ft
4 "Che Conservative
THE NEW GOLDEN EKA. AND ITS
INFLUENCE.
The Increasing Supply of Gold.
UY HON. MEOItOK K. 11O11EIIT8 , VIKECTOll
OF THE MINT.
[ Rcpublished from The Forum of February ,
1899 , by permission of The Forum Publishing
Company. ]
The articln appended was written for The
Forum ( New York ) , by Hon. George E. Ro
berts , director of the mint , for the public in
formation , and not to uphold any one side of
the currency question. The facts and figures
which Colonel Roberts gives are , however , of
such current importance that The National
Sound Money League obtained permission
from The Forum to republish the article both
in Sound Money and in pamphlet form. The
high reputation of Colonel Roberts while edi
tor of the Fort Dodge , la. , Messenger , ns a
writer on economic subjects and as a zealous
defender of the gold standard imparts an ad
ditional interest to these pages. The plain
facts therein disprove abundantly the asser
tions made by William J. Bryan and other
upholders of the free coinage of silver , that
gold was becoming scarce and had appreciated
in value , owing to the increased use of it as
standard coin by the great commercial nations.
These assertions caused undue alarm among
many people who were led to believe that the
moneyed interests were engaged in a plot to
control all the gold in existence. William P.
St. John of New York , a zealous advocate of
free coinage , said in a speech at Saint Louis :
"The increase in the number of dollars , when
dollars are confined to gold , is not suillciently
rapid to meet the growth of our exchanges.
The consequence is a growing value of dollars
or a diminishing value of everything else ex
pressed in dollars , which is to say , a tendency
toward constantly declining prices. " All this
is disproved by the abundance of gold and the
general advance in prices that followed the
gold standard victory at the polls in 1890.
The silver party's platform of 1890 contained
a like assertion. It said that "tho demonetiza
tion of silver in 1878 increased the demand for
gold , enhancing its purchasing power and
lowering all prices measured by that stan
dard. " Colonel Roberts' statistics show that
the supply of gold is greater than the actual
needs of commerce , while all people know that
produce and manufactures have increased in
price since the defeat of the silver coinage
scheme in 1890. In the city of New York alone
the specie held by the banks has increased
from $05,023,000 in 1893 to the great sum of
$204,103,700 the amount held on June 10,1899.
The general information herein is now of
immediate interest inasmuch as it confirms
the wisdom and justice of the growing demand
for the establishment of the gold standard on
a firm legal basis that shall be permanent and
unassailable. E. V. SMAI.I.EY ,
General Secretary.
The average annual production of
gold in the world during the ten years
from 1851 to 1860 , inclusive , was $182-
298,000 ; for the period 1801 1870 , $126-
801,000 ; for 1871 1880 , $115,081,500 ;
while for the ten years , 1881 1890 , it
was but $106,005,800. In the five years ,
1881 1885 , the average annual produc
tion was only $99,116,000. For twenty-
five years the yield diminished ; and the
output of I860 , $184,088,000 , was not
again reached until thirty-two years
later. Out of this supply an amount ,
variously estimated at the time as be
tween $80,000,000 and $50,000,000 , was
annually consumed in the arts and man
ufactures.
It was during this period that grave
doubts were entertained by many emi
nent men as to whether the supply of
gold was sufficient for that metal to bo
made the universal standard of value
and to enable all nations to base their
currencies upon it. It was in these
years that the statement erroneous
then , and much further from the truth
now that industrial uses consumed
one-half of the annual products of gold ,
was generally set afloat , and that falling
prices and every economic change which
pinched anybody seemed to find a plaus
ible explanation in the theory of a re
stricted money-supply. This was the
period during which many public men
in the United States made records from
which in more recent years they would
gladly have been delivered. It was the
time when international bimetallism
won advocates among scholars and
statesmen , and propositions less sane
gained countenance and favor.
