Mohave County miner., 1918-07-20
THE CRISIS IN
 GOLD MINING

Gold IS the basis of money.
 The gold supply of the world has
 been falling off very rapidly. The
 credits placed upon gold have been in
 creasing with startling rapidity. The increase in demand for money, created
 by the increase in business transac- tions, has been met with currency promises to pay-notes of credit, gold
 notes so long as the gold foundation
 upon which they rest is kept at a proper ratio. AS commodity prlces,
 based on rapidly increasing circulat- | ing medium go up, the relative value of gold goes down. The cost of gold mining has been and is rapidly in- creasing while the value of the output remains stationary. Gold production has reached a crisis. While prOduc- tion has been gradually growing less, present conditions will shut off produc- tion altogether, except in mines where gold is a by-product. Gold production is on the verge of precipice and, un- less help is given, cannot continue. Low grade gold mines are now oper- ated at loss and there appears to be no hope for the future. A bonanza gold deposit in which twenty years ef- fort eliminates in one or two years excessive profits have the profit of the twenty years effort treated as the profit of one year, and the war excess ] profit tax law takes all the profit and large part o1 the original capital. There is nothing to stimulate the { gambling instinct which searches for . high grade mines. There is no hope for regular low grade gold mining op- erations. This presents a startling situation when it's consequences c-c considered. The structure of credit . cannot continue to grow while the foundation upon which 1t rests re- mains the same.
 Our Liberty Bonds are promise to pay in gold. If production is stopped the gold cannot be available for their redemption. A world effort to liqui- date would produce a money panic which would put gold in its proper re- lation to genera lprices. A better method must be found to meet this situation.
 It now costs nearly double as much to produce gold as in normal times. Gold therefore should be, and if not controlled by governments would be, at a. 100 per cent premium. Gold IS now at a premium in foreign coun- tries. The hope of being able to take advantage of possible premium ad- vances would give hope to the gold mining industrly Many small things may properly be done for gold mining First, gold production may be relieved from the requirements of the war eX- cess profits tax law. This would jus tify speculative effort in the finding of high grade ore bodies, but would be of no assistance to the regular opera tions which are not making a profit. | Second, gold mining may be classed as ! war industry through which prefer ence might be given in obtaining its supplies. Third, freight rate advances as relating to gold mining might be remitted. Fourth, its employees may be made immune from draft into war service. These things would be help ful, but this hel pwould not be suffi- cient to keep up the proper ratio ot production. The Mining Congress ] Journal is on record to the effect that sooner or later governments will ind 1 it expedient to offer bounty on gold production from low grade ores. This cannot be suggested as practical so- lution at this time, because immediate aid is necessary. What is there, then, that can be done to prevent the eXtlnc- tion of the gold mining industry?
 Our suggestion is that the embargo shall be lifted upon the exportation of all newly produced gold, and allow the present and future gold produc- tion to take advantage of the pre- miums which now or hereafter may obtain. The present foreign premium of 4 per cent is not consequential eX- cept that it brings hope to the gold miner that he ha5 an even chance in ! the worlds markets. The Mining
 Congress Journal now predicts that, unless some substantial help is given
 to the gold industry gold will be at
 a premium of 50 per cent within five years. To state it differently, curren-
 cy will be depreciated to 66 1-2 per cent of it's face value. The appeal of the gold industry to the nation has been unheeded. The appeal of the na- tion to the gold industry will be heed ed, but the unwatering of abandoned mines, the. rebuilding of abandoned ! treatment plants. the assembling of