Pittman Act compelled the US government to purchase American silver at $ 1 an ounce .
According to Israel , in 1921 many members of Congress asked why “ the United States was buying several million ounces of silver — the product of America ’ s mines every month — at 35 cents an ounce above the world market price .” The simple yet frustrating answer was that such purchases were made law via the Pittman Act .
Actual cash losses on silver purchases under the Act were about $ 70 million . The sales to England — which saved British India from turmoil and helped the Allied war effort — totaled around $ 259 million . The repurchase of American silver at $ 1 an ounce replaced that substantial amount . Israel wrote , “ The metallic value of the dollars at the time of sale was approximately $ 200 million . Their metallic value after repurchase was approximately $ 60 million . The differences represented an additional loss .”
There should have been another way to help England in its struggle to acquire the silver needed to save British India . In a dire situation during a world war , the
silver interests — with the help of their lackeys in Congress — forced the American taxpayer to gift them a boondoggle of absurd proportions . In a 1932 article in The North American Review , Neil Carothers wrote , “ That the Congress of the United States should pass such a measure as the Pittman Act is a tragic commentary on government in a democracy .”
Eric Brothers has been a frequent contributor to The Numismatist , the publication of the American Numismatic Association ( ANA ), since 2006 . Several of his articles have covered financial history , including “ Alexander Hamilton and the Panic of 1792 ” ( January 2021 ). He also writes for ANS Magazine , a publication of the American Numismatic Society in New York . This is his fourth article for Financial History .
Sources 65th Congress . “ An Act to Conserve the Gold Supply of the United States …” [“ The Pittman Act ”]. Sess . II . Chap . 63 . 1918 .
Bliss , Don Carroll . “ Sources of Silver Imports : Sea-Borne Trade .” The Bombay Bullion Market . US Government Printing Office , pp . 56 – 57 . 1927 .
Carothers , Neil . “ Silver : A Senate Racket .” The North American Review . Vol . 233 , No . 1 , pp . 4 – 15 . January 1932 .
Israel , Fred L . “ The Fulfillment of Bryan ’ s Dream : Key Pittman and Silver Politics , 1918 – 1933 .” Pacific Historical Review . Vol . 30 , No . 4 , pp . 359 – 380 . November 1961 .
“ Our Silver Saved India From Crisis : Release of $ 200,000,000 at the Urging of Lord Reading Averted Financial Disaster .” The New York Times . August 23 , 1918 .
“ The Silver Situation in the Far East .” The Economic World . New York : Chronicle Company . Vol . 105 , pp . 547 – 549 . April 17 , 1920 .
Typescript of letter from [ Secretary of the Treasury ] W . G . McAdoo to [ Senator ] Key Pittman . March 30 , 1918 .
Unpublished War History . ( Vol . 2 ) Chapter V . “ Gold and Silver .” The Bank of England , 1914 – 1921 . Bank of England Archive ( M7 / 157 ).
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