The Precious Metals

The role of the precious metals is changing rapidly. They are becoming primarily materials of modern industry, and their decorative and monetary functions are diminishing in relative importance. Certainly gold is still the premier metal for jewelry, as silver is for silverware. But these uses are not growing nearly so fast as are the uses of these metals in a variety of industries. This is even more true of the platinum metals. Moreover, this is true despite the fact that the precious metals are highly expensive and liable to substitution by the base metals in cases where this is feasible. For the fact is that the physical and chemical properties of the precious metals make them relatively invulnerable to substitution; where they can be replaced by the base metals, they have been, and the opportunity for further substitution is, therefore, limited. SILVER In November 1969 the United States Treasury stopped minting the only remaining coin with any silver content. That was the silver-clad Kennedy half dollar, which had a silver content of approximately 40%. The step was taken out of necessity, because of the rising shortfall between world mine production and consumption. It was important to divert the 35 to 40 million oz of silver per year used for the minting of this coin into the open market, where it would be available for industrial consumption. This decision was important, not only for its practical effect but also for what it symbolized. Only four years earlier, in 1965, the Treasury had used 320 million oz of silver" for the full range of coinage. Now not an ounce of silver goes into the United States coinage. The reason is simple and yet complicated. For many years the U.S. Treasury had purchased silver at prices which provided a subsidy to domestic producers. As a result, silver producers were eager to sell to the Treasury, and that agency built up a huge supply of the metal -almost 2 billion oz by- 1961. But, as the free-market price neared $1.29, the basic melt value of the coinage, the Treasury became a seller of silver, not a buyer, and its stock was depleted rapidly. The Treasury lost more :than a billion ounces of silver in the years 1962 through 1965, and it continued to lose silver, both through coinage and through sales to consumers, through 1969. The Government continued to sell silver to consumers at the rate of 1.5 million oz a week, even after terminating the 40% silver Kennedy half dollar. But it was apparent that the Government stocks could last no more