The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1937-08-12

Question caused it. First
mong h e
things is the matter of rising prices
for foods and other necessaries of
life, but attention seems to have
conferred on the silver question
again as result of the Treasury's
newly arranged agreement to trade
some of its gold for some of the
Chinese silver.
Probably the silver question is not
as widely discussed as it might be
because it is complex subject and
there are not too many people who
understand it and it's implications.
l cannot refrain at this time, how
| ever, from recalling that when the
silver act of 1884 was passed, I
wrote in these columns prediction
that the country sooner or later
would regret that legislation. I re-
| peat the statement now and I do
not believe it will be long until the
average citizen will recognize what
the silver policy is doing to most
of us. mean by that, it will not
be long until Mr.. John @. Public
will understand that the silver poll
cy has a lot to do with the high
prices he is paying for his pound of
bacon, his slice of beefsteak or a
thousand and one items that he buys
at the grocery store. He will feel
it, too, when he seeks to buy a new
suit of clothes or a new pair of
shoes. There can be no argument
about it: The affect of imitation
brought about by perfectly ridicu-
lous silver policy is upon us.
Early in July, the Chinese minis
ter of finance visited Washington
and called personally at the Treas
F, ury to express the appreciation of
the Chinese government for the sat
isfactory conclusion of negotiations
that enable the Chinese to give the
American Treasury silver for gold.
1t was the usual diplomatic courte-
sy. At the same time, however,
the visit of the Chinese minister
served to awaken America to the
fact that the Treasury has been 60
ing along, buying silver from for
eign countries in order to maintain
an arbitrary price which the Wash
| ington administration contended
should be the world price for silver.
This price is forty-fve cents an
ounce, and it is a most profitable
price for silver producers in Mexico
and Canada and some other foreign
countries. It is not as profitable,
however, as the price the Treasury
pays to American producers-which
is seventy-seven and one-haf cents
an ounce.
But, one may ask, what has this
thing to do with the cost of beef
steak, ham and eggs or shoes?
I hope I may be able to explain
it as have watched the picture un-
fold and to explain it in a manner
that those unacquainted with high
finance may see the thing in its true
light.
First of all, the policy of the ad-
ministration that has brought bill
>, lions of gold into
IiiS 1ISdSuIy W DG
Works stored as so much
dead weight has
resulted in many thousands of
shares of stock in American cor
porations or their bonds being
bought by foreigners who gave gold
in payment. President Roosevelt
early in his administration insisted
that gold should not be in circula-
ton as money. Consequently, the
Treasury has so much gold that it
has had to build separate store
houses to protect it. Now, we are
sending some of that gold to China
in trade for China's silver. I think
most everyone will agree that the
silver is just as useless because we
have no need for it in our currency
structure. People do not want to
carry silver dollars around in their
pockets.
Assuming that the exchange was
simply an even trade of two OBJ
jects, neither of which was disable to
us, one probably could dismiss the
matter with wave of the hand.
Regrettably, such is not the case.
The additional silver frankly is add
ing to our troubles because of the
Silver Act of 1884 which permits the
Treasury to issue currency-silver
one-dollar bills-against it.
So, instead of being sterilized and
stored away in vaults, the silver &C
cession results in prompt increase
in the amount of currency in circu-
lation. That action tends to increase
the excess reserve-unused money
of the banking system. AS this
money becomes available for cir
culation, it's value necessarily and
obviously is cheapened. Or, to say
it another way, the things you buy
with money become of greater value
because it takes more of these
pieces of currency to buy the same
quantity of food or clothes or shoes.
Authorities will disagree with the
above statement to the extent that
,,,., all kinds of cur
Some viii rency have not
Disagree b e expanded
(Which m ms
infiated) by the issuing of silver
certificates. That is true. But we
must be realistic and recognize that
a silver certificate occupies exactly
the same place in our currency
structure as does a bill that is
backed by gold or one that is is
sued by the Federal Reserve banks.
Therefore, it seems to me to be a
fair statement to say that the whole
currency structure is tainted by this
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