davidaulloa/AmericanStories huggingface dataset:
New-York tribune., 1918-07-28
Is Gold Mining
An Essential Industry

The question therefore presents it.
self: Is the production of gold neces-
sity, and is gold mining an essential
industry?
In order to determine this, some of
the operators from Alaska, through
Delegate Charles A. Sulzer, from that
country, raised this question with Mr.
William McAdoo, Secretary of the
Treasury, who, in letter addressed
to Mr.. Sulzer dated June 10, 1918, very
clearly and forcibly defines the posi-
ton Of the gold mining industry as
next to that Of the production of food
and ammunition, pointing out at the
same time the necessity of increasing
the gold reserve Of the country to sus-
tain the great credit structure now
being developed in order to finance the
war.
The use Of gold as the basis Of credit
and exchange has been 80 firmly estab-
lished and has proved so universally
satisfactory, and its occurrence in
nature, its physical and chemical char
acteristics are such that it may be
positively stated that no other commod-
ity compares with gold for this partic-
ular purpose, and there is no other
likely or possible substitute.
Nor will there be so long as there
are separate nations and governments
on the face of the earth; all balances
in international trade must be paid
for in some fixed and Interchangeable
medium like gold.
Nations will not accent the ran>r -
New-York tribune., 1918-07-28
Relevant Comment
Russian Trade Relations

American exporters who are inter
ested in resuming trade relations with
Russia seem to agree that the coopera-
tive societies there furn sh the most
available medium for economic inter
course. These organizations now have
a total membership estimated at 15,-
100000 men, representing the varied
composition of the Russian population.
They are economic units and are not
swayed by political adjustments. They
consist of producers cooperative or
CARNATIONS, consumers cooperative So
cieties, cooperative credit unions. CO.
operative workers leagues and peasant
cooperative societies. These coopera-
tive societies are not a product of the
revolution of 1917, but represented the
democratic elements in Russia while
the Czar still sat on the throne.
New-York tribune., 1918-07-28
TIME attention Of the Treasury
Department Of the United

TIME attention Of the Treasury
Department of the United
States and, in limited degree,
of members of Congress- and the bank
ing industry Of the country has recent
ly been called to the serious situation in
which the gold mining industry Of
America and the world finds itself, due
to the materially increased cost of labor
and supplies, resulting from the war.
and the unique fact that the value Of
the product produced-gold-fxe in
price by the government, has therefore
had no proportionate increase in It's
market value.
By far the greater quantity of gold
now produced necessarily comes from
low grade deposits in which the margin
Of profit, even in normal times, over
and above working costs, is compare
lively small. This is true because Of
the unusual occurrence of gold as
found in nature. While it is widely
distributed, such distribution occurs, as
a rule, in minute quantities, and high
grade deposits resulting from unusual
concentration, arc, by the very nature
Of things, rare.
New-York tribune., 1918-07-28
Declining Ratio
OF Gold Cover

G' NI. dCecISOIls OIL INC university
of Pennsylvania, discussing our ma
tional financial situation in The New
York Tribune, points out that "although
the amount of gold held by the Reserve
banks has almost doubled, the ratio of
gold to net deposits and Federal Re-
serve notes combined has fallen in tho
last year from 83 per cent to 81 per
cent"
The quantity of gold coming into the
United States and now held by the
United States was doubled because of
the tremendous quantities of war ma
terials and supplies sold to the foreign
governments which had to be paid for
in gold, and in consequence this gold,
heretofore held in reserve by England,
France and other countries, temporarily
found its way to this country.
1t is unlikely this condition will con-
tinue now that we have entered the
war, for our large armies now in
France require huge expenditures, and
purchases made in foreign countries
must be paid for in gold and, as Mr..
McAdoo has pointed out in his letter,
we are, at least for the time being,
compelled to pay for our purchases
from neutrals in gold, because we re-
quire all Of our own supplies and there
fore have no balance of trade with
them.
Combining this fact and that the
producing and operating gold mines of
the country will be compelled to dis
continue operations unless assistance
is given, it can be seen that the gold
reserve held by the United States be-
cause of the necessity Of the additiona al
issue of new bonds, certificates, etc, in
order to finance the war, will suffer q
further and material decrease IN the
immediate future.
AS a matter Of actual fact, the
United States is paying out to-day gold
to neutrals for purchases at a fixed
value which is considerably Yess than
the cost of producing it.
There is an international phase Ia
this gold situation which apparently
has been lost sight of, having direct
and most important bearing on the war
itself.
AS has been pointed out by Mr.. Hen.
men Jennings, consulting engineer Of
the Bureau of Mines. 81 per cent OF
the gold and gold mining districts of
the world are owned and controlled by
the Allies-France, England and the
United States. Approximately, l per
cent only is owned and controlled by
the Central Powers. with whom we
are at war, and 9 per cent in the hands
OF neutraIs. AS will be seen from the
following, this Is not alone an inter
estlng fact, but one which, if prop.
erly handled as q war measure, car
be used to very great advantage hs
New-York tribune., 1918-07-28

