The Hunt family of Texas lost another $41 million yesterday when silver prices plunged 65 cents an ounce, depressed by speculation that the Hunts might have to sell some of their vast horde of the shiny metal.
In trading on the Commodity Exchange Inc. in New York, silver prices dropped to $11.52 an ounce. Silver now is selling for only 72 cents an ounce over the bottom it hit last spring when the silver market collapsed, wiping out the Hunt's silver fortune.
The Hunts still own an estimated 63 million ounces of silver, and after yesterday it was worth $40.95 million less than it had been on Friday.
On Friday the Hunts reportedly made the first payment -- $75 million -- on a $1.1 billion loan they took out last spring after silver prices plunged.
One reason for the continuing collapse of prices was the disclosure that the Hunts have moved about 27.5 million ounces of silver from Chicago to Delaware in an apparent attempt to escape both scrutiny and sales taxes.
Illinois imposes its 6 percent sales tax on silver sold from vaults in the state. Because buyers aren't willing to pay 6 percent more for silver that happens to be in Chicago, the Hunts would have to absorb the tax if they sold the metal, silver market observers said yesterday.
Last Friday two semi-trucks pulled up to the Bank of Delaware in Wilmington and unloaded more than 1,000 thousand-ounce bars of silver, competing the transfer of the Hunt's holdings.
After a Wilmington newspaper photographed the unloading, bank officials confirmed that the Hunts have shipped 27.5 million ounces of silver to Delaware.
It had been known for several months that someone was pulling silver out of Chicago, because the warehouses there issue reports on the amount of stockpiled silver. Since last summer, the warehouse stocks are down almost 28 million ounces.
There is no such public reporting of silver stocks held by Delaware banks, which are believed to serve as depositories for large amounts of silver and gold. Delaware state law makes it difficult for creditors to attach assets held in the state's banks; that provides another incentive for banking in Delaware, bank officials there explained.
Silver prices have been slipping for months, depressed by fears that the Hunts would have to sell part of their holdings. The various Hunt interests own enough silver to supply the entire United States consumption for about six months.
The Hunt silver was put up as collateral on the $1.1 billion loan they took out from a group of banks after silver prices collapsed.
Neither the Hunts, the banks nor the officials of the Federal Reserve Board would comment yesterday on the loan. The Federal Reserve is overseeing the transaction, because it was made at a time when the Fed had forbidden banks to make loans for speculative purposes.
As part of the loan agreement, the Hunts transferred all their silver and more than a billion dolllars worth of other assets to a Placid Investments, a new holding company for their assets. The loan was made to Placid rather than to individual members of the Hunt family.
The first payment on the loan was made on time last Friday, sources familiar with the transaction said.
If the Hunts are forced to sell silver to meet future payments on the loan, it could further depress silver prices.