Evening star., 1939-03-03
Defends Government
Purchases of Silver
Member Of Congress Says
! Alternative Is Large
Interest Payments


.. Alternative Is Large
Interest Payments
TO the Editor Of The Star:
With reference to the editorial "Silver
Lined Cloud" appearing in your issue Of
February 20, for the information of
your readers, feel the statements in
your editorial discussing the purchase
and use of silver as money in our cur
rency system should square with the
facts.
You say, For four years the United
States has been pouring sand into
rat hole with proverbial results and the
rat hole is the great underground vault
at West Point"
What has been the result of this silver
purchase program? 1t has operated to
put (reading from the Treasury state
ment of January 20, the date of your
editoriaD $1,586, ,976, ,416OO in money in
circulation in the form of silver cer-
tificateS and constitutes the only mon
etary policy of the Treasury on which
the Government is making a profit, but
best and most important of all the Amer
1can people are relieved Of the interest
charge as the cost for the issuance and
circulation of this money. On its silver
purchase the Government is making 100
per cent profit on domestic silver bought
at 64.64 cents per ounce and issued into
pirpl1a finn in, ho ofc c;l,,o
Gates Qegal tender currency in paying
Government expenses at $129h per
ounce, and 200 per cent profit on foreign
silver bought at 43la cents per ounce
and issued into circulation in the form
OF silver certificates. AS an illustration
of how our silver certificates are placed
in circulation, it is interesting to note
that members of Congress and their
clerical help in cashing pay checks at
the disbursing Office in the Capitol are
paid in brand-new silver certificates
which they proceed to put into circu-
lation.
AS matter Of record most of the
silver, as fast as it is acquired by the
Treasury, is Immediately put into circu-
lation as money in the form of silver
certificates as evinced by the Treasury
daily balance sheet, the amount of silver
certificates put into circulation increas-
Ing day by day as silver is purchased.
In consulting the Treasury balance
sheet, We find on January 20, 80 days
before the date of your article, under
the heading Of silver there was S1,654,-
o51 ,963.3l in silver on hand, against
which there was in circulation in the
form of silver certificates and Treasury
notes Of 1890 1888, ,144, ,088 90, leaving
S66, ,4O7, 1881 in silver in the general
fund IN the Treasury. Thirty days later,
on February 20 the date of your article,
there was 81 1859 1871 in silver in
this account and the currency (money)
In circulation in the form of silver GER
tlficates and Treasury notes of 1890 was
sl,6l5,3ll $3.50 showing an increase of
s27.l67,O ,Os7o 90 in new currency placed in
circulation in the month preceding YOUR
article.
Now what is the motive behind this
opposition to the Governments silver
policy? Principally it is the simple
matter OF collecting interest by the banks
OF this country on the money in circu-
lation. We have at this time s1.614-
143,5l3.00 February 20) in silver GER
tiflcates circulating as money in the
channels OF trade and business which
has been issued in circulation by the
treasury interest free and which dis
places an equivalent amount in Federal
Reserve notes, the kind of currency which
can only be issued and placed in circula-
ton by depositing with the Federal
Reserve Bank its equivalent in eligible
paper Understanding commercial notes
or Government obligations) currency
tnat must be supported as long as it is
IN circulation by this class of interest,"
bearing obligations (notes or bonds.
II the banks are successful in their CAM
palgn to retire the interest-free silver cer-
tif1cates and replace them with Federal
Reserve notes Qegal tender currency in
the amount now outstanding, s1.6l4,-
l43,5l3OO, that will force business to pay
the banks an annual interest yield of
$40, ,424 ,3O539 computed at per cent,
but We all know that the current rates of
interest are more than 3 per cent. If
we calculate the interest at per cent,
then the Federal Reserve notes that
would replace the silver certificates now
IN circulation would yield the banks
S96,848el0.78. Ninety-six million dollars
every year-something for the banks to
night for--money to come right out of
TIE pockets Of every one every time a
purchase Is made from a business firm
that has note eligible paper made
to bank and rediscounted to the Fed
eral Reserve Bank on which the interest
must be paid If the money (Federal Re-
serve notes. is to remain in circulation.
Now if the silver that is being pur-
chased by the Federal Government is
being. poured down a rat hole with
the proverbial results"-a billion and a
half dollars in interest-tree money flow
ing out into the channels Of trade and
business to finance industry-won't you
agree that The Star should urge Con-
gress to further assist business Sy ests:b-
fishing bigger and better rat holes?
COMPTON I. WHITE, M. c.
February a.