The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1920-02-05
Metal ShortageCre-
ates New World
Basis
CALL IN SILVER MONEY
Drastic Steps May Be Neces-
sary to Cope With Unfor-
seen Situation

Coinage laws of the nations of TIT
world are undergoing remarkable
changes these days. The shortage o
gold and silver, with a decreasing
production in both metals has upse
the calculations of the money mar
kets and has brought about a state OF
affairs never before felt in the bust
ness life of the world.
Underlying this remarkable situa-
ton are two commanding causes.
The Position of Gold.
First is the position Of gold AS
everybody knows, it is mainly to that
metal that the modern world has
looked to perform for productive en-
terprise the requisite functions of ia
cilitating exchange, furnishing the ba-
sis of the credit system and imparting
liquid form to capital.
But compared with the almost in
conceivable burdens which gold has
been called upon to carry since 1914,
its supply is lamentably deficient Es-
Inmates for 1918, the latest year fol-
which figures are available, place the
total world stocks of the metal, ex-
elusive of those of India and Egypt, at
about $4,000, 100000 Against this it
is estimated that during the war, the
worlds bank deposits increased $25,-
600. 600, 900 and note circulation $780,
600, 900, 900. From which it becomes
apparent why the great central banks
and treasures have been so eager to
gather into their vaults every vestige
of the gold supply available, leaving a
scant Is per cent in general circula-
ton, or less than half the require
ments Of normal times; and why au
thorities hold the opinion that the
metal will probably not for years
come to be allowed to circulate freely
for internal purposes, especially in
European countries.
Production Declining.
In the face of this basic need for
gold, so rapidly growing in urgency,
production has been falling off. In
1915, for example, it was s47O,S2 ,527;
in 1918 only SSS4,576,7OO. Preliminary
estimates indicate even smaller world
DIOuutLlOu 4OI IJlJs ANOA NellA NAiAo oAb-
uation easily be corrected. With the
price of gold definitely fixed in ac-
cordance with the monetary stand
ards, there is left little margin for
stimulating production by offsetting
increased costs.
Therefore, silver, which next to
gold is the most universally accepted
form of money, has come to the front
to bolster up the inflated currency
and otherwise watered capital of the
world and to meet the necessity for a
largely increased circulating medium
of exchange.
Added to these demands are those
rising out of the abnormally large |
trade balances which India, China and |
all of the other eastern !
where silver is in special |
favor have been pinng up against the |
rest Of the world In these countries !
there has lately been a great awak-
ening to the opportunities Of closer |
relationships.
This country has, Of course, been !
the main source of the silver supply, ,
not only because of the position it
took a few years ago as the worlds
largest producer, but also because in
with Europe, it has been
under a relatively slight monetary
strain. Despite the fact that, as shown
by a recent federal reserve board re-
port. we exported over S6S million
dollars in gold last year. our holdings
still amount to perhaps 25 per cent Of
The worlds stock. And the ratio Of
reserves to net deposits and reserve
1ote liabilities combined stands at
about As per cent comparing, for ex-
lmple with reserves of 14% per cent
against note circulation of the Bank
If France and a ratio of only about
"a per cent in Germany.
Reorganize Silver Currency.
This state Of affairs has therefore
brought a necessity in the change Of
laws and already several Of
he leading nations of the world have
aiken steps to adjust themselves to
he new order
The first of the powers to take def
lite steps to reorganize silver cur
ency is Germany J
The Reichsbank, beginning January 7
j, offers 615 marks in lawful money {
paper) for each silver mark coin. {
This is intended to draw such silver 7
mark coins as yet remain in circula- 7
ion and that may have escaped the S