Evening star., 1942-03-01
War Industry Calls for Silver
While the Treasury Hoards It
Morgenthau Favors Repeal of Legislation
Freezing Great Metal Stocks, but
The Bloc Stands Pat
By Arfhnr Whipble Crawford,

Tne perennial silver issue has come
to life again This time the friends Of
silver are on the defensive. With an
increased industrial demand for this
metal because of a shortage of others,
the Treasury continues to buy all do
mestic newly mined silver and store it
away. In the face of defense needs for
labor and materials the Government
maintains its subsidy for the silver-pro
ducing industry, even though objectives
of the silver program of the early days
of the New Deal have proved impossible
of attainment.
Renewed discussion of the silver ques-
ton, which has been interviewer with
other monetary issues throughout the
history Of the Nation, has resulted from
the recent assertion Of Secretary of the
Treasury Morgenthau that 80 far as I
am concerned will be glad to see Con-
gress strike all of the silver legislation
of the books" While his statement was
made before subcommittee of the House
Committee on Appropriations, which
does not have Jurisdiction over monetary
laws, it was indicative of the trend of
sentiment within the administration.
Western champions of silver have rushed
to the defense of existing policies.
Silver Bloc Argument.
At present the silver forces are firmly
entrenched with two laws. both of
permanent character. One, which was
attached to an extension of the Presi-
dante dol1or devo 1,o tior, r,ouerS in 1870
requires the Treasury to buy all newly
mined domestic silver at price of Till
cents an ounce. This measure gives
statutory authority for purchases which
had been made at varying prices by
order Of the President under the bimet-
allism clause of the Thomas Imitation
Act. The other law, which is the basis
of purchases of foreign silver is the
Silver Purchase Act of June. 1884. Under
this law the Treasury is directed to pur-
chase silver, at such prices as it chooses
to pay, until silver monetary stocks be-
come one-fourth of all gold and silver
stocks or until the market price becomes
equal to the monetary value. The Treas
ury has paid IS cents an ounce for this
silver in recent years, although original
ly it paid more. Under existing condi-
tions it appears impossible to attain
either of the goals prescribed in the law.
The silver forces not only have the ad-
vantage of permanent laws, which al
ways are difficult to dislodge, but they
are able to assert that the program is
costing the taxpayers nothing except
for relatively small administrative ex-
penses. Indeed, they point out, some
profit has been made and very sub
stantial profit can be realized at will.
The amount paid for silver does not ap-
pear as an expenditure in the Govern
ment budget. The purchases of silver
are sef-fnancing inasmuch as silver
certificates are issued equal to the
amount paid to the producers and i'm
porters. A potential profit, realizable
at the will of the Treasury with the
approval Of the President, is piling up
in bullion which represents the excess
of the monetary value as fixed by statute
over actual COST
Objectives of Program.
Objectives of the original silver pro-
gram, as advocated by President
Roosevelt as one means of combating the
world depression in the first year of the
New Deal, inclddeo broadening Of the
metallic base Of the monetary system,
stabilization of the price of silver at
higher level, encouragement of wider
Use of silver in monetary systems of the
world, a promotion Of trade with the
Orient and moderate imitation of the
currency with a view to a stimulus to an
upward movement of commodity prices.
1t was contended that the program would
improve economic conditions throughout
the world while also meeting immediate
needs for full employment and stable
market In the Western industry.
Much emphasis was placed on the de-
STABILITY of a broadening of the metallic
base OF the monetary system by theorists
who attributed the world depression, in
part at least, to monetary causes. At
that time some authorities believed that
a world shortage of gold was tending to
depress commodity price levels. While
the silver program has served to broaden
the metallic base of the monetary sys-
tenn, such action was rendered unneces-
sary by the simultaneous increase in
stocks of gold.