Perth Amboy evening news., 1923-05-19
HASKIN TELLS OF THE RISE
AND FALL OF Sill YER
Daily Letter by Frederic j. Haskio

WASHINGTON, May 19:-Can the
Jingle of silver coin be put back into
the pocket of the world?
This is a question which means a
great deal to the silver producers of
this country, and incidentally to the
business world in general. 1t is one
OF the questions which is being in
vestigated during the recess of con-
gress by a committee of the senate
appointed to make a study of the
world situation as to the use of gold
and silver.
This is the situation faced by the
silver mining industry: during the
war Great Britain needed silver bad
ly to bolster up the coinage of India,
to keep that country quiet and to in
sure it's cooperation with the rest OF
the empire in winning the war. In
order to supply this need, congress
passed the Pittman act which pro-
vided that not more than $S5O,OOO,-
900 worth of silver cart wheels, lying
in the treasury of the United States,
should be melted down into bullion
and sold to Great Britain for a dol
lar ar ounce, and also that afterWard
the government should buy from
| American silver producers an equal
dlilOuIbt VI SllNcI d. llS SdlAAo iiNSs
These government purchases have
provided a market for American sill
yer ever since, but they will cease
early this fall. After that, the price
of silver will depend upon the world
demand, as it did before the a
But during the war many things
happened to that market. First,
owing to the demand upon the part
of Great Britain and to other causes,
/ silver took a most spectacular rise.
Old abandoned mining camps once
more doomed and the price of bar
silver went so high that 1t actually
caused our treasury department
some uneasiness about u silver
coinage. In 1920 an ounce of silver
was worth S1.31, which caused an
! American silver dollar to be worth
$l.2929 or nearly thirty cents more
as silver than it was worth as money.
In those days it would have been
a fine speculation to accumulate new
silver dollars, melt them down and
sell them. But there was not much
opportunity thus to destroy coinage
for profit, because 50 few silver dol
lars were in circulation. Only in
some parts of the West is the silver
cart wheel still preferred to the dol
lar bill. And most of the silver dol
lars in circulation were old and worn
so thin that there was not much
profit in melting them down. The
bulk OF our silver dollars safely re-
posed in treasury vaults.
Fortunately our dimes, quarters
and halves contain a smaller proper
ton of silver than do our silver dol
lars. Silver would have had to reach
/ q 1 90 m Dt1nnn hnfnrn ay4unnn nnrlH
have made money by melting down
his change, and it never quite reach
ed that figure.
The Post War Slump
After the war the market value OF
silver took a rapid slump. This was
due to a variety of causes, which this
committee will investigate. One Of
them is that nearly all of the minol
countries engaged in the war have
ceased coming silver altogether. Thii
was inevitable as their currencies de
preciated, for bad money Away
drives good out of circulation. A
the insolvent governments began is
suing great foods of paper money
the people began boarding and hid
ing the silver, so that the bad pape
completely replaced the good of sill
yer as mOileys
On top of this the British govern
ment, in order to economic, reduce
the standard OF It's subsidiary silve
: coinage from 925 fine to 500 flint
This knocks a big piece out of tn
market for American silver. Tn
British subsidiary coinage has bee
one of the chief uses of silver 70
years. Furthermore, several mino
countries, including the Argentine
followed the British example and de
based their silver coinage also.
Great Britain put another and sti
more serious dent in the market b
. seeking to replace the silver rupe
in India by the paper rupee, as tn
standard of exchange. This ha
been attempted before the war, bt
: the attempt had to be abandone
during the a
This effort to replace silver wit
paper in the Orient, IL it should b
: successful, would be the most seriou
blow of all. But 1t is not likely TO b
completely successful. The Orien
and especially India and China, ar
, the great silver markets of the worlt
o Silver has been pouring into ther
: for three centuries and going-n
one knows where. Some of 1t
leoined. some Of 1t Is simply stampe