Greed Unadorned

West Point, peaceful enough since the truce with the British in 1780, was in the front line again. This time the conflict was over West Point's government-owned cache of 225 million oz. of unpledged silver. The opponents: U.S. manufacturers v. the Silver bloc.

Short on silver throughout the war, U.S. silver users have been hit even harder in peace. Production of aircraft engine bearings, silverware, dental fillings, film emulsions, etc. is being crippled. The estimated needs for 1946 (125 million oz.) could be easily met out of the U.S. hoard. But the silver bloc will not let the U.S. sell.

The most powerful group of its size in the Senate, the bloc gains most of its punch from a loose partnership with the Farm bloc. In 1878, it maneuvered an act through Congress which required the Treasury to support the silver market in the U.S. at a price high enough to hand western mining interests a substantial subsidy. Then followed more than a half century of special-privilege legislation, culminating in the Silver Purchase Act of 1934. This bill required the Treasury to buy silver until its holdings equaled 25% of the U.S. monetary reserves, or until the price reached $1.29 an ounce.

Silver flowed into the Treasury's vaults until by 1942 they held a huge, stagnant reservoir of 98,800 short tons. Results: As the world silver price climbed, China went off the silver standard; other nations reduced the amount of silver in their coins. Silver sellers the world over had a long and profitable ride, paid for by the U.S. taxpayer.

As a wartime measure, the Treasury was permitted by the bloc to sell silver for industrial use at 71.11-c- an ounce. This was stopped last December.

Then the Silver bloc agreed to allow U.S. industry access to the treasure trove --for a price. Industry could buy the metal at 90-c- an ounce if i) the Treasury bought from producers at 90-c-, and 2) in two years the price of silver were raised to $1.29. As tribute to the bloc, U.S. silver users would pay an increase of about 81% for a two-year respite from the artificial shortage.

But last week the Silver bloc's high hopes to put this deal over ran into a snag. A subcommittee of the Senate Appropriations Committee reported favorably on the bloc's plan. But the House balked, indicated that it would discuss 90-cent but not $1.29 silver. Miffed, Nevada's Senator Pat McCarran, bloc leader, claimed he would settle for no less.

This meant that the Treasury will not be able to sell any silver. Chances are that the Silver bloc, if it does not gain its objectives, will stall until Congress adjourns. It will rely on the crippling shortage to soften up opponents at the next session.

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