THE ORIENT'S SILVER

The Administration's policy of purchasing silver at artificial prices--a dubious policy for our international well being--is having serious effects in China. Although economists predicted an upheaval in China's silver market, Government financiers did their best to be little such predictions while the silver purchase act was pending. The cataclysm is now reaching proportions beyond even the most dire forecast.

Since our legislation went into effect the Chinese have seen their stock of white metal diminish. Naturally the value of silver has increased. Thus the people of China are experiencing a deflation arbitrarily created by an outside force quite as much as the people of the United States suffered, after 1929, from the natural deflation that followed our long, unplanned economic expansion. Our Government that has resorted to all expedients to check deflation here apparently looks on Chinese deflation with complete equanimity.

But not the Chinese. For them the cost of living has steadily risen. Unemployment has increased. Banks have failed. The Oriental exchange market is unsettled and will remain so while our Government continues to draw Chinese silver in abnormal amounts. A tax of ten per cent was imposed by the Chinese Government on silver exports last fall. Smuggling was the answer. Recently fines have been imposed on smugglers in amounts twice the value involved. Still Chinese silver finds its way to our Treasury.

Thus in addition to conflicting with Administration's attempts to increase American exports we find our silver purchase policy inflicting economic harm and social injustice on the Chinese.