The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-04-14
BY HERBERT LITTLE
Times Special Writer

SILVER UOyS III congress are HAD
bergasted and badly divided over
whether to try 10 get the whole hog
or just piece of 1t. Combining
with agTarian forces who demand
an export subsidy for surplus farm
products, they think they are about
to pass a bill 'rehabilitating" silver
Now, 'rehabilltating" silver means
little or nothing. Senator Burton
K. Wheeler and other old-line silver
men-Shades Of w. J. Bryan-Want
silver made basis for money on
definite ratio with gold. Others
silver men as we'll as those who pri-
marily want initiation, produce nu-
merous schemes whereby the United
States will go out into the markets
Of the world and buy up enough of
the surplus in sight to boost the
world price to a point profitable for
silver miners and the other mining
companies which produce it as by
product.
Most directly benefiting under any
real silver expansion program would
be the Guggenheim interests, OPP
Grating on a large scale in both
Mexico, the worlds No. l silver pro-
ducer, and this country.
Two other promised land vistas
however, constitute the real polit-
ical strength Of the silverites.
Initiation Finds Advocates
One is straight currency imitation,
depended on by many political lead
ers to lessen debt burdens. restore
the 1926 price level and otherwise
redistribute wealth and spread pros
perity single-handed, without set
ting up taxation and industrial ma
chinery to stop the concentration of
wealth and the over capitalization
OF debt. The silver people argue
that their kind of imitation is con-
trollable; paper money imitation is
not.
To this first point has been added,
in the Dies bill passed in the house
by more than two to one, plan to
exchange surplus farm products for
silver valued at 25 per cent above
its world price, the silver to be used
as a currency base.
The second point is the promise
that an increase in the world silver
price, now around 46 cents an ounce,
will boost China's purchasing power
and thereby create a rich market
for American exports.
The Roosevelt administration on
the first point takes the fiat stand
that it wants to use the remaining
nine months of 1884 to try to work
out returning prosperity on present
monetary lines.
Money Experts in Orient
One the second point, the admin
istration's actions speak loudly in
the absence of words. 1t has sent
James Harvey Rogers, well-known
money authority, to Shanghai to
study the situation. Separately, and
with no indicated connection, the
commerce department has sent its
authority, Herbert M Bratter. ma
tionally-known silver expert, to
Toxic to study the oriental foreign
exchange situation.
What they will find, according to
most money experts here, is that the
silverites' China argument is a fall
lacy. China's tremendous store of
silver is entirely for internal ex-
change. She imports silver con-
stantly. When she buys American
goods, she pays for them, not with
the silver in which her goods are
valued, but with goods. Conse-
quently, an increase in the price of
silver will decrease China'S internal
purchasing power, and also her abil-
ity to buy abroad, according to
these officials.
On the 16-to-1 ilver-gold ratio
which Senator Wheeler inherits
from Bryan. little arithmetic pro-
duces results which will indicate the
extent of administration opposition.
Gold is now valued ia $35 an ounce.
The Bryan ratio would bring silver
to S190 or more an ounce - four
times the present world market
price and eight times its low OF
December, 1882.
Old Theory Destroyed
This ratio is based on the statis-
teal indication that for centuries
the aggregate production of silver
has been fifteen or sixteen times
that Of gold, and the hoary Amer
lean tradition set up by Alexander
Hamilton and Thomas Jefferson of
parallel use of the two metals as a
money base. The worlds thirty
year drop in silver as currency
base, however, has destroyed this
psychological fact-eXcept perhaps
in the western half of the United
States and a few non-industrial ma
tions where gold has not yet pene-
trated.
The dyed-in-the-wool sixteen-to-
one-ers and infationiStS will be
content, however, with nothing less
than an extended issue of new
money. Some might be willing, for
the time being, to compromise on a
certain amount, say $1,000, 900, 600
Some, such as Senator Key Pittman
want to use the silver issue to pay
off the soldier bonus at once.
But anything less, they feel
would be a mere subsidy to the sill
yer mining industry, entirely unsat-
isfactory to the tradition of The
Crime of '73"-that famous act of
congress, which demonetized silver
and stirred political and agrarian