The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-07-21
EFFECT OF ALASKA GOLD
EXPERT OPINIONS ON THE INCREASE
IN THE WORLDS SUPPLY.
What VIII the Yukon ield:-New
Mines Are the Richest in the World,
Some Say, While Others Doubt.
New York World.

New York World.
The reported discovery of gold in fabu-
lous plenty on the distant Yukon has stirred
up students of finance no less than seekers
after wealth.
TO the hot-headed, money-hungry crowds,
naturally eager to start at once for the
new Eldorado, GENE warnings from men of
experience in mining. go SLOW" is their
advice. Recognize the fact that early re-
ports are frequently misleading; that the
Yukon is a long way off and as desolate as
nature can make it; that it is a two
months journey from our part of the
world, and that by the time one could
reach this land of promise winter will be
getting ready to tie up the placers in I'M
breakable bonds of ice
AS to the monetary significance of the
alleged discovery there are opposing
theories.
M L. Muhleman, of the New York sub
treasury, a recognized authority, thinks
that the present ratio of values will not be
disturbed no matter how much gold is
found in Alaska He said:
Il see but one chance for silver to OBJ
tain any benefit from this promised crop of
new gold. 1t is that in the rush to the new
fields silver may be neglected and it's
product diminished. But this is off
chance. The great smelling companies
which virtually control the production of
silver are doing a profitable business, and
no amount of gold-mining excitement
would be apt to lure them away from a
good thing.
"A great increase in the supply of gold
is not likely to boom the price of pork,
neither would it send up the value of sill
yer. The financial history of the last ten
years shows cOnclusvely that the volume
Of on6 pVaTtS influence silver
Since 1886 the worlds production of gold
has practically doubled 1t was 800, 100000
per year in 1885, while to-day the annual
production exceeds $500, 000 This means
that we have added to the stock of gold
practically $500 600 OO0-a splendid increase
truly, yet, Notwithstanding this, the pur-
chasing power of gold has increased while
silver has fallen off.
WHERE HAS 1T GONE?
Where has this great volume of gold
gone? The banks of Europe are loaded
with the entire increase of gold productions
of the last ten years, besides 5000, 100000
drawn from the regular production. This
immense treasure is held by these banks
to protect their note holdings.
IN 1889 the leading banks of Europe held
$947, OOO 900 of gold in their vaults. In 1896
their gold holdings amounted to $685.
''The amount of specie held by the Euro
pean banks against their notes amounted
TO 0S per cent. III 1917 L our years ldI&r
their specie holdings reached II per cent.
THE Bank Of France was doing well
when it held specie representing 20 per
cent of its note holdings Yet in 1896 this
bank held 80 per cent of specie. Our coun-
try has a reserve of $40 100000 on about
$3.50, 600 in notes, little more than 81
per cent.
And there remain vaults yawning for all
the gold which the new Alaskan fields may
produce let them be ever so rich"
Rapidly reviewing the financial history
of the years, Mr.. Muhleman made some in
teresting points in connection with the
early discoveries of gold in California and
Australia.
"At that time silver" continued the finan-
cer, was in great demand coin metal.
came practically at the same time. throw
ing enormous volume of the yellow met
al on the market. Many argued that the
value of silver would rise like a skyrOcket. |
One famous French economist openly adj
vocated the decentralization of gold, insist
ing that the metal was certain to become
common.
Now what did happen? Why, through
out the years of vast gold production in
California and Australia silver advanced in
value only five cents an ounce Soetbeer,
in his careful review of that period, writes
that even this small advance was not
caused by the excessive supply of gold, but
by the Increased demand for silver from
India, where trade had been stimulated by
the American civil war. People in specu
latiAg on the vault of a great gold prOduc-
ton forget the note issuing business. If
gold is scarce there is large issue on
credit When gold is plentiful the banks
absorb it as a reserve against these out
standing notes. Silverites clearly can draw
no encoura cement from the Alaska gold
OTHER OPINIONS.
4 dissenter from these views is Daniel
Guggenheim. of the firm of NJ. Guggenheim
& Sons, of No. so Broad street, who has
large smelling interests. Saturday Mr..
Guggenheim confirmed the reported dlscov-
cries in the Yukon country and prophesied
that the new fields would yield far in ex-
cess of even present roseate Indications
For some time my firm has had expert
mining engineers at work in Alaska he
said, and their reports leave no doubt