The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-10-09
RECENT SILVER
ACT PUTS END
TO PROP GANDA
Large Scale Buying May
Retard Recovery, Is
Viewpoint.
BY CLARENCE w. FACKLER
Professor of Economics.
New York University

By United Press
NEW YORK, Oct. 9.-The recent
naturalization of silver has quieted
the agitation for the do something
for silver" movement and promises
to dampen gradually the ardor Of
those people who have funds in
vested in silver mining stocks.
The higher prices paid for silver
during the World war, and the
greater attention given to it by var
ious governments, revived the hopes
of the silverites that eventually
something could and would be done
for silver. That the agitation is
strong and has gained force since
1892 is shown by the fact that the
proposal to buy silver on monthly
basis base been raised ten-fold since
that date.
Bordering on absurdity, the pro-
posed amount of fifty million
ounces is more than double the pro-
duction of silver in the United
States in 1882, and a little less than
one third of the worlds production
of silver in that year.
Silver Facts Related
Here are some of the simple facts
relating to the silver question which
the investor should know. To begin
with, nearly two-thirds of the
worlds production Of silver comes
annually from Mexico and the
United States, with Canada and
Peru of less Importance but still
prominent in the field. India and
China still remain the chief con-
sumers. Since 1900 the annual pro-
duction of silver in the world has
advanced from an average of 167
million ounces to 253 million ounces
by the beginning of the second
quarter of this century. In 1882,
however, production fell again to
1854 million ounces.
The investor may be astounded to
be reminded again that the silver
producing industry in the United
States contributes only about $1,000
part of the total annual in
come of the nation. Like the steel,
textile and coal industries, it is con-
centrated in rather definite areas,
and so only a section of the country
is directly affected by its condition.
Nevertheless, silver prices have
fallen less than the average Of all
commodity prices, hence the holders
of the white metal are able to buy
more with dollars which they de-
rive from the sale of their silver
than in 1928-1929.
Labor Under False Notion
If the investor will examine the
suggestion that the purchasing
power of the Orient will be in
creased by higher silver prices, he
will find that only in China and in
two small African countries are eX-
ternal values quoted extensively in
silver.
Determined "quantitative" money
advocates labor under the false no
ton that if silver prices are raised,
the boarding of silver by orientals
will stop. They will exchange, it is
said, their gold for silver, and this
gold flowing back into western
lands will stimulate higher prices
generally.
Another faction of the same
group apply the same incorrect
logic to the reconciliation of silver
domestically. At present the in
weston should be very sure that in
respect to the second case more sill
yer money at home has little
chance of being inflationary.
Foreign Purchases Dangerous
The biggest damage can come
from purchasing of silver abroad,
which if carried to such an extent
as to raise the silver stocks to 25
per cent Of the total monetary
stocks, would cost upward of $780,
100000 and add so much to the
money in circulation or to the bank
reserves.
With respect to its irfationary
effect, it is likewise relatively I'M
important, because it will take
about fifty-two years to acquire the
necessary 1900, 100000 ounces Of sill
yer in order to bring the silver
stocks to their required level. The
prevailing silver acts probably will
be repealed long before this time
has elapsed.
What may very we'll happen is
that the continual buying of silver
on a large scale may cause a slow
ing down of the recovery movement,
if not a return of the depression it
self, as a similar buying campaign
did from 1890 to 1893. Developments
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