Wairarapa Daily Times [Established Over 50 Years.] THURSDAY, 19th JULY, 1934. POSITION OF SILVER.

Wairarapa Daily Times, 19 July 1934, Page 4

Wairarapa Daily Times [Established Over 50 Years.] THURSDAY, 19th JULY, 1934. POSITION OF SILVER.

A hundred years ago, the United States Government decided to “do something” about gold, just as to-day it is intent upon “doing something” for silver. In those days the American standard was bi-metallic, and up to 1834, the law made 15oz of silver equal in value to loz of gold. Both silver and gold coins contained their full value in metal, and were interchangeable for each other at this legal ratio, whatever the market conditions in other countries might he. In the years preceding 1834, silver was cheaper in other countries, compared with gold, because silver production was expanding rapidly. This meant that it paid people to import silver ingots into America, and have them coined into silver coins. These silver pieces would then be changed for gold pieces, which when exported Avould sell for more than the cost of the original silver ingots. This profitable business led to so heavy

an export of gold tliat by 1834 gold coins tvere rarely seen in America. The Government, therefore, changed the legal ration of the coins so that 16oz of silver would exchange for loz of gold. This made gold dearer in America, compared with silver, than outside, so gold began to be imported and silver exported. By 1853 nearly all the silver coins had been exported for sale in other countries. This time, instead of changing the ratio again to attract back some silver, the Government minted token coins, containing metal worth only portion of their nominal value, like our shilling and pence. These served as small change, and gold gradually became the standard about 1853. In the nineties a considerable body of opinion favoured a return to bimetallism, but by then the gold standard was fashionable. France, Germany, the Scandinavian countries, and Holland had adopted gold, and those who urged the remonetisation of silver found ears deaf to their arguments. But since this depression silver has come to the fore again. The United States agreed in April, 1933, to accept portion of war debt payments in silver, and the British Government immediately took advantage of this in its June token payment lastyear. One outcome of the World Economic Conference was that in July, 1933, an international agreement was signed under which India, China, and Spain are to limit their sales of silver, while the U.S.A., Canada, Mexico, and Aus-\ tralia will buy or withdraw from" the market at least 35 million ounces a year. Of this, the U.S.A. will take 70 per cent. The latest proposal in America is to purchase silver until it constitutes 25 per cent, of the metallis monetary ba-