These shipments may be presumed to have been the direct cause of the ban on imports. The ban, however, has all the appearance of being 2 "duration" measure. These particular shipments, on the other hand, were but an insignificant ebb in the flow of silver to the United States. How abnormal and precarious was that premium in the sterling price of silver was shown last Tuesday, when the offering of a mere 50,000 ounces—little more than £4,000 worth of silver—caused the spot price to fall by td. and the forward by Jd. to 234. for each. This suggests that it would not have needed much expenditure in the way of exchange to have allowed the sterling price of Silver to fall to its traditional export point in relation to the United States price of 35 cents for imported metal Besides, there might have been other ways of restoring this normal relation between the sterling and dollar prices for silver. The Indian Government has considerable and redundant stocks of silver, which may be placed in the neighbourhood of 160 million ounces. Of this total, rather over 10 million ounces are held in London. It was the readiness of the Indian authorities to sell at 23%, which, in the recent days of acute shortage of spot silver in London, prevented the price from moving above this figure. Would it have involved a serious loss to make a little more of this metal available We lost no exchange on silver dealings during these three years and eight months, while during that 1 period a reasonably active silver market was helping the balance of payments by its modest contribution to our income from invisible exports, Tt is true that since the end of last August imports of silver had been more than overtaking our export of the metal, This was the result of a largely artificial situation reflected in the rise of the sterling price of silver to a premium over the shipping parity from the United States. The reasons for this abnormality were two-fold. In the first place, it followed the development of a bear position built up during the summer when there appeared to be a probability of the United States discarding their silver policy. In the second place, the shortage of spot supplies in London connected with the initial attempts to cover this bear position was a thg outbreak of the war by the exchange regulations. As the exporter of silver to this country could not be sure of converting the sterling -proceeds of his sales into foreign currency at the official rates, the arbitrage business in silver came to a temporary stop, despite the widening of the premium over import parity at which silver was quoted in London... This last factor, however, ceased to be operative with the devel-lopment of a free market for sterling in New York in which lor a time silver was quoted at parity and even at a premium in relation to the official sterling-dollar rate. Thus shipments of newly-mined silver were arranged from the other side of the at the slightly lower price that would have prevented silver from making the eastward journey across the Atlantic? Neither this course nor readiness to allow silver arbitrage to remove the premium over the import point would have involved an ultimate cost comparable with that of putting the whole London silver market into cold storage for the duration of the wer. The policy of the authorities in this matter bears some resemblance to the manner of obtaining roast pig described in Charles Lamb's famous essay.
Nor does the matter end there. The ban on free import point would hav involved an ultimate cost on an ultimate repeal of the existing silver legislation in the United States Towards the end of last June, the immediate chances of such a repeal were rated high. A reprieve was granted with the extension of the President's monetary powers. but the smouldering antagonism to the silver policy which flared no a few months ago remains in both Houses of Congress and can only be strengthened by the recent decisions of the British and Indian Governments. If revision of the United States silver policy occurred. and found its expression in a considerable depreciation in the market price of the metal. the British authorities would no doubt view the position with complete unconcern. That could not be true of the Indian Government, whose choice would no longer be that of selling silver at 23%d., or say 2144, but a far more unpalatable one,
Text read from the printed page and cleaned; old type leaves the occasional error.