The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-08-08


partment of the United States of tn,
members of congress, and of the bank.
ers of the country. has recently beer
called to the serious situation in which
the gold mining industry of America
and of the world finds itself in conse.
quence of the increased cost of labor
and supplies resulting from the war
and because Of the fact that the value
of the gold produced. being fixed in
price by the government, therefore
enjoys no increase in it's market value
BY far the greater quantity of gold
now produced necessarily comes from
low grade deposits, in which the mar
gin of profit, even in normal times, is
comparatively small. This is true be-
cause of the unusual manner in which
gold occurs in nature While it is
widely distributed, it is found, as a
rule, in minute quantities High grade
deposits resulting from unusual con-
centration, in the nature of things, are
grade deposits usually are the first to
be found. mined, and depleted. The
active and persistent search for gold
in the past has resulted in complete
knowledge Of it's occurrence, and in the
discovery and exhaustion of the richer
deposits: those engaged in the indus
try and familiar with the habit of
gold deposits are agreed that the flu
ture Of the gold mining industry and
of gold production in the world is now
and will hereafter be dependent main
this into consideration, as well as the
present fixed value of gold and the
rapidly rising cost of material and la
Dor it Is obvious that the existence of
the entire industry, as now developed
is threatened.
This condition has been developing
for the last four years and it has be-
come so acute that the production of
gold from the majority of the low
grade deposits is now being made at
loss. Last month 100000 ounces of
gold, produced on the Rand which Is
the most productive gold mining re-
glon in the world, was sold to the gov
eminent at less than cost, and the
same thing is true Of several of the
largest properties in Alaska, canada
and the United States. 1t is inevitable
that, unless some form of bonus is CIV
en- to the producing mines, or an ac-
tual increase in the value of the pro-
duct itself is made by the countries IN
which gold is now being mined, the
large producers will be compelled to
discontinue operating and the already
decreasing production of gold VIII be
most seriously affected. 1t is obvious,
likewise, that the estimated profits on
ore based on pre-war conditions on
which these enterprises were estab-
lished, have ceased to exist. Ton
nages of developed ore in the mines
that were carried as an asset because
profit was indicated on the pre-War
basis, must be entirely written off UNI
der present conditions, and only the
richer ore in the operating mines can
be carried now in the form of a re-
serve In other words, no low grade
gold mining operation conceived, fin
anced and developed under pre-war
conditions can possibly work out as
planned, nor can 1t hope to
continue for any length of time unless
a bonus is offered by the government
to compensate for the increased oper-
ating costs, or unless the value of the
gold as fixed by the government, Is
materially increased.
The question, therefore, that pre-
sents itself is whether the production
of gold Is a necessity and whether gold
is an essential industry. In
order to determine this, some of the
operators in Alaska, through Mr..
Charles Sulzer, the congressional dele
gate from that territory, raised this
question with Mr.. William McAdoo,
secretary of the treasury, who, in
letter addressed to Mr.. Sulzer, dated
June 10, 1918, clearly and forcibly de-
fined the position of the gold mining
industry as next to that of the produc-
ton of food and ammunition, pointing
out at the same time the necessity for
increasing the gold reserve OF the
country to sustain the great structure
OF credit now being developed in order
to finance the war.
The use Of gold as the basis OF cred
ii and exchange has been so firmly es-
tablished, 1t has proved so universally
satisfactory its occurrence In nature,
and its physical and chemical charac-
teristics are all such that 1t may be
stated positively that no other COM
modify compares with 1t for this par
ticular purpose, and there is no other
likely or possible substitute; neither
will there be so long as there are sep
arate nations and governments on the
face of the earth. All balances In in
ternational trade must be paid in some
fixed and Interchangeable medium ike
gold. Nations will not accept the pa
per of other countries in payment for
credits unless backed by a proper golu
reserve, and, as a rule they will not ac-
In,