Drama of Silver– And of Discord
By: Hal Borland
July 9, 1939
New York Times

Silver plays many roles in finance and industry; it is, and always has been, a source of controversy.

In Peru, in a mine shaft in the Andes, an Indian laborer pauses at his work and turns to the man beside him. "They say the wage is to be reduced," he mutters. "The price of silver is lower than it was." His companion stares at him, then picks up a lump of the heavy, dull-gray ore and curses it. He flings it aside and they both resume work, more slowly now.

In China, an old man sits in a hut and stares at a little heap of silver coins, his eyes bewildered. He once had twenty times as many coins and was a rich man among his peasant neighbors; then the Japanese came and took all save this little heap he had hidden. But one of his own people, one who knows such things, told him he still need not starve; and now that one who knows has told him that he may starve after all, for the value of silver has changed. He stares, not comprehending; for they are the same coins they always were.

In Mexico, a government official listens to a voice in the telephone and his face flushes in anger. "They can't do that!" he exclaims, and he clams down the receiver. With a pencil he calculates the new deficit that has come tumbling down around his ears with the new change in the price of silver.

In the United States, drawn up at the doorway of a square, fortress-like building in a hollow on the military reservation at West Point, N.Y., is a huge truck. Around it are Coast Guardsmen armed with submachine guns. Workmen are carrying pigs of white metal from the truck into the building's vaults, pig after pig, ton after ton, each pig worth more than $1,200 at the government's price. Near by sits the truck driver. Inhaling deeply from his cigarette, relaxing. He has been on the "silver run" for six months, trucking the white metal from downtown Manhattan to "the hole in the ground." Eleven tons every load, worth $400,000 at government figures. He makes a hazy calculation of the wealth he has brought up the Hudson. Millions. And he relaxes this way every time the unloading starts.

In Montana, a miner comes home from work, sags into his chair at the supper table, scoops out a helping of fried potatoes, reaches for a slice of bread. His wife says, "I heard the government's going to raise the price of silver," and he demands, "Who says so?" "Mr. Elkins, at the store," she tells him. He scowls. "I heard a lay-off's coming at the mine." Then he adds: "Wonder where Elkins heard it? Think I'll go down to the store after supper. Might be something on the radio."

In Washington, a Senator is saying: "The testimony stands uncontradicted that the drop in the price of silver from 77 1/2 cents to 64 1/2 cents threw 318,000 people, in five Western States, out of work, and I think nearly all of them went on the relief rolls." The debate drones on, for and against raising the price of domestic silver, for and against ending purchases of foreign silver.

In London, the representatives of the four big bullion brokerage houses which handle all the buying and selling in London's silver market gather in an office.
"The Four Just Men." Each has his notation of orders for buying and selling silver stocks. They compare their totals, tally them up, strike a balance. They solemnly make note of the results and return to their offices. The day's price has been set. Two cents lower than yesterday. Word flashes to Bombay and New York, to Tokyo and Mexico City, to Cape Town and Toronto. The world knows that more men wish to sell silver than to buy.

In Colorado, an old man with the light of hope in his eyes follows his laden burro into the Sangre de Cristo mountains, dreaming of one more silver strike, one more change at the big riches his fifty years of prospecting have never brought him.

Silver. Strange, soft, white metal. Metal the early Egyptians regarded as more beautiful and more valuable than gold. The metal Hannibal took from the mines of Bebulo in Spain to pay his soldiers. One of the treasure metals that keyed the nerve of Cortez for the conquest of Mexico, that led Pizarro to Peru. Galleons of silver and gold threading their way across the Caribbean, across the Atlantic, to Spain. Spain a new empire built on silver and gold. The gold is soon gone, but the silver mines remain and continue to pour their precious streams across the world. Men fight and die for silver; men are enslaved in the mines, to dig more silver.

Silver helps finance the Renaissance, already an intellectual ferment in Europe when the mines of the New World are opened. Silver flows across Europe, in the packs of traders, the hoards of merchants, the pockets of artists and scholars. Cellini transmutes silver into designs of amazing beauty, gives it a lasting place in the enduring arts of the world.

