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Press, Volume LIV, Issue 16408, 31 December 1918, Page 6

Lord Inchcape : s committee, which has reported against the proposal to subsidise the production of gold, was set up by the British Government in October last, as the result of representations from the gold-producers of the Empire. A ircoting of about forty of the latter was held in London in July, to discuss the situation resulting from the higher cost of gold production. Various speakers referred to the efforts made to impress the Gov- [

eminent with the unfairness of tho present system, by which producers were paid for their gold in currency at the pre-war prico, whereas that amount in currency was no longer able to procure tho same amount of commodities necessary for tho production of gold, and was not equivalent considering, among other things, tho rates of exchange, to the actual value of the metal.

The meeting maintained that tho losses suffered by gold producers, owing to the increased cost of commodities and the rise in wages, should not bo borne entirely by them, because, if it had not been for the action of the Government in controlling tho disposal of tho gold output during the war, the producers could have disposed of their gold in the best Allied markets, and would have derivod greater value than they had received. A committee was appointed to put their case before tho Government, and after three months' consideration tho latter set up a committeo composed of Lord Inchcape, chairman of the P. and 0. Company, and a noted financier, Sir Thomas Elliott, Controller of tho Mint, and two leading London bankers, Sir Charles Addis and Mr W. H. X. Goschen. This committee was instructed "to report upon the effcct of the war upon gold production in the British Empire, with reference more particularly to tho treatment of lowgrade ores and how far it may bo of importance to national interests to secure the continuance of the treatment of such ores and generally how to stimulate the production of gold."

The Gold-Producers' Committee did' not, so far as Ave can gather, put forward any definite proposal as to tho form which the relief they desiredshould take. Sir Lionel Phillips, who had been the chief speaker at the July meeting, did not propose any changei in the standard price of gold, which would mean tho eventual further depreciation of the sovereign, though this was advocated by some people. One financial authority suggested that, with a view to maintaining the gold output, the British Treasury should subsidise tho lower-grade mines, which have been hit very hard by the increase in wages. Indeed, if they had to pay tho amount demanded, at least fourteen of the Rand mines, paying annually £3,700,000 in wages and salaries, and £2,800,000 for stores, would have to close down. Lord Inchcape's committee, looking at the question from an Imperial and not merely a South African point of view, does not recognise any great importance in the closing down of low-grade mines which are unable to work at a profit, and is not prepared to recommend any bounty or subsidy for the purposo of stimulating the gold, output of thci Empire.

The Committee's report deals solely with tho gold produced in the Empire. The totals for the four past complete years are as follows: 1914, £56,089,0^0; 1915, £60,377,000; 191G, £59,550,C00; 1917, £56,139,000. The decline of £3,411,000 in the 1917 production, as against 1916—the figures we have do not agree quite exactly with those given in the cable —included a drop in the Transj vaal's output of £1,162,000, elsewhere in Africa £484,000, in Australasia £907,000, in Canada £778,000, and in India £ 17,000. But it is not only in\ the British Empire that the gold mines! have been yielding less. Between 1915' and 1917 the annual "production in the United States decreased by some three millions .sterling, in Russia by tw»cv millions, and in other countries by half a million. The grand total f or tho world in the record year was £96,525,000, last year it was £87,983,000, and the process of diminution continued during the first half of the present year. "With the close of the war the supply of high-class labour will increase and the cost of explosives and other materials will decrease, so that) to some degree the added cost of production should gradually disappear.