U.S.A. REMONETISES SILVER.

Horowhenua Chronicle, 23 December 1933, Page 7

U.S.A. REMONETISES SILVER.

PURCHASE AT 19 CENTS ABOVE CURRENT MARKET PRICES. ACTION EXPECTED TO MUZZLE CONGRESSIONAL INFLATIONISTS Received Friday, 8.25 p.m. WASHINGTON, Dec. 21. President Roosevelt on Thursday night formally ratified.the London silver agreement, and ordered the Government to purchase metal at 644 cents an ounce, which is half the legal price and about 19 cents above the current market price. The proclamation said that the President, in accordance with the Act of Congress, opened the country’s mints to the coinage of standard silver dollars from silver hereafter produced in the United States or its possessions. Half of the silver presented will be coined at the statutory price of 1.29 dollars an ounce and the remaining half “surrendered to the Treasury as seigniorage and to cover the usual charges and expenses.’’ It is estimated that about 24,000,000 ounces will be purchased annually. This figure approximates the amount stipulated in the London treaty which America will buy annually. It-is understood that Mr. Roosevelt decided to ratify the agreement following India’s acceptance of silver. Advocates are jubilant at the President’s action. Senator Pittman, author of the silver agreement, declared that exports to Oriental ' and other countries with a silver base will be greatly increased. “The action of the United States will be followed by Canada, Australia, Mexico and" Peru, ’ ’ he added, and “undoubtedly will stabilise the price of silver throughout the world at 644 cents until some further action is taken to raise it higher.’’ Observers agreed that the President has done much to muzzle Congressional inflationists. New York foreign exchange circles were taken completely by surprise by Mr. Roosevelt’s remonetisation of silver announcement. One silver expert declared that, since the United States produces currently only about onesixth of the world’s production of silver, the effect of the purchases upon the world price was likely to be no greater than has been the effect of the Reconstruction Finance Corporation’s purchases of newly-minted gold upon the world gold price. The question immediately arises, therefore, - whether the present announcement may not be the forerunner to purchases of silver produced abroad. It is predicted that the immediate market response is likely to be strongly rising prices, but it is doubtful if they will hold unless they are followed by authorisation for purchases abroad.

The Reconstruction Finance Corporation to-day allotted another 25,000,000 dollars for the purchase of gold. It was indicated that about 60,000,000 had been expended, 16,000,000 for domestic purchases and 45,000,000 for foreign purchases.