Show Is gold an essential or a nonessential non essential BY RICHARD HOADLEY TINGLEY A serious situation has developed in the old mining industry and a shortage of the bilow metal is threatened indeed a short ige ge already exists unlike almost any other commodity the rice irice of gold is a fixed thing it was fixed t 2067 an ounce years ago while the rice of everything else in the category of uman desire has risen that of gold re lains ains the same as it was before the sky oc process set in this means to ou and me that our gold dollar is now orth only sixty or seventy cents in pur basing power the offset being that you and must receive an advanced price for what e in turn produce but to the miner it means that his gold ollar collar when applied to the mining of more old will produce only sixty per cent or per cent of the quantity he former produced with the same amount of mon y F yet et the market value of what he does reduce is the same as it was five or ten ears ars ago the gold alarm has been sounded and ope pe is expressed in mining t quarters that gisla tive action will be invoked in order i protect this industry as other industries re e being protected to guard against a furler furer shortage it is pointed out by miners of gold and Y i economists that although the amount if gold held by the federal reserve banks is as almost doubled since the world became holved in war the ratio of gold to reserve tes has been steadily falling they claim 10 0 that the united statts states is paying out id now to neutral countries for pur purchases chases a fixed value considerably less than the ual cost to produce it and they further alore the shortage on the theory that this uy and her allies will need all of this boney oney metal meta they can command in dealing h the credit structure of the central lehen peace settlements are in or it r but why gold ioel es gold mining come legitimately in the category of essentials 7 Is 15 gold needful to our happiness 14 shall hall the world discount gold or rather ot lot the world already begun to discount f id e kelt these are some of the questions that are aed by y mr air arthur in celyn brown a rel contribution to the journal of amer bankers ali kers association chese ese 1 are questions now in the process solution lon and by the time universal peace ce k is agai a again gaan become come a fact the world will ala J have recorded the answer count countless otless centuries of usage have placed american in industries gold on a pedestal as the autocratic arbiter of value of credit many economists think however that with the dethronement of other world autocrats sure to take place at the end of this war gold will be among their number for the war has taught us among a great many other economic lessons that we do not need them not it A few years ago any authority who had the temerity to predict the passing of gold in the near future or at all would have been regarded with suspicion with respect to his sanity yet today such thoughts are in the minds of many able financiers who are figuring out the probable effect of the substitution of commodity documents for gold as a credit base the growing popularity of acceptances in commercial credit transactions and the introduction tro of a large number of bonded warehouses for the storage of goods wealth is helping out the idea the former represents live transactions in actual commercial commodities and the latter through neb negotiable 0 o warehouse receipts the actual possession and deliver ability of goods wealth they represent represent something that has an intrinsic trin sic value something that does not need the presence of gold or silver to back it up it is claimed that the use of gold as a basis for the issue of currency issues could be entirely abolished tomorrow without causing the slightest tl financial embarrassment or inconvenience or without disturbing our credit structure in any det degree gree indeed the advocates of this theory claim the world would be better off for the change our su surplus oplus gold or rather that portion of it that forms the basis of note issues earns nothing and serves no practical or useful service on the other hand its storage in expensive vaults its transportation from from one quarter of the globe to another in settlement of trade balances the expense of guarding guardin it against burglary its insurance while on its travels or at rest all constitute avoidable expense and contribute to the general hi high gh cost of living Is gold really useful as the yardstick yard stick to measure the worth of intrinsically V valuable things mr air brown seems to think not and his he seems view is upheld by many bankers bit of gold in ill tile the to think that if every accumulated in the united states world were we ive would be no better off at the present time we have mol more mole e gold ii had d before Is in this country than we ever a Is it performing real good it doing us any of credits that an arbiter office as any performed fornies by effectually per could not be more instruments the promises to pay the credit ownership of actual intrinsically based upon the valuable commodities Is it possible that a fitting substitute for gold as a monetary factor can be supplied by commercial paper based on a selected list lift of fifty or a hundred of the commonest and most universally necessary articles of commerce mr air brown says that such a money would be far more stable and economical than gold to be sure such a currency if adopted would still be quoted in terms of dollars and cents and for general convenience the subsidiary coins would still continue to circulate the iconoclast is always at work the war offering special tart targets lets for his activities in many different directions in the near future therefore may we look to see the leading nations discard gold as a monetary exchange base just as they discarded silver in 1850 and substitute something in its place of real value in the meantime we will have to determine the status of the gold 6 old miner Is he producing an essential or a nonessential non essential it editors note if gold were not the measure of value there is every reason to believe that gold would have appreciated in value during durin the past three years at the same ratio as that recorded by silver in w which event gold would now have a market value of about 41 an ounce had such been the case there would have been no necessity for the gold producer to seek aid from the government for he would now be enjoying the sanie relief that nas been rendered the producer or of silver because of the fact that silver is a commercial commodity whose selling price fluctuates with conditions governing the commercial and financial world with the law of supply and demand the question is would the 6 gold old producer be better off if gold were demone sized the mining review would appreciate expressions of ideas on this subject |