The question of silver is then dealt with in the article. This question is not now of such importance as was the case a few years ago, when the bi-metallic theory was so much to the fore. The position of silver is very different now from what it was up to quite recent years. For many centuries previous to about thirty years ago, the price of silver as compared with that of gold was about as 15 is to 1; in other words, an ounce of silver was worth about 5s., and an ounce of gold about 75s. to 80s. This state of things has now entirely disappeared, however, and we find silver fluctuating rapidly and extensively in price—having in the course of the year 1902 been as low as 21⁹/₁₆d. per ounce.
The reason for this fall in the price of silver is not far to seek; supply has largely exceeded demand. Several countries which had been large consumers of silver for currency purposes have, during the last thirty years, thrown over their silver system and adopted gold in its place, as a standard of value. This, of course, largely decreased the demand for the metal, and in addition it threw a large amount of silver out of circulation and on to the market. The supply of the metal has also been largely increased, owing to extensive discoveries of new mines, and to improvements in the method of mining, which have made it possible for mines of a low grade of ore to be worked at a commercial profit.
The paragraph in the article relating to silver is of chief interest to those who have commercial transactions with silver using countries, and also to those who are interested in companies whose business is conducted in such countries. These companies earn their revenue in silver, but pay their dividends in gold, in addition to often paying for much of their material in gold. Therefore the rate of exchange between such countries and London, which rate is of course subject to the price of silver, is of material interest to the holders of such stocks.
The price of the Mexican dollar is frequently noted in the “silver” paragraph of Money Articles. Mexican dollars circulate freely on the coast of China, in spite of many efforts which have been made to supplant them. When the dollars arrive in China the merchants who receive them put their “mark” on each coin, which thereafter circulates freely; the merchants’ “marks” being looked on by the populace as a proof of genuineness. In London, Mexican dollars are dealt in by weight, and as they are coined in silver nine-tenths fine, their price should consequently be a little less per ounce than the price of bar silver; but demand sometimes exceeds supply, when the price of the coins rises somewhat considerably above their intrinsic worth.
The Indian price of silver is also noted in the article: this price refers to the number of rupees which have to be given for one hundred tolas of silver; the tola being an Indian weight equal to ·375 ounce, and the silver being about nine-tenths fine.
Up to this point the information given in Money Articles is of daily occurrence, and attention is then turned to various items of intelligence according to the day of the week or month. For instance, the day after ’Change is held in London, a paragraph is inserted dealing with the various alterations which have been established in exchange rates since the previous post day, and the “Course of Exchange” is usually printed, more or less in full. On Friday mornings the Bank Return is published, and the City Editor adds his own notes on the same, calling attention to, and explaining as best he can, any alterations which have occurred since the previous return. On Friday also, the return of the Bankers’ Clearing House makes its appearance.
On Wednesdays and Thursdays the traffic returns of various railways are published. These returns are of interest as exhibiting the state of trade throughout the country as a whole, as well as the position of individual lines. In considering railway traffics, and comparing them with previous results, care must be taken to bear in mind any alteration which may have taken place in the price of labour, coal, or material; as an increase in gross profit may be quite offset by an increase in any one of these items, and vice versâ. It is also of interest to note that an increase or decrease in the gross earnings of a railway, the chief business of which consists of passenger traffic, has far greater effect on the net earnings than does a similar increase or decrease have on a line the chief business of which consists of goods traffic. Passenger trains run whether they are full or empty, and therefore an increase in the takings from passengers means, very largely, so much more net earnings; whereas goods trains usually run only when traffic offers, and therefore extra traffic means considerable extra expense. In considering the probable results of railways doing business in silver using countries, the influence of the price of silver must not be overlooked.
On the seventh day of each month the Board of Trade publishes a return showing the exports, imports, and re-exports of goods for the previous month. This return is summarised in the following day’s Money Article, and when this is read in conjunction with the Clearing House Return and the Traffic Returns, the three together form a very good barometer of the state of our trade. In studying the figures of the Board of Trade, and comparing them with previous returns, it is important to remember that values only should not be considered, but quantities as well as values; we may have imported considerably more of a certain commodity, but paid less for it, or imported less and paid more.
In many articles two tables relating to the foreign exchanges appear daily; one of these is a table of the rates of interest for money ruling in the principal financial centres of the Continent, and the other is a table of the exchange rates prevailing in foreign centres for drafts on London. The first of these tables is of use as providing one of the factors necessary to calculate the “long” rate from the “short” rate; it is also of use as being a guide to the comparative value of money in various centres, and thereby indicating the likelihood of foreign bankers investing their funds in London bills, or of withdrawing such investments. The second table indicates the movements in rates which are taking place on the Continent between our “’Change” days, and it is of use to those persons who have considerable sums to pay to, or receive from, foreign centres. As was noted in the chapter dealing with the [foreign exchanges], the rates between any two given centres always keep nearly on a level, but there is at times a slight variation. Advantage can be taken of this variation by persons having transactions with such centres, and this table affords necessary information in the matter.
The foregoing items of news comprise the Money Market portion of the article, and attention is then given to the Stock Exchange portion. This portion is divided into several paragraphs, each one of which deals with a special and well-recognised class of stock, or “market,” as it is called.