Chapter XXIX: Gold (1)

BY JOHN E. ORCHARD

USES OF GOLD

The physical properties of gold and the difficulties connected with obtaining it have made gold through all the ages one of the most precious of the metals. Because of its luster, its color, and its indestructibility, it was shaped by primitive man into rings, bracelets, and other ornaments. These same properties, together with its divisibility, early led to the use of gold as a trading counter, and in all but the most primitive societies it has been regarded as a measure of value and a medium of exchange. The earliest known reference to gold is a reference to its use in trade, and is contained in an edict of Menes of Egypt (perhaps 3800 B. C.) fixing the ratio of the value of gold to silver at 2¹⁄₂ to 1.

As a medium of exchange gold is used in a variety of forms. The primitive trader accepted and gave ornaments of gold in exchange for commodities. In mining camps, gold dust and nuggets have been the circulating medium. In a settled community under a government possessing the confidence of the governed, gold coined into counters of convenient denominations by the government is accepted without question in all transactions. For the settlement of balances in international trade, gold bullion is used, its value being determined by weight. Today practically all nations are on a gold standard, and even those on a silver standard in domestic trade have adopted the gold standard for foreign trade.

But gold, though it has many excellent qualities, is one of the heaviest of metals, and carrying it on the person is inconvenient, especially in amounts sufficient for large transactions. Also, through constant handling, gold wears away and coins deteriorate in value. Accordingly a large part of the coins or the gold bullion is kept in the national treasury or in the vaults of a bank, and some form of paper currency is used as the circulating medium. Upon this reserve of gold, seen only by a few employees of the government or bank, who have no ownership in it, is built an intricate system of credits and trade.

It is true that little gold is in actual circulation and that for domestic trade mediums of exchange secured only in part by gold are being used in increasing amounts. Even international exchange is no longer on the gold standard, but this situation is undoubtedly temporary and with the improvement in financial conditions in Europe gold will be restored to its position as foundation of trade and finance, national and international. The circulating medium, whatever its nature, must be freely convertible, and credit, to remain sound, must be founded upon an adequate gold reserve.

It has been officially estimated that between the years 1492 and 1894 the world’s production of gold equaled about $8,000,000,000. Of this amount a little less than $4,000,000,000 was held as gold reserve in 1894, the remainder having been lost or absorbed in the arts or in the manufacture of jewelry. Since 1894 the consumption of gold in the arts has been between $50,000,000 and $100,000,000 annually, or for the 27 years about $2,100,000,000 out of a total production of $9,000,000,000--almost 25 per cent.[158]

[158] JENNINGS, HENNEN: “The Gold Industry and Gold Standard,” 1919.

GEOLOGICAL OCCURRENCE

Gold is widely distributed, both geographically and geologically. It is found in about 60 countries in all parts of the world and occurs in rocks of all ages, from Archean to Quaternary, often in association with other metals, as silver, copper, tellurium, lead, and iron.

Gold deposits may be broadly classified as lodes and placers. Lode deposits are also known as vein or quartz deposits; and in them the gold is found with silica or quartz in irregular masses, strings, scales, plates, and crystals, or more often in microscopic particles in the sulphide minerals or the gangue. Much the same methods are used for extracting the ore as are used in mining silver, lead, or zinc.

Placer or alluvial deposits are sedimentary beds of gravel or sand in which the particles of gold, washed from the mother lode, have been concentrated by the action of water. Most of the placer deposits lie in the open, along the bed of a river, but some are covered by a sheet of lava or other non-productive rock. The gold occurs as scales, grains, slugs or nuggets. A number of large nuggets have been found, the largest being the Australian “Welcome Stranger,” weighing 2,520 ounces and valued at about $42,000. Usually, however, the particles of gold are minute.

Placer deposits are worked by one of the following methods, depending on the nature and richness of the alluvium: sluice mining, hydraulic mining, dredging, or drift mining.

During the early years of what has been called the modern era of gold mining, beginning with the discovery of gold in California in 1848, most of the world’s annual production came from placer deposits. De Launay estimates that from 1848 to 1875 placers contributed 87 per cent. In more recent years, with the exhaustion of the easily discovered and the easily worked placer mines, the proportion has decreased and at present it is probably not more than 10 per cent. Today the great gold mines of the world are lode mines. The world’s deepest gold mine has attained a vertical depth of 5,900 feet.

