Evening star., 1934-02-13
SILVER MAY GET
MONETARY ROLE
Tightening of Gold Market
Might Force Turn to
White Metal.
BY CLAUDE A. JAEGER,
Associated Press Financial Editor.

NEW YORK, February l3.-If the
international struggle to devalue the
dollar cannot be won with gold, there
Is still silver.
Foreign exchange experts forsee
that it may be impossible to sell
enough dollars in the world market
to buy gold-to keep the dollar from
rising Such a situation might be
precipitated particularly II France
and the other gold bloc countries
should quit the free gold standard and
refuse to sell the metal.
open market supplies of gold appear
limited chiefly to new production from
South Africa, and to the willingness
Of the Bank Of France to sell.
Should the free gold market sud-
denly tighten, the two billion dollar
American stabilization fund might
then sell dollars to buy paper cur
rencies. In SO doing, however, it
would run the risk of incurring large
losses
Another course would be for 1t to
sell dollars to buy silver, which it
might use along with the gold the
Treasury has purchased as part
reserve against currency.
Investigation Begun.
Wall Street has no knowledge of
any such plan in Washington. but
indications of renewed consideration
of silver appeared 10 days ago, when
the Treasury began an investigation
Of the speculative position of silver
In New York.
| Aside from the purchases of do
mestic production of silver at 64K
cents an ounce, the official position of
the monetary aspect of silver in
Washington is that it is still being
studied.
One American suggestion at the
London Economic Conference was
that silver might be used up to one
| fifth of central bank reserves. II
the Treasury contemplated use Of any
such amount of silver, in addition to
gold. it would have to increase SUBJ
stantially the present monetary silver
of some 450,000,0 900 ounces.
Based on the old silver dollar price
/ OF Sl.29 an ounce, this silver has q
value of only about $4,000, 900, oil
little more than 8 per cent Of the
countrys monetary gold under the
new valuation of little more thar
$1,000, 900 900. At current market
prices of around A cents an ounce
this silver is worth less than $780,
900 900.
At its price of 64i2 cents an ounce
for newly mined domestic silver, the
| Treasury is spending. at the current
rate of production in this country
only about s12,00o,0 900 annually.
Output Eestimated.
Handy g. Harmon, New York bullior
brokers, estimate the worlds produc
ton of silver for 1888 at 1853 900 ,o0t
| ounces, of which 81 400 900 was pro-
duced in the United States. Tota
supplies coming into world market
in 1888 this firm estimates at 273,000,
900 ounces. including demonetized sill
yer and sales from India and China.
How much silver it would be posi-
BILE to buy in world markets is largel!
conjectural. Some 5000, 1000, 900 ounce
T, is believed to be boarded in India ant
| some 5000 900 900 ounces in China
If American buyers were to bid VI
| the price In the London market it il
believed here that it could tap thos,
boards to a considerable extent. 1
they bought the silver in the Londor
market. it is argued, they would dC
so by selling dollars and buying sterl
ing. thus tending to keep the dollal
| down.
Some 100000 ounces is under.
/ stood to be held by SPECTATORS anc
hoarders in New York. Such hoardec
silver, it Is pointes out, might b
taken over. as the Government tool
over the boarded gold. should tht
Treasury decide to go in for silver il
a big way.