Failure of the market to respond
sensationally either to favorable or
unfavorable news is puzzling many
observers. War reports that arouse
the greatest enthusiasm find little
or no reflex in the market. Tax de-
velopments that ordinarily would
cause serious disturbance of values
are practically ignored. Only the
technical factors, such as tight
money, exert an important inhu-
ence, and that only to the extent of
restricting the volume of trading.
Meanwhile, for all this stolidity,
prices creep gradually upward. The
movement is almost imperceptible,
except over a period, but survey
of several months shows substantial
appreciation in values, not only in
stocks listed on the local board, but
on the London and Paris exchanges
as well. This synchronization in
movement may be significant, for it
is not improbable that the advance
of prices here has been produced
by the same fundamental influence
that caused the rise in the Allied
capitals. And there is only one
thing which could react on all these
markets in this way. That is the
growing confidence in the certainty
of ultimate victory for the Allied
cause. Certainly that conviction has
been responsible for not a little of
the quiet accumulation of stocks for
investment that has been going on
here for several months.
New-York tribune., 1918-07-28

In another column W present an
interesting paper discussing the
gold-mining situation, in which it is
made plain that, unless the industry
Is favored by . bonus, q higher
fixed price for tho metal, or in some
similar way, production win be cur
tailed because the greater part Of
the output comes from low-grade
ores that cannot now be worked at
a profit, owing to the greatly in
creased INSTRUMENTATION that re-
suited, by the way, largely from q
superabundance Of gold. The situa-
ton is, as Mr.. Thane says, acute,
but, nevertheless, if the relief
sought should be granted it might
be at too high a price in terms Of
war efficiency. The War Industries
Board, at the request Of the Treas
ury Department, has listed gold
mining as an essential industry. 1t
would be futile, therefore, to debate
the Importance Of the industry, but
it does not follow that it should be
unduly stimulated, for that might
react unfavorably on the produc-
ton of those things which are vital
to the successful prosecution Of the
war. Our armies cannot blast a way
through the German lines with gold.
Steel and copper and other basic
metals are needed for the job. And
the payment Of a bonus Of $40 or
$50 an ounce for gold or q proper
tionate increase in the mint price
would in all probability result in a
shifting Of a certain number of
miners from the copper and iron
mines to the gold mines. However
desirable it may be to increase the
output of gold, we do not need the
metal badly enough to obtain it at
the price Of a reduction in the out
put of the industrial metals.
New-York tribune., 1918-07-28
Supply Comes Chiefly
From Low-Grade Ore

