The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1921-03-31
The Silver Market--How London Fixes
the Price--Larger Use of Silver as
Basic Money is Desired

(iaper read by G. w. WheelOck be
fore the New York section of Ameri
can Mining and Metalurgical Engi
neers).
The beginning OF the fourteent
century is usually taken as marSin
the establishment of the monetar
system OF Europe. About that tim
the change from currency system
based entirely on silver to one whicl
was bimetallic-based ON silver an,
gold-became operative.
In their struggle TO maintain theiI
supremacy in the commerce anC
banking Of the world. the Hollanders
about the beginning OF the nineteenth
century, developed the theory that if
they could take away the money
function, or right to unlimited coin
age, from one of the precious metals,
il would naturally increase the de
mand for and the value Of the re-
naming one. The exploiting and de-
volopment of this theory and practice
constitute the real beginning of what
we have now come to recognize as
the problem of the silver market"
This occurred about a century and a
quarter ago. During the intervening
period Holland because and IN spite
OF those who held this theory, has
been on a silver basis; then on a BIZ
metallic basis; again on silver ba-
sis and finally on nominal bimetal-
lie basis, though, more accurately on
a gold basis.
In the meanwhile England, too. had
been studying money it's uses and eff
fects, as Well as developing her world
trade, commerce, shipping and bank
ing. Although the English disagreed
with the Hollanders, who We're advo-
eating "a silver basis they none the
less endorsed the principle involved.
They fully appreciated that if they
could take the money function away
from one of the metals. either gold or
silver it would make the other, slow
ly bat correspondence. more valuable
the while it enhanced the values OF
fixed Investments such as bonds and
mortgages. Further through the fa-
vorable position England had acquir-
ed by the end of the Napoleonic era
as the worlds creditor and banker, it
would enable her to buy more cheap
~ in silver using countries. and at
the same time. sell for relatively !
higher price, TO the silver-using coun- /
tries, her own products. Accordingly. j
in 1916, England. as the dominating
financial, banking trading. creditor
and shipping country of the world
put this theory into practice and
went ON a gold basis In this position
England had the power to exact
settlement of the trade balance i'm
gold alone instead of gold or silver at .
The debtors option ass heretofore"
Subsequent to 1916 the English gold
theory made little actual progress UNI
III the early 70s when Germany
France. the Latin union and the Unit
'd States were put ON gold basis
rom which time 1873. the deprecia-
ion OF silver began The year 1873
s therefore the date of the beginning
IF the silver market as we know it
With all its fluctuations
During the previous 200 years the
.verage yearly price of silver stated
n terms of gold or the gold price. was
bout $lS5 per ounce. It's lowest
early average price was i'm 1913
le7. It's highest was IN 1869. sI46
The extreme average fuctuation i'm 4
90 years quoted at the gold price
or it, was therefore 19c per ounce ,
ince 1873 it has nuctuated go or csc ,
Dr. conversely, when prior to- 1873 q
ractically an the world except Eng q
md was on either silver or bime- q
allie basis the price of gold during {
be same 200 years. stated in terms d
silver varied from am average of lc
l9.l4S to s22S92 per ounce-or only r
6 per cent Today when we fire. N
uenuy state the price of gold s.
'rms of commodities. we know it has ,a
'llen 40 per cent on more i'm the last S.
X years.
Why London Controls the Market. d
The market for silver is unlike that e.
any other commodity unless an J.
reception is made of gold Markets S.
an other commodities are more or 81
SIS localized The market for silver %
substantially Worldwide. and in
aching the disturbing points the ~
lestion of rapid transportation ~
'ompt handling and delivery settle c
ent OF trade balances, banldng and
surance are an factors of great inn q
'rtance. 1t was therefore natural n
nat England, the premier banking. ls
surance. trading. shipping and dis a
ibuting country of the world should w
y able to become subsequent TO 1873 81
e great silver market of the world ~,
Further reasons are evident owing u
the decentralization of silver Ann ST
lea was not consuming it's own out 1,
IT, Buyers of our surplus had to be pa
und. This country had none of the n
cilities necessary for sale and dis To
button to other countries of the er
)rld. especially to China and India. D.,
! the other hand. London had every
cilitv So perforce of circumstance a
,ndon naturally became not only the is
ime silver market of the world. but no