The Government's Silver Purchase Plan and Its Effect on Mining

MANY MISUNDERSTANDINGS have arisen regarding -Al the purchase by the Government of 24,000,000 oz. of domestically produced silver annually for the next four years at a price of 64 1/2c. to the producer. Some editorials have an¬nounced rather sarcastically that be¬cause of the strong western silver bloc in Congress, the Administration is paying a bonus of approximately $22,000,000 to a few large silver produc¬ers of the West, the amount being figured on the total purchase of about 100,000,000 oz. and the difference between the Government price and the world price for silver. Actually the Government will make a profit on this purchase, due to seigniorage, of something over $60,000,000. The 96,000,000 oz. of silver, for which the producers will receive approximately $62,000,000, will be produced in association with at least $100,000,000 worth of lead, zinc, copper and gold; the greater part of this $162,000,000 worth of metal will be produced at little profit to the mining companies, as will be shown later, because of the low prices for lead, copper and zinc. This amount of money will be spent largely for labor and supplies, thus greatly relieving the national burden of unemployment. Certainly, western mining, in the purchase of this silver, is not victimizing the Federal Government.