report of June 16 says:—Business has been comparatively inactive during the week. India has figured as a buyer and also (yesterday and to-day) as a seller, whilst a small purchase has been reported for China, possibly in the nature of bear covering. The Continent has sold silver, and some speculative interest has been taken in the same direction.
The market has shown a front of apparent steadiness, A good deal of this is owing to the appreciation of gold reflected in the U. S. exchange, and to a consequent indifference to make silver sales from that quarter. On the whole the position of China with regard to silver is immobile. On the one hand are obstinate speculators who have sold sterling (that is to say, bought silver); on the other, are banks which hold a different view of the relation between silver and sterling.
India has been a powerful force this year, but may be said to have shot its bolt for the moment, and, pending an assured and favourable monsoon, is hardly likely to figure heavily as a buyer unless more gold is available for export than has recently been making its appearance.
The rupee has been fairly-maintained of late, but an untoward monsoon would certainly have an unusually ill effect. At present the rains, which arrived late, seem somewhat uncertain. It may be mentioned that the intrinsic value of the rupee, with silver at 35d., is not much over Is. 1d.
Trade demand for silver is almost non-existent—luxury trades are beginning to feel the stress of the times and the pockets of many spenders are not so well filled or the owners are not inclined to part readily with the contents. In other words, caution is the mot Behind, however, the apparent steadiness (helped by lessened production and U, S. purchases under the Pittman Act), looms the factors a) demonetization of the metal. changed attitude toward currency acts in two ways, it prevents fresh purchases on behalf of mints and. it places from time to time supplies on the market of more or less importance. The Frankfurter Zeitung" referred in its issue of June 6, 1921, to a stock of ona million kilos—(32.150,000 ounces) which the Reichsbank proposes to pledge with the object of obtaining funds for the discharge of German obligations due on August 31 for reparations to the Allies. The collection of the silver from—the yariovs branches of the Reichsbank may take some time. Various banks are said to have been approached in England, America, Holland, Sweden and Switzerland on the question of advancing the money. The difficulty of easily disposing of such-a large accretion of silver seems to be the reason why the idea of borrowing is entertained, rather than that of attempting an immediate sale.
Obviously, also, the reduction of the quality of British silver coin from.925 to.500 is resulting in a surplus stock of silver, Whether one or other, or both of these substantial accumulations be realized—and it is difficult to see why they should be held unsold for an indefinite period—the fact of some 60 or even 80 million ounces of demonetized silver being held in abeyance is a serious factor in estimating the sterling value <f silver. Notwithstanding an undoubted shrinkage of supplies brought about iby the higher cost of mining, and by the operation of the Pittman Act, bull operators will find it difficult to avoid the sensation of skating upon very thin ice. 2
Text read from the printed page and cleaned; old type leaves the occasional error.