Evening star., 1937-05-30
The Worlds Increasing
Gold Pile.
BY FREDERIC J. H4SKIN


idly. This is referred to as an anomatv
because, in the years since the World
war, there has been food of discussion
and propaganda about the ultimate
Worthlessness Of gold. There have been
carnlValS OF decentralization and any
number OF experiments. There have
been lnslstent suggestions that land be
made the basis OF paper currencieS, that
olmetalllc cover of gold and silver and
even OF other metals be employed
An unlnformed spectator a sort OF
man from Mars, viewing the scene, could
De excused for concluding that gold, as a
money standard, was rapidly drifting
into the discard and that search for the
metal would flag. The reverse has hap
pened. In spite of all the monetary re-
1ormS proposed, the world more or less
secretly has clung to gold The wave of
boarding which swept the world during
and before the great depression showed
how people thought. The actual fact
was that the further currencies drifted
away from gold, the more gold became
the standard Currencies were given
value by no other criterion. In describ-
ing the value Of mark, a dollar, pound
or any other monetary unit the terms
used showed how far off the gold stand
ard the currencies were. The less gold
became an actually circulating medium,
the more it became the yardstick by
which measurement was made Every
point currency deprecated marked a
yearning back to gold par
The underlying reason was that all
mankind realizes that gold is the only
measure OF value which has worked for
most OF the world. When the Seven
Sleepers found their way back to civili-
zatlon from the sOmnolent cave in which
they had spent 300 years or So they were
dated, the term Of their slumber guessed,
by the fact that they had gold coins Of
Declus. That was interesting, but
more interesting fact is that their gold
was just as good, worth just as much if
not more than it had been when they fell
asleep. Today an occasional gold slater
of Alexander the Great or some other
early ruler is found.
No man knows when gold first was
discovered, but that it was recognized as
a standard OF value at very early date IS
beyond dispute. In the year Columbus
discovered America, the world production
Of gold amounted to 186470 fine ounces
having value of $685. 900 on a gold
standard basis of S2067 an ounce. Today
this much may be recovered from single
mine. So slowly did the finding of gold
progress that the million-ounce mark
was not passed until the middle of the
last century. In spite of all the eXplora-
tions over the face of the earth, the
search for King Solomon's mines, the
search for an American Ell Dorado. and
for ancient hidden treasures, it required
the discovery of gold in California to
cause the first big jump.
In l840, the average annual production
was 652290 fine ounces. valued at the
equivalent of sl3,484 900. But for 1850,
after the California discovery in 184S.
the output for the world was l,7605O2
fine ounces. worth S36 $4,000 Never
again did the world output sink below q
million ounces year. The next big up-
ward bound came with the Alaskan dis.
coveries, the Klondike gold rush The
figure for 1900 was l2446, ,939 ounces and
the value s257,301 100. Then South
Africa swung in. and 1910 saw world
production of %. 397 1856 fine ounces, VAL
ued at s455 5.239l0O.
While. in the absence of artificial gov
ernmental actions, gold is its own price,
the values of other things change. When
the World War period came on. prices Of
everything and the wages Of labor went
to amazing levels. Also, some millions
OF men were drawn under arms. A result
was falling off in gold production. One
might think that the search for gold
would 60 forward in spite of everything,
but the prices of commodities and the
wages of labor make a difference. When
prices and wages are low, mining COM
panleS can afford to work grade
mines because the gold recovered leaves
profit after paying the extraction costs,
but with high prices and wages, the
profit on gold diminishes or vanishes
altogether This happened during the
era of high prices incident to the World
War and its aftermath. In 1922 gold
production fell to the lowest point in the
twentieth century-only l5576,270 fine
ounces, valued at 1921 100000.
With comparatively slight variations
prices and wages held high until 1890.
1t was not until that year that gold pro-
duction topped 100000 ounces. A
world production of 20,8363l8 ounces,
valued at $3.50 724934 was recorded. BY
1888 the production had mounted to an
all-time peak OF 25,O0O00O fine ounces.
valued at 1924 ,000 That was the last
year in which the old gold standard price
of S2067 an ounce was the standard price
for the world. 1t still is the world stand
ard, but the United States in 1888 1xed
a price of S35 an ounce and offered to
give that price for any gold offered. This
upset exchanges and further stimulated
gold production. Figuring on the new
basis, the 1886 output was vastly in
creased in American value. reaching
81 ,240 900 900, but of greater importance
is that the production by weight also
leaped far above any previous figure.
The vast total Of 355O0,00O fine ounces
was produced.
Soviet Russia was responsible for much
of this increase, although Canada was an
important factor with extensive new de-
velopments. Russia in the past rela-
lively small gold producer, leaped into
second place almost overnight, and there
Is a possibility that, in few years, she
will exceed even the Rand production in
South Africa.
Because of domestic production and
also because of imports in payment for
goods, the United States has long had a
disproportionately large share OF the
worlds gold Even as far back as 1900
the United States had gold reserves Of
SSH 900 900, compared with 81 ,635, 900 900
world reserves. There were fluctuations.
of course, due to trade relations and
other factors. In 1915 for example, the
United States had only $l,707 900 900,