Tuesday, May 24, 2022
The Story of Silver     Source
Contents ♦ click to select chapters   
About this book
How the White Metal Shaped America and the Modern World

This is the story of silver’s transformation from soft money during the nineteenth century to hard asset today, and how manipulations of the white metal by American president Franklin D. Roosevelt during the 1930s and by the richest man in the world, Texas oil baron Nelson Bunker Hunt, during the 1970s altered the course of American and world history. FDR pumped up the price of silver to help jump start the U.S. economy during the Great Depression, but this move weakened China, which was then on the silver standard, and facilitated Japan’s rise to power before World War II. Bunker Hunt went on a silver-buying spree during the 1970s to protect himself against inflation and triggered a financial crisis that left him bankrupt.

Silver has been the preferred shelter against government defaults, political instability, and inflation for most people in the world because it is cheaper than gold. The white metal has been the place to hide when conventional investments sour, but it has also seduced sophisticated investors throughout the ages like a siren. This book explains how powerful figures, up to and including Warren Buffett, have come under silver’s thrall, and how its history guides economic and political decisions in the twenty-first century.

Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
Chapter 23
Introduction: Obsession
Hamilton’s Design
Solving the Crime of 1873
Free Silver
Seeds of Roosevelt’s Manipulation
FDR Promotes Silver
Silver Subsidy
China and America Collide
Bombshell in Shanghai
Silver Lining
Costly Victory
JFK’s Double Cross
LBJ Nails the Coffin Shut
Psychiatrist’s Meltdown
Battle Lines
Nelson Bunker Hunt
Heavyweight Fight
Saudi Connection
Silver Soars
The Trial
Buffett’s Manipulation?
Message from Omaha
The Past Informs the Future
From the Author

A lover of silver will never be satisfied with silver.
—Ecclesiastes 5

You left us too soon


I did not know Nelson Bunker Hunt, whose death in 2014 spawned this book project, but many who knew him well shared their insights and recollections. I could not have written the story of silver without them. Phil Geraci of the Kay Scholer law firm that represented the Hunt brothers during their silver manipulation trial was a young lawyer back then and provided key personal observations from his six-month interaction with the Hunts. His assistant Patricia Apuzzo made it easy to use the related material.

Henry Jarecki, whose business dealings with the Hunts while chairman of Mocatta Metals Corporation lasted more than a decade, gave me access to his unpublished manuscript that offered details unavailable elsewhere. His assistant Emily Goodnight made the process enjoyable and productive. Professor Jeffrey Williams served as an expert witness for the Hunts at their 1988 trial and provided copies of plaintiff and defendant expert reports that had been stored in his garage since then. I also relied on his excellent book on the economic testimony at the trial.

But this book is more than just about the Hunts. It is the story of silver, so at the beginning I spent a day with silversmith Geoffrey Blake at Old Newbury Crafters in Amesbury, Massachusetts, watching him mold the white metal into sterling silver flatware with the same tools and techniques that Paul Revere might have used.

The ancient craft practiced in Blake’s dusty basement workshop contrasted with the modern spectrograph used by Don and Angelo Palmieri in their Gem Certification & Assurance Lab to determine whether sterling silver jewelry contains the required 92.5% pure silver. But some things do not change. I watched Albert Robert (Irina and Gabriel’s cousin) of the New York Gold Refining Company turn a silver coin into molten metal by heating it in a blackened crucible over an open flame as in ancient times.

My research work benefited from the cheerful effort of many individuals. I owe Carol Arnold-Hamilton, Alicia Estes, and Robert Platt, librarians at NYU’s Bobst, for recovering source material that challenged Google’s algorithms. Jack Shim, an outstanding PhD student at NYU Stern, and Omer Morashti, a great Stern MBA, analyzed the data with surgical skill. Bob Oppenheimer shared firsthand observations of the silver ring at the Commodity Exchange (Comex). Bernard Septimus, my friend for as long as I can remember, applied his biblical expertise to keep my references consistent with modern scholarship. Seth Ditchik and Bruce Tuchman read an early draft and molded the framework of the story for the better. Dick Sylla, Ken Garbade, and Paul Wachtel read the entire manuscript as if it were their own and scrubbed the fuzzy logic from the final product. Peter Dougherty, my editor at Princeton University Press, offered sage advice and gentle encouragement throughout the process. His e-mails at 5 a.m. were just the tip of the iceberg. My wife, Lillian, let me work on the book whenever I wasn’t playing golf, read every word, and excised most (but certainly not all) of the annoying metaphors. And I apologize to my children and grandchildren for not calling the book “Silber on Silver,” a unanimous recommendation at our family gatherings that fell to the cutting room floor like so many other gems.

