Page:The Economic Journal Volume 1.djvu/814

 NOTES AND MEMORANDA THE SILVER QUESTION IN AMERICA SINCE the middle of August, 1890, the Treasury of the Uniteft States has been buying silver at the rate of 4 million ounces every month, paying for the bullion in Treasury notes, which are legal tender for all debts, public and private, and are redeemable at the Treasury in gold or silver coin, at the option of the Secretary of the Teasury. Two parties combined to carry the measure;'the one hoped to raise the price of silver to what it stood at before the demonetisation of the metal by Germany; the other desired to make money cheap and plentiful. The expectation of neither has been realised. Just before the Act which requires these purchases was introduced into the United States Senate in February, 1890, the price of silver in London was 43d. per oz. On the introduction of the measure a very wild speculation grew up, and the price was gradually raised to 54d. per oz. at the beginning of September, being a rise.of abo.ut 25- per cent. in less than seven months. It was, however, entirely the work of speculation, for the purchases of the Treasury did not begin till the 13th of August, and the highest quotation was reached on the 4th of September. Since then the price has fallen, though, of course, with frequent fluctuations, until early in November it was as low as 43d. per oz., or a fraction under what it had been before the introduction of the Act. The increased demand of the United States naturally stimulated production so much that the augmented output has neutralised the effects of American buying. At the same time it is obvious that, were it not for the large purchases of the United States Treasury, the price would be much lower now than it is, and consequently, whenever the artificial support now afforded to the silver market by the United States Treasury is withdrawn, there must be such a fall in price as will probably throw into confusion the trade of all silver-using countries, and therefore bring about a grave crisis. The hopes of those who expected that money would be made artificially cheap and plentiful have been disappointed almost as rudely as the anticipation that the price of silver would be raised and kept at.