Gilpin observer., 1918-07-11
GOVERNMENT MUST COME TO
THE RESCUE OF THE YELLOW
METAL OR ITS PRODUCTION
WILL CEASE.

Money is the life blood of CON-
merce. 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
increasing with startling rapidity
The increase in demand for money,
created by the increase in business
transactions, has tleen met with cur
Tency-promises to pay-notes of
credit, good notes so long as the
gold foundation upon which they
rest is kept at a Proper ratio. AS
commodity prices, based on a rapid
ly increasing circulating medium, go
up, the relative value of geld goes
down. The cost of gold mining has
been and is rapidly increasing while
tho value of the output remains sta
tionary. Gold production has reach
ed crisis. While production has
been gradually growing less, present
conditions will shut off production
altogether except in mines where
gold is by-product. Gold produc-
tion is on the verge of a precipice
and, unless help is given, cannot
continue. Low grade gold mines are
now operated at loss and there ap-
pears to be no hope for the future.
A bonanza gold deposit in which
twenty years effort eliminates in
one or two years excessive profits
effort treated as the profit of one
year, and the war excess profit tax
law takes all the profit and a large
Part of the original capital. There
is nothing to stimulate the gambling
instinct which searches for high
grade mines. There is no hope for
regular dow grade mining operations
This presents startling situation
when its consequences are consider
ed. The structure of credit cannot
continue to grow while the founda
tion upon which 1t rests remains the
same.
Our Liberty bonds are a promise
to pay in gold. If production is stop.
ped the gold cannot be available for
their redemption. world effort to
liQuidate would produce a money par
ic which would put gold in its prop
er relation to general prices. A bet.
ter method must be found to meet
this situation.
1t 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 prem.
ium. Gold is now at a premium in
foreign countries. The hope of be-
ing able to take advantage of pos
sible premium advances would give
hope to the gold mining industry
Many small things may properly be
done for gold mining. First, gold
production may he relieved from the
requirements of the war excess prof
its tax law. This would justify
speculative effort in the finding OF
high grade ore bodies, but would be
of no assistance to the regular oper-
atoms which are mot making a prof
it at the present time. Second, gold
mining may be classed as a war in
dustry thru which preference might
be given in obtaining it's supplies.
Third, freight 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 helpful, but
this help would not be sufficient to
keep up the proper ratio of produc-
tion. The Mining Congress journal
Is on record to the effect that soon.
er CT later governments will find 1t
expedient to offer a bounty on gold
production from low grade ores. This
cannot be suggested as a practical