LETTERS TO THE EDITOR.
THE COST OF PRODUCING SILVER.
[To THE EDITOR Or THE "EIDECTATOR.°'_1 SIR,—In one of your "Notes" in the Spectator of July 1st. you express the following views in regard to the cost of pro- ducing silver :—" The idea that silver cannot be extracted to. pay a profit at 2s. an ounce—that is, over 23,580 a ton—is an illusion. Copper does not cost 250." That is true ; but according to this reasoning why should copper cost 250 when pig-iron only costs 42s. per ton P On the other hand, why should gold be worth nearly 2140,000 a ton P These metals are distributed over the world in very unequal propor- tions, and the above prices are an index of the relative cost at which the quantity of each metal in demand can be obtained. A very much smaller quantity of each of these metals, if the demand were so reduced, could be extracted at a smaller cost in each case, because the smaller quantity of each metal would be obtained from the richer mines and those most inexpensively worked, whereas the arger quantity can only be obtained by resorting to mines in which the cost of production is greater.
In regard, then, to the cost of production of silver, I do not believe that more than a fraction of the present supply—per- haps not one-tenth or even one-twentieth—could be produced at 2s. an ounce. The Committee on Mines and Mining of the United States Senate made a special Report on the sub- ject, along with a large body of evidence, on February 18th,. 1893, and they state some of their conclusions as follows :— "But 99 per cent. of all the supposed discoveries and locations of mining claims upon which labour and money have been expended have been utter failures, and produce nothing. If it be said that the vast outlays for exploring mines, prospecting and developing them sufficiently to ascertain if they are valuable, should not be taken into account in the cost of mining, it may be answered that whenever prospecting and exploring ceases, the end of silver- mining must speedily come. The ordinary life of a silver-mine in the United States is from three to ten years. Very few have paid dividends for a longer period The great bonanzas are exhausted much more rapidly than new mines which will pay for working are found. There is no dividend-paying mine in the State of Nevada, which State has been the greatest producer of silver. The product of silver in Idaho has fallen off 50 per cent.
in the last year But a large increase in the production of silver in the United States is impossible from any mines now known to exist, and the chance of finding other mines that will keep up the present output, whatever may be the price of silver, is very remote The fact that mines having ore bodies in sight are daily closing down on account of the present price of silver, is a very strong argument to show that the produc- tion of silver costs more than the coinage of the metal produced ; for if the ore cannot be taken out and reduced for 83 cents (410.) an ounce, which does not exceed GO per cent, of the average cost of production, how can new mines be discovered, opened, and equipped, and afterwards mined at the present price of silver P We repeat our conclusion, that all the evidence taken together establishes beyond controversy the main fact that the cost of producing both gold and silver has, during all the ages, and does at the present time, exceed the coinage value of those metals."
It may be mentioned that the State of Nevada, which in 1876 and 1877 produced gold and silver to the value of 210,000,000 per annum, produced last year little more than 21,000,000. The production has gradually fallen off, because the mines would not pay at much higher prices for silver than the present. The history of gold and silver mining in the United States, and indeed in all countries and in all ages of the world, is the history of mines successively exhausted; and now the whole State of Nevada is practically exhausted as a mining-field. The production of silver in Idaho is falling off, and, apart from the present tremendous crisis in silver, it can only be a question of a limited number of years when Colorado and Montana will begin to fall off as producers both of gold and of silver. If the London silver-mining companies are con- sidered, it is probable, notwithstanding some very satisfactory results in a limited number of companies, that the average cost of the silver produced by London Companies can hardly have been less than 10s. an ounce. The Committee of the United States Senate estimate the average cost of acquiring American silver to be about 7s. an ounce. No one acquainted with silver-mining could for a moment have doubted that a 30d. or a 33d. price for silver would compel a wholesale shutting-down of silver-mines. And yet it can be demon- strated that the present production of gold and silver together in the world is not sufficient to maintain the present level of prices.—I am, Sir, &c., [We cannot see that Mr. Robertson has even touched our point. What we want to say is that silver is a valuable article, that it is now extracted in an expensive way because the price will bear that waste, but that if the price falls a cheaper method will be devised. If the price of copper were to rise permanently, the price of getting it would rise too, all superintendents, distributors, miners, and prospectors, demanding higher wages and neglecting all improvements in machinery. Look at the history of aluminium.—En. Spectator.]
Previous page
