Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-10
CHINESE SPECTATORS REAP
HARVEST FROM SILVER BOOM
Wall Street Opinion Divided on Whether
Rise In Price of Metal Will
Reach Hig her Level.
BY the Associated Press.
From Yesterdays $50 Edition.

and energizing tide of wealth into the
anemic business life stream.
Divided councils rule among inter-
national metal dealers here. One group
insists that, for some reason not clearly
understood, silver is the infallible in
dex of commodity prices and that. in
the long run, securities range up or
down with silver quotations. Good
times come as the demand for silver
market of 1922. Eight days before it
started, there was a sharp rise in sill
yer. Charts show. they maintain, that
upbound silver is the harbinger of pros
perity.
Another group weighs all factors and
finds no basis for higher silver prices
in the world situation. Representative
of this group is the president of one
Of the country's leading firms dealing
in silver. To this writer he outlined
his views, as follows:
1T is apparent that there is some
relation between silver and commodity
prices. 1t is quite possible that the
rise in wheat, whether economically or
speculatively motivated, has been re-
f1ected in silver prices. Second, the
critical situation in the Far East, as
it involves China and Japan, might
very reasonably have the same effect
In times of crisis Oriental people are
given to boarding money. When India
went of the gold standard there might
have been even greater drops in sill
yer had it not been for the Chinese,
unsettled by revolutions and disorder.
gathering in silver. Third, there has
been recently an opportunity for specu-
lation in silver. and believe that
speculation largely accounts for the in
creasing price.
U. S. Silver Output.
This opportunity was opened up June
is of this year, when the National
Metal Exchange, which before that had
dealt only in base metals, provided for
trading in silver. They tegan buying
calls and selling puts and silver be-
came an effective medium for specula-
ton. With the lethargy in movements
OF base metals, there was a considerable
volume of money ready for a fling in
the silver market, and this activity re-
cruited considerable following.
The American silver output was about
81 100000 ounces in 1929. 10000, 900 last
year, and we estimate it at about 49,
OO0,0 this year. A long and steady
rise would, of course, stimulate mining
in the silver producing States, but Just
when and to what extent is a matter
OF the widest conjecture, depending
upon the cost of production and many
other factors.
1T Is true that Shanghai has been
long on silver and short on sterling.
TIE Chinese traders know silver and
SPECTATORS do well to. watch them.
In my opinion, any sound estimate
OF the silver situation cannot be sep
arated from general world economic
cond1tions-in the long view. China
and India are the worlds greatest buy
erS OF silver. They take it in exchange
for their raw materials and manufac-
tured goods. The price of these goods
governs such imports. Until there are
higher commodity prices abroad, which
will enable them to build up gold credits,
l do not see any sound warrant for
higher silver prices.
Sterilization Plans.
"In economic discussions there has
been much consideration of plans to
stabilize silver, which, to be exact,
means to boost its price. This hint of
something comparable to the old free
silver movement has, believe. also
been contributing cause of higher
prices"
The heaviest silver production in the
United States is in Utah, Montana,
Arizona, Idaho, Nevada and Colorado,
with Utah leading with 10000 600
ounces last year. During the last two
years, falling prices have considerably
stimulated the use of silver in the arts
and industries, with a notable increase
in this demand
(CopyriRht 1917