National Affairs: Second Casket

There is a poetic tradition that he who opens a gold casket “shall gain what many men desire.” Last January President Roosevelt sent Congress a gold casket. When it was opened it contained a brand new vest-pocket-size dollar, desired by many inflationists. Silverites soon began to clamor for a second precious casket from the White House. For a long time the President demurred. Last week to keep the peace he sent a silver casket to the Capitol. When Congressmen lifted the lid, they found its contents to be: three sops, a new tax, and some consoling generalities. There is also a tradition that he who chooses a silver casket “shall get as much as he deserves.” Most silverites in Congress professed to be pleased. Senator Key Pittman of silvery Nevada promptly delivered a two-hour oration in favor of the Administration’s latest silver bill. “We are now,” he cried, “going back to normal. . . . There is nothing which inspires such confidence as silver money.” Only a handful of Senators thought they deserved more than the President had sent them. One was Senator Pittman’s Nevada colleague, independent Patrick Aloysius McCarran. Others were Idaho’s Borah, Montana’s Wheeler, Oklahoma’s Thomas, Louisiana’s Long. It was a foregone conclusion, however, that Congress would accept the President’s offering and pretend to like it. Meantime interested persons made an inventory of the President’s second casket: Sop No. 1. The U. S. will increase the amount of silver in its monetary stocks until the proportion reaches 25% silver, 75% gold. This is, however, merely a declaration of policy, an “ultimate objec-tive” for which no date is set. Sop No. 2. The Secretary of the Treasury will buy silver until this objective is attained—some 1,300,000,000 oz. or approximately twice the amount the U. S. now holds. However he will buy only if and when his own judgment tells him to. By law he is forbidden to pay more than 50¢ an oz. for silver in the U. S. on May 1. If he begins buying silver on a big scale he will have to buy much of it abroad and very likely pay for it in gold, thus cutting down the amount of silver to be bought. Sop No. 3. The Treasury is authorized to regulate or prohibit trading in silver, and the President to take over all silver in the U. S. But when and whether is left entirely to Administration discretion. Tax. A stamp tax will be placed on each sale of silver (made on or after May 15, 1934) equal to 50% of the seller’s net profits. This tax will take all the joy out of silver speculation, and dampen the silver enthusiasm of speculative interests. Generality. Not in his silver bill but as part of an accompanying message to Congress, the President declared himself in favor of broadening the metallic base of U. S. money by the use of both silver and gold—but only on condition other nations joined the U. S. in a world move toward bimetallism. The proviso overshadowed the proposal. Although the President expressed hope of getting international action, every statesman knew that no important nation except the U. S. is willing even to consider bimetallism.

The opening of the silver casket was promptly followed by a slump in silver futures, largely due to the stamp tax on speculation. In Colorado, silver men said that the President’s silver bill gave them “nothing at all.” Britons deplored the comfort given to the heresy of bimetallism. Frenchmen applauded the President’s political savoir faire and shrugged their shoulders at the grotesque thought of bimetallism. Japanese peeped that bimetallism was impossible. Germany studiously explained that bimetallism does not work. Only foreign word of praise came from Shanghai. Mr. Tsuyee Pei, manager of the Bank of China’s Shanghai branch, was pleased, not because the President hinted at bimetallism, not because the price of silver might be raised but because: 1) the U. S. would not pay more than 50¢ an oz. for domestic silver, 2) the tax on silver profits would discourage speculation and thereby tend to steady the value of silver, which is China’s money.