The Timaru Herald. MONDAY, JUNE 26, 1933. THE SILVER QUESTION.

Timaru Herald, Volume CXXXVII, Issue 19525, 26 June 1933, Page 6

The Timaru Herald. MONDAY, JUNE 26, 1933. THE SILVER QUESTION.

Within recent months the agitation to persuade the leading countries of the world to remonetize silver, has really developed into a campaign to force King Gold to share his throne with Silver. How this can be done, the advocates do not wait to tell us. It must be plain to everyone that the danger of hitching the waggon of currency to a silver star would be full of dangers. Unlike gold, which is scarce and consequently regular in price, silver is plentiful and its price very jumpy, partly due to the fact that silver is not only produced by mining operations, but is also the by-product in smelting copper, lead and zinc, The slightest rumour affects the price, which often changes from day to day. In 1920 the price of silver rose to S9|d per oz. Early in 1931, the price fell to 12d. During 1930 it varied as much as lid to 21d., largely due to causes little known to the average man of commerce. The adoption of the gold standard by Indo-China, the embargo by the Chinese, on the export of foreign silver, and the export of gold, the sale of surplus silver by the Indian Government, the imposition of an import duty of Gfd per oz. on silver entering India, and the boycott of the Bombay Bullian Association of silver from London, were all important factors affecting the price of silver. Two or three years ago Sir George Schuster, the Indian Minister of Finance, warned the people of India who invest largely in silver, that it ‘.‘is only an ordinary commodity, liable to fluctuations in price, just as other commodities are. It has no sacred properties that make it immune from these vicissitudes.” But he concluded by offering to co-operate with other holders and producers of silver to consider joint action to regulate sales. The Americans did not receive this suggestion with any show of cordiality, and Sir George was led to say:

The more he studied the matter the more convinced he was that the fall in the price of silver was part of a much wider movement in the price of commodities, and the more doubtful he became whether silver could be dealt with successfully in isolation.

It is realised, of course, that the continuous depreciation in the value of silver has had a bad effect on Chinese trade in making imports unduly dear and raising the cost of living in China. Millions of natives in India also have been prejudically affected. On the one hand, stimulus is given to the exports of silverusing countries who thus become more formidable competitors in foreign countries. Consequently stabilisation of price would be beneficial if practicable, particularly to countries (such as Britain) that engage in immense trading operations in the Orient and in India, . It is interesting to note that nearly two thirds of the total silver produced each year comes from Mexico and the United States, which accounts for the fact that the bimetallist agitation started on that side of the Atlantic, where powerful interests are concerned in raising the price of silver. For nearly forty years, they have been busily engaged pushing • their schemes forward at every favourable moment. In 189(1, Mr W. J. Bryan, Democratic candidate for the American I’residency, made bimetallism the chief plank in his platform. “You shall not crucify mankind upon a cross of gold,” was his election battle-cry and slogan. But what is desirable or what is practicable is quite another matter. Obviously, any measures adopted to create an artificial value for silver in Britain alone would be a most dangerous experiment. Some of the best informed criiics expressed doubts as to the soundness of any move on the part of Britain designed to restore the price of silver. When considering the bimetallist agitation, therefore, we have to bear in mind that whereas the United States and Mexico produce two thirds of'the annual output of silver, the British Empire produces nearly two-thirds of the annual production of gold. Why Britain should be active in fulminating schemes to mitigate this advantage is difficult to understand. The advocates of bimetallism base their case on two grounds. They say first, that remonetizing silver would benefit British trade in the East. Secondly King Gpld is not. doing his duty, and that the low prices of primary commodities are due to the scarcity of gold. The truth is that production has outstripped consumption, and some changes in methods are desirable, but it is difficult to understand how conditions can be changed by conferring an artificial value on silver when there are such vast supplies visible and unmined.