Montana oil and mining journal., 1936-09-26

increases without a single significant recess
sion.
Prophecy is dangerous. put unless history
is bunk" as Henry Ford once said and has
| since, I suppose, regretted. this probably
means that gold win never go back to the
old s2067 price. In addition, and vastly more
significant, the British Dominions Russia, and
the United States are the only substantial
gold producers, and between them these three
nations control SO percent Of world gold pro-
duction (Tabie H.
The English-speaking group has revalued its
currencies-that is, they have reduced the
amount Of gold in the pound sterling and
the dollar-thus Increasing the value OF gold
\ in terms Of money and decreasing the value
/ Of money in terms Of gold Russia on the
other hand, finds the increased price Of gold
to her adyantage in trading her rapidly
mounting gold production for commodities
IN the world markets. Hence, it is clearly not
TO the advantage Of England, Russia, or the
United States to allow the price Of gold to
slip back again. France drnsticaIy depreci-
ated her currency before the depression and
naturally does not want to do so aRains
! therefore she clings to the old gold stand
ard. But France controls practically no gold
production, and world pressure viii soon be
too strong for her
In a measurably short time there must
surely be q world monetary conference the
main business Of which viii be the stabiliza-
ton OF exchange on an agreed gold orlce.
VIII the price be above or below 1852 That
is the paramount question for the gold miner.
50 far as the United States is concerned, the
President has legal authority to reduce the
gold content Of the dollar so percent-that
Is, to make the price twice s2o.67, or s4l.34-
thus SO far as present legislation goes, this
is the United States maximum. There is
charm in simple arithmetic, and for this rea-
son the international dignitaries might adopt
S4l.34 On the other hand, the pound sterling
and the American dollar have reached near
equilibrium with s35 gold, and If this con-
tinues up to the time Of the conference, s35
might easily become the pegged price. No
body would want to lower 1t. except France.
And unless France by that time, VIII prob
ably be the case, has bowed to the inevitable,
she would protest. but would find few sup
porters. Thus it seems reasonable that on the
basis first Of history and. more important,
Of world economic interest, the price Of gold
erable period provided there is no world
war at a price somewhere between sss as a
minimum and s4lS4 as a maximum.
Are we therefore justified in concluding
that the future OF gold mining is to be like
the rosy dawn Of a new day? wish devoutly
that we were. But the purpose-the main pur-
pose-of the present administration In de-
valuing the dollar was two-fold. First, to in
crease prices at home and second, TO meet |
foreign prices In the export market. Had the |
purpose OF increasing prices at home become |
Immediately effective and in inverse proper |
tion to the decrease in the amount Of gold in |
the dollar, then the gold miners supplies, his /
In direct proportion to the increase in the /
price Of his gold and the gold miners ad- /
vantage would have been wholly illusory. /
Such, however has not been the case; prices /
creased but as a whole the gold miner is
still in position to reap perhaps so percent Of
the apparent s14.33 increase in the price of
his product.
Even this. Of course, is true only OF we'll
established gold mines which were on a sound
basis Of operation under the old gold price.
New properties opened under the stimulus Of
The new price. OF properties wfe5ff we're
marginal or submarginal before the price in
crease, can operate only because OF revaua-
lion and must close Immediately II geld goes
back TO the old price, or suffers any serious
recession.
If. however. I am correct in my assertion
hat gold win shortly be ''pegged' at some
hing like its present PRICE then what Of the
uture Of gold mining in the western states
and elsewhere2 The present impetus which
s being given to the search for new deposits