Rise in Price of Silver Affects Canada

January 1 1932

Rise in Price of Silver Affects Canada

January 1 1932

Rise in Price of Silver Affects Canada


Hundreds of thousands of dollars are lost annually in Canada through careless investment. Fraudulent and worthless securities are being constantly poured on to the market to trap the unwary. A general observance of this simple maxim swlll assist in the reduction and elimination of this economic waste— •BEFORE YOU IN V EST—IN V ESTIG AT E”

IN RECENT weeks the New York price of bar silver has risen to a new high mark for the current year, the value of sales also reaching new high levels. On November 13 silver was up to 35⅜ cents an ounce, compared with 29¾ cents on October 9 and 25¾ cents last February, when it touched a new low. On November 16 the price broke to 32.90 cents, serving to confuse the prophets of the new silver era.

British financial papers say that silver is the chief topic of conversation in every capital of Europe. It is likewise a topic in Washington. With a world corner in gold which has paralyzed the commerce of the earth, bimetallism has been seriously proposed as a substitute for the gold standard not only in Britain and Europe, but even in the United States. “This may or may not lx a sound view,” says the London Times, “but there is little doubt of its being held by the leading central bankers. Failing the removal of fundamental causes which led to the cornering of gold, namely excessive debts and prohibitive tariffs, the scarcity of international monetary means of payment might with advantage lx relieved by using silver."

The International Chamber of Commerce at Paris recently recommended the holding of informal conferences of world powers looking toward an international silver agreement. Influential interests on Wall Street joined in advocating similar measures early in November, and the spectacular advance in silver prices was said to have been due to buying by Sir Henry Detering of the Royal Dutch Shell Company, who has for months been advocating some form of bimetallism as one of the solutions of the world’s troubles. In addition to this, a Democratic Senator from Montana has intimated that a resolution looking to a world conference on silver might he introduced at the forthcoming session of the United States Congress.

All of these happenings have served to place silver in the limelight. But it is difficult, in fact im[x>ssible, for the man on the street to know how much is speculative propaganda and how much is genuine. The sharp decline which followed the initial advances lends strength to the suspicion that speculators have to a certain extent tx*en “kidding the troops.” to use a stock market expression. It is fairly certain, however, that something will eventually be done to stabilize silver at higher prices, whether for monetary purposes or simply for the sake of restoring the earning power of many large mining companies. When this happens, Canada stands to benefit in a substantial way.

Canada As a Producer

ASA silver producer Canada ranks third -**■ among the countries of the world, being preceded in rank only by Mexico and the United States. In 1929 the last available figures — world output totalled approximately 261,700.(XX) ounces. Mexico’s production was 108.700.000. United States, 61,000,000. and Canada’s, 23,000,000ounces.

Peru came a close fourth with 21.500,000 ounces.

Silver mining in the Dominion does not now occupy as im¡x>rtant a place as it did

when Cobalt was in its heyday, but it is still an important industry. The silver mining companies in Ontario had paid $97,471,280 in dividends at the end of 1930, and Canada’s total production in 1930 amounted to 26,443,823 ounces, valued at $10,089,376. This was a substantial increase over 1929 as. owing to the high price prevailing in 1930 for cobalt, a metal which is found with silver, the output of the white metal was increased. In the first six months of 1931 the Dominion produced 11,701,718 ounces compared with 13,223,559 in the first six months of last year. In the same period the price dropped from an average of 41.268 cents an ounce in 1930 to an average of 28.094 cents up to July 1 of this year. The highest price at which silver ever sold was $1.11 an ounce in 1911.

Production by provinces in 1930 in order of rank was as follows:

Ounces Dollars

British Columbia.....11,825,930 $4,512,065

Ontario.............. 10,205,683 3,893,876

Yukon............... 3.746.326 1,429,373

Quebec.............. 571,164 217,922

Manitoba............ 94,653 36,114

Nova Scotia.......... 67 26

Most Silver a By-Product

nPHE hulk of the silver produced in ■*• Canada is a by-product output of base metal mining, the largest producer being the Sullivan Mine, of the Consolidated Mining & Smelting Company in British Columbia, which last year mined nearly 7,000 000 ounces. This is one of the most difficult problems in stabilizing silver prices, as the largest percentage of the world’s output is produced along with lead, zinc and copper, and cannot be curtailed without at the same time affecting the production of these metals. Over $42,000.000 is invested in the silverlead-zinc industry in Canada, which in 1930 produced approximately 10.600.000 ounces of silver from eighty-six active operations. In 1927 there were 157 of such properties in operation, and it is probable that if the price of silver rose to fifty cents an ounce, many of the silver-lead-zinc properties now shut down would lx reopened.

According to the Department of Mines, there were only thirty-two silver-cobalt properties producing in 1930. of which twenty-nine were in Ontario. The largest of these was the Nipissing Mining Company at Cobalt with an output of 1.546.000 ounces. This old producer, which has paid approximately $30,OCX).000 in dividends since 1906. is now reaching the end of its productive [xriod and is searching for other properties. In 1923. one of its banner years, the output was 3,485.500 ounces. Unfortunately it would not stand to profit in any large measure should silver come back.

Mining Corporation of Canada has been another of our largest operators, having paid over $7.500.000 in dividends. It. too. is now reaching the end of its silver rope and is practically becoming an investment trust with interests in various diversified proper-

ties. The restoration of higher prices in silver would not greatly affect this company. The same may be said of Keeley, which has produced in its day over 12,000.000 ounces.

If, therefore, silver is eventually stabilized at higher prices, say fifty cents an ounce, the effect in Canada will be largely felt by the base metal producers. This is why the recent upward flurry in silver was accompanied by substantial advances in the prices of base metal securities. The gold mines will also benefit, as they likewise produce silver. The Ontario gold mines last year produced approximately 300.OCX) ounces of the white metal in connection with their gold mining operations.