Indian Silver Imports
PCGS
A silver one rupee coin dated 1919 struck at the Calcutta Mint , more than likely produced with silver bullion from melted US silver dollars , courtesy of the Pittman Act of 1918 .
urgency to develop emergency legislation to assist the British , senators and representatives from the silver-producing states wanted to replace the reserve to equal the amount that would be melted and sold .
After a conference that included senators from silver-producing states , silver mining interests and experts from the Treasury Department , the repurchase price of $ 1 an ounce was agreed upon . Israel wrote , “ In other words , the Treasury would rebuy all silver that had been sold at the swollen war price .” It was on the House floor that Representative Edward Platt of New York declared that this was “ a plain case of holdup by the silverites .”
On April 9 , 1918 , Pittman introduced the bill as a war emergency action , after which it was submitted to the Committee on Banking and Currency . The crisis situation was explained to the committee by representatives of the silver producing states , along with Treasury Department officials . Unanimously approving the bill , the committee reported it to the Senate . The critical situation in India was explained to every senator . Few speeches were presented on the resolution , and those that were delivered were carefully guarding the main purpose of the bill . Only two dissenting votes were cast on the Senate floor , while in the House it passed with little opposition . President Wilson signed the Pittman Bill into law on April 23 , 1918 .
Specifics of the Pittman Act
Pittman designed this emergency war measure to profit the silver industry , pure and simple . The Pittman Act set a temporary price for silver at $ 1 an ounce , authorizing the Secretary of the Treasury to melt up to 350 million standard silver dollars and to sell the bullion from them at $ 1 per ounce . The Treasury Secretary was ordered to retire silver certificates equaling the number of melted silver dollars . Israel wrote , “ The Pittman Act therefore assured the miner of …$ 1 an ounce for at least four years . Thus , two markets for American silver existed , the world market and the government market .”
Due to shortages of silver during the war , the sources of Indian silver imports shifted during and after World War I ( see Table 3 ).
It should be noted that India had no domestic silver mining industry during this period . Therefore , all silver — coin and bullion — had to be acquired via trade and import . The below table demonstrates the problems the United Kingdom was having providing silver to India , as well as the significant amount of imports from the United States resulting from the Pittman Act . The unpublished Bank of England report states that due to the Pittman Act , “ the share of India was 200 million fine ounces , which were imported to India before July of [ 1919 ]. The silver was required by India owing to a run on the Indian Redemption Agencies , to cash silver certificates , which was said to have been started by German propaganda .”
The Indian trade with China was mostly of an arbitrage nature , with silver continuously being shipped back and forth between Bombay and Shanghai when local price levels in these two important silver markets had a significant shift from each other . However , when UK silver exports to India virtually dried up , it was only the United States and China that demonstrated generosity to the Indian subcontinent vis-à-vis silver exports .
The Pittman Act ’ s Cost to Americans
The heightened war demand for silver from 1917 to 1919 saw the world price soar to an unequaled $ 1.38 an ounce during 1919 . The high price for the year 1920 reached $ 1.37 ; however , it also dipped to a low of 60 cents an ounce . No matter how low the actual market value was , the
TABLE 3 : India ’ s Annual Silver Imports , Percentage by Countries |
|
UK |
Bahrain |
Arabia |
Persia |
China |
East Africa |
US |
Australia |
Other |
1914 – 15 |
77.00 |
2.82 |
1.14 |
1.58 |
4.44 |
. 14 |
. 54 |
6.41 |
5.93 |
1915 – 16 |
62.69 |
2.00 |
1.04 |
1.73 |
6.64 |
— |
. 34 |
11.63 |
13.93 |
1916 – 17 |
34.40 |
. 64 |
. 18 |
1.00 |
45.53 |
— |
2.09 |
3.02 |
13.14 |
1917 – 18 |
8.51 |
. 03 |
. 18 |
. 09 |
36.83 |
— |
39.70 |
5.37 |
9.29 |
1918 – 19 |
. 34 |
— |
. 01 |
. 01 |
1.66 |
— |
72.36 |
3.68 |
21.94 |
1919 – 20 |
2.78 |
— |
. 65 |
1.52 |
. 03 |
— |
59.42 |
2.71 |
33.49 |
1920 – 21 |
63.63 |
1.42 |
2.67 |
2.44 |
14.81 |
— |
4.43 |
. 10 |
10.50 |
Source : Don Carroll Bliss . “ Sources of Silver Imports : Sea-Borne Trade .” The Bombay Bullion Market . US Government Printing Office , 1927 , p . 56 . |
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