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Show URGES THAT PRODUCTION OF GOLD SHOULD BE SUSTAINED Editor of Mining and Scientific Press Discusses at Some Length Big Problem of World Finance. Under Ute caption, "Sustain the- Production Pro-duction of Gold," the editor of the Mtn-Ijiet Mtn-Ijiet and Scientiilc Press, writing In the current Iwpue of that journal, saya: "No official of the government, no committee com-mittee In cliarfre of war preparation, no representative man anywhere has ven-I ven-I ured to surest that gold, mining Is a nonessent ial Industry. The, disabilities under which it has labored have, how-ei how-ei er, been overlooked until recently in tho hurry to build ships and the manufacture manu-facture of shells and powder, liven the treasury department has been so cone-rued with the trying task of financing tho war as temporarily to disregard the difficulties that the gold producers were facing on account of the enormous increase in-crease in costs. Suddenly, however, Hocrelary McAdoo awoke to tho fact that Industry was doomed unless measures for relief were taken promptly. At his refines re-fines t a hearing was given last week In Sun Kraneisco by Raymond T. Raker, director di-rector of the mint, to tho gold producers of California, at which ways and plans for saving the Industry were considered. McAdoo's Statement. "Prior to that McAdoo had written to Charles A. Sulzer on this subject, malting the unequivocal statement that 'at no time has tills country so much required tho largest possible production of gold as at present. Next to food and of many western miners. It is a crude B and reactionary method, but. for a time at ffl least, it would be effective. That it would S prove a relief for the duration of the war. and through the period of reconstruction 5 afterward, is open to serious doubt. It is B like keeping a patient alive by stimulants S instead of finding a cure. Nevertheless H ft, has something to commend it, whereas E the proposal to increase the unit value of gj gold is a contradiction in terms. That E notion seems to have been advanced inde- pendently in America and England. An- other suggestion, which must appal sane gj financiers, is to permit the exportation of new gold to foreign markets at a pre- miuin. Such a course would precipitate H a panic and would force gold to a premium a In our own country. We may mention a u much simpler method for relieving the stress, namely, to exempt gold milieu front I federal taxes, and to supplement this by Jj according similar exemption from local H taxation. On the time-honored theory n that gold belongs to the sovereign. Lhis mark of sovereign favor and need, on H behalf of the sovereign people of this de- S mocracy, would Introduce no new and ex- H traordinary principle. It would merely g accentuate the distinction of the monetary a metal as vitally necessary for the nation's B financial health and for the stability of its S public obligations; it would be no more an jfl unfair discrimination than the exemption i enjoyed by certain bonds, and it would tend to make gold mining, if not the most profitable, at least a gilt-edged industrv." II M ammunition, gold is one of the most needed need-ed war essentials. In order to face the enormous amount of government honds recpuired to finance our wax expenditures, a largo credit structure will inevitably bo erected on our gold reserves, a nd it is necessary that those reserves, which are the foundation of the structure, shall he maintained on the broadest possible basis. Confirmation of this authoritative authorita-tive opinion has been given by many of the leading financiers of America. The Importance of gold mining, therefore, is not being debated; the riuestion is merely mere-ly that of finding a practical means of fostering it. "The California Metal Producers' association as-sociation has laid before the authorities at Washington the facts regarding the stress of weather against which the gold miners ure contending, and Charles G. Tale has made a special report on the subject at the request of the treasury department. The value of the jrold produced in the United Suites, including Alaska and the Philippines, was ?S4.4.S6,600 in 1917, being be-ing $7,133,700 less than in the previous year. It is estimated that the output this year will decrease 35 per cent unless an effective stimulus be applied. Tn California Cali-fornia the decline in the first six months of 1 91 S has been alarming. The output was 6S.66X ounces, against S9.S30 for the corresponding period of 1917. In one of the leading districts of the California gold belt the cost this year increased $1 per ton, against a recovery of $7 per ton of ore. On the Mother lode, which yields -16 per cent of the total output of the state, the added cost has been nearly as great, and the average recovery is about $4.20 per ton of ore. This shows how the industry is threatened. Affects Labor Problem. "The difficulty is aggravated by the growing fear among the miners that gold mining is destined soon to end, and, a result of this apprehension, an exodus of labor to more promising fields has taken place. The first and most obvious remedy that would serve to hearten the gold miners is to secure a definite order from the war industries board placing them on the priority list. Some complaint h;is been made that supply houses have discriminated against the gold industry by declining to contract for steel and other materials beyond immediate requirements. re-quirements. No industry can prosper if placed on such a hand-to-mouth basis. The war idustrtes board should stop this at once. The next problem is to relieve the stress caused by exorbitant prices. uold. as the standard or reference for all markets, bears an immutable relation as regards a unit quantity of the metal to the unit of exchange. All values, all wealth, all credits, are based on the fixedness fixed-ness of that relation. To tamper with it is to undermine the whole credit structure of commerce and of nations. As we pointed point-ed out in a recent issue, the real trouble that overshadows the gold industry is the consequence of mistaken policies at the ; beginning of the war whereby the profi- t er was permitted to escape govern- I mental restraint. Direct Remedy Required. "Only direct and specific remedies will sufiiee to rescue an industry that already confronts an operating cost as great as the market value of the article produced. Had a more rational plan been followed. tlie disparity between the purchasing power of gold and the cost of its produc-rion produc-rion could have been obviated. The problems prob-lems of individual and national credit would tht n have been simplified. It was not done, however, and as one result we row confront a shrinkage of the very basis of our credit. Not only would such a shortage cf gold be serious during the war. but it must be remembered that the closure of mines at this time would Involve In-volve a shortage of gold for many vears. j Mhts th.t a-e onetirg or a narrow margin of profit at all times will not socr ! resume forced into idleness. Peteriora- ! tion of plant and equipment, mrting of i timers underground and collapse of ! stopes. gangways, arid shafts, ir;e vitaMe '' under these circumstances, would dis- ! courage revival of the industry unless gold ' were to command a considerable premium. 1 That is an evil from which the nation . may devoutly hope to be spared. The 1 I peril of it will increase unless gold mining ! be sustained- In an effort to escsp from : the dilemma, proposals are being made that would be condemned as wronc in principle were it not for the serious peri! confronting th-3 cold industry. ; "The plan t".at seems to have gained the larger number of adherents is To pay a bo u n t y of ? 1 0 . or some would have it SJ0. per ounce on all new gold produced. The American Mining concress is urging I thi idsa. uron congress, with the approval |