America is settled and freed from England and grows into a nation. Bimetallism prevails, both silver and gold legally established in the currency. France, too, has bimetallism. England clings to gold; but the rest of Europe relies on silver. Then California's gold bonanzas are opened in 1848, to lead 10,000 wagons across a continent and sweep gold into every market in the world. Three years later huge gold strikes in Australia swell the gold streams. Gold displaces silver in France; French silver flows to the Orient. Gold is established as the principal currency in the United States.

In 1867 an international conference in Paris proposes an international currency system based on gold. After the Franco-Prussian War Germany demonetizes silver, turns to gold. IN 1873 the gold dollar is formally established as American's standard coin.

Meanwhile there have been silver strikes. In 1859 three gold seekers are working out a catch basin to hold water with which to wash gold from gravel in the Sierra foothills of what will soon be called Nevada. They find a soft, lead-gray rock and curse it and throw it aside. Some one says it may be silver, but they have eyes only for gold. Men offer to buy their claims and Pat McLaughlin, Peter O'Riley and H.T.P. Comstock, the three gold seekers, sell out for a grubstake. Silver it is, silver that yields more than $340,000,000 in the next thirty years– the Comstock Lode. All three men live to know their error, and McLaughlin dies a pauper. O'Riley dies insane and Comstock, brooding over the irony of naming the lode for him, commits suicide.

Silver in Montana. Roaring camps and vigilantes and the law of the rope. Silver in Colorado. "Hell, man! There's silver enough here to pave every street in Leadville and have a million left over for every one of us!" Silver in Arizona. "Silver enough to buy the whole damn country and build a fence around it!" Silver mine shares sell for $1.25 in May, rocket to $1.525 in August.

Silver begins to drive gold out of America, even out Europe. Europe tries to check the movement by limiting the coinage of silver. Germany, holding huge stocks of demonetized silver, suffers. The Far East, on a faltering silver standard, is in distress. By 1876 both England and America are studying ways to check the depreciation of silver. There is an international conference in Paris in 1878 to consider means of coping with the situation. At home, the Bland-Allison act that same year attempts to bolster silver prices by order continuous coinage of silver. But silver prices ease downward. World trade declines. "The outlawry of silver" is blamed. In 1881 another international conference is held, but England and Germany refuse to abandon the gold standard for bimetallism.

International action having failed, in 1890 the Sherman act is passed, to increase silver coinage. Prices lift, then sag again. And there is a cry for free and unlimited coinage of silver. The issue grows. Debtors, miners, farmers, Populists take it up. "Restore silver and bring back prosperity!" William Jennings Bryan cries, "You shall not crucify mankind upon a cross of gold!" The Presidential campaign of 1896 is fought on the silver issue. Ringing phrases echo, phrases that ring like a silver dollar. But they are only phrases. Too much silver, not enough votes. McKinley is elected; Bryan goes on with his oratory.

After 1900 the issue wanes. Gold surges back. In 1898 the Klondike was opened and now it pours a new stream of the yellow metal out across the world. Talk of a "gold famine" dies away. One after another the countries settle back on the gold standard.

But silver is still minted for India. Silver dollars– once the Dutch thalers– are the currency of the East. Mexican dollars, officially "chopped" with the proper hieroglyphics, are currency of the realm in China. Maria Theresa dollars are currency in far places long after Austria turns to other coinage. Mountains of silver are scratched and tunneled in Mexico; civil wars are fought over silver. America exports silver to the Orient, to Europe again, to Africa. Silver flows through the trade channels, fighting its own way.

And the silver producers fight on. A few years back it was thought the peak production was over. Now they turn to new methods, cyanide processes, cupellation, electrolysis, and the output swells once more. It won't remain stable. A great, new silver lode is discovered in Canada. Another in Bolivia, or Peru. Silver prices are still low.

