Evening star., 1933-06-18
The Economic Conference
Prospects for an Increased Use of Silver IN
Monetary Systems Seen as Result OF
international Sessions.
BY ARTHUR CRAWFORD.

BY ARTHUR CRAWFORD.
Increased use Of silver in the none
tary systems Of the world Is highly
probable as one of the results Of the
World Economic Conference.
Espousal of the silver cause by Presi.
dent Roosevelt, together with congress
sional sentiment as reflected in the In
flation sections of the farm act, have
given a substantial impetus to the
movement. Silver has an ardent cham
pion in Senator Key Pittman Of Neva-
Relations Committee and one of the
American delegates to the London Con-
ference
Under the authority vested in the
President by the so-called Thomas in
f1ation amendment to the farm act he
may establish a fixed ratio between
gold and silver and provide for un-
limited coinage at this ratio. This
would be bimetallism. The ratio would
not necessarily be, but the theory is
that it probably would be Is to l as
favored in the Bryan campaign OF 1896
and as provided in the Wheeler bill
which met defeat In the Senate during
the past Winter.
The authority to provide for bimet-
allism was designed to bolster up the
Presidents power in the World Eco
nomic Conference The chief objection
to bimetallism always has been that it
is not feasible without an agreement
among all the leading nations to adopt
it. Otherwise, as has been demonstrated
many times in experiments by many
European nations as well as in the
early history of the United States, the
baser metal drives out the other Unless
the same ratio is maintained by other
nations there would be tendency for
the nation adopting bimetallism to at
tract silver while gold would flow out
of the country or out Of monetary use.
Bimetallism BoIstered.
flation law has been bolstered up by a
resolution adopted by the Senate at
the instance of Senator Burton K.
Wheeler Of Montana, urging the dele.
gates appointed by the President to
the World Economic Conference to
work increasingly for an international
agreement to remonetize silver on
basis Of definite fixed ratio of not
to exceed 16 fine ounces Of silver to
l fine ounce of gold"
The resolution declares that the
stabilization Of exchanges Of world cur
rencies can best be accomplished
through bimetallism and that the re-
monetization Of silver at its historic
ratio with gold would raise world COM
modify prices, increase the purchasing
power Of slver-using countries in the
United States and increase production
CitUnr-11cif1y
the American farmer and manufacturer
would not be so handicapped by their
deprecated currencies.
The effect Of the adoption of bimet-
allism on 16-to-1 ratio with gold
assuming that the gold content of the
dollar remains as at present, would be
to increase the price of silver to about
$1.25 an ounce. Not long ago the price
Of silver dropped as low as Is cents an
ounce and recently has been above IS
cents.
There is every probability, however,
that the silver advocates will have to
be content with lesser gain for their
cause than adoption of bimetallism.
perts for the World Conference, in dis
cussing the silver question, stated that
bimetallism standard could be safely
introduced only if the most important
countries of the world agreed to such
measure"
"As the only international monetary
standard which is at present likely to
command universal acceptance Is the
gold standard" said this commission in
its report, ''the idea Of introducing
bimetallism must be regarded as i'm
The imitation law also authorizes the
President, during a period of six
to accept up to 5000 ZOO, 900 Of
silver at a price not In excess Of SO
cents an ounce in payment Of foreign
debts. The silver thus accepted would
be the basis for the issuance of silver
certificates.
Special Factors Cited.
The preparatory commission Of ex-
pertS, in discussing the silver question,
said that the decline of more than one
half IN the price of silver In less than
three years was in the main due to
the same causes as have acted on the
general level of prices. Special factors
operating in the case of silver, it was
stated, have included the demonetiZa-
ton of silver, the reduction of the sill
yer content of token coins and the dis
posal of surplus stocks.
Among other suggestions besides
bimetallism for increasing the price of
silver is the holding of increased.
quantities of silver in the legal re-
serves Of central banks. There was
considerable discussion Of a plan of
this character during the visit of Prime
Minister Ramsay Macdonald Of Great
Britain to Washington. The suggestion
was that instead Of gold reserves Of
from IS to 40 per cent as at present,
there should be gold reserve Of 20 or
rs per cent and silver reserve Of
per cent.
The Preparatory Commission stated
that on the assumption that no form
of bimetallism would prove acceptable,
clusion in the metallic reserves of a
central bank, there being no fixed price
at which 1t would be received by other
central banks in the settlement of bal
ances on the international account
The commission indicated that in
connection with suggestions that gov
ernmental action be taken to improve
the price of silver examination should
be made of the extent to which silver
might be used in subsidiary coinage as
substitute for notes of small denom-
nations. 1t was suggested that the
World Conference should also consider
whether the marketing of the metal
by producers and currency authorities
might be improved and also whether
new and enlarged industrial uses of
silver might be encouraged.
The commission was of the opinion
that from the point Of view of COM
mercial relations with silver using
countries. particularly China, trade in
terests would best be served. not by
a rise of silver as such but by rise
in the general level Of commodity
prices.
The Committee on Coinage, Weights
and Measures of the House Of Repre-