Source Materials

No one needs to read the notes appearing at the end of the book, but they are there to expand on historical details and to provide technical information. The notes contain citations to newspapers, periodicals, academic articles, and books to support specific opinions and quotations appearing in the text. Statistical tests and a precise explanation of silver price data also appear in the notes. Silver prices usually refer to the price of physical silver in the form of bullion bars. These are sometimes called cash prices to distinguish them from prices in the futures market that become important in the second half of the book. The silver price data come from a variety of sources:

  1. annual data during the nineteenth century come from the Annual Report of the Director of the Mint, Washington, DC: Government Printing Office, 1936;
  2. daily data on silver prices during the 1930s were hand-collected from the Wall Street Journal, which published cash market quotations by bullion dealer Handy & Harman;
  3. daily data on cash prices since 1947 and futures prices since 1963 were purchased from the Commodity Research Bureau (CRB), an independent data distributor that was a division of Knight-Ridder Financial Publishing and is now a division of Barchart.com, Inc., a Chicago-based vendor of financial data; and finally,
  4. daily data on the London silver fix since 1968 come from the London Bullion Market Association as published by Quandl, an internet provider of economic and financial data.
Illustration Credits

Figure 1
Figure 2
Figure 3
Figure 4
Figure 5
Figure 6
Figure 7
Figure 8
Figure 9
Figure 10
Figure 11
Figure 12
Figure 13
Figure 14
Figure 15
Figure 16
Figure 17
Figure 18
Figure 19
Figure 20
Figure 21
National Photo Company Collection, Prints & Photographs Division, Library of Congress, LC-DIG-npcc-24200
Everett Historical / Shutterstock.com
Brady-Handy Collection, Prints & Photographs Division, Library of Congress, LC-DIG-cwpbh-04797
Prints & Photographs Division, Library of Congress, LC-USZ62-22703
Prints & Photographs Division, Library of Congress, LC-USZ62-86702
Bettmann / Contributor / Getty Images
nsf / Alamy Stock Photo
Bettmann / Contributor / Getty Images
National Numismatic Collection, National Museum of American History
Sueddeutsche Zeitung Photo / Alamy Stock Photo
National Numismatic Collection, National Museum of American History
(top) Photograph by Dimitri Karetnikov; (bottom) United States Mint
John Marmaras Photography
AP Photo/Charles Wenzelberg
Central Press / Stringer / Hulton Archive / Getty Images
doomu / Shutterstock.com
Bettmann / Contributor / Getty Images
Bettmann / Contributor / Getty Images
Classical Numismatic Group, Inc. www.cngcoins.com
Bloomberg / Contributor / Getty Images
United States Mint
A Confession

The outline of this book when I started five years ago differs considerably from the final product. History surprised me with events and personalities that changed my thoughts and perceptions. I have shared those stories with you throughout this book and hope they are as pleasurable, instructive, and exciting for you as they were for me.

About the Author


William L. Silber is the Marcus Nadler Professor of Economics and Finance at the Stern School of Business, New York University. He received NYU’s Distinguished Teaching Medal in 1999 and was voted Professor of the Year by Stern MBA students in 1990, 1997, and 2018. He received his PhD in economics from Princeton University and has written about monetary economics and financial history, including seven books, most recently, Volcker: The Triumph of Persistence, which chronicles the career of former Federal Reserve Chairman Paul Volcker. The Volcker biography won the China Business News Financial Book of the Year in 2013, was a finalist in the Goldman Sachs / Financial Times Business Book of the Year in 2012, and was named “One of the Best Business Books of 2012” by Bloomberg Businessweek. His first book, Money, coauthored with Lawrence Ritter, made a serious topic fun to read.

