The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-12-22
FRIDAY. DEC. %. 1888.
THE SILVER POLICY


there is one subject on which there is
more disagreement today than gold if is
SILVER. Therefore che Presidents new silver
buying policy will please some and frtghten
others- Though it probably will cause inlmedi
ate speculation, our inclination is to doubt
that the new policy will have important ner-
Inahent economic effects either for good or i'll
0uV II Is natural supplement to the more
important gold-buying policy.
IN our judgment the Roosevelt monetary
experiment as a whole is hopeful for several
reasons. 1t breaks away from the old orthodox
system, which failed in the world depression
ana which perpetuated unsound money for the
great debtor class that borrowed cheap dollars
and now owes dear dollars Hence the need
Tor experiment to ind a more honest dollar
Such experiment becomes dangerous only
"hen the experimenter is a quack, thinking
he has a cure-all device
President Roosevelt is not operating that
way. He is depending more on basic economic
reform than on monetary manipulation. as the
sweep and size of his recovery program
proves And in approaching the monetary
problem as one of many needed reforms.
rather than as the key to prosperity, he is
moving carefully and moderately
He has authority under the farm law Of
last April to put us on bimetallism system.
But he has not remonetized silver
His policy of silver purchase announced
last night merely puts into effect the London
economic conference agreement under which
our government promised to buy over a four
year period, 97,685 $40 ounces of silver. half
for coinage. Of The sixty-six governments
represented only eight are involved directly:
The five producing countries, Mexico. the
United States. Canada. Peru and Australia,
and the three large silver holders. China.
India and Spain
Whether or not the other seven countries
ratify the agreement and carry it out the
United States must carry the burden Our
share is over two-thirds of the total purchase
quotas The limit which the agreement puts
on midas dumping of silver and thus depress-
ing the market. represents about the figure Of
her previous sales and is no sacrifice China
and Spain have not been heavy sellers Of
demonetized silver in the past
AS to the benefits which the United States
may receive, the advocates claim that this
policy among other things will help restore
prices and prosperity to this country by lift
ing our seven silver producing states, and that
It will open up vast foreign market in the
silver using countries
We rather doubt that silver as a commodity
is important enough even in the economic life
of our seven producing states to be a deter
in, "
silver price expert points out that of $50 COM
modities sold at wholesale in this country sill
yer accounts for only one-tenth of l per cent
of the aggregate value-a very small industry
indeed either in terms of capital or employ
ment.
AS to the foreign trade possibilities, it is
not true as frequently stated that "two-thirds
of the worlds population use silver as cur
rency" Only in China and Hong Kong is
currency tied to silver. India abandoned the
silver standard in 1898; its currency, though
printed largely on silver, is based on the pound
sterling which is a managed currency
Even in the case of China, many American
experts-such as Dr. Herbert M. Bratter, for
instance-think that higher silver prices would
not help general trade with China. DR.. W. W.
Yen thinks an abnormal silver rise would in
lure his country and its purchasing power
Experts on the preparatory commission of the
world economic conference agreed that China's
trade interests would be served best, not by a
rise in the price of silver as such, but by the
rise in the general level of commodity prices
Under the circumstances it seems to be
fair guess that the Presidents sllver-ouylng
,oolicv will have less direct economic result
than psvchological and political effects. 1t
viii no encouraging to the silver producing
states. Politically it probably will satisfy the
silver moderates led by Senator Pittman' ana
thus presumably isolate the bimetallist group
IN congress. To that extent the new admin
istration policy appears to be a step away
from rather than toward, extreme imitation.