The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1921-05-26

are chiefly exchange banks interested
in many parts of the world. but so
far as silver is concerned chiefly in
India and China.
China and India have each of them
a rate of exchange on England. These
rates of exchange vary almost daily
and each rate of exchange has an
equivalent i'm silver bullion. For eX-
ample if the rate of exchange in
shanghai is 9s per Chinese tael, sill
yer bullion is worth a very high fig
ure per ounce; if exchange is As. Cd,
the price that they will pay for silver
bullion is only half the former price.
Both these rates of exchange have
been current within the last y months
hence the wide nuctuation in the
price of silver without the slightest
manipulation on the part Of the brok-
ors The banks know what rates for
silver will pay them and what will not
pay them. and they give their orders
accordingly: that is, usually with
limits-say: BUY Cor selD on our ac-
count 100 600 ounces today at f2d., or
perhaps a fraction higher. but not
above 42isd."
THE fact is that the China and
India rates of exchange on London
dominate the silver market hence the
fact that the London market domin-
ates the American price of silver.
Now. If the London price is sod, and
the rate of exchange on New York is
s2S6. the market price is very diff
fercnt figure if the rate of exchange
moves to $3.50 per English pound.
This provides you with two variables
first. the Chinese or Indian rate on
England and then the London rate on
New York; and all the mysteries of
variations i'm the price of silver come
down to these two factors. so that the
mysteries are simplicity itself. They
are simply buying and selling by re-
sponsible banks through responsible
brokers' silver is a commodity and
travels mp and down in response to
supply and demand and can not be
made to follow the wishes OF produc-
ers any more than wheat or cotton
can be kept within certain bounds"
Answering a question on the sub
iect of competition from other silver
markets. this same authority said:
Outside competition would hardly
stand a chance within the next so
years. if that First of all, a broker
requires a clientele on both sides of
the ledger: for instance, at present
the large supplies of continental sill
yer resulting from the melting down
of continental currencies come to the
brokers through their old continental
customers. collected together into
their books through the experience
of years and years During the last
nine months these supplies of contin-
entail silver have been very much
larger than supplies of American sill
ver-in fact the market has been, to
"a large extent, Independent of Am
erican supples-and we believe that
there were times when America sold
nothing here, but, instead. sold it for
delivery in San Francisco to exchange
banks representatives of the eX-
change banks here). However, they
have been able to sell there only at
the equivalent of the rate arranged
in London on the day of their sales
in San Francisco or New York, or
close thereto, so that London has still
dominated the American market.
at present it looks as though
the continent of Europe can go on
selling indefinitely, largely owing to
The fact that continental rates of ex-
change are so high here as to give
he sellers a wonderful return for
heir currencies. For instance, at
,6O marks per pound on Berlin, Ber-
in is reaping in paper IS times its
FORMAL return on silver. In addition,
china and India have absorbed such
tbnormally large quantities of silver
While the prices of produce were
nigh that it looks hardly possible for
'ither of them to continue absorb
ng at anything like the same pace;
n fact, there is quite a possibility,
f not a probability, that with trade
n it's present languishing condition
he world over, large disgorgements
If silver from those quarters might
axe place.
You Will appreciate that bullion
brokers' have to be aware of and in
aily touch with. all these factors,
nd also that it is not a business
which can be taken hold of at five
minutes notice and proceeded with
n the absence of long and inherited
experience"
Undoubtedly the four firms in
barge of the London market exer-
Use an enormous power which eX-
ends to every part of the world and
to the United States,
ndia and China; but inquiry fails to
isclose a single definite complaint
hat they artifcially manipulate the
market, although numerous Observ-
rs recognize that they are potential
y able to do so.
AS already stated, there are no
governmental measures of special