In addition to this, these high grade
deposits are the first to be found, mined
and depleted. The active and persistent
search for gold, as continued through
the past, has resulted in q very COM
plete knowledge Of it's occurrence in
nature, and the discovery and subse-
quent working out of the higher grade
deposits; those engaged in the industry
and familiar with its occurrence are
agreed the future Of the gold mining
industry and of gold production in the
world is now and will hereafter be
dependent mainly upon low grade de-
posits.
Taking this into consideration and
the present fixed value Of gold, and the
rapidly rising increased costs Of mate
rial and labor, it is obvious that the
entire industry as now developed is
threatened in its very existence.
This situation has been developing
for the last four years, and has now
become so acute that the actual pro-
duction Of gold from the majority of
the low grade deposits is now being
made at loss. Last month 300,00O
ounces Of gold produced in the Rand
the most substantial producing area in
the world--were sold to the government
at less than cost, and this same con-
dition is true of several of the largest
operations in Alaska, Canada and the
United States.
1t is inevitable that unless some
form Of bonus is given to the produc-
ing mines, or an actual increase in the
value Of the product itself is made by
the several countries in the world in
which gold is now being mined, the
important producers will be compelled
to discontinue operations and the al
ready decreasing production of gold
will be further and most seriously af-
fected.
1t is obvious, likewise, that the calcu-
lated profits on ore based on pre-war
conditions, and on which operations
were established, have ceased to exist.
Tonnages of developed ore in the mines
to-day which were carried as an asset
because profits were indicated on pre-
war basis have, under present condi-
tions. to be entirely written off. Only
the higher grade sections of the oper-
ating mines (always occurring in small
er quantities) can now be carried in
the form of reserve.
| In !
| mining operation conceived, financed
and developed under pre-war conditions
can possibly work out as originally
planned, nor can they hope to continue
their operations for any length of time
unless bonus is offered by the gov.
ernment to compensate for the IN
creased operating costs or the actual
value of the gold fixed by the govern
ment is materially increased.
New-York tribune., 1918-07-28
BY B. L. Thane

other countries In payment for credits
unless it be backed up with proper
gold reserve, and, as a rule, will not
accept payment excepting in gold it.
self.
The necessity Of finding a fixed
basis for credit became pronounced as
international trade developed to large
proportions. The first country to
adopt gold as tho standard of value
was England, and this was later ac-
cepted and adopted by all the principal
nations of the earth.
One Of the most important and in
teresting questions arising in this
discussion Is the value Of gold IS now
fixed and accepted by the leading ma
tions Of the world.
Price Fixed
Arbitrarily
The price Of pure gold in our stand
ard of money is fixed at $20.67 an
ounce. This value was arbitrarily
fixed by the Bank Of England when, as
4 nation, England decided It was ad-
visabls to fix the value Of gold in or
der to standardize exchange. Prior to
this. while England had adopted gold
as standard, she had been in the
habit Of purchasing gold on the open
market ut variable range Of prices.
This necessarily affected, from day to
day and from purchase to purchase,
the very basis of exchange. Hence
the necessity Of establishing a fixed
price.
1t is generally conceded the price as
fixed was taken from the last purchase
made by the Bank Of England for gold
in the open market, which in our
money, as stated above, happens to be
$2O.67 Very shortly after this all the
other leading nations in the world ac-
cepted this gold standard, and like
wise the price which had arbitrarily
been fixed by the Bank Of England
and sustained with the approval Of the
British government.
Inc important fact regarding this
in so far as the present discussion is
concerned, is that the price as fixed
was purely arbitrary.
Even if measured in the currency OF
the time at which this occurred, when
gold was calculated to be worth $2O67
an ounce, it is evident, the very grea,
increase in the demand for this product
and increased cost in producing it, that
this valuation Is now incorrect, anc
decidedly too low.
Accepting gold as a basis Of all credit
structure, there has never been a period
in the history Of the world when the
demand has been as great as now, il
order to sustain a reasonable reserv.
against the government issues of bonds
certificates, etc.
New-York tribune., 1918-07-28
British Coal Requirements

In regard to the fuel situation in the
United States and elsewhere, "Black
Diamond" says there are indications
that America will have to supply Eng
land with 2o,0O0,000 tons OF coal to
make good the probable loss which she
will suffer through putting miners into
the army, and we must supply South
America with very large quantity Of
coal next winter to help move their
crops.
New-York tribune., 1918-07-28
Baltimore & Ohio Financing

Speyer & Co. and Kuhn, Loeb & Co.
have made arrangements with the Bal
timore & Ohio Railroad for the ex-
tension until October / of the Sc, ,oOO,-
900 Of bank loans OF the company
which mature Monday. These loans
under the extension will mature at the
same time that S10,500,0OO of three
months per cent notes recently
placed with the bankers fall due, and
the expectation is that by that time the
government contracts for rentals will
have been concluded, putting the com
pany in a position to do permanent
financing.
New-York tribune., 1918-07-28
Money and Credit

