420 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.

ounces, shipped by this company to London is simply forwarded from London
to India. Under the circumstances this company has felt that it should deal
and was entitled to deal directly with the consumers in India. Our endeavors,
however, to do business directly with consumers in India have been blocked
and prevented by the combination of brokerage and banking arrangements in
London. The price of silver is fixed in London by what is termed publicly the
“ Fixing Board,” which consists of four banking or brokerage houses dealing in
silver and eastern exchange. This Board of four representatives meets at a
guarter past 2 every afternoon. This permits prices to be made in New York at
the opening of business here, on account of the difference in time. Since virtually
 the entire silver business of London is in connection with exportations from
the United States, it will be seen that the meeting time in London is after the
members of the Fixing Board know the full receipts and demands in London, but
before business opens in New York. All silver in London is sold through these
four members of the Fixing Board. The distribution of silver in London is, as
stated above, approximately 75 per cent for shipment to the East, which is sold
entirely to eastern banking representatives, and the 75 per cent is sold very
largely to Government representatives, both English and continental, for coinage
 purposes, and, to a minor extent, to the manufacturers of silver.
The eastern banks and the Government representatives will not buy through
uny one except the members of the Fixing Board and at the fixed prices, because
if they do otherwise they take a responsibility which they do not seem to be
willing to take. In fact, if they should buy in any quantity from other parties,
the Fixing Board would probably fix a price that would make their purchase open
to criticism. These four brokers therefore have the ability, and exercise it, to
absolutely fix every day the price at which the entire production of the mines
of the United States in silver has to be sold. Such a large proportion of
the production of this country is necessarily exported to London that the price
obtained for the London exportations absolutely fixes the price at which the
balance of the silver production, which is consumed in this country, is sold.
This Fixing Board has, however, a much greater power than that covered by the
actual transactions in fine silver, for the reason that the commerce of the East,
India, the Straits Settlements, and China is expressed in silver; in other words,
the entire exchange transactions of London, covering the entire commerce between
 the Continent of Europe and India, is expressed in silver values, and the
price of silver is the price of exchange. These exchange transactions are at
least 10 times as great as the total value of silver purchased and sold in London.
 The great eastern banks are the great buyers not only of silver for exportation
 to the Hast but also of the exchange covering the commerce with the
East. The silver value of the American mines, therefore, is dominated not only
by the London situation as to silver but also the London situation as to their
commerce with the East, and the whole situation is dominated by four brokers
designated as a Fixing Board. This company at one time made a very considerable
 effort to do business directly with India and established an agency in
Bombay for this purpose. It is impossible, however, for offers to be made from
New York to Bombay and receive an answer the same day. The business, therefore,
 has to be transacted by an offer one day to be accepted the next day. We
found that when London advanced the next day, buyers in London regularly
accepted our offers; when London declined the next day, they regularly declined
our offers. Our business therefore with India showed constantly a loss, in comparison
 with doing a daily business with London. Furthermore, our offers to
London became known, naturally, to the eastern banking representatives in
London, who immediately cabled the same to London; and the London buyers
were therefore in possession of all of the facts as to our business in India and
would establish their price accordingly. After continuing this agency for some
time, until our loss was so constant and apparently so inevitable, we closed our
agency and have ever since continued the dealings direct with London. Since
the London silver market is absolutely dependent upon the exportation of silver
from this country, it does seem quite ignominious to acknowledge that the producers
 of this country are not allowed to have any influence whatever upon the
silver market in London, which absolutely dominates the silver values to be
obtained by American producers, yet such is the fact, .
This company is at the present time refining approximately 60,000,000
pounds of copper monthly. About 60 per cent of this production is exported
to European countries, and, prior to the war, fully one-half of all of the exportation
 was made to Germany. Prices established by the Metal Exchange
In London, which seldom deals in more than 5,000,000 pounds daily, estab-