Canute at the Treasury

Who among all former Secretaries of the United States Treasury had the lowest IQ? This writer had narrowed down the choice to Morgenthau and Dillon. But William F. Rickenbacker’s new book has removed any final doubts: Dillon deserves the “distinction.” This sparkling little book records an amazing mess of ineptitude, incompetence, illogic, and sheer ignorance in high quarters. The analysis has been based on thoroughgoing research of our postwar coinage policies, told in a vivacious and brisk style worthy of a thriller.

The prime reason for the quagmire into which Messrs. Dillon, Roosa, and Co. have maneuvered themselves, was their inability to understand the operation of the free market. They ignored, or pretended to ignore, the tremendous growth of the demand for silver while the new supply (from the mines) was virtually stagnating. Both sides of the silver equation were becoming practically unresponsive to price changes. On the supply side, since silver is a sparse by-product of base metals, there is scant hope for increasing the output, however high the price (and the subsidy to the miners) may rise. Nor was the demand restrained when the Treasury, forced by the market, raised its selling price (late in 1963) from the fictitious 90.5 cents per ounce to $1.29, the statutory limit. The bulk of the silver demand, other than for tokens, has been due to new, vitally important industrial and military applications in which there simply is no substitute available.

MP

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Melchior Palyi

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Department of the Treasury

Who among all former Secretaries of the United States Treasury had the lowest IQ? This writer had narrowed down the choice to Morgenthau and Dillon. But William F. Rickenbacker’s new book has removed any final doubts: Dillon deserves the “distinction.” This sparkling little book records an amazing mess of ineptitude, incompetence, illogic, and sheer ignorance in high quarters. The analysis has been based on thoroughgoing research of our postwar coinage policies, told in a vivacious and brisk style worthy of a thriller.

The prime reason for the quagmire into which Messrs. Dillon, Roosa, and Co. have maneuvered themselves, was their inability to understand the operation of the free market. They ignored, or pretended to ignore, the tremendous growth of the demand for silver while the new supply (from the mines) was virtually stagnating. Both sides of the silver equation were becoming practically unresponsive to price changes. On the supply side, since silver is a sparse by-product of base metals, there is scant hope for increasing the output, however high the price (and the subsidy to the miners) may rise. Nor was the demand restrained when the Treasury, forced by the market, raised its selling price (late in 1963) from the fictitious 90.5 cents per ounce to $1.29, the statutory limit. The bulk of the silver demand, other than for tokens, has been due to new, vitally important industrial and military applications in which there simply is no substitute available.