The weekly statement of the New
York Clearing House banks disclosed
an increase of s11s,36s, 900 in loans
and discounts, the result of large gov
ernment operations in the money mar
ket. The total of loans and discounts
stood at s4,Ss1 ,257,oo0 at the close of
the week Net demand deposits in
creased s1,s2s,oo0 to s3,57s,422,ooo.
Surplus reserves decreased $2,o22,s1o
to s72,SS3,71o.
United States government deposits
New-York tribune., 1918-07-28

The above rates express the cost Of
foreign money in terms Of the Ameri-
can dollar. You buy an English pound
sterling at, say, $4.75h. The intrinsic
parity is s4.86h per pound. Thus you
say either that pounds ar. at a dis
count or that dollars are at a premium,
which is owing to the fact that in Eng
land the demand for dollars with which
to settle accounts in this country il
greater than the demand in this coun-
try for pounds with which to settle ac-
counts in EnRlnnd.
New-York tribune., 1918-07-28
Royal Dutch Oil Dividend

Because there was not a quorum
present at the meeting of shareholders
Of the Royal Dutch Petroleum Com
pany, in Amsterdam on july "a. sec
ond meeting has been called for August 3
to pass upon the increase of the cant
New-York tribune., 1918-07-28
Colorado FUELS Quarter

The Colorado Fuel and Iron Company
reports gross receipts of $12,812oo3
for the quarter ended June 80, COM
pared with s11,97S,995 in the CORE
spending period Of 1917. The balance
New-York tribune., 1918-07-28
Country Bank Deposits

According to Kansas advices, at tho
rate wheat is being marketed in the
interior section Of the grain belt the
country banks will soon have their
deposits back to the high level of last
spring. 1t has been difficult for the
banks in the winter wheat district to
accommodate their customers for sew
eral week, owing to the need of funds
for financing the harvest This demand
is slackening now, however, and it is
expected that deposits will mount rap
idly.
New-York tribune., 1918-07-28
availaDle Tor dividends was s1,20e,155,
compared with $1,579 ,0s4 year ago
Corn Products Refining

In the gossip of the Street it is re-
ported that the directors Of the Corn
PRODUCTS Refining Company NAV now
see their way clear to begin the dis
bursement of dividends on the com
mon stock It has been suggested that
payment might be made in script. The
company's earnings are running large.
as was indicated by the quarterly state,
ment issued on Friday.
New-York tribune., 1918-07-28

the Allies in affecting the credit st,u.,.
ure Of the Central Pow.-s.
1t is a we'll known fact that ~.
issue Of paper credit by the Central
Powers to their own people and n.
adjacent neutrals has been nec.ssa-;In
in far greater proportion to their s,,a
reserve than in the case of III. Aii;s.
Need of Adequate
Gold Foundation
So long as these countries are de.,.
ing with themselves only and unahle 4,
engage in international business and
just so long as their governments re-
main strong enough to compel the
peoples Of the Central Powers TO ae-
cept such paper issue on it's face value.
their actual gold reserve is not i'm
portant; but the instant war is ended
and the Central Powers are again com.
PEELED to enter foreign trade In order
to replenish their exhausted supplies
Of material, their paper credit struct.
ure will have to be maintained By a
proper gold reserve; else 1t will fall
to pieces and end in . tremendous
financial disaster.
The German fnanciers are aware Of
this, but expect to build up their gold
reserve through their ability 70 sell IN
the world markets materials and sup
plies at q very much less cost than
they can be produced in the Allied
countries.
There is grave danger that this con-
dition will actually develop so far as
this country and the Allies are con-
cerned, because one of the results Of
the war has been greatly increased
cost of labor in these countries. mat
Is to say, labor has demanded-and
received-a very much larger wage
approximating 100 per cent greater
than before the war. AS net result
of this, to-day the cost in gold in the
United States at least, and to a lesser
ducing all commodities has increased
is selling at s33, as against s15 before
the war-and the cost of almost every
other important commodity has risen
in like proportion.
The danger of this comes about
through the fact that the Central Pow
ers in general, and Germany in par
ticular, have not Increased the wage
scale in like proportions; SO that the
cost, measured in gold, of producing
all articles in Germany after the war,
or even now, is less than it is in this
country, very much less. The German
fnanciers have boasted Of this condi-
I tion repeatedly. This amounts to the
same thing on the part of Germany as
placing a premium on our gold supply,
such premium being equivalent to the
difference in the average cost of labor
between the Central Powers and the
United States and her Allies.
While tariffs and trade agreements
may be developed and arranged which
will Offset this difference to some de-
gree, the easiest, most sensible-most
practical and quickest way to place
German labor and industry on a parity
with the United States and her Allies
will be to arbitrarily increase the value
of gold in an amount sufficient to off
set the average difference in wage scale
now existing between the Allies and
| the Central Powers
New-York tribune., 1918-07-28
G. w. Pope Co,

