The Washington herald., 1917-09-18
HOLLAND LETTER
The Biggest Daily
Financial News Feature of
the Country's Best Newspapers.

authorities on the production of pre-
cious metals. and for years officially
associated with the United States
subtreasury branch in New York.
said that, leaving Alaska out of con-
sideration, he was inclined to think
that all of the productive gold mines
of the world had now been exploited.
although some of them were not
worked to their full capacity. He es-
timated that within a few years the
world might look for an annual out
put of gold of the value of approx
mately $500, 100000.
A day or two ago there came from
Washington an official statement
which reported that the gold produc-
ton of the entire world in the year
1916 was of the value of $40 O00. 900.
That amount was only Ss,00O,OOO less
than the money value of the gold
mined in the year 1915, and the falling
OFF is explained by the fact that the
United States did not mine quite as
much gold in 1916 as in 1915. Since the
war in Europe began the gold mines
of the world have produced little
over 81. .OoJ, coo, coo in new gold. OF this
Germany has received not one cent
directly. and only a small amount.
relatively speaking. through the chan
nels of trade. England received con-
siderably more than one half of it.
and in this fresh sunpply of gold is
to be discovered one of the reasons,
perhaps the chief reason, why Eng
land has been able to maintain high
credit while financing her own ne
cessities and a considerable part of
the needs Of her European allies.
England's fresh gold received every
year supplemented by the enormous
mass of foreign securities. which
represent loans made by the citizens
of Great Britain to other countries.
in a great measure explains her finan-
cial strength. 1t is this strength which
has made it practicable and even
easy for Great Britain to secure, on
the instant. large amounts of credits
or funds in the United States.
Africa. including Madagascar. In
the year 1916 dug out of the soil
gold of the money value of $780,
100000. and North America. includ-
ing Alaska. obtained fresh gold of
the money value of s129.O00,0 900.
about $4,000. 900 of which was OBJ
tanned from mines over which floats
the flag of the United States.
At the time of the war in South
Africa, gold-mining operations per-
suadcd by men of science. and espc-
cially by John Hays Hammond. that
certain intensive methods of min
ling would make it possible to bring
to the surface from great depths
greatly increased gold production.
The managers sent to the United
States a little company OF four or
five of their engineers with instruc-
tions closely to examine American
made mining apparatus, and if the
inspection was satisfactory. then to
negotiate for the purchase of a
large amount of this apparatus.
The engineers visited a great manu-
featuring plant at Easton, Pa, and
while there said to those who were in
control of this industry that after the
war in South Africa was ended the
yearly output of gold in the South
African mines would be greatly in
creased. and in the course of a few
years would surely be of the money
value of 500. 1.OO0,0Ol This was re-
Garded as a somewhat eXtravagant
prediction. in view of the fact that
when the prediction was made the aE-
Sregate output of all of the gold mines
of the world was of the value of ap-
proXimately $2J1. 100000 Nevertheless
this prediction has been abundantly
justified. The modern methods taught
by men of science and the vigorous
operation of the South African gold
mines so greatly increased the worlds
yearly production that in the year 1899
it was OF the money value of S3ll COO
600. Seventeen years later. II was of
the money value of si70,OC0,0C0. Part
of this increase is explained by the
output of Alaska, part of it reflects
the highly intensive methods which
have been adopted by the mine owners
Of California. This process has en-
abied California to maintain first rank
among American States as gold
producer, California, Colorado and
Alaska together having brought from
the mines a little over one half of
the gold taken from the American
mines in the year 1916.
Scientific prospecting and the great
improvements in transportation make
it inevitable that the gold production
of the world will steadily increase 1t
is probably true. as Mr.. Muhllman
once said, that the best gold-produc-
ton properties of the world have al
ready been discovered, but since he
spoke there have been wonderful sue
cesses secured by the men of science
whereby very low-grade gold ore can
now be worked to handsome CONNER
cial profit
One of the reasons why leaders in
the world of finance and of our large
industries are almost persuaded that
Germany will speedily be compelled
to suggest peace terms to which the
allies will feel they must give some
thought, is the fact that while the
allies are being enriched each year by
this enormous output of gold, Germany
is getting none. and is compelled to
part with some portion of the great
surplus she built up as one of her
factors in preparation for the war
Therefore, the men of finance and the
bankers of Germany will feel compelled
to use what influence they have and
to exert such pressure as they can
upon the German government so as to
compel. perhaps within a few months,
something like genuine peace PROPOSE
tions from Germany.
The enormous increase in the worlds
supply of new gold in the past three
years is regarded by bankers as par
TALLY explaining the high cost of COM
modi.ieS. In that sense gold has been
cheapcned, but it is a curious fact
that gold. while still maintaining its
standard as the money metal of the
great nations. although its plentiful
ness may have increased the cost of
commodities. now is gradually find
ing that silver is so increasing in
value that its parity with gold may
be only short time distant. But even
If silver should increase in price so
greatly that within a short time 1t
would stand upon parity in the
markets with gold, nevertheless there
is no probability that it's increased
value will be followed by any change