Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1937-08-14
ASK CREATION OF DEPARTMENT Of MINES

Alav off" the accumulation OF 50 much
of the worlds wealth BY cutting the
orice of gold. London seemed 70 be
the source Of the discussion which ag-
caused the securities of gold mining
COMPANIES to tumble rapidly, not to
mention recessions in other securities
Observation-Disclosures repeated denials of
anv intention to change the price, on
the part Of the American government,
It was several months before confidence
was i''''- Much Attention
During this period the whole qties-
ton of gold prices has received much
attention by international bankers and
monetary experts without arriving at
specific remedies for the existing stu
alton. Like the prospector who had
the bear by the tail, 1t Is nard to
figure out how he let go without a
The events of the past few months
have shown how sensitive Is interna-
tional finance to change in the gold
price This is further indicated IN the
more or less flexible agreement among
the leading powers, Great Britain,
FTance and the United States, as to
a gold policy. Gold still remains the
ultimate of value.
Montana Interested
AS gold miners at Virginia City and
other districts in Montana we are
deeply concerned as to the future OF
cold Will the price Of $35 be main
famed? The arguments against re-
duction in price are briefly as follows:
/. The United States gold holdings
of II billions cannot be marked down
without grave disturbance 70 our eco
nonic structure which has been so
deliberately built up during the past
few wears. Every effort that has been
made in the direction OF easier credit
and Increased purchasing power would
suffer a setback by lowering the price
of gold. 1t is generally conceded that
any sort of deflation Is lnadylsaDle
at present Furthermore, government
expenses still remain unduly high and
cutting down the assets would make
the balancing of the budget still more
difficult.
3. Frances gold holdings if reduced
in value would be insufficient to main
tain the already tottering credit struc-
tlre Of that country, which has recently
passed through a severe financial
crisis.
moderate reduction in gold price, but
it must be realized that the South
African gold mines are now operating
on the new gold price of $35. A drop
In price would be nothing short Of
disastrous to the industry which pro-
duces nearly half of the worlds gold
Great Britain may be expected 70 40
everything possible to foster South
African interests In fact, recent ad-
vices are to the effect that EngnSn
gold purchases are increasing. con-
tinuation of this policy would relieve
the United States treasury IN marked
degree
A large proportion of the gold
offered for sale has been ''hoarded
gold from storehouSeS in Europe ana
from Oriental treasures accumulated
for the past hundred years. Eventually,
bringing this stock out Of private hapdS
| into monetary uses viii be a benefit
to business. These stocks appear 70 be
diminishing in volume and 1t Is eA-
Dected that future gold offerings VIII
! be confined more or less 70 newly
mined gold. ~.
II these arguments are correct, the
conclusion is clear that we had peteer
"hanp on" a while longer and see the
sit,1afion through. in spite of tempor-
ar-v ennbarrassments. OF course, there
Is still the problem of maldiStribu-
tom Of gold among the commercial
nations The gold problem is part OF
fine dilemma of the "haveS" and OF the
@haye nots," which is the occasion OF
much Of the present lnIeInaLlOALal Ill IL
! rest. However, it is difficult 70 SEE
how any reduction OF golo Prices W" ~
helm solve this disturbing element IN
! international relations. -
These questions are not hkely 70 y
solved TODAY or tomorrow, but IN tne
meantime, it is the opinion OF tne
sneaker that the owner Of q produclnl
eoId mine is freer from the fluctuations
Of politics and business than anybody
]