VALUE OF SILVER.

Star (Christchurch), Issue 12486, 27 November 1918, Page 4

VALUE OF SILVER.

BECOMING RARE AS GOLD. WHERE THE MONEY GOES. • Ask your bank for gold these, war days (says the New York "Sun") and yowhl find it about as easy to obtain uh platinum, palladium, iridium—which aren't obtainable ut all, and for which tho Government is paying prices running from 105 dollars an ounce to 17/5 dollars. And though you o;in still obtain siltlio fact remains thafc. in proportion* to the demand—especially for foreign trade—silver is becoming, if not absolutely scarce relatively, rare as tho rarest metal. Is the day coming when silver, too, will become shy and disappear in the invisible " sink " that absorbs precious metals in times of warP The demand for silver is exactly like a groat reservoir of water with half a dozen inflowing pi pi!S nn d. an unknown number of leaks in the bottom- All we see is that the surface level of the water keeps sinking faster than the flow comes in. Wo find one hole and stop the leak. Up comes- thp. water level; but before the world financiers liavo had a chance to soap their hands with satisfaction down tho water level goes again. Not all tho man-made regulations can stop tho tide, any more I than Oanuto could command the seaIndia's demands alono could drain tho world of silver. SOME OF THE IMPORTANT FACTS. Take a few disconnected facts. "Within a. few mouths the American Government melted down 100,000,000 silver dollars for export to India, China nnd Japan. Immediately afterwords, about a month ago, the Treasury fixed tho maximum price for silver at. 1 dollar 01 £ cents. It then announced that export licenses for silver would be granted only on condition thafc the maximum price was not exceeded. This was to stop tho speculators, who had - been buying silver at one dollar and reselling it at one dollar 8 cents and one dollar 7 cents. As the Government pay« only ono dollar an ounco its profit is 1,1 cent, which covers the oxnenso of melting and recoining. France tried to stop the leak by demonetising silver. > WJien 15,000,000 small nickel nnd silver coins were struck off by Franco with only 67 per cent value in real silver they Vanished within a week of issue as if by magic Wlio or what sucked them up bo furtively that the French Government did not k-uoav the new coins had disappeared until there literally was not one m circulationP Tho story is_ told of thirty*sevcn United States coinage presses this summer being unable to turn off silver dimes as last as tho -, commercial demand for those dimes! You may use the silver to buy bullets, but you can't use silver JLix bullets. Why did trade , suddenly deed'so many more dimes ? So fast was silver'leaking away from , Mexico to Japan and China and India ■ that Mexico, too, clapped, on an em--1 largo. It was a typical Carranaa embargo—those who exported silver must reimport 25 per cent of the value ot the silver in gold within ten days. ; RISE IN PRICE. Tho greatest store of unused silver I in the world was 350,000,000 "ounces bought in tho ninotios by tho United .States Treasury at a price described ■ , as " a song"—tho song.being 58 to bb ■ cents. It was to permit the melting L and exporting of this silver that the Hitman Aat was possible in. April, ' 1918. Since the outbreak of the great war wlver has gone up in price from 60 • cents to one dollar plus. Why? ' Several reasons are given. Hero they " are: . . . - ' Owing to the war, silver mining, like ; all other, mining of precious metals, is ; declining. When you examine it there . is very little fact beneath this explana--tion. The silver production of the ! world for 1916 was 175,933,024 ouncesIn 1915 and in 1914 it was more than 182.000,000 ounces—which _ seems •■ to show there has been a decline. But , wait! From 1908 to 1913 silver pro- ■ duction went as low as 78,000,000 ounces and never once exceeded 162 000.000 ounces, but the dimes didn't disappear nor did the price jump i to 1.08 dollars' Another explanation is that owing i to the disappearance of gold as coin there has been an increased demand ! fair !the use of silver, bub'in the old '. pre-war days how often was gold really 1 used as com? About as often-as 500 ' dollar bills'. Wo knew it was there if we wanted it, but we didn't bother using it. . EXPLANATION DOESN'T EXPLAIN. Then an explanation is given of the • explanation. The nations having embargoed gold for foreign trade, the increased demand comes _ for _ silver, but this explanation likewise iB so much bunk. True, gold is chiefly used for foreign trade, and ihe various Governments have forbidden the export ot gold, except with special license, but the very same Governments have also forbidden the exportation of silver except under special license, so the real explantion of silver almost doubling in i price narrows down to two questions which no man can answer, bluff ho , never so wisely: , Are peoplo privately hoarding silver coin? Or has the price doubled because of open and secret buying of silver for the countries of the Orient, chiefly India ? No one can answer the first question, for hoarding is too furtive to be traced, i but the action of the Governments in Mexico and in France would seem to indicate that both authorities are apprehensive of secret hoarding also of : secret agents for foreign Powers buying ', up the hoards at a price above the ' minted face value. But that does not explain tho absorption of American dimes, and it would take a powerful lot of proof to convinco : sane people that the American public . has taken to salting away silver dimes in old stocking toos and unused teapots. Still the cardinal fact remains—dimes hero and smaller coins in France were absorbed as if by magic Even before the Pitman Act permitted the melting and exportation of tho silver dollars piled «P dead and unused in the United States Treasury, private purchases had sent the price of silver up 50 per cent. For the ten years preceding 1908 India had absorbed and "sunk" or lost to circulation 135.000,000 of gold—more, than a quarter of the world's yearly production of gold. AVERTED TROUBLE IN THE EAST. By the end of 1917 India was drawing three-fourths of all the silver produced in tho world. Silver had to be supplied to India to avert a financial panic, and perhaps revolution. Tho world had produced about 175,000,000 ounces of silver and India- needed immediately 200.000,000 dollars worth and later 150.000,000 dollars more, so tho United States Treasury dollars were melted nnd exportedBut before that a curious situation had arisen as to the rupee. The premium was so groat on metal that tho silver in the rupee was worth more than the fact value of the minted rupee, < so rupees were being melted up and going o.ut of circulation. A law was passed in India making it a penal offence to melt or export coin. Silver cannot now be shipped to Tndia except by purchase of the Government-.