Gold prospecting claim

“ The limping standard without the gold-exchange attachment may at any time break down, if the silver (or whatever else the overvalued money may be) should become so redundant, relatively to trade, as completely to displace gold. As soon as all gold is driven abroad, parity with gold ceases. But with the gold-exchange system this catastrophe is avoided. In fact, with this system it is not necessary to have gold in circulation at any time. ”

“ That for many years, however, gold will outrun trade seems probable, for the reason that there is no immediate prospect of a reduction in the percentage growth of the gold stock, nor of an increase in the percentage growth of trade. Not only do mining engineers report untold workable deposits in outlying regions (for instance a full billion of dollars in one region of Colombia alone) , but any long look ahead must reckon with possible and probable cheapening of gold extraction. ”

“ The truth is at length apparent to the nation—which had been so long denied and so studiously concealed by those who were profiting by the opposite delusion—that gold, like every other metal, is a commodity liable to change in value according to its plenty or scarcity, and that it is hopeless to make a fixed standard of an article which is itself liable to greater vicissitudes of price than perhaps any other. ”

“ That an outflow of gold does not follow from a rise of general prices, but only of prices of articles of international trade, is manifest from the fact that if land becomes cheap in other countries, gold does not leave this country to buy it. When real estate is cheap in Brazil, or Australia, or in Germany, France, or even England, the owners of gold in this country do not send it abroad to make purchases of real estate. ”

“ In one place it is in vain to look for it except on the top of a hill; in another, the valley alone will yield gold; and not a few geologists and so-called mining experts who have visited the gold-fields lately, for the purpose of reporting on properties for intending purchasers, have been much at fault regarding the possibility of finding payable gold, and confessed that it is necessary to spend a considerable time before a property can be even cursorily examined. ”

“ Our problem really amounts to this: How shall we, in deciding the destiny of this gold, secure to the world the greatest stability of monetary values? In other words, how much if any of this gold can be devoted to monetary and general use without seriously disturbing proper standards of value? When we settle that point, the ratio between gold and silver will adjust itself. I submit that it is not in the power of any government or combination of governments to fix that ratio arbitrarily in defiance of the actual ratio of the supply of the two metals. ”

“ It is only to pay for importable goods that gold ever leaves the country in which the owner resides. Being an international money, and receivable everywhere at its full face value, gold loses nothing by transfer; hence it is sent wherever it will for the time being have the greatest purchasing power.
Whenever the general range of prices in this country of commodities internationally dealt in becomes than higher than the general range of the same commodities abroad, it is manifest that then gold can used to advantage by purchasing those articles abroad and selling them here. ”

“ In the first place, it must be understood that the supply of gold immediately available for transfers is limited within distinct bonds in America. New York and the country behind it contain an amount usually estimated at about $20,000,000. The national government commonly holds from $75,000,000 to $100,000,000, which may be thrown bodily on the market if the President orders it. To obtain gold from Europe, or other sources, requires time.
“In the second place, gold in America is a commodity bought and sold like stocks. In gold, as in stocks, the transactions are both real and speculative. ”

“ One of the staple arguments of the advocates of the single gold standard is, that if our stock of gold were greatly reduced we should be unable to make payments to foreign countries in case the balance of trade turned against us. It is only through an excess of imports over exports that gold could go, and this country now produces of nearly all articles almost all that it consumes. ”

“ If gold were not our standard of value, no such panic could exist in any mind; but, on the contrary, the abundance of a metal so pre-eminent in beauty and utility must be universally hailed as a boon. Silver is now the legal tender in most countries of Europe, and used to be so in England, till it became too abundant; but where transactions are large, silver is too cumbrous: a man can carry L.500 in gold in his pocket, but L.500 in silver would require a horse. ”

“ It is estimated that not fewer than 2500 men are at this moment walking over the rocks of Colorado, Idaho, Utah, and California looking for gold. Nobody prospects for silver nowadays. It is all gold. The reason for this is that gold is so valuable, and silver so cheap. But there is another reason, and that is that gold is found everywhere, and a new way has just been discovered for getting it out of the rock or sand in paying quantities. Hence gold-fields that once were not worth working are now rich in promise. ”

“ Were gold a thousand times more valuable than it is held to be, it would not even then be able to represent all other values. Therefore, gold is a false standard of value, a false representative of wealth.
Many people think and speak as if gold would be of no use to this country if it were to come into disuse as money; that we should entirely lose it as wealth; the very reverse is really true, since we should have just the same quantity of gold that we now have, to be used for the same purposes for which it is now required, to wit: to export to other countries in exchange for imports. ”

“ In truth, gold plays a small part only in actual business. It is a regulator of business rather than an active instrument for the transaction of business. It is not an exaggeration to say that the use of gold in business is limited to a small fraction of one per cent of the aggregate transactions in countries where gold is the standard.
It is not improbable that in the near future the world is to meet a surfeit of gold, as it is now meeting a surfeit of silver. ”

“ Such indestructibility, and facility of being tested, are united in gold; its intrinsic value is great, and its imaginary value greater; so that, partly through indolence, partly through necessity and want of organization, most nations have agreed to take gold for the only basis of their currencies;—with this grave disadvantage, that its portability enabling the metal to become an active part of the medium of exchange, the stream of the currency itself becomes opaque with gold—half currency and half commodity, in unison of functions which partly neutralize, partly enhance, each other's force. ”

