March i8, 1920] 



NATURE 



\ 



The World's Production of Silver. 



T"HE recent action of the Chancellor of the 



-L Exchequer in introducing a Bill into the 

 House of Commons for the purpose of debasing 

 the silver currency from 925 to 500 parts per 1000 

 has directed public attention to the acute shortage 

 of silver which exists. This action is unavoidable 

 if a silver currency is to be maintained, since the 

 price of the metal has risen so much that coins 

 are no longer tokens. They are, in fact, worth 

 to-day considerably more than their face value, 

 and there is, accordingly, a temptation to melt 

 them down and sell them for the considerable 

 profit that the transaction would bring in. Such 

 a procedure is, of course, illegal. In the years 

 preceding the war the market price of silver, 

 while subject to fluctuations, was never far from 

 25. per "standard ounce." This expression is 

 rather unfortunate, since it is not the ounce that* 

 is standard, but the quality of the metal. Its 

 real meaning is a troy ounce of silver alloy con- 

 taining 92-5 per cent, of the metal. With 

 standard silver at about 55. 6d. per ounce, "the 

 coins reach parity. During recent weeks the 

 market price has fluctuated between js. and 

 75. 5^. per ounce, though it is true that a remark- 

 able fall of 6| in the price took place on 

 March 5, and a further fall of 5^ on March 11, 

 owing largely to the improvement in the exchange 

 with the United States of America." As 

 stated, however, the Chancellor's action is neces- 

 sary, since the minting of silver coins is possible 

 only at a heavy loss. Nevertheless, this Bill was 

 opposed in the House, although the opposition 

 was not carried to a division. 



It so happens that in January this year the 

 report and appendices of the Committee appointed 

 by the Secretary of State for India to inquire into 

 Indian exchange and currency were published and 

 presented to Parliament. In vol. iii. will be found 

 appendix 



world's production of "fine" — i.e. pure — silver 

 was 30 million ounces. With some fluctuations 

 this increased steadily until 191 2, when the output 

 was 233 million ounces, or nearly eight times that 

 of more than half a century earlier. From that 

 date, although a continuance of the upward trend 

 was to be expected, a decline in production set in 

 and continued down to the end of 1917, which was 

 the last year for which complete figures are avail- 

 able. It is clear from the report that this reduc- 

 tion in output is assignable not to any sudden 

 failure of the world's resources, but to an inter- 

 ruption in the winning of them. 



The main source of the sunnlv of silver ore is 

 the American Continent, which in 191 2 produced 

 825 per cent, of the total output. Approximately 

 three-quarters came from North America and 

 Mexico, the former furnishing 42 per cent, and 

 the latter 32 per cent. Mexico was the largest 

 single producer. A decrease in Canadian produc- 

 tion had set in shortly before this, due to the pro- 

 gressive exhaustion of the Cobalt mines, but this 

 was more than compensated by an increase in the 

 production of the United States. The key to the 

 shortage of the world's supplies is to be found in 

 Mexico, where, owing to a series of political 

 revolutions, the production fell from an average 

 of close upon 74 million fine ounces for the years 

 1910-13 to an average of little more than 30J 

 million fine ounces for the years 1914-17, a reduc- 

 tion of some 43^ million out of a total reduction 

 of 50I million ounces in the world's output. 



This serious diminution in the supply came at 

 a time when, owing to the withdrawal of gold 

 from circulation on account of the war, there was 

 an unusually keen demand for silver, particularly 

 for coinage purposes. The report of the Currency 

 Committee points out that the coinage of the 

 British Empire absorbed nearly 108 million ounces 

 which contains a report on the j of fine silver in the years 191 5-18, as against 



world's production of silver. ^ This is the work of 

 Prof. C. Gilbert Cullis and Prof. H. C. H. Car- 

 penter, who at the request of the Secretary of 

 State for India undertook an inquiry more than 

 a year ago into the output of silver during recent 

 years in the various silver-producing countries ; 

 the prospects, so far as they could be estimated, 

 of future output ; and the causes by which it is 

 likely to be influenced. Their report covers some 

 sixty foolscap pages. The subject-matter is pre- 

 sented in five main sections dealing severally with 

 the raw materials from which silver is obtained, 

 the location and quantitative importance of centres 

 where silver-bearing ores are mined, the processes 

 involved in the extraction of the metal, the dis- 

 tribution and relative importance of the centres 

 where refining is carried out, and the conclusions 

 affecting the supplies and price of the metal. 

 It appears from this report that in i860 the 



1 Vol. iii., Appendices lo the Report of the Committee appointed by the 

 Secretary of State for India to inquire into Indian Exchange and Currency. 

 No. XXX., " Keport on ti.e World's Production of Silver." By Prof. 

 H. C. H. Carpenter and Prof. C. Gilbert Cnllis. Pp. 182-241. 



NO. 2629, VOL. 105] 



30^ million ounces in the years 1910-13, and there 

 is evidence that there have been similar increases 

 in the coinage of other countries. Moreover, 

 whereas China from 1914-17 was a seller of silver, 

 and her net exports amounted to more than 

 'j^ million ounces, she has since become a per- 

 sistent buyer, and the recent remarkable rise in 

 the price of the metal is due to her purchases. 

 India has for many years been a heavy buyer of 

 the metal, and in times of normal trade was the 

 largest importer of this commodity. War con- 

 ditions have accentuated this, and in the three 

 fiscal years April, 1916, to March, 1919, purchases 

 for the purpose of liquidating trade balances 

 amounted to more than 500 million ounces, which 

 was probably very nearly the entire world's pro- 

 duction for the period. These have been the chief 

 (but not the only) factors in raising the price of 

 silyer to its extraordinary level. 



It is clearly seen from the report that silver is 

 mainly obtained as a by-product from mines 

 which are worked for some other metal or metals. 



