St. LOUIS () -- After first speaking to the Silver Users Association (SUA) Executive Director , then to Barclays Advisor and lastly to silver analyst , Resource Investor still could not uncover the true motives behind the SUA's opposition to Barclay's proposed silver ETF.
The Silver Institute would not comment on the SUA's position because of an agreement with Barclay's. The SUA would not say anything other than what is posted on its website. The only conclusion that could be drawn is one group wants the price of silver to stay low; the other wants it to climb high.
Thus, RI delved deeper into both organisations in the hope of uncovering something new. After futilely trying to contact members from both organisations, RI discovered an interesting anomaly - a company on both lists.
J.W. Harris Co., a manufacturer of soldering, brazing and welding products, is a member of two groups that are seemingly at fundamental odds. But how could one company represent the interest of both groups simultaneously? Resource Investor contacted J.W. Harris for its take on the SUA's opposition to Barclay's silver ETF.
"We don't want to be paying more for metals just because of speculation," said David Jacobs, Controller of J.W. Harris Co.
But Jacobs said he wasn't even contacted by the SUA about the policy statement and doesn't know if anyone else at the company was.
Jacobs also said he was unaware that the company was an active member of The Silver Institute, but did not think it was a conflict of interest.
"We're much more active in the SUA," he said.
Michael DiRienzo, Executive Director of The Silver Institute, which is primarily made up of mining companies, told RI that the Executive Committee ultimately makes the decision on membership.
"If it is a reputable company, then they're in," he said.
According to the website, The Silver Institute draws its membership from "across the breadth of the silver industry." This includes leading silver mining houses, refiners, bullion suppliers, manufacturers of silver products and wholesalers of silver investment products.
But the fact that both banks and producers appear on the member list of The Silver Institute begs the question, what exactly is the purpose of the organisation?
"The Institute serves as the industry's voice in increasing public understanding of the many uses and values of silver," according to the website.
DiRienzo said the SUA is very specific with its mission; The Silver Institute is more broad-based.
"[The Silver Institute] is the only organisation solely focused on silver," he said.
The Silver Users Association strictly represents the interests of companies that make, sell and distribute products and services in which silver is an essential component, according to the SUA website.
SUA members include "representatives from photographic, electronic, silverware, mirror and jewelry industries, producers of semi-fabricated and industrial products, and trading and service organisations responding to member needs," according to the website.
Paul Miller, Executive Director of SUA, told Resource Investor the benefits of joining the SUA are "having a voice in the market."
"It's up to the members how active they want to be," he said.
Miller added that the members are very happy about the policy statement opposing Barclay's silver ETF. But remember, Jacobs seemed to be in dark over the SUA's position.
According to Stephen Kovaka in an article entitled "The Silver Conundrum," investors are in the dark over the true role of the SUA in the silver market.
Kovaka writes, "a politically powerful Silver User's Association calls all the shots."
Furthermore, because the Silver Institute does not solely represent the interests of silver producers, there doesn't seem to be a counter voice.
In another article entitled "Precious Metals Emergency," Charles Savoie calls The Silver Institute a "near comatose organization, mainly for statistics and information."
According to Savoie, a silver producers association is desperately needed.
"We could have more than one lobby. We could have one representing corporate members, and another for rank and file shareholders and investors. If things go that way, as much mutuality as possible should be sought, the better to influence legislation," Savoie writes.
One thing is for certain, if there is a battle in the silver market, the ones who want the price to remain low are winning. If The Silver Institute is the only organisation to represent the ones who want the price to go higher, it is woefully inadequate.