Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-10-08
AN INDUSTRIAL ANoMAL1.

One of the curious features developed by the
industrial changes due to the war is that the produc-
ton of gold became less profitable, that it had been
in many cases become so Improbable that it had to
be discontinued. This condition existed in spite
Of the fact that the mining industry in general was
exceedingly prosperous due to the increased demand
for its products and the increased market prices
which they commanded. sy
The gold situation is unique. Gold under our
present system is the one product whose value un-
der all circumstances remains fixed in relation to
the terms commonly used to describe it. In the
carrying on of our business Of exchange it had be-
come necessary to adopt one standard of value and
to have that standard represented by some token.
BY common consent for various reasons w have
made gold almost the universal standard of value.
1t is i'll terms OF gold that most civilized peoples
measure the values of other commoditessWhe the
price of a commodity advances it takes more gold to
obtain the same quantity Of that commodity. It may
be said that in this case the price of gold declines.
1t makes little difference. but it is more in accord
with the actual facts in the case to use the common
method, and to say that the prices of the other ar
tlcles have advanced, because it is gold which is
used as the standard. A certain number of grains
Of gold are designated as being worth one dollar.
That condition remains fixed through all the mu-
tations of trade and exchange. During the era of
exceeding high prices, while there was no change in
the number of grains of gold to make a dollar; there
was a decided change in the investment required
to produce those grains of gold. The mining of
gold involves the use of machinery and labor, the
consumption of food, the wearing out Of clothing,
and all the expenses incidental to the conduct of an
industry. The price of every one of these items in
creased very materially. The investment was i'm
mensely greater than it had been. The result III
grains of gold was the same. The gold in the dol
lar therefore cost very much more than it had done
hut that gold remained worth Just one dollar. The
consequence was that mining operations which had
been conducted on a narrow margin of profit were
obliged to suspend. Those which had been very
profitable became less 50. Consequently the pro
duction of gold diminished very materially, a con-
dition which did not exist in any other of the ma
jr mining enterprises.
It might be supposed that this condition would
reetfy itself by making gold more scarce and hence
more valuable; in other words, that the purchasing
price Of the dollar would increase because of the
scarcity of gold with which to make dollars, until
conditions had again equalized themselves. This
might have been brought about in time, had it not
been for the fact that such a very large proportion
Of our trade is carried on on a basis Of credit, behind
which there stands only an infntesmal quantity
of gold. While gold production was diminishing,
credit was being expanded in every direction, and
this tended still further to accenthate the existing
conditions. 1t is interesting to note that at this time
legislation is proposed in congress, the purpose of
which is to make the mining of gold more profitable,
and therefore to, overcome some of the difficulties
which are the result of the peculiar conditions of
the war.