The Washington herald., 1920-02-24

our future needs. II the worlds
creot' therefore. is to be carried on
with gold. every ounce that can
possibly be produced will be reopir-
ed as basic foundation upon which
international and national finance
has been reared.
Production of Gold n Vital
! Necessity.
The production Of gold is a vitality
essential industry which, for obyi-
Gus reasons. should be promoted 70
the fullest extent. 1t is very appar-
ent, however, that with a fixed value
Tor the yellow metal together with
the rapidly increasing cost OF ma
terial. labor and transportation. this
particular industry as now deyslon-
ed is seriously affected and IL would
seem inevitable that unless some
form of government relief is given
to the producing mines, many of
them will be compelled to discon-
tinue operations.
In a letter addressed to the Hon.
orable Charles A. Sulzer relating to
the present conditions concerning
the production OF gold in Alaskan
the Secretary of the Treasury
clearly voiced the attitude of our
government when he stated: "I fully
appreciate that with the rising cost
of raw material and labor and with
fixed value for their output, the
gold mines are facing difficult cons
ditiohs. l should be sorry, however,
IL for this reason there was any re-
Taxation in the effort to produce
gold. At no time has this country
SO much required the largest pos
sible production of gold as at pres
ent. In order to place the
enormous amount Of government
bonds required to finance our war
expenditures. a large credit struc-
ture will inevitably Be erected upon
our gold reserves, and it is necessary
that these reserves-which are the
foundation Of the structure-shall
be maintained on the broadest pos
sible basis"
Monetary Price of Gold VIII Re-
/, main Fixed.
There are people who argue that
IL the government would agree upon
a plan to increase the value of gold
from $20.67 to, say. $40 or $40 a
fine ounce IL would make a settle-
ment of obligations possible with
only half the metallic requirement
otherwise necessary to redeem out
standing paper credits. This course.
radical to say the least. would have
disastrous effect upon all credits
and especially reflect upon the cost
of living which, in all probability,
would climb to limits beyond the
reach of the average citizen. In
creasing the value of gold or Civ
ing 1t a premium does not necessarily
give 1t a higher purchasing power,
but, on the other hand, in the final
adjustment seriously disrupts the
basis of international credit.
have carefully analysed the leg
islative proposal suggested by the
American Mining Congress for the
consideration of Congress to create
a fund by imposing an excise upon
the manufacture and sale of gold
used for other than monetary pur-
poses, this Gdnd to be utilized as
premium to producers OF new gold
in order to stimulate production.
This plan would seem a practical
solution of the complex problem
with which the gold-mining indus
try Is now confronted, since It elm
mates monetary entanglements and
reduces the subject to the sale of
gold as a commodity In it's manu-
factured state. 1t would seem that
lsuch stimulation of the gold-min-
ing industry would insure a suffi-
Client supply of gold to the trades
and at the same time protect the
gold reserve.