After making all allowances for further discoveries, students of the subject are of the opinion that the world’s gold production has already reached its zenith and that a decline may be expected.[159]

[159] The above discussion of the geological occurrence of gold is
based mainly on “The Gold Industry and Gold Standard” and other
articles by HENNEN JENNINGS, consulting engineer, U. S. Bureau of
Mines.

GEOGRAPHICAL DISTRIBUTION

Commercially important mines are found in every continent, and there are few regions on the earth’s surface that do not contain deposits profitably worked now or formerly. The distribution of gold has played an important part in the settlement of new lands, notably California, western Canada, Alaska, Mexico, Australia, and South Africa, and will undoubtedly greatly influence the future movements of peoples. Yet although gold is distributed thus widely, $323,950,000, or over 75 per cent. of the total amount of gold produced in 1917, came from four countries, Transvaal, United States, Australia and Russia.

The outputs of the chief producing countries are given in Table 67 and Figure 19.

NORTH AMERICA

=United States.=--Although at present surpassed by the Transvaal, the United States formerly led the world as a producer of gold. It is estimated that this country since 1792 has contributed about $3,913,000,000 to the gold supply of the world, a little less than 25 per cent. of the total produced, and an output greater than that of any other nation.[160] The United States first became an important producer in 1850, following the discovery of gold in California. Previous to that time some gold was mined in the Appalachian states, the total probably reaching $50,000,000.

[160] Report of the committee appointed by the Secretary of the
Interior to study the gold situation.

In 1915 the output of the United States was $101,035,000, the highest mark so far reached. Since that year there has been an annual drop of about $8,000,000 in output. The yield in 1918 was $68,646,700 and in 1919, $58,488,800.

During the past four years, eight states, California, Colorado, Alaska, South Dakota, Nevada, Arizona, Montana, and Utah, have produced more than 90 per cent. of the gold mined in the United States.

TABLE 67.--GOLD PRODUCTION OF THE PRINCIPAL PRODUCING COUNTRIES, 1880-1917[161]

----+------------+-----------+-----------+----------------+----------+
| United | | Transvaal | Russia- | Rhodesia |
Year| States |Australasia| [162] | Siberia | [162] |
----+------------+-----------+-----------+----------------+----------+
1880|$36,000,000 |$28,765,000| $1,993,800|$28,551,028 | ...|
1881| 34,700,000 | 30,690,000| 1,993,800| 24,371,343 | ...|
1882| 32,500,000 | 31,955,017| 1,993,800| 23,867,935 | ...|
1883| 30,000,000 | 27,150,000| 717,000| 20,119,000 | ...|
1884| 30,800,000 | 28,284,000| 830,000| 21,874,000 | ...|
1885| 31,801,000 | 27,439,000| 1,384,000| 25.338,000 | ...|
1886| 34,869,000 | 26,425,000| 1,438,000| 20,518,000 | ...|
1887| 33,136,000 | 27,327,600| 1,919,600| 20,092,000 | ...|
1888| 33,167,000 | 28,560,660| 4,500,000| 21,302,000 | ...|
1889| 32,967,000 | 33,086,700| 7,788,372| 23,905,600 | ...|
1890| 32,845,000 | 29,808,000| 10,438,356| 25,484,000 | ...|
1891| 33,175,000 | 31,399,000| 14,885,639| 24,162,500 | ...|
1892| 33,015,000 | 34,159,000| 23,220,108| 24,806,200 | ...|
1893| 35,955,000 | 35,688,600| 28,293,831| 27,808,200 | ...|
1894| 39,500,000 | 41,760,800| 39,696,330| 24,133,400 | ...|
1895| 46,610,000 | 44,798,300| 43,893,300| 28,894,400 | ...|
1896| 53,088,000 | 45,181,900| 43,779,669| 21,535,800 | ...|
1897| 57,363,000 | 52,665,700| 57,633,861| 23,245,700 | ...|
1898| 64,463,000 | 64,860,800| 79,213,953| 25,463,400 | 444,617|
1899| 71,053,400 | 79,321,600| 71,384,561| 22,167,100 | 1,129,773|
1900| 79,171,000 | 73,498,900| 6,124,226| 20,145,500 | 1,158,815|
1901| 78,666,700 | 76,880,200| 5,333,994| 22,850,900 | 2,974,943|
1902| 80,000,000 | 81,578,800| 34,901,140| 22,533,400 | 3,366,561|
1903| 73,591,700 | 89,210,100| 61,454,439| 24,632,200 | 4,065,489|
1904| 80,464,700 | 87,767,300| 78,004,559| 24,803,200 | 4,794,208|
1905| 88,180,700 | 85,926,500|101,489,199| 22,291,600 | 7,337,211|
1906| 94,373,800 | 82,391,400|119,618,507| 19,496,500 |10,082,747|
1907| 90,435,700 | 75,677,700|133,361,943| 26,684,300 |11,199,181|
1908| 94,560,000 | 73,327,300|145,862,971| 28,052,200 |13,022,460|
1909| 99,673,400 | 71,007,900|150,799,880| 32,381,300 |13,223,955|
1910| 96,269,100 | 65,470,600|155,597,202| 35,579,600 |13,590,658|
1911| 96,890,000 | 60,184,200|170,566,159| 32,151,600 |13,823,733|
1912| 93,451,500 | 54,509,400|188,293,100| 22,199,000 |14,226,900|
1913| 88,884,400 | 53,113,200|181,885,300| 26,508,700 |14,274,700|
1914| 94,531,800 | 47,569,023|173,559,940| 28,586,392 |17 663,686|
1915|101,035,700 | 49,397,797|188,033,156| 26,322,745 |18,915,324|
1916| 92,315,363 | 38,213,328|192,182,900| 22,300,000 |19,232,200|
1917| 84,456,600 | 35,275,000|186,254,256| 18,000,000[164]|14,988,600|
----+------------+-----------+-----------+----------------+----------+

