742 MINERAL RESOURCES, 1918----PART I.
and
Australia marked the beginning of great gold output. The figures show a
slight decline from 1855 to the opening of the mines in the Transvaal
in 1887; then there was a very large increase in the yearly output
until 1910, since which date there have been irregular fluctuations
until 1915, when a serious decline took place.
Though
the increase in the output of gold has been rapid during the past 25
years, it has not kept pace with the output of coal, iron, copper, or
petroleum, or with the rapid growth of bank deposits.
The
present decrease in gold production demands serious consideration, as
the maintenance of a sufficient gold reserve is essential to the
security of our national finance and credit. The United States is at
present the most favored nation in regard to gold reserves, holding
over $3,000,000,000, or more than one-third of the gold stock of the
world, but it has contracted debts on a gold basis many times that
existing before the war.
The
principal causes of the decline in gold mining in this country are the
shortage of labor and higher wages due to the war, the lower efficiency
of available labor, the great increase in the cost of supplies, and the
higher cost of power. In addition, the depletion of certain deposits
and the lower grade of ore mined in others have contributed to
reduction of output.
Bankers and political economists nearly all agree that the gold standard should be maintained in principle.
The war has changed the United States from a debtor nation into a great creditor nation.
Since
the outbreak of the war, prices of all commodities have increased
greatly except that of gold, which, as the standard of value, is fixed
at $20.07+ per ounce. Thus the purchasing power of gold has diminished
as the prices of other commodities have risen.
The
great increase in the cost of gold mining has discouraged new
enterprises and curtailed existing operations. Many mines have been
compelled to close and await more favorable conditions. Those mines
that have continued operations have been able to do so only by
practicing the most rigid economies and by the curtailment of
development work. The average operating cost of producing a dollar's
worth of gold at the large and most favored quartz mines in 1917 was 70
cents as compared with 57 cents for 1915. Gold mining under present
conditions offers little inducement to capital.
Various
means of stimulating the production of gold in the United States have
been proposed. The committee reports on them as follows:
Payment
by the Government of a bonus on newly mined gold has many advocates.
The committee does not believe that the granting of a bonus would be
beneficial at this time.
The
United States Employment Service can, if properly authorized, be of
great help in diverting labor to the gold industry. Gold mining has
been officially declared an essential industry, and in the opinion of
the majority of the committee should rank in this respect with other
preferred industries. Exemption from draft and deferred classification
of gold labor nas already been granted to a certain extent by the War
Department.
The furnishing of supplies to gold mines at pre-war or cut prices does not seem to be feasible.
The
elimination of the excess-profits tax on gold mining, and the
encouragement of a maximum output thereby might result in larger
revenues than with the tax standing, as larger dividends paid to share
holders would mean greater revenue for general taxation. As the profits
of a gold mine, no matter how large, can not be ascribed to war
conditions, but on the contrary are diminished by them, the remission
of this tax is just and logical.
Gold
mining as an essential industry is entitled to preferred classification
for railroad freight, etc., and should receive the benefit of any
modification of freight rates granted any other preferred industry.
When
electric power is used gold mines should have a high-class rating with
regard to power consumption, and power should be curtailed only when
necessary.
The
privilege of free export and of sale to manufacturers would stimulate
production, and might also be a safeguard against inflation. The
committee recommends the removal of restrictions on the export and
sale of gold.
The
committee suggests that gold and other mining companies might properly
be required bylaw to furnish to the Government, with such frequency as
may he desirable, statistics of their costs, production, and profits, and these should be available forpublication.
The
Government should, through the Bureau of Mines, assist in improving
methods of mining and metallurgy of gold ores, particularly in the
treatment of complex and !ow-grade ores. A wide field of work is presented here.
