CO129-523-12 Currency situation 17-2-1930 - 9-7-1930 — Page 45

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Extract from TIMES-305.30

Those who have for a long time re- garded silver as a friendless commodity the price of which might easily reach yet lower levels, find justification for their views in the fresh weakness in the white inetal during the last week or two. The reduction in the price to so low a level as 17 7-16d. per oz. has nevertheless caused some surprise. No new development has recently occurred, so far as the London silver market is aware, which can explain so severe a fall. Needless to say it is the lowest level ever recorded and comparison of this price with the average price of 24 7-16d. last year, or with the average of 34d. for 1924, provides a striking com- mentary upon the changed conditions of the market for this once precious inetal. In all probability the fresh spell of weak- ness in the metal is simply due to a con- tinuance of the adverse influences which have been weighing upon the market for a long time past. So long as no relief from these factors is in sight, silver must continue an easy prey to the speculator, for the fall and sales of this nature from Shanghai are held to have been largely responsible for the weakness in the metal. To the extent that a fair-sized bear account has been created in the metal some recovery from the present low level seems probable, but it is impossible to say that any fresh development is in sight which should bring fresh hope to holders: of silver.

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Growth of China's Silver Stocks

One of the principal visible adverse factors is the continued growth of stocks of silver in Shanghai and the indications that in its present state of political un- rest China, the one remaining country of importance where silver continues to form the basis for the currency, cannot absorb the silver which is still being shipped to her ports. Shanghai stocks of silver, according to the latest advices, amount to 99,200,000oz. in sycee, 142,000,000 dollars, 15,700,000 Saigon dollars, and 10,920 silver bars; a year ago the stocks were 76,600,000oz. in ' sycee, 128,000,000 dollars, and 4,640 silver bars. The presence of Saigon dollars is a result of the recent adoption of a gold standard by the French colony of Indo-China, whence stocks of unwanted. silver coins have been shipped to Shanghai. If her trade were active and thriving China, as the one great remaining silver-using country of the world, would hardly require all the silver she is asked to absorb. The actual facts are that, owing to the deplorable conditions exist- ing in China, her trade development is stifled, and her silver requirements, there- fore, much below what they would be if her trade were encouraged by the exist- ence of a strong central Government and freedom from the ravages of banditry.. The serious effects of low silver prices have already been pointed out in this column. By the fresh fall which has now occurred the enormous stocks in China will undergo further heavy depreciation, and trade in China will again be disturbed by the adjustments which must follow in the silver prices of goods. If silver were not primarily produced as a by-product of base metals, the continual fall in price would probably have already exerted an appreciable effect upon production. Only about 25 per cent. of the mines producing silver, however, are estimated to be worked for silver alone, and in spite of a falling price the output of silver has remained at a very high level of late years. For 1928 the output reached the record amount of 257,000,000oz., and for 1929 a London bullion authority has estimated it at 254,000,000oz.

CR

for Cent

18.

45

? Alt to HIC Currency the fut by

1.2. 21-30.5

Mrant,

30