MINING IN U.S.

Auckland Star, Volume LXIV, Issue 205, 31 August 1933, Page 20

MINING IN U.S.

GOLD POSITION. HIT BY TRADE REVIVAL . A RESTIVE INDUSTRY. (By a Special Correspondent.) WASHINGTON, July 31. One American industry not sharing in the business revival, but instead finding itself worse off with every price advance, is the gold mining industry. Its cost of production mounts as general prices go up, while the price at which it must sell its product is fixed, frozen, set. In fact, there is nothing saleable in the world that equals in its price stability American gold. Unlike the Governments of all other gold-producing countries that are off the gold standard, the American Government makes 110 concessions to the gold miner to compensate him for the depreciation of its currency. The effect of the new gold laws and regulations on him is this: He may sell his gold, fresh from the mine, only to the Government itself, meaning United States assay offices and mints; he may not export it; he may not sell it to jewellers and manufacturers. He lias but the one customer. That customer, Uncle Sam, pays him, not in gold certificates as previously it did, but in ordinary currency. Moreover, Uncle Sam also pays him in that currency just exactly what lie paid him before March 4, namely 20.07 dollars an ounce, no more, no less. The miner can take it or stop mining. Better Off in Canada. Across the northern border in Canada the Dominion Government a different plan. It wants to encourage the mining of gold. Therefore, while making itself the sole legal purchaser of gold, permitting no competition, it pays the miner a premium equal to the difference between the gold value of it! currency and the actual value. Thus, if the Canadian dollar is valued in the exchangee of the world at 85 cents, or 15 per cent below par, it pays a bonus of 15 cents. Australia, South Africa, and the other gold countries not off the gold standard, make the same or similar provisions. The American gold mining industry grows restive under existing conditions. At the beginning it regarded those conditions as merely temporary; the lack of consideration given to it in framing regulations was thought merely an oversight. Now, as no Telief appears in sight, it wants the Government to do something. Several suggestions have been advanced as to remedial measures. Roughly these are: — (1) That a free gold market be set up just as there is in London. (2) That the Government adopt the Canadian plan and pay a premium on mined gold equivalent to the difference between the depreciated dollar and the gold dollar. (3) That the Government modify the embargo on gold shipments to permit legitimate gold miners to export thenproduct so that they may obtain the higher price current abroad. Licensed Export Urged. The majority of the industry, as represented in the American mining congress, has decided to advocate the third or licensed export plan as the most practicable and the one more in accord with the administration's recovery programme. It has laid down this proposal before the Secretary of the Treasury, who has it under consideration. No decision will be reached, it is understood, until President Roosevelt returns. The history of gold production in this and other countries shows that when general prices go up the mining of gold diminishes, and that when prices go down, gold production increases. During the period of the Great War, and immediately after, many low grade gold mines were obliged to shut down —the margin between costs and price of gold being too narrow. Since the depression began American gold production has steadily increased, as a result of the lower price level. Last year new gold to the value of 50,028,000 dollars was produced in American mines, an increase of 1,098,800 over the production of 1931. —(N.A.N.A.)