----+---------------+----------+----------+------------
| | | British |
Year| Mexico | Canada | India | World[163]
----+---------------+----------+----------+------------
1880| $989,160 | $815,089| ...|$106,436,800
1881| 858,909 | 1,094,926| ...| 103,023,100
1882| 936,223 | 1,094,926| ...| 101,996,600
1883| 951,000 | 954,000| ...| 95,392,000
1884| 1,183,000 | 954,000| ...| 101,729,000
1885| 867,000 | 1,116,000| $135,000| 108 435,000
1886| 614,000 | 1,330,442| 421,600| 106,163,000
1887| 824,000 | 1,178,637| 320,000| 105,774,900
1888| 974,000 | 1,111,959| 685,720| 110,196,000
1889| 700,000 | 1,295,000| 1,502,600| 123,489,200
1890| 767,000 | 1,666,000| 2,000,000| 118,848,700
1891| 1,000,000 | 930,666| 2,495,000| 130,650,000
1892| 1,129,200 | 907,600| 3,318,300| 146,651,500
1893| 1,305,300 | 927,200| 3,813,600| 157,494,800
1894| 4,500,000[164]| 1,042,100| 3,882,900| 181,175,600
1895| 6,000,000[164]| 1,910,900| 4,656,200| 198,763,600
1896| 8,331,700[164]| 2,810,200| 6,130,500| 202,251,600
1897| 7,500,000[164]| 6,089,500| 7,247,200| 236,083,700
1898| 8,500,000[164]|13,838,700| 7,781,500| 286,879,700
1899| 8,500,000[164]|21,324,300| 8,658,800| 306,724,100
1900| 9,000,000[164]|27,880,500| 9,435,500| 254,576,300
1901|10,284,800 |24,128,500| 9,395,900| 260,992,900
1902|10,153,100 |21,336,700| 9,588,100| 296,737,600
1903|10,677,500 |18,834,500|11,428,900| 327,702,700
1904|12,605,300 |16,462,500|11,722,900| 347,377,200
1905|16,107,100 |14,610,400|11,950,200| 380,288,700
1906|18,534,700 |12,023,900|12,087,700| 402,503,000
1907|18,681,100 | 8,382,800|10,383,600| 412,966,600
1908|22,371,200 | 9,842,100|10,598,500| 442,476,900
1909|23,842,900 | 9,382,200|10,358,600| 454,059,100
1910|24,910,600 |10,205,800|10,718,400| 455,239,100
1911|24,880,100 | 9,762,100|11,054,100| 461,939,700
1912|24,500,000 |12,648,800|11,055,700| 466,136,100
1913|19,308,800 |16,598,900|12,178,000| 459,941,100
1914| 4,788,175 |15,983,004|11,378,400| 439,078,260
1915| 6,559,275 |18,977,901|11,522,457| 468,724,918
1916| 7,690,700 |19,235,000|11,206,500| 454,176,500
1917| 9,000,000[164]|15,449,426|10,756,800| 423,590,200
----+---------------+---------------------+------------

[161] Compiled from reports of the Director of the Mint, 1880-1917.

[162] Previous to 1898 production of Rhodesia and Mozambique included
in Transvaal returns.

[163] Total production of world, 1492-1917, $16,916,735,394.

[164] Estimated.

With the discovery of gold in a mill race at Coloma, Eldorado County, _California_, by J. A. Marshall in 1848, the history of modern gold production began. The great rush to California followed and the state became the leading gold-producing region of the world. The output for 1860 amounted to $45,320,000, as compared with a total output of only $1,000,000 for the remaining states. For many years the gold production of California has been declining, the total yield in 1917 amounting to only $20,000,000, a decrease of almost $2,000,000 from the output of 1916. About three-fifths of the output comes from lode mines and the remainder from placers.

For a number of years _Colorado_ was the leading gold-producing state, principally because of the output from Cripple Creek, Teller County, which was from 1893 to 1908 the leading gold camp in the United States. Recently the output has fallen below that of California. Over half of the yield of the state in 1916 came from Teller County.

The earliest discovery of gold in _Alaska_ was probably about 1849 along the shores of Cook Inlet. In 1879 the gold-quartz veins near Sitka were discovered, and a year later the placers of Juneau. The discovery of the gold placers in the valley of the Yukon was made in 1886 and of those in the Klondike in 1896. Most of the Alaskan output is obtained from placer deposits, the richest being in the Seward Peninsula near Nome and in the Yukon basin. The largest producing lode mines have been those near Juneau; of these the Treadwell was for long the greatest gold mine in the world, but it is now inactive. During the past few years the working of large low-grade disseminated deposits of the Treadwell type near Juneau has been undertaken on a scale hitherto undreamed of, but thus far these ventures (Alaska Gold and Alaska Juneau mines) have not been financially successful.

The gold-producing area of _South Dakota_ is confined to an area of less than 100 square miles, lying in the Black Hills. The gravels of Whitewood and Deadwood gulches were first washed in 1875, and in 1876 the famous Homestake lodes were discovered. At present about 94 per cent. of the total output of the state is controlled by one company, the Homestake Mining Co., the largest producing company in the United States.

Following the exhaustion of the famous Comstock lode, demarcated in 1851, _Nevada_ was of little importance as a gold-producing state until the discovery of the rich deposits of Tonopah in 1900. At present practically all the gold obtained in the state comes from the vein deposits of Tonopah and Goldfield. Divide is a newly developed camp between these two.

There are three main auriferous areas in _Arizona_: the vicinity of Bisbee and Tombstone, Cochise County; the Oatman district, Mohave County; and the Verde district, Yavapai County. Arizona was one of the few states to show a larger output in 1917 than in 1916. The United Eastern mine, a new property opened in 1913 in the Oatman district of Mohave County, produced heavily and was responsible for the increase. The gold output of Cochise and Yavapai counties is obtained largely from copper ore.

During the sixties and seventies, _Montana_ was second only to California in its yield of placer gold. The most famous placers were those of Bannack and Alder Gulch and later Helena. Much of the present output is obtained as a by-product from copper ores.

Few mines in _Utah_ are worked exclusively for their gold content, the greater part of the yield of the state being derived from copper and lead ores.

Gold is also mined in _Idaho_, _New Mexico_, _Oregon_, and _Washington_. Small amounts were produced in 1917 in a number of the Appalachian states. Before the discovery of gold in California, practically all of the gold coined in the United States mint came from the mines of _Virginia_, _Maryland_, _Alabama_, _Georgia_, and the _Carolinas_, but since the Civil War their output has not been important. The gold production of the _Philippine Islands_ in 1917 amounted to $1,404,000.

=Canada.=--The total gold yield of Canada in 1900 amounted to $28,000,000, but with the exhaustion of the placer deposits it declined to $8,382,000 in 1907. With the development of vein deposits, production increased steadily from this low point, and reached $19,235,000 in 1916, and $15,272,992 in 1917, placing Canada sixth in the list of gold producers. Three provinces, Ontario, British Columbia, and the Yukon Territory, yield most of the gold, the remaining provinces producing less than 1 per cent. of the total.

More than one-half of the Canadian production comes from the Porcupine district in Temiskaming, _Ontario_, developed in 1912. Other producing districts, though of minor importance, are Kirkland Lake and Munro Township, also in Temiskaming, and Long Lake, near Naughton, Sudbury district.[165]

[165] “Production of Copper, Gold, Lead, Nickel, Silver, Zinc, and
Other Metals in Canada, 1916.” Canadian Department of Mines, Mines
Branch, 1917.

At one time most of the gold output of _British Columbia_ was derived from placers, chiefly from those in the Atlin and Cariboo districts, but less than 5 per cent. came from that source in 1917. The main lode mining districts are West Kootenay and Yale, in the southern part of the province.[166] Gold production in 1917 amounted to about half of the total for 1916.

[166] “Production of Copper, Gold, Lead, Nickel, Silver, Zinc, and
Other Metals in Canada, 1917.” Canadian Department of Mines, Mines
Branch, 1919.

Gold has been known in the _Yukon Territory_ since 1869 and the deposits have been actively worked since 1881. The greater part of the placers of Forty-mile River and all of Sixty-mile River are within Canadian jurisdiction. In 1897 came the discovery of the Klondike. Gold production reached its height in Yukon Territory in 1900, when the output was 1,077,649 fine ounces, valued at $22,000,000. Practically all of the 1917 production was derived from placer deposits.

Gold was mined in _Quebec_ as early as 1823, but Canada was of little importance as a gold-producing region prior to the discovery of the British Columbia placers in 1857. Gold deposits of little economic value are still worked in _Quebec_, _New Brunswick_, _Nova Scotia_, and _Newfoundland_. Prospecting and development work in _Manitoba_, _Saskatchewan_, and _Alberta_ indicate that these provinces may become important producers of gold.

=Mexico.=--For many years Mexico ranked fourth among the gold-producing countries of the world, being surpassed only by the Transvaal, the United States, and Australasia. Revolutions and bandit warfare have seriously interfered with mining operations since 1911, and the output of gold in 1917 was little more than one-third of the normal annual yield. With the establishment of a stable government, able to protect foreign investments, Mexico will no doubt regain its former position.

A large part of the gold output of Mexico is obtained as a by-product from lead, silver, zinc, and copper ores. The only true gold-mining district is the El Oro district of the states of _Mexico_ and _Michoacan_. The chief producing mines are the Esperanza, El Oro, Mexico Mines of El Oro, and Dos Estrellas. In 1906 the Esperanza was considered, in respect to both actual output and profits earned, the most productive gold mine in the world. Since then it has been surpassed by mines of the United States and the Transvaal. Another famous gold mine of Mexico, the Dolores, situated in western _Chihuahua_, yields ore whose silver content is almost equal in value to the gold. _Lower California_, _Sonora_, _Durango_, _Hidalgo_, _San Luis Potosi_, _Guanajuato_, and _Chiapas_ are all gold-producing states.

=Central America.=--At the time of the discovery of America, the Spanish were attracted to the region now included in the states of Central America by reports of fabulously rich mines and of the wealth of the Indians. A number of expeditions were sent out in search of the gold and some rich mines were discovered and worked. Gold is still produced in Central America, but the total amount is small, being less than 1 per cent. of the world total in 1913. _Honduras_ is the richest of the states in production and _Nicaragua_ ranks second, the principal centers of the gold-mining industry being in the Departments of Matagalpa and Chontales, and in the district of Cabo Gracias and Prinzapolka.[167]

[167] U. S. Commerce Reports, Supplement 34_a_, 1915, p. 4.

SOUTH AMERICA

South America was also an important source of gold during the years following the discovery of America. The early conquerors obtained gold by plundering the temples, churches, and even the graves of the natives. Following the conquest, the Spaniards by means of their slaves systematically searched much of the continent for gold deposits. About 15 per cent. ($2,266,000,000) of all the gold produced between 1492 and 1917 came from South America.