“ While this vast amount of gold already lies in the vaults of the Bank, nearly every ship from Australia, and steamer from America, brings more of the precious metal.
There are not wanting persons to whom this accession of treasure to the country is a subject of panic. The annuitant dreads a depreciation of the value of gold, equivalent, of course, to a general rise in the price of those commodities which conduce to his comfort; or, in other words, to a diminution of his income. The millionaire sees rivals springing up on all sides from the mountain of gold. ”

“ I believe the struggle now going on in this country and in other countries for a single gold standard would, if successful, produce widespread disaster throughout the commercial world. The destruction of silver as money and the establishment of gold as the sole unit of value must have a ruinous effect on all forms of property, except those investments which yield a fixed return. ”

“ It is undoubtedly true that the evils of special privilege have been accentuated and increased, temporarily at least, by the accident of gold depreciation. Gold has been depreciating rapidly for about eighteen years. Since 1896 or 1897, the gold dollar has lost about one third of its exchange or purchasing value. Gold is depreciating in value because its supply is increasing more rapidly than is the supply of other commodities. ”

“ It is safe to accept the conclusion which every intelligent person in Australia, New Zealand, and California has arrived at; namely, that the cost of getting gold out of the earth is as much as its intrinsic value. To put it in other words: in the long run, the average laborer, working at any other calling for three dollars or even less per day, will realize more money in a twelvemonth than the average gold-miner in the same period. Nevertheless, gold-mining seems to be the active agent which Providence has employed to people the waste places of the earth. ”

“ The specie basis affords a means by which greedy speculators work “a corner” in gold and thus extort large 291sums in profits which the people eventually have to pay. The laws and official rulings, for instance, which require the maintenance of a gold reserve in the Federal treasury and the payment of duties and interest on the public debt in gold, create a special and imperative demand for the yellow metal ”

“ The bimetalist holds that a nation, or at any rate a group of nations, can fix by agreement the price of gold and silver in terms of each other, when used as money. Since the use of these metals as money makes the chief demand for them, it is thought possible to make this legal ratio hold upon the total product of [pg 127] both gold and silver. If, then, in any country the supply of gold should be out of due proportion with silver, its overvaluation will at once attract gold from other countries until it becomes no more profitable there than elsewhere. ”

“ An influx of gold from abroad would also have a tendency to decrease the sentimental estimate of its desirability which its unrelieved scarcity was apt to create in timid minds. It was especially plain that so far as withdrawals from our reserve for speculative shipment abroad were concerned, they could be discouraged by the efforts of those whose financial connections in other countries enabled them to sell gold exchange on foreign money centers at a price which would make the actual transportation of the coin itself unprofitable. ”

“ What is needed is to induce the entire civilized world to do what is now within the power of the gold-exchange countries to do, viz. to keep pace with a tabular standard. It is a little anomalous that these gold-exchange standard countries now have a power to regulate their price level, which is not possessed by the gold standard countries themselves. The latter are, by their present system, kept absolutely at the mercy of the accidents of gold mining and metallurgy, while the former can keep or change the par of exchange with gold countries at will. ”

“ People, terrified at the unrest of the times, and nervous of fresh troubles to come, secreted coin, and consequently the premium on gold rose to an extraordinary height, not only on the Continent but in England as well. A guinea would then fetch as much as twenty-seven shillings, and was worth a good deal more on the other side of the Channel. Patriotism was not proof against p. 159the prospects of profits to be earned by the export of gold, and not a few otherwise respectable banking-houses embarked in the trade. Finance has no conscience. ”

“ Reserving these points, we are ready to coöperate heartily in the best policy the situation may demand. It seems to us advisable, for the present at least, to continue the support of the market on about the existing basis. We shall be glad to receive your advice upon this point. To demonstrate our ability to maintain prices, we will deposit at the government Assay Office within the coming week additional gold to the value of one hundred millions of dollars. We note especially the warning of the secretary of the treasury against the dangers of a too rapid increase in the circulating medium. ”

“ He says:—"We have about 2,000 millions invested in American and other foreign bonds, and with this we are paying for a large part of the difference between our imports and our exports. We are constantly told that gold is disappearing, and we know that instead of being an importer of the precious metal we are now obliged to export it. The theorists who uphold the wonderful dogma just referred to are lost in wonder over the 'drain of gold,' and are always asking some one to tell them what becomes of it. ”

“ With gold at a premium of anything over 10 per cent above the currency in use, it is probable, almost certain, that silver would be bought up for exportation as fast as it was put out, or until change would become so scarce as to make the premium on it equal to the premium on gold, or sufficiently high to make it no longer profitable to buy for export, thereby causing a direct loss to the community at large and great embarrassment to trade. ”

“ But so much more is this true of gold than of silver, that the dependence of modern commerce, and, through it, modern civilization, upon it is almost absolute. If, therefore, free coinage at a ratio unfair to gold were attempted, gold would cease to be offered at the mints, but it would nevertheless continue in use in final settlements, especially in transactions of some magnitude, thus preventing its decline in value. ”

“ It makes gold a privileged product, the king of commodities. And as long as this royal of gold exists, the protectionists who make so much of the theory of the "balance of trade" will occupy an invulnerable position. While gold is king, the nation which absorbs it—that is, the nation whose exports largely exceed its imports—will surely govern the world. But dethrone this worst of despots, and that country will be the most powerful which succeeds to the largest extent in getting rid of its gold in exchange for products more useful. ”