"New uses for silver; that's the new." How about the films? Silver nitrate, silver bromide, sensitive to light. Hollywood uses tons of silver. Swab out your throat with silver. Silver instruments for dentists and surgeons. That man with a hole in his skull– a silver plate will protect his brain. Patch up that shattered shinbone with silver wire. Silver jewelry. Silver plate. Silver in every home.

Silver is ideal for airplane bearings, says a research man; and some one laughs at him. It's not that cheap, yet. How about electricity, then? Silver is the best electrical conductor known, 25 percent better than copper. Maybe silver could take the place of copper in the electrical industry. How about it? Another laugh. Why, if silver were cheap enough for that silver wouldn't be money any more! A dime wouldn't be worth a penny! And the Senator from Nevada solemnly states that it costs a minimum of 70 cents to produce an ounce of silver.

Then get together with the other nations and peg the price of silver. Some kind of agreement. After all we have to protect our own stocks of monetary silver from raids in the world markets. And what's our own currency worth unless other currencies are stabilized? Stabilize currencies generally, both gold and silver, the pound and the franc as well as the dollar. Improve world trade. Bolster the Orient. Restore silver!

A program is agreed on. Silver shall be bolstered, and thus trade shall be helped. In 1923 the world price for silver was 70 cents an ounce. By 1933 it had slipped to a fraction under 40 cents. Now, in 1934, it is run up to 48 cents an ounce.

Silver begins to move, from the East, from the West, from the South, into America. In China, the silver content of the trade dollar, under the new price, is worth more than $1. Silver coins are demonetized and melted down, their silver extracted, cast into bars, sent to America. Silver flows out of China and by November, 1935, China will have gone off the silver standard and there will be no nation on the globe that maintains silver as it currency base. Silver flows out of India, out of Siam, out of Japan, out of Europe, out of Africa and Mexico.

At home silver revives. The government announces that it will buy newly mined domestic silver at 64.64 cents an ounce, and a little later the Silver Purchase Act calls for continuing purchases of silver both at home and abroad to build up and maintain monetary stocks in a proper relation to the mounting stocks of gold. Domestic silver production rises from 23,000,000 ounces in 1933 to 33,000,000 ounces in 1934 and nearly 49,000.000 ounces in 1935. The domestic price rises to nearly 72 cents an ounce, then to 77 1/2.

The silver pours in, by rail, by airplane, by ship. Stores pile up, not by pounds or tons but by thousands of tons. Mexico, in serious financial difficulties, begins to get her head above water. Her silver production booms; so does her silver export total. Mexico's nationalization program, financed with silver, expands. Japan increases her silver production and export. In 1935, when the price of silver rises to 81 cents an ounce for a time, Japan exports 225,000,000 ounces, an all-time record– and finances her "incidents" on the Asiatic mainland.

By 1939 America has accumulated– or had thrust upon her– 2,500,000,000 ounces of silver. Then the price is dropped. The flow slackens. The domestic price is lowered from 77 1/2 cents an ounce to 64 1/2 cents an ounce, and there it remains, rankling in the hearts of the Senators from the Silver West, until Republicans and anti-New Deal Democrats, eager for any change to repudiate the President, band with them for action.

"Quit buying foreign silver!" is the cry. "Quit subsidizing Mexico and Japan!" And while you're about it, say the Silver Senators under their breath, boost the price of domestic silver and give us fellows a break. We aren't asking for bimetallism; that issue is dead. But we want a break for our silver. Eastern industry is protected by the tariff; give our Western mining industry more protection. The differential between world price and the domestic price of silver? Its not enough.

Silver. Lovely white metal for the artist, ringing coins for the tradesmen, wages for the miners, currency for the silver lands. A healing salt for the doctor's patients, shadows on a film that makes pictures on a screen, jewelry for the lady.

The Greeks mined it and made coins. Solon wrote of its scarcity. From the mines of Laurion came the wealth of Athens, and the ships to stop the Persians. Thrace prospered in its production. Rome sent men to mine it in Spain. Wars were fought for it, lands captured and populations impressed to dig it from the earth.

Silver states, silver statesmanship, silver diplomacy. Seventy thousand tons of silver in a fortress on the highlands above the Hudson.