The Washington times., 1935-12-12
SILVER MESS
SCANNED BY
PROFESSOR
BY LEWIS HANEY
Professor Of Economics, New York
University

Professor Of Economics, New York
University
There is dynamite in silver.
It has always been a peculiar
political factor in this country.
Whenever a depression comes the
cranks arise to proclaim that 1.-The
people" need more money, and de-
mand that we monetize silver.
They are, of course, Joined by
silver mine interests, and are Sec
onded by greenbackers and all
softmoney advocates and infla.
tionistS.
Mr. Roosevelt fell for this old
softmoney propaganda, so we
have been buying and storing tons
of silver at inflated prices. The
stuff is probably worth around 80
cents an ounce. We have been
paying so to IT cents an ounce.
Why?
Because Mr.. Roosevelt wants to
win the political support of Sen
atorS from the silver States.
Because he wants to win the
political support of the advocates
Of currency initiation.
Because he does not understand
money and appears to believe
that silver is as good a "mone-
tary reserve" as gold.
Because he wants to cheaper
the dollar, in order to force us to
give more dollars for the goods
we buy. In other words, he has
tried to raise prices by depreclat-
ing the dollar.
AS result of all this folly,
the Administration bid the price
of silver up like any market
operator. 1t has rigged the silver
market to levels more than
double its normal value.
This has driven the last large
nation which had clung to the
silver standard, China, to de-
monetiZe silver. China was being
ruined by our tampering with the
value of her standard money
(silver), so she abandoned it.
Her next move was to accumu-
late all her silver, with the idea
of selling it to us at our fancy
price - playing us for tn
"suckers" we are (thankS to the
Roosevelt administration Mean
while, as I pointed out a month
or so ago, individual Chinese
have been smuggling out great
quantities of silver to unload on
Uncle Sam, the silver Santa
Claus.
So the world silver market
finally came to the point where
everybody was selling the stuff
and Mr.. Morgenthau (acting for
Mr.. Roosevelt) was the only
buyer. He didn't put in a bid
one day, and the market cracked.
Nobody else would pay such
absurd prices as we have.
Probably several developments
have caused the President to
change his policy again. One
is the realization that the world
is not going to remonetize silver,
and there will be little demand
for it. Thus we face huge loss
on our purchases. China'S action
made this obvious. Another
factor is our growing gold hoard,
which makes it an endless task
to accumulate silver up to Is
per cent of our gold. Then, too,
the franc has been saved again,
SO there is no need now 10
supply dollar exchange by buying
silver.
Some possible results are:
/. "A further decline in the
world silver market.
2. "RepercuSsionS on related
metals, and on securities Of those
companies which produce silver,
especially in foreign countries.
8. A tendency toward weakness
in the pound sterling rate IT eX-
change for dollars.
4. Pressure on the So-called
international commodities, whose
prices are affected by movements
in the pound.
S. A tendency to compel us to
take increased imports of foreign
products in place of the silver we
have been importang.
6. Pressure on the gold bloc,
again tending to drive France to-
uord dnvo1l1ati0O
7. A tendency in this country
to raise the Administrators art1-
ficial buying price for newly
mined domestic silver to $1.29.
This would satisfy the "silver
crowd" of politicians, and enable
the Administration to quit buying
foreign silver.
8. A big disparity between our
domestic silver price, and the
world market.
9. A realization that OUR silver
dollars are enor mouSly over
valued, and that our silver certi-
ficates, if they mean anything
more than government debt, are
bad money.
Thus the silver mess made by
the Roosevelt administration is
worse than ever.
Don't blame England Senator
Thomas says England made suck
erS" of us. Suckers are born, not
made.
MCKesson & Robbins