The Washington times., 1935-05-04

Lewis Haney chief reason
for the crack in the silver mar.
ket is the fact that it has been
run up by a silver speculation
craze, and speculative run-ups
always react. Silver spectators
sold to take profits.
The immediate occasion was the
hesitancy of the leading silver
Spectator, the U. S. Treasury, to
raise its bid. When the specu.
lative market rose above the Gov.
ernment's buying price, the Treas
ury failed to rush "smilingly" to
protect" the domestic market.
Apparently, the New Dea. politi.
clans have quit buying for while.
These conditions we're touched
off by the not unreasonable rumor
that maybe Mr.. Roosevelt would
play the devaluation game with
the silver dollar, just as he did
with gold.
That would put a Crimp in the
silver spectators plans, for two
reasons. First, it would mean that
the New Dealers would buy less
silver. Second. it would probably
mean a reduction in the value of
the dollars paid for silver.
Be that as it may, the silver
market went down as fast as it
has gone up.
Why not? Why has it gone
up? No one can suppose that
silver is worth anything like ~
cents an ounce, to say nothing
of $1.29-at least, not unless
one believes that dollars are
worth less than half their cur.
rent purchasing power.
The use of silver in the arts or
as money has probably been re-
duced recently. The cost of pro.
ducing it has not changed appreCi-
ably. If left alone, silver would
doubtless collapse, and fall back
below 35 cents an ounce.
1t has been marked up by the
New Dealers Who have been run
ming a speculative pool in it to rig
the market. Spectators the world
over have gone long on silver,
following Mr.. Roosevelt's lead.
They buy with only one idea in
mind namely, that as near the
top of the rise as possible they
will unload on our Treasury, thus
leaving us holding the bag.
We are in an impossible stu
alton. The idea is to buy 1,3 as
much silver as we have gold; but
gold keeps coming in. Even with
out this it would take the total
world production of silver for sew.
eral years to make up the tonnage
indicated by the law. Already we
have more money than we can
use.
What will be done with the
stuff?
AS to the silver stocks, they
move with the metal but tend to
anticipate its moves. Whenever
there is doubt that silver will rise
much further, you may be sure
that silver stocks will decline, be-
cause they are chiefly bought for
a rise.
Doubtless the domestic price
of silver will at least be main
tanned, and efficient domestic sill.
yer producers be allowed to make
large profits. The Treasury has
to buy their output.
But foreign mines are not in
such certain position. Cd The
Treasury can quit buying silver
abroad. at least for long periods.
Then no matter how high the
price. foreign producers might not
be able to sell. (2) The foreign
price may be allowed to fall in
definitely below the domestic
price. 90 Foreign governments
may increase taxes on silver
mines. Already Mexico levies
heavy progressive tax. a. Foreign
currency depreciation may in
crease mining expenses and re-
duce the income available.
would, therefore, prefer do
nestle producers if I wanted to
speculate in silver stocks. But
in general, the cream appears to
be off the silver stocks for the
present.
Especially, beware of the cats
and dogs. Don't touch the cheap
silver stocks which are being
peddled around. They are q