Our weekly Market Letters present
each week the facts as we see them
concerning the investment position
of the Sound Unlisted issues.
This letter Is sent free on request.
Information of this class will be of
help to you. Write us today and we
will send the letter on trial for three
months.
No Margin Business Accepted.
Ws l"viss Psrsonal 1sqs1ry.
3 Broad St. New York CITY
New-York tribune., 1918-07-28

tai Of the company, the Equitable Trust
Company of New York has been in
formed by cable. The meeting last
week authorized a final dividend of Is
per cent for the year of 1918.
New-York tribune., 1918-07-28
Allies Control
Gold Output

This is only possible because of the
condition mentioned earlier in this dis
cussion; viz: That 81 per cent of the
| gold and gold producing properties Of
the world are controlled by the Allies,
and less than 1 per cent by the Central
Powers. 1t is evident that if the gov
ernments of the Allies owning and con-
trolling this gold resource would arbi-
| trarily double its value, the Central
Powers would have to do twice the
amount Of work and sell twice the
! quantity of material in order to obtain
the gold supply necessary to estab-
! llsh proper reserve against the paper
credit structure which has been de-
veloped by them on account of the war
In other words, the governments Of
the Allies would compel Germany to
| pay twice as much for her necessary
| gold supply.
1t has been argued that such chang.
in value of the basic metal-gold-
would derange. credit structure, but
this can be obviated by agreement with
the Allies-England, France and the
United States, who, as has been pointed
out, control the gold supply of the
world, and by suitable legislation in
their respective countries.
IL would be necessary, of course, first
LOT .he governments not only to draw
in all gold coinage and hereafter COM
mand the entire existing supply, but
all that produced in the future.
IN very large degree this has a.
ready, been done, as gold coinage is
rapidly going out of circulation. The
issue of the Federal Reserve cert
ncates IS an illustration of what would
take place in lieu of the issuance Of
gold coinage.
1t would not derange the value Of
the currency as issued because it is
apparent that the value of gold behind
Inc currency is in any ase arbitrarily
hxed by the government.
For instance, if the governments sr-
bltrarily agreed that god should DO
fixed at $40 an ounce instead Of the
present fixed price Of s20.67, the re-
demption Of certificates or bonds will
receive half as much gold as they would
now receive in redeeming their paper;
but If half an ounce of gold is wort,
twice as much as it is now worth ana
this would be the case) there would %
no actual arrangement or change in the
value OF the currency or paper issues,
In other words, half an ounce Of gola
worth $40 would be just as satisfactory
to the holder OF paper as an ounes
worth s20.67, because in both cases th:
value itself would be arbitrarily ikea
by the government
Moreover, this value would be mon
in keeping with the actual value OF tns
gold as produced.
Fineness of gold should not be con-
fused with this statement, because hne,,
ness has to do only with the purity o.
gold. Tho fixed price of s20.67 an ounce
as now established, refers to pure goIa
only. Gold of less fineness than pu.ss
gold is obviously worth less than s2u:e.
per ounce, in proportion to the quant!
of other alloys or impurities containsas
therein. For instance, in $50 go.s
piece, as now issued, there is not qu'r
an ounce of pure gold-the differenS
between the $40 and $2o67 being mss
up of copper, added for the purpose
making the coin harder and moro y
New-York tribune., 1918-07-28
Increased $141,5So,ooo, the total Of
such deposits now being $424,563, 900.

Discount Rates.-Ths following table
gives the current rates Of the twelve
Federal Reserve banks on commercial
paper on all periods up to ninety days: