The 1979 - 1980 Bunker-Hunt silver scam - research question

kevs · Feb 20, 2007

Hi all.

As some of you may know, i'm currently writing (aka throwing together) a dissertation for my B.A. course. The subject of my diss is the alternative processes, why they disappeared and the ongoing revival. I'm now researching into the revival, and looking at the reasons it happened when it did.

One of the factors seems to have been a drop-off in the quality of silver-gelatin photographic papers in the 1970's and '80's. My research has turned up the Bunker-Hunt scam of 1979 to 1980, which sent the price of raw silver skyrocketing. There's a Wikipedia article at http://en.wikipedia.org/wiki/Silver_Thursday

I remember vaguely being aware of the 'silver shortage', and hearing and reading that the silver content of silver-gelatin papers had been reduced. It was also the time when RC papers were coming onto the market, so maybe it ony affected the RC side.

Does anyone here recall the affair, or the alleged drop in the quality of the papers they were using?

(BTW, this in no way intended to discredit any manufacturers or suppliers - i'm not on an agenda - just gathering information).

Thanks for your time and help,
kevs

skygzr · Feb 20, 2007

I used to have a fairly complete set of the Zone VI newsletters. Fred Picker would go on and on about how paper manufacturers were going to drop FB in favor of RC, presumably because it was easier and cheaper to manufacture. His contention was that RC had much less silver. Picker had some good ideas but he was also a grumpy old cuss! Who knows if that was true or not.

I never was aware that the price of silver in any way affected the growing interest in alt processes. Interesting idea, if true.

Interesting graph available here. Quite a spike in silver prices around 1980.

http://www.nma.org/enumerate/silver/silver.htm

JBrunner · Feb 20, 2007

My understanding is the Hunt brothers got the idea that silver was a very under valued commodity, and by purchasing huge futures on the margin (ie borrowing money against future value) they could send silver in a self perpetuating upward spiral, and eventually control the entire market. They very nearly succeeded. What they did not count on, was that as the price of silver spiraled upward as anticipated, hundreds of millions of ounces of silver came out of hiding, silver coins, ingots, jewelry, flatware, stashed for decades and cashed in on the high price. As the resultant glut moved the price downward, the brothers continued to try to hold the price up by making further margin purchases, hoping to weather the storm, and prevail with their plan. Despite the effort, the price slid, the loans were called in, and the price of silver collapsed. Thats what I remember, anyway. Utah is a ways from Texas billionaires, and the world commodity market. I don't recall any paper quality issues at the time, but I was just a kid, and at the time I wouldn't have even known if I had been printing on the wrong side.

eclarke · Feb 20, 2007

JBrunner said:
My understanding is the Hunt brothers got the idea that silver was a very under valued commodity, and by purchasing huge futures on the margin (ie borrowing money against future value) they could send silver in a self perpetuating upward spiral, and eventually control the entire market. They very nearly succeeded. What they did not count on, was that as the price of silver spiraled upward as anticipated, hundreds of millions of ounces of silver came out of hiding, silver coins, ingots, jewelry, flatware, stashed for decades and cashed in on the high price. As the resultant glut moved the price downward, the brothers continued to try to hold the price up by making further margin purchases, hoping to weather the storm, and prevail with their plan. Despite the effort, the price slid, the loans were called in, and the price of silver collapsed. Thats what I remember, anyway. Utah is a ways from Texas billionaires, and the world commodity market. I don't recall any paper quality issues at the time, but I was just a kid, and at the time I wouldn't have even known if I had been printing on the wrong side.

Not to mention marginal production mines. When is costs $13.00 to mine it, $50 looks pretty good. These guys shut down instantly when it hits below $13..EC

Pinholemaster · Feb 20, 2007

Just got out of college at the time (1978). The two newspapers I worked for tried to find ways to save money on print paper and film purchases due to the spike in silver cost.

The biggest disaster was switching to bulk loaded film. The time wasted loading our own film instead of doing assignments was frustrating. Also bulk film cassettes were terrible. You'd shoot a job, only to find the top of the cassette popped open when it was time to process. There there was the question of when did the roll of film actually end. You'd always have a few images ruined at the end of the roll.

Also we were all use to printing 8x10 prints. We were told to cut paper down to 5x7. Made it difficult to dodge and burn at the smaller size, and our caption sheets didn't fit on 5x7 paper.

Early RC paper never matched FB paper in my opinion. It could be that the amount of silver was reduced. I had heard those rumors at the time. For me, the plastic paper base of RC lacked the visual weight of FB paper. Richness of tone was never there. But then in the newspaper business, once the image hit newsprint, it didn't matter.

Just say no the Texas billionaires, billionaires in general. Not to be trusted. Greedy SOBs if you ask me. They must be personally insecure if they need that much wealth. A good reason the tax them at a higher rate than the rest of 99.99999999999999999% of humanity.

eclarke · Feb 20, 2007

"Just say no the Texas billionaires, billionaires in general. Not to be trusted. Greedy SOBs if you ask me. They must be personally insecure if they need that much wealth. A good reason the tax them at a higher rate than the rest of 99.99999999999999999% of humanity."

Amen, at least tax them highly on pure speculation like the stock market, this institution invests nothing into our productive society. Make them start real goods businesses if they want to make money. Stock speculation is part of what is fueling the demise of silver photography...EC

juan · Feb 20, 2007

This is a topic that will take a lot of research. First, the name is not hyphenated as though it were two people. One of the brothers was named Nelson Bunker Hunt.

I remember the spike in silver prices and the howling in the photo mags about its effect on photo supplies. Now, however, you'll find a lot of argument on what the actual effect was. I don't know if the changes that occurred in the market were the result of RC getting better and finding more customers, the always changing supply of paper, environmental concerns about chemicals used in photo manufacture and processing, or whether the silver price fluctuations actually had an effect. Throw into the mix the terrible economy the US was suffering at the time, too.

I think there's another thread here on APUG from several years ago on the topic.
juan

Joe Lipka · Feb 20, 2007

I always felt the rise in alternative processes began in the late 60's and early 70's as a continuation of the counter culture revolution. Anything that was a product of corporate America (Kodak) was considered evil and anything alternative was good.

Hand made papers "stuck it to the man" and were thus considered natural, organic goodness.

It didn't have to make sense, man. It was the 60's.

Photo Engineer · Feb 20, 2007

The amount of silver used in color paper was about 3x the amount used in B&W and the amount of color paper sold was probably hundreds of times greater than B&W at that time. As a result, the big push in R&D was to reduce silver in color paper, where it made no significant difference in imaging as long as the proper amount of dye formed.

This project was cancelled when the price of silver dropped, but it would not have gone anyhow due to technical problems.

There was no observable resurgence in alternative processes at that time. It seems to have come later, in the mid 90s IIRC.

PE

dynachrome · Feb 20, 2007

silver prices

There's an expression I heard years ago about the cost of film spooled especially for old cameras with outdated sizes: It's a truly ill wind which doesn't blow anbody any good. By 1979 my father had collected quite a few coins from the Franklin Mint. Most were solid silver with a very thin gold coating on the outside. My younger brother, who knew more about cins that my father, convinced my father to sell everythng when silver was at $49 an ounce and gold at nearly $800. After all of the weighing and bargaining my father managed to get back just about exactly what he had paid for the coins. That's much better than most other Franklin Mint coin owners managed to do.

There never was a shortage on silver. There was just a short period during which inexpensive silver was in short supply. At the time I never thought Kodak's price increases were warranted based on the small amount of silver in each product. I have an old photo magazine from the early 1970s in which it is speculated that if photography kept expanding there wouldn't be enough silver to go around. We never got to that point and now it looks like we never will. Where the price of a commodity like silver is concerned, it can become more expensive or less expensive due to meddling in the short term but in the long term, supply and demand will determine price. Remember gas at $3.50 a gallon last year? Unleaded regular in now less than $2.00 in most of NJ.

dynachrome · Feb 20, 2007

Make than anybody.

Dinesh · Feb 20, 2007

Pinholemaster said:
Just say no the Texas billionaires, billionaires in general. Not to be trusted. Greedy SOBs if you ask me. They must be personally insecure if they need that much wealth.

Do you have any evidence to support this ridiculous claim?

Frank R · Feb 20, 2007

I remember the congressional hearings when they were asked about their attempts to corner the market.

A reporter also asked them how it felt to lose a billion dollars. Nelson Bunker Hunt replied: "Well, a billion dollars isn't what it used to be"

Photo Engineer · Feb 20, 2007

I saw internal figures on what the increased prices did to Kodak. I assure you that the increases were justified. There was a 10x increase in the price of silver, but we only passed on a few percent of that to the customers, IIRC.

I know that it cost us a lot to make experimental coatings during that period.

PE

jovo · Feb 20, 2007

Frank R said:
: "Well, a billion dollars isn't what it used to be"

Wasn't it Senator Everett Dirkson who said: " A billion dollars here, a billion dollars there, and pretty soon you're talking about real money!"

MikeSeb · Feb 20, 2007

Dinesh said:
Do you have any evidence to support this ridiculous claim?

Absolutely correct, Dinesh. The market, left to its own devices, fixed the problem. As I recall, the Hunt brothers took it on the chin.

I love the economic illiteracy of those whose only thought is to tax to fix "problems."

Flotsam · Feb 20, 2007

Back in the mid 19th Century, the Industrialist Robber Barons Fisk and Gould tried to corner and manipulate the Gold market. The resulting panic is blamed for the Black Friday Stock market crash of 1869.

Sweet Fellows.

MikeSeb · Feb 20, 2007

JBrunner said:
My understanding is the Hunt brothers got the idea that silver was a very under valued commodity, and by purchasing huge futures on the margin (ie borrowing money against future value) they could send silver in a self perpetuating upward spiral, and eventually control the entire market. They very nearly succeeded. What they did not count on, was that as the price of silver spiraled upward as anticipated, hundreds of millions of ounces of silver came out of hiding, silver coins, ingots, jewelry, flatware, stashed for decades and cashed in on the high price. As the resultant glut moved the price downward, the brothers continued to try to hold the price up by making further margin purchases, hoping to weather the storm, and prevail with their plan. Despite the effort, the price slid, the loans were called in, and the price of silver collapsed.

