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SIR ERNEST OPPENHEIMER
Klerksdorp
area and the Orange Free State area is mainly a matter of the last
three decades and was achieved in the face of grave difficulties—
technical, as well as financial and economic. For the time being, at
least, the spectre of a decline in the aggregate output, which
has haunted generation after generation, has receded; though this does
not mean that the problem of declining output in the older areas has
been disposed of, with all the social implications that such a decline
carries with it. The differentiating issue for the gold-mining industry
is not the relationship between the price of its product and the
general level of costs with which it has to contend; in this respect it differs in no way from other industries. What does differentiate
it is that for long periods of time the price of its product has
remained constant, though the cost level may have gone up—in fact, the
discovery and exploitation of the Witwatersrand gold-field, which
coincided with an increasing output of gold in other parts of the
world, initiated a long period of such rising prices. But changes in
the price of gold have been the consequence of changes in the
world's monetary situation, which have pushed the world's price level
upwards, and such changes in the price of gold have tended to
lag behind the changes in the world price level which were their
initial cause. Historically, it is the case that a period of falling
world prices, given a fixed gold price, have invariably stimulated the
search for gold, not only in South Africa, but all over the world;
periods of rising prices with a fixed gold price have discouraged
gold-mining.1 It is thus no coincidence that the period of
relatively low prices in the early thirties of this century, which
marked the years of the great depression and which accompanied a marked
rise in the price of gold, due to the de facto devaluations of the pound and dollar, should also have been the years when the first steps were taken which
