The Daily Alaska empire. [volume] (Juneau, Alaska) 1926-1964, 1938-01-17

the London Silver Agreement of 1888 by which the
Government obliged itself to purchase fixed
LOT silver every year for period OF four years The
other is the Presidents proclamation providing tor
The purchase of newly mined domestic silver at prices
1ar above the prevailing world market price In carry
ing out the obligations thus incurred, and in fulfill
ing the terms laid down in a subsequent measure
known the Silver Purchase Act of 1884, the United
states has acquired curing the last four years no
less than 1400 100000 of silver. That is equ-
valent to more than eight times the entire world S
production in the year the Treasurys purchases
began, and to more than sixty times our own domestic
mine production in the same year. What have We
achieved by ping up this huge reserve of an artfici
ally valued metal?
The silver purchase policy was put forward on the
basis three claims First that it would lead to the
reconciliation of silver in other countries; second
that it would revive the purchasing power of the
Orient" for American goods and third that it would
broaden the base of own currency. What has
actually occurred, under each Of these three heads
may be summarized briefly follows:
ID The first clear effect of the American silver
purchase program to drive off the silver standard
the only important -China-which had previ-
ousy been it. This because forcing up the price
of silver had strongly deflationary effect upon the
level of other prices in China and because silver
became more valuable export bullion than as cur
rency So China left the silver standard and intro
duced managed currency. In this respect our pur-
chase program has succeeded in accomplishing the
its reconciliation"
90 The purchase program has indeed helped to
revive purchasing power" in China for foreign goods
but not in the anticipated by the authors of
the proposal that is to say, not through the process
of raising the value of Chinese currency but rather
through the process of transferring purchasing power
from the people of the United States to the people of
China. For China, having left the silver standard,
has become exporter of the metal. And what the
present arrangement amounts to, in effect is this:
can machinery and other American goods for Chinese
silver purchased at an artificial price, for which We
have no Even the basis of this Improbable
exchange however sold less American goods III
China last year than did in 1892 the year before
silver purchases began.
80 Finally. so far as broadening the base" of
currency is concerned, it must be noted that
when the Silver Purchase Act passed the monetary
gold stocks of the United States amounted to
S7756 000 far than needed as an ade-
quate reserve behind all currency in circulation
Subsequently have acquired so much additional
gold-and have had little need of additional silver
that the Treasury has actually sought to 'sterize'
gold imports in order to prevent them from having an
inflationary effect upon bank credit
The silver purchase program has been folly from
the start Its chief effects have been to produce
fusion abroad and uncertainty at home The sooner
the Government get out of its present position the
better