The Washington times., 1935-12-14
SILVER POLICY
SEEN NBASED0N
POLITICS
BY LEWIS HANEY
professor of Economics, New
York University


Administration silver policy, in
view of the Treasury's great gold
hoard, confuses him. He says,
"Here we have an Administrator
which has practically pledged it.
self to raise the price of silver
to $1.29 per ounce, despite the
fact that silver has little value in
comparison to gold. Why?"
The immediate reason is rotten
politics. The "silver Senators"
and inflationists put it across.
Back of this, however, lies the
notion that the country needs
"more money" This notion is
the result of a confusion of
thought. Many persons do not
have enough money income and,
therefore, they are easily led to
believe that there is not enough
money in the country. The fact
is that the total money supply
in the country is so enormous
that we would be, better off if
there were less.
The amount of money you and
I get has no direct relation to the
total amount in the country. The
politicians, however, say that you
and I need more money, and we
agree. Then they tell us that they
will have the Government create
lot more money, and they let us
think that in some way you and
may get some of it. They figure
that this will make us vote for
them.
In order to make more total
money the politicians may Cd
print more notes (greenbacks).
They may CD print more Gov
ernment bonds and notes." put
them in the banks and have the
banks issue more notes Federal
Reserve notes.. Or 90 they may
debase the coins, so as to make
two dollars out of one.
The politicians now in control
at Washington have used the last
two methods. They have loaded
the banks with Government debt
as a basis for bank notes and "ex-
cess reserves" They have "de-
valued" the gold dollar 40 per
cent, so as to make our gold look
like nearly twice as many dollars!
Now they are ION the way" to
do similar things with silver.
To begin with, the quantity of
silver in a silver dollar has long
been worth only few cents, so a
little silver makes a lot Of silver
dollars.
They then further overvalue sill
yer. That is. they undertake to
give two or three times as many
dollars for a ton of silver as it
is worth. And they buy tons of
it. They not only treat it as a
part of "our metallic reserve"
but they have issued nearly a bill
lion dollars in "silver certificates"
OF course, they can write up a
paper profit on the TreaSury's
books on the silver that they held
originally.
The next step will probably be
to devalue silver as they devalued
gold. They are likely to say,
''Let's put fewer grains of silver
in the silver dollar; then we can
make more dollars out of the silver
we have"
Say we have one and half
billion ounces of silver. If silver
is really worth 3Oc an ounce, this
would make our total silver stock
worth four hundred and fifty
million dollars. If they SAY sill
yer is worth $1.29 an ounce, how
ever, they can SAY that we have
1.9 billion dollars worth! And if
they SAY it is worth $2.19 an
ounce, they can SAY we have 3.3
billion dollars worth!!
Since we have 10 billion dol
lars (devaluedD worth Of gold,
they could then say that they
have all the silver the law re-
quires, or one-third of the gold.
WQHG dll GIllS duOuuGS W 10
that the politicians are trying to
fool us by making US think that
we can have more money by di.
Viding the same quantity into
smaller pieces. The less silver or
gold they put in each dollar, the
more dollars they can make.
The Roosevelt administration is
using up our credit and running
up our debt by buying tons of
silver at crazy prices. It loads
our Treasury up with overyalued
silver. Then it says, "Oh well,
we will just split the stuff up
into smaller chunks and cali them
dollars. The people won't know
the difference. They will think
they haye more money because
we have more dollars"
In the end, all this manipula-
ton must come out of savings. in
vestments, salaries, and wages.
The smaller and smaller dollars
the politicians are giving us will
buy less and less.
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