The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1920-02-19
Here Is What Ais. Us All.

basis Of dollar value in 1913. rms
startling fact is brought out plainly
in a statement to Congress today by
Harold N. Lawrie, nationally known
economist for the American Mining
Congress. The purchasing value Of the
ounce of gold, which, under statute can
not bring more than $2067 has, Mr..
Lawrie shows, shrunken through infla-
ton of currency until it is no longer
passible for gold to be profitably pro-
duced. The expansion of the national
credit has lowered the purchasing pow
er Of dollar through increasing all
commodity prices. Based upon the
pre-war prices of 1913, these prices
gradually advanced from 100 per cent
in 1913 to 223 in October, 1919. Each
increase in credits has been absorbed
by corresponding increase in commo-
dity prices and has resulted in placing
the Nation upon an artificial plane of
living. The gold producer finds the
actual purchasing power of his ounce
Of gold is now 5000 instead of $2O67.
Gold mines of the United States are
being closed down at an alarming rate.
Many of these can never be reopened
owing to the prohibitive costs of re-
timbering and unwatering. Cripple
Creek, the greatest American gold camp
isa taking on the appearance of city
of dead hopes. Great drainage tun-
nels, monster underground workings,
vast areas of extensively constructed
plants, whole cities of homes are be-
ing deserted and thousands of skilled
miners are being forced to seek new
camps because gold-the basic none
tary metal Of the United States-can-
not longer be produced at a profit.
The manufacturers of the United
States used $21 ,848,SO0 more gold last
year than was produced in the United
States. The gold producer lost mil
lions during the year-forced to lose
by peculiar circumstances not easily
understood by the layman. The manu-
featuring jeweler made millions be-
cause while his goods mounted in val
ues, he secured the gold at coinage
price Of $2067 per ounce, an amount
less than the cost of production. Sew
enty-five years ago the world produced
but $30,000,0oO in gold per year. In
1915, the world produced $469,000,000.
Rapid increase in population, increase
in per capita wealth and adoption of
gold standard of finance in all civilized
countries together with waste and
boarding absorbed the increasing gold.
The gold stock Of the United States
suffered loss in 1919 of $292,796,000
by the excess gold exports over imports.
TO further deplete the gold reserve,
the consumption of gold III the arts
and trades during 1919 was $S0,337 600
while the production of new gold in the
United States and possessions was but
$58, 4S8,80O. The estimated production
in 1920 is $40,000,000. The ratio Of
the gold reserve to the Federal Reserve
net deposit and note liabilities contin-
ually declined since 1914, until it
reached AS per cent on December 26.
]" 10, margin of but 6.8 per cent above
that required by the Federal Reserve
Act.
Certain officials Of the Government
have persistently endeavor to mini
mize the danger of the failure of do
nestle gold prodpctiop, but leading
fnanciers of the United States are or
ganizing campaign to protect the
al a. 1op A To.
Association in 1918 and again in 1919
passed resolution calling attention Of
the Nation to the threatening danger.
The American Mining Congress called
a national gold conference in st. Louis
last November and this conference of
bankers, economists and miners, by
resolution put itself ON record as ex-
pressing the opinion that no change
should be made in the gold standard
and unit of value of monetary trans
actions in this and other countries, but
requesting Congress to act, and under
that resolution bill shortly will be
introduced in Congress to impose
tax of so cents per pennyweight of fine
gold contained in all articles which
may be sold on and after May 1. 1920,
from which fund the producer of the
new gold ounce will receive on and af-
ter the same date a $40 premium to
compensate for the increased cost of
production. This is the only proposal
yet advanced, whereby the monetary
unit is not altered and free gold
market in the United States may be
maintained. The bill merely creates
the machinery by which the manufact-
urers of gold in the arts and trades
may property pay the cost of its pro-
duction, so that sufficient new gold may
be produced to satisfy their require
ments and make it unnecessary to
withdraw their gold from the monetary
gold reserve of the country.
The gold in the bank reserves is the
basis of bank credit. The amount of
gold in reserve limits the expansion of
credit. These reserves have been
steadily falling. The Government has
allowed vast shipments of gold for ex-
port and must continue to export gold
In order to maintain export trade !;