Question of Gold Bonus—Comments
On the Urgent Necessity for Main
taining the Production of New Gold
Washington.—In an interview given
om tnda\ by Representative Louis T.
McFadden, chairman of the com mi nee
on bal king and currency of the House
of Representatives, he asked the fol
lowing pertinent question with refer
ence to the gold situation: “Is the
United States to continue to ignore the
problem of gold production, thus per
mitting the British Empire to gain an
unquestioned supremacy?”
An estifttate of the gold production of
the United States based on the output
for the first six months of this year in
dieates that, the production for 1920
will lie less than half the amount pro
duced in 1915. In 1915 the United
States produced 21.5 per cent of the
total world’s gold output, and the Brit
ish Empire 63 7 percent. In 1919 the
United Stafes produced but 16.6 per
<teut of the total world's gold output,
while the British Empire produced in
•excels of two thirds. SiDce July 24,
1919. the British Empire has been pay
ing ap exchange premium as high as 50
per cent to the gold producers of South
Arfrica. where the bulk of British gold
is produced, while in the United States
nn assistance has been rendered the
gold mining industry. This year the
err ri button -of the United States to the
gold production of the world will prob
ably be toot -tvtwe than 12 per cent,
about half that which it contributed
Ht 19J5. while the stimulating elfect of
the exchange premium will probably
icrease the queta which the British
Empire will contribute to 35 per cent.
As compared to 1914, the purchasing
power of i lie dollar in terms of all com
modi ties in 1919 was 47 cents. The gold
producer’sour.ee in 1914 had a purchas
ing power of $20.67, whereas during
1919 the same ounce could purchase in
te-ms of all commodities but $9 70.
Since the price of gold is fixed %by stat
ute at $20 67 an onnce, the gold pro
ducer is in the same position as a per
son wt;o received the same income in
1919 as in 1914 and finds that a $^000
income has shrunken in purchasing
power to $930. ••This is the principal
reason for Lite decline of the gold pro
<dtaenion of the United States from
^K'1.000.000 in 1915 to less than $50,
4X10 this year,” said Mr. McFadden.
The .United Slates Mint sold for in
dustrial consumption during 1919
nearly $22,000,000 more gold than was
produced from the mines of the Uniteti
States, while this year the drain on the
monetary gold stock will probably be
.$40,090.4)99. The American Bankers
AssocisU,"ihi passed a resolution on Oct
2. i9l#, •argiag upon the Government
it.be necessity for maintaining a domes
tic production of new gold in sufficient
volume to satisfy the industrial re
quireinents of the arts ami trades. To
complv with the specifications of this
resolution, the soundness of which
cannot lie questioned, 1 introduced H
R. 13201 on March 22. 1920.
Since the industrial consumers of
gold are the only ones in the country
receiving war material at the pre-wat
price, while the general increase in all
■commodities was 112 per cent in 1919 as
compared with 1914, it is evident that
they are being heavily subsidized. Mr.
McFadden emphasizes that the imposi
tion of t his excise tax merely adjusts
the cost and price equation between
the producer of uew gold and the con
sumer of gold in the industrial arts,
and is free from all monetary entangle^
meats. A free gold market is main
tained under the provisions of this bill
for the reason that the excise tax is
collected on the finished product as
gold, and not upon the bullion which is
sold to the manufacturers. There is
nothing in the bill which in any way
alters the number of grains in the
standard dollar, the unit of our mone.
tary system. The bill creates the gov
ernmental machinery by which the
consumer of gold in the industrial arts
may pay more nearly the cost of pro
duction for his raw material. The
stimulus to the gold producer specified
in this bill is equal to the excise tax
imposed, and is no greater than the
exchange premium paid by Great Brit
ain in the latter part of 1919 to the
South African producer, whose operat
ing conditions are more favorable than
those in the United StalPS.
Id addition to paying the exchange
I discount, which in the case of the
j French industrial consumer of gold
I would amount to 100 per cent more in
francs than the price paid before the
war, the French Government has im
posed a sumptuary tax for the use i I
gold in the fabrication of articles
{other than money) of 60 francs per
hectogram ($3.73 per fine ounce) by
| law of June 25, 1920. Previous to that
date the guarantee tax was 37 francs,
50 centimes per hectogram. The
i French Government justifies this tax
j in a formal document jransinit'ed by
i the United States Bureau of Foreign
' and Domestic Commerce, as follows:
“Moreover, this tax, striking as it does
luxury goods, or unessential articles
enters into the category of a somptu
ary tax, the levying of which is admit
ted by ali economists as a legitimate
procedure.”
It is important that the gold mining
industry be kept alive for fear that
with greatly increased production
there will be diflic titty ie i*e tain in g the
gold standard during a popular cam
paign for credit restriction accompa
nied by declining prices. The -con
tinued depletion of the gold stock by
excess exportation and industrial use
will seriously impair the public con
fidence in the nation’s finance and cur
rency unless a normal gold output is
insured.
The gold mining industry will be
completely shutdown unlessconstruct
ive aid is provided without delay, in
| which event it will take years to de
velop a normal output of gold at a vei y
much greater expense. To allow the
' gold mines of t he United States to cave
in and fill with water entails a waste ol
developed go^ resources, which do «
•most critical hour iff 'Eoaoeial meet
w-ill cause vvatrt. 'So argument can-be
made in favor Of waste. The time tr
act is now before the industry is shu
down.
Notice of Forfeiture.
To Arnold Hals, Hans Sorensen, P.
Olson, C. Hoontz, F. E. Levy, James
Hansen, P Cristensen, John Griffin,
Fred Vogelsang, their 'heiis, ex
ecutors and assigns:
You and each ot vou are hereby no
tifide that during the vears 1310, 1911.
1912, 1913. 1914. 1915, 1*910, I expended
the suuu of r($100.00) One Hundred Dol
lars upon your interests in the Nugget
Association and Hie North Pole Asso
ciation. situated on Yankee creek, in
the Inoka Recording Precinct. Terri
tory of A'aska, in order to hold said
claims under the provision of Sectiou
2324 of the Revised Statutes of the
United States, and the amendments
thereto concerning annual labor upon
mining claims, being the amount re
•quired to hold said mining claims for
the i>eriod ending December 31. 1910,
and if wit hin ninety days after the pub
lication of this notice you fail or refuse
to contribute your proportion of said
expenditures, as co-owners, your inter
ests in said claims will become the
propartv of the undersigned, your co
owner, who has made the required ex
penditurs under-the terms of said sec
tion of *t!he (Revised Statutes of the
United States.
, -John A. Olson.
First publktrtioa, January 19. 1921.
» Last publication, April 2d, 1921.
PIONEER ROADHOUSE
Sooth Fork—Seward-Iditarod Trail.
Plenty of Dog Feed. Antelope and Ibex always oA tap.
Ih season, Mountain Sheep, Wild Moose and Grizzly Bear.
Don't forget to look in and see the man who blazed \the
s
trail for you over Rainy Pass. Call in at Hellsgate and
get your bearings. %
Joe Blanche!!
Prop.