William L. Siber at Wikipedia

By the Same Author

Volcker: The Triumph of Persistence

When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America’s Monetary Supremacy

Financial Options: From Theory to Practice (coauthor)

Principles of Money, Banking, and Financial Markets (coauthor)

Financial Innovation (editor)

Money (coauthor)

Portfolio Behavior of Financial Institutions

Main Characters



Alexander Hamilton
America’s first secretary of the Treasury recommended both gold and silver definitions for the U.S. dollar in 1791 and chose the $1.29 price that the mint would pay per ounce of silver bullion. He recommended bimetallism, the coinage of both gold and silver, to promote economic growth and “to avoid the evils of a scanty circulation.”


John Sherman
U.S. senator from Ohio, chairman of the Senate Finance Committee, used deception and misrepresentation to pass the Coinage Act of 1873, demonetizing silver and establishing gold as the sole backing for the U.S. currency. Sherman later served as secretary of the Treasury, secretary of state, and is most famous for the Sherman Antitrust Act but was vilified for the so-called Crime of 1873, downgrading silver, which shadowed American politics for a century.


William Jennings Bryan
The thirty-six-year-old U.S. congressman from Nebraska captured the 1896 Democratic nomination for the presidency with the electrifying “Cross of Gold” speech at the convention. Despite its name, the speech was all about silver, a response to twenty-five years of deflation in America since the Crime of 1873, pitting rural westerners favoring easy credit against the hard-money urban East. The Wonderful Wizard of Oz, published in 1900, memorialized the class battle and portrayed Bryan as the cowardly lion whose roar was greater than his bite. Bryan ran three times for the presidency and lost.


Key Pittman
Elected U.S. senator from Nevada, the Silver State, in 1913 and made a career with legislation to promote the white metal. He became the influential chairman of the Foreign Relations Committee in 1933 and led the Senate’s “silver bloc” of western mining states to convince the newly elected president, Franklin D. Roosevelt, to subsidize the price and production of the white metal. His support of silver debuted in 1918 with what was called the Pittman Act, authorizing the sale of silver to Great Britain to support the Indian rupee and then subsidizing the repurchase of the metal at above-market prices.


Franklin Delano Roosevelt
Elected U.S. president in 1932 in a landslide, pushed legislation with the help of Key Pittman and his allies to cure the Great Depression, including taking the United States off the gold standard. FDR repaid Pittman with a December 1933 proclamation to subsidize domestic silver production and by signing the Silver Purchase Act of 1934. FDR’s programs doubled the price of the white metal, a boon to American mines but a catastrophe for Nationalist China. Smugglers drained the white metal from Shanghai banks for saleat inflated prices on world markets and forced the Asian giant off the silver standard.


Henry Morgenthau
Roosevelt’s neighbor in Dutchess County, New York, and a personal confidante, became FDR’s Treasury secretary and implemented the Silver Purchase Act for the president. Morgenthau nationalized the white metal and led a buying program to make silver 25% of America’s monetary reserves but warned Roosevelt that this made Nationalist China, led by American ally Chiang Kai-shek, vulnerable to an internal threat from Mao Tse-tung’s communist insurgents and an external threat from Imperial Japan. Morgenthau abandoned the aggressive buying program in December 1935, with the approval of Key Pittman, but failed to save China. The Silver Purchase Act tipped the balance of power in Japan away from the diplomats and towards the military, contributing to the outbreak of the Sino-Japanese War in 1937.


John Fitzgerald Kennedy
Elected U.S. president in 1960 and assassinated on November 22, 1963, by Lee Harvey Oswald before his main legislative initiative on civil rights could be enacted by Congress. He succeeded in repealing FDR’s Silver Purchase Act in June 1963, a small step in making the white metal more readily available to industry. As a former senator from Massachusetts, home to silversmiths since the time of Paul Revere, Kennedy had long favored eliminating any monetary use of the white metal. The Warren Commission investigation into the assassination concluded that Oswald acted alone but failed to consider whether Kennedy was murdered for dropping the silver subsidy, a conspiracy theory no worse than the rest given the metal’s power to provoke passion and fury in the American heartland for more than a century.