That's as good an elucidation of the function of a market economy as you'll read anywhere. As I recall, the Hunts were ruined by their failed ploy, or nearly so.

Amen, at least tax them highly on pure speculation like the stock market, this institution invests nothing into our productive society. Make them start real goods businesses if they want to make money. Stock speculation is part of what is fueling the demise of silver photography

If this quote is serious, it's as stunning an example of economic illiteracy as you'll ever encounter. One hardly knows where to begin its refutation, doubting as I do whether the effort could bear fruit on such barren soil.

TheFlyingCamera · Feb 20, 2007

The Hunts still came out of it with their trucking company in the family hands, so they weren't quite destitute. But yes, they got the slapdown they so rightly deserved, and the prices for silver never quite recovered afterwards. I think it took another 20+ years for silver to go back up above $7.50 an ounce.

bdial · Feb 20, 2007

At the time of the Hunt's adventure I was doing a lot of photography, and working with 35, 120 and 4x5 and doing a lot of printing. Also I was a student at the time. I don't particularly remember noticing any big effect on prices of materials though.
And as someone else noted, I wouldn't associate the interest in alternative processes to the silver spike. I think of the alternative process interest as coming much later.

Michael W · Feb 20, 2007

dynachrome said:
I have an old photo magazine from the early 1970s in which it is speculated that if photography kept expanding there wouldn't be enough silver to go around. We never got to that point and now it looks like we never will. Where the price of a commodity like silver is concerned, it can become more expensive or less expensive due to meddling in the short term but in the long term, supply and demand will determine price. Remember gas at $3.50 a gallon last year? Unleaded regular in now less than $2.00 in most of NJ.

Interesting quote. I recall seeing some figures 10 or so years ago that showed that the photography market used about 25% of world silver production. (Please feel free to correct this number if anyone knows better. I just recall that it was a significant amount). That percentage must be falling & unless something replaces it suggests not much upside in the price of silver.

kevs · Feb 20, 2007

Thanks all

Thanks everyone for your information and memories of that time. I was still at school - i was eleven at the time, and that was years before i was even allowed to handle a camera!

It's all fascinating stuff. What set me researching this thread was the following passage in The Keepers of Light, William Crawford 1979, p111:

"[They [the alt. processes] are worth [attention] because of the regrettable state of commercially made printing papers, now undeniably inferior to the papers of a few decades ago. Whatever the reasons, manufacturers have lost track of the tonal, color, and surface characteristics the best papers once had. The conveniences gained from such things as resin-coated papers have been at the expense of the qualities that give prints their physical beauty - that pull us across the room and make us take notice".

There was obviously something going on - Crawford mentions RC papers, and it was a concern that FB papers were becoming unviable. The article that brought it to my attention was written in 1994 by Martin Reed of Silverprint. 'Monochrome in Black and White' is in AG+ no.4 - Reed mentions the Bunker Hunt (sorry about the hyphen PE - it's an old habit!) affair and the effect on prices, but doesn't mention any reduction in silver levels in a papers. So maybe i'm making a connection that isn't really there. I'll search for the older thread in the archives.

The present Snowdon exhibition in Plymouth Museum at the moment is an interesting example. Most of the monochrome prints date from the 1970's and 1960's - they're all very neutral in tone with good blacks but no real character. But the two from the late 1950's - one of commedienne Joyce Grenfell - have rich, deep blacks of a warm base. IMO they definately have something the other prints don't have. I know now what Crawford meant.

Thanks for your help everyone again,
kevs

Curt · Feb 20, 2007

Yes, I remember that time, everyone was spreading the rumor that photographic material costs would kill most photographers. I was at Brooks Institute of Photography and remember buying film and being told that the price was going up, up, up. It didn't take long before I went, went, went, into the medical field were I used tons of Kodak film, bought by someone else. Should have had a photo career in the, well was there really a good time?

Wasn't it in the very late '70's and '80's that photo prices soared. In 1973 I could buy an AA or EW for just bucks. By the very late '80's they weren't so cheap anymore. Did silver prices have any thing to do with the value of photographs? I don't really know, but I do know what the silver price increase did for me.

Frank R · Feb 21, 2007

The Hunt brothers ended up being the models for the Duke brothers played by Ralph Bellamy and Don Ameche in the 1983 Eddie Murphy/Dan Akroyd movie Trading Places.

Jed Freudenthal · Feb 21, 2007

silver price

As far as I remember, the whole thing was purely political. The silver price went up, because of monopoly reasons. At that time, I calculated the difference in price for a certain pack of B&W paper. It was say: 1 penny. But they charged one dollar more. The price for hydrochon went up too. The reason: the price of of silver was up! That is the logic behind it.

Jed

The 1979 - 1980 Bunker-Hunt silver scam - research question

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