken by the
treasury to be the most serious. Up to
the present appeals in TIE press and in
Parliament to "keep small change NOV
ing quickly" seems to have produced
the desired effect.
A Favorable Factor
What the treasury is most concerned
about is the fact that silver prices are
now over 20 cents per ounce above the
price at which the mint can produce
coinage without suffering loss. A re-
newed rise in silver would Immediately
enhance the dangers from melting and
boarding, but favorable factor in the
situation is the existence in the Bank of
France, of an enormous quantity Of sill
yer francs, capable now of being used
profitably in the open market. The
acuteness of the situation was further
relieved by the recent break which took
place early in December on the news
that the United States Government was
prepared to supply broken up silver
dollars in exchange for gold dollars.
Further movements of the New York
exchange against the pound sterling
have almost eliminated this gain. The
release of American dollars. which were
melted down End shipped to India, has
had a beneficial effect, because it re-
leased that much silver for the rest Of
the world.
The native of India has the utmost
aversion to any sort Of paper money
and will not accept it under any cir
cumstances. He uses silver as cur
rency, but will also accept gold in
payment for his work. But he imme-
diately boards the gold, or melts it
down into ornaments. Thus, India has
become a great chasm to fill. Similar
feeling exists in China and is spread
ing. hence the recent heavy demands
from the East for silver.
e.