The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-05-31
When Is a Boom?
New York Herald Tribune)

ferring to what has happened to sill
yer in the last year or two as spec
ulative BOOM" The point on which
he bases his objection Is irrelevant
and ordinarily might be ignored. II
happens. however, to be one Of those
economic sophistries that have beer
sedulously cultivated OF late by silve,
advocates, and which are all too like.
ly to be swallowed whole by the eco
nomically illiterate or half informed
For that reason, perhaps 1t Is well
that the point be given q brief but
thorough airing here and now.
The letter Of our reader says, II
part:
L was shocked by your lead
Ing editorial yesterday. The writ
err, In talking about speculative
boom in silver, never took into
account the drop in the dollar.
AS I recall, silver never sold be-
low q cents, and Is now about IS
cents, which equals a world price
OF q cents. which. I would guess,
Is just about the rise OF world
commodity prices in the last
eighteen months. That is hardly
a speculative BOOM
When our reader refers to "worle
price he is referring to something
Of course. that does not exist. Thu
world. being largely off gold, Is nj
longer on single monetary stand.
ard, so that there is no such thine
as a world price," What he means
OF course, is the gold price" Of sill.
yer.
But what has the price Of silver
in terms Of gold to do with our read.
er. or with anybody else? The gold
price Is an empty economic concept
nothing more. The question that the
holder OF silver Is interested In Is how
silver has Jared in relation to com.
modities as whole. What can II
matter to him II silver has risen te
the equivalent Of only q gold cent.
In the gold standard countries? Il
he wants to purchase silver In France
he first has to buy French francs
and when he has got through buying
his francs he will find that the silver
has cost him, In the end. Just what
it would have cost him had he bought
1t IN the New York market, namely
around IS cents.
There are two tests as to whether
we have had speculative BOOM II
silver, and only two. One Of then
Is. how much speculative activity ha.
there been In the metal? The Other
Is, how has the rise In the price o.
this commodity compared with thu
rise in other commodities?
According to the testimony Of Her.
man Oliphant. counsel for the treas.
ury department, before the house
ways and means committee las
Thursday, there has been an accu.
mutation Of speculative holdings II
silver here during the last year war.
iously estimated at between 10000,
600 and 250. 100000 ounces" CWha,
this means may be gathered from tn,
fact that in 1929, before the silver
agitation had begun to take hold
visible and invisible stocks of silvel
in the New York and London mar.
kets combined totaled about $4,000,
600 ouncesD As to whether silver ha,
risen disproportionately to prices Z.
q whole in this country. the evidenc,
Is equally clear. The bureau Of Ia
boris index Of commodity prices show,
that the rise from the low has beel
approximately from go to 70 at tn.
present time. In other words, Will
silver prices have been rising roughl,
100 per cent, commodity prices as .
whole have risen less than Is pc
cent.
II ten-fold expansion Of the spec
ulative holdings Of . commodity
coupled with . 100 per cent rise Il
its price (at time when other price
are rising less than one fourth tina
amounb does not constitute 'specu
lattve BOOM" then We should BE in
debted to our reader II he would &C
quaint US with what. precisely, h
would regard Is the characteristic
and 1nAaY4&3+ q 1a1A ,@ao~(%~~<s%aA,a. .