In 1877 Dr. Edward Suess , the emi
nent Austrian geologist , published his
book , "The Future of Gold , " in which
he developed an elaborate geological
argument against gold as a single stan
dard of value. He set forth that gold
was found on the frontiers of civilization
only , that lode production was unprofit
able , that deep gold-mining had never
proved successful , and that , therefore ,
the alluvial deposits in the yet remote
and unexplored portions of the earth
were the only dependence to maintain
the monetary supply. More than one-
half of the quantity of gold obtainable
by the means thitherto employed , he es
timated , had already passed through the
hands of man. The inaccessible loca
tion of the remaining scattered and un
known placers made it probable , in his
which he argued have undergone a
great change. Gold-mining in rock
and at deep levels was then , as ho said ,
of little promise ; but in 1898 in South
Africa a field unknown when ho wrote
rock was raised from nearly a mile
underground , crushed , and treated at a
profit , with a yield of $10 per ton. The
average yield of the Witwatersrand ore
in 1897 was about $9.50 per ton ; and the
average working costs about $5.60 per
ton. The yield of that district in 1898
was $80,000,000 ; and within two years
it will probably exceed the entire yield
of the world at the time Dr. Suess wrote
his book. So recently as 1890 the gold
product of Colorado was only $4,000,000 ,
and that of the United States , $88,000-
000. Chiefly by processes of reduction
unknown when Dr. Suess wrote , the
product of Colorado has been raised to
about $25,000,000 a year ; and its miners
do not think the figure reached by the
whole country in 1890 a very distant
figure for their state. Through the
same improved methods , the product of
Australia has advanced , from about
$30,000,000 in 1890 , to about $62,000,000
in 1898. These figures are sufficient to
show the importance of the new factor
which was absent from Dr. Suess' cal
culations , and which has wrought a
revolution in the situation.
The new "golden period" had its be
ginning in the year 1884 , when South
Africa appeared on the stage with a
modest contribution of about $50,000 to
the world's product. From that time ,
save for a slight check received in the
latter part of 1895 , due to the Jameson
raid , the production has been steadily
progressing. The remarkably constant
pace of its growth is shown by the fol
lowing table , which gives the yield in
crude ounces , valued at $17.50 per ounce ,
by mouths for 1896 , 1897 , and 1898.
Gold Production of the Hand.
January.
. . .
February.
March
April
May
June
July
August. . . .
September.
October. . . .
November.
December.
Totals.
1894.
Ozs.
149,814
151,870
105,872
108,745
109,778
108,102
107,958
174,977
170,707
178,878
176,804
182,104
2,024,159
1895.
Ozs.
177,403
109,295
184,945
180,823
194,580
200,941
199,453
203,573
194,701
102,052
105,218
178,248
2,277,085
opinion , that they would be but slowly
exploited , and would yield only a mod
erate annual product.
Vast TrouHiiro Discovered and Developed.
The ability and learning with which
Dr. Suess presented his view caused it
to attract wide attention ; and great
weight was given to it at the time. We
may say for him now , as for the econom
ists who shared his fears , that , under
the conditions then existing , it was a
rational view. But the premises from
1890.
118,178
107,018
178,952
170,707
105,008
103,040
203,878
218,418
202,501
109,880
201,118
200,517 ,
2,281,874
1807.
200,832
211,000
232,000
285,008
248,805
251,520
242,470
250,008
202,150
274,175
297,124
810,712
8,034,074
1898.
818,820
207,975
825,007
835,125
844,100
844,070
859,843
870,011
884,080
400,791
893,810
419,504
4,295,002
The World's Production of Gold.
The figures suggest the steady growth
of a manufacturing industry , rather
than the record of one usually regarded
as extremely uncertain in results.
Therein is contained one explanation of
the extraordinary increase in gold pro
duction. Lode mining , under modern
scientific and business methods , has an
assurance of stability which , with the
profits that can bo reasonably forecast ,
has made unlimited capital obtainable