Evening star., 1932-12-27

Of America less than 141a ounces Of sill
yer have been taken out Of the ground
ratio of production of silver to gold has
dropped to less than IL to !. The de-
cline in price was brought about by arti-
fetal means and not by the operation OF
normal economic laws.
"The government Of Great Britain
and the British government for India
have been the chief offenders against
silver. Great Britain debased her silver
coinage in 1920 by reducing its silver
content nearly a half. Beginning with
that year, according to report trans
mitted to the State Department by Am
bassador Mellon, over 102 ,000, 900 ounces
Of silver have been taken out Of the
British coinage and sold. Handy and
Harman, recognized authorities on sill
yer, estimate that since 1927 the Brit
ish government for India has sold 131,-
100000 ounces Of silver derived from
demonetized coins. Other countries
particularly France and Belgium, have
followed tIe bad example set by Eng
land and IndN in the flight from silver.
price Of silver the governments which
are chiefly responsible for its fall can,
by retracing the steps they have taken
restore the price of silver to its pre-war
and pre-panic level. Great Britain
which started silver on the downward
path, and India, which sold silver down
to half its former price, should lead the
way back to recovery.
Both the Democratic and Republican
national platforms pledge American CO.
operation In an international effort to
restore the use Of silver as money. The
quickest and most effective international
cooperation that the American Govern
tion Of silver is to accept 100000
ounces Of silver In full settlement OF
s100, 100000 due from Great Britain
upon two conditions. First, that the
British government acquire an equal
number Of ounces Of silver to restore its
coinage to its former silver content
Second, that satisfactory assurances be
obtained from the British government
for India that no silver owned by 1t will
coinage purposes.
This transacti4 will take of the
market 2O0, 600, 900 ounces of silver and
utilize the same for coinage. Certainly
there should be some favorable effect
on the price of silver il an amount
equivalent to a whole years world
production is thus legitmately disposed
of and the fear Of future governmental
dumping by Great Britain and India
Is ended
Would Meet Two Debts.
THE British government for India
owes a debt to Great Britain arising
out of the World War that now amuonts
to is, 721 900 pounds which is ss1, ,422, 900
at par Of exchange. II that debt could
be paid in silver 1t would be possible
not only to relieve the, British tax
payers Of any expense in meeting
s1OO, 600, 900 payment to the United
States, but also to restore the British
silver coinage to its former finness with
out cost to them Two intergovern-
mental debts would be settled by the
use of the same silver.
IF the $81, ,422, 900 were fully paid by
the transfer Of 200, 100000 ounces OF
Indian silver, the price paid by Great
Britain for the silver would be 40.7
cents per ounce In 1881, the British
government for India, which still has
a reserve Of over 2O0,000,000 ounces OF
unencumbered silver, sold $4,000. 900
ounces at the market price which
averaged 80 cents for that year. The
present market price Is around Is cents
an ounce so that at 40 cents the Indian
government would be well paid for its
silver.
"But 1t will be said that the United
States Is accepting silver worth only
S25, 900, 900 at the present all-time low
price in payment of q 10000, 900 debt.
That is true on its face. but, since there
t. af q
100 ,OOO, 900 ounces Of silver can be
coined into 1929, 900 dollars whicn
the American people will be glad to
accept at par in these hard times. Such
dollars, or silver certificates issued
against them, will serve our Govern
ment Just as well as though the British
payment were made In gold. There
will be no added burden to the Amer
ican taxpayer.
"Some will say that this means in
flation of the currency and SO 1t does,
but only a mild imitation. I now pro-
pose to accept silver for only one pay
haent from Great Britain because one
payment Is sufficient to accomplish the
make the British silver coinage honest
money" and to remove the menace OF
further open market silver sales by
India.
"Let me remind those who worry
abo,,t imitation and the maintenance OF
the gold standard that in 1900, when
Congress provided that all forms OF
money should be maintained at . parity
with gold, the American stock OF none
tary gold was Just little over 81 1000,
600 600 and the stock OF silver was
about $3.50 ,0oO, 900. Today we have ap-
nroximately $4,000, 100000 In gold and
only about $3.50, ,0O0, 900 in silver money
The united States could now absorb
over a billion dollars Of silver into its
monetary system and still have less sil-
yer in proportion to gold than we had
in 1900. To take one payment In silver
on all Of the foreign debts would mean
but q moderate imitation and In nc
sense threaten the maintenance OF the
gold standard.
26 on Gold Standard.
II freely admit that for the United
States and Great Britain to coin 2OO,-
100000 ounces of silver Is no pernna-
nent solution Of the worlds monetary
problem. It would help restore the
price of silver to level comparable to
that which existed before England and
India began dumping 1t on the market
but more permanent measures must be
adopted. The stabinzation Of silver can
best be accomplished by an interna-
tional agreement to which it Is essen
tial that the two governments shall be
parties.
"In President Hoover's message to
Congress last week recommending prep
aration for discussions with the several
nations respecting their Indebtedness ID
the United States and in anticipation
of the World Economic Conference. the
President said:
"Whilc the gold standard has worked
badly since the war, due to the huge
economic dislocations Of the war, yet It
Is still the only practical basis OF inter-
national settlements and monetary sta
bility 50 far aS the moro advanced In
d,,etria1 nofinS1R are fnneeFned The