The Washington times., 1911-01-04
Loss TO OPRODUCERS
IN GOLD OUTPUT
Reports on Past Year Indi-
cate a Fall in
Prices.
MANY RICH MINES
NOT MAKING MONEY
1t Is Predicted That 1911 Will
Show Still Larger Decrease
Than 1910.
By JUDsoN C. wELL1vER.

The world produced less gold in 1910
than In 1909. and will probably produce
less in 1911 than in 1910.
Why Is that? And what is the sig
nificance?
Scientists, economists and especially
students of currency problems are ask
ing these questions with the keenest in
terest. They believe they see in the de-
creased gold produce reason for expecta-
tion that the era Of high and advancing
prices is definitely at an end, and that
the tendency henceforth will be toward
declining prices.
Among economists, none has been
more vigorous than Mint Director Rob-
erts in maintaining that the worldwide
upward movement in prices is attribu-
table to the increased volume Of gold.
His writings for several years have pre-
sented this view with peculiar force and
clarity. Therefore, 1t is significant that,
In announcing the statistics that tell of
falling product of gold Mr.. Roberts
should have called attention to the fact
that this might fairly be regarded as
premonitory of an era Of falling prices.
Mr.. Roberts does not believe there
will be much further increase in the
gold product; he inclines rather to be-
lieve 1t will gradually fall still lower.
Production Is Held Back.
There was time when many people
believed the Alaska deposits would
finally food the world with gold and
break down the gold standard" said Mr.
Roberts. But that fear is past Alaska
,,4N a u
gold there. but to mine it costs so much
that the profits will not make a great
output probable. Natural economic
causes will hold back the production,
and 1t is best for the world that they
should.
California is increasing its output, but
the Cripple Creek district in Colorado
cannot keep up it's production indef-
ntely. Australia is losing fast, and is
likely to continue to do so. Difficulties
OF getting labor are tending to check
increase in Africa. No great new fields
are being found or developed. I con-
slider the showing of an actual decrease
in the gold output as most interesting
general economic conditions
Views of Another Expert.
Exactly in line with this opinion was
the statement of a SCIENTIST whose work
in another Government department has
for many years kept him in close touch
with the economics of gold production.
Gold is like any other commodity"
he said. TT cannot be produced when
It costs more to produce it than It is
No 81
reacted upon itself. We got so much
gold that is got cheap. An ounce Of it
buys less labor, less, machinery, less
wheat, less kerosene than before the era
Of high prices. That means that 1t takes
4 bigger share of the ounce of gold to
pay for digging 1t. In some cases the
Increased cost of digging is big enough
10 make the mining Improbable, under
exactly the same conditions that would
have been profitable some years ago.
II know Of a mining company in
Alaska that has taken out about $780,
100 worth of gold. Looks profitable,
doesn't it? Yet that company has spent
about $4,000 to get that gold out, and
therefore has lost 100000 People don't
iig gold on such terms. The worlds
product of gold cannot be increased at a
oss. There are mines that were once
profitable. but are not now, simply be-
cause of the increased cost of mining
under the high-price regime.
You see how the economics Of it
finally work automatically. When the
gold output Is so big, prices get 30
high-that is, gold gets so cheap-that
automatically the production is shut OF.
That seems to be the answer to all our
fears about a flood of gold. The flood
will itself open the safety valve that
will prevent explosion"