Today South America is of little importance as a gold producer, the combined yield of all the countries for 1913 being about 2.5 per cent. of the world total. The great bulk of the South American production has so far been alluvial gold. With the establishment of more stable governments and the improvement of transportation facilities it is likely that the production of South America will increase.

According to Maclaren[168] the gold fields of South America are disposed in three somewhat sharply separated areas. The chief area is that extending the length of the Andes from the Isthmus of Panama to central _Chile_ and including the deposits of Colombia. The second area is contained in a well-marked petrographic and metallographic province extending across the rearland of the Guianas and including also the mines of _Venezuela_ and northern _Brazil_. The third area is contained in the province of Minas Geraes, Brazil. Some gold is obtained from _Chile_, _Argentina_, _Bolivia_, _Peru_, _Ecuador_, and _Uruguay_. The chief gold-bearing areas of _Colombia_ are Choco, the Department of Antioquia, and the district lying between the Cauca and Magdalena rivers. Fairly rich deposits have also been found in Colombia near the Ecuadorian border.[169]

[168] MACLAREN, J. MALCOLM: “Gold: Its Geological Occurrence and
Geographical Distribution, 1908,” p. 619.

[169] U. S. Commerce Reports, Supplement 42_b_, 1915, p. 12.

The principal mines of _Brazil_ are the St. John del Rey mine, and the mines owned by the Ouro Preto Gold Mines of Brazil, Ltd., both in the State of Minas Geraes. The former mine is said to be the deepest in the world.

EUROPE

Although Europe in the past has played an important part in the production of gold, very little is mined at the present time. Previous to the discovery of America, much of the gold in use came from the Alps and from _Hungary_. Deposits were also worked in _England_, _Ireland_, _Wales_, _Spain_, and _Germany_.

The only gold mines in Europe of any present economic importance are in the former empire of _Austria-Hungary_, _France_, and the Urals of _Russia_. In the south of France gold has been produced along the streams flowing from the Pyrenees, and also in the eastern provinces. At present only three mines are in operation, which in 1911 produced 2,554 kilograms of gold. The Hungarian deposits are very old, as they were worked by the Romans 2,000 years ago. Most of the producing mines of today are in Transylvania. Russia is credited with producing 5.8 per cent. of the world total in 1913. A small part of this production came from the Urals of European Russia, chiefly as a by-product from other ores, but the greater part was obtained in Siberia. The Siberian deposits are discussed below, under Asia.

ASIA

Since the decline in the Mexican production, Russia ranks fourth among the gold-producing countries. Most of the output comes from _Siberia_, which has long been a source of gold, the mines of the Altai Mountains being considered among the oldest in the world. The production of gold in Siberia from 1830 to date has been estimated by Russian authorities at approximately $1,000,000,000.

Maclaren[170] has divided the auriferous areas of the country into two distinct regions, the eastern and western. About four-fifths of the country’s production is derived from the former region, which extends in one fairly narrow auriferous belt from Lake Baikal to the southwestern shores of the Sea of Okhotsk.

[170] MACLAREN, J. MALCOLM: “Gold: Its Geological Occurrence and
Geographical Distribution,” p. 210.

A number of dredges have been operated in the Ural district. The most promising property is the Riderlinsky, east of Omsk. In the southern Urals, most of the mines produce copper, pyrite, or zinc, the gold by-product making the profits. The Ridder mine, in the Altai Mountains, is the best-known lode mine in Siberia.

Placers are located along the Manchurian frontier on the Onon and Amur rivers. They are among the most important in Siberia and have produced over $100,000,000 in gold. The deposits of Irkutsk along the Lena River are the most important deposits so far exploited in Siberia and are probably the richest placers ever discovered. The district produces about one-third of the Siberian output. The placers are at present about worked out as drift mines, but will continue to produce with the installation of dredges.

Many engineers believe that Siberia is the richest remaining potential source of gold in the world. It has been estimated that the country will produce in the future, say in the next 30 or 40 years, about $6,000,000,000. The unsettled political conditions have greatly interfered with mining. Many of the mines were taken over by the Bolshevists, and although it is unlikely that any attempt at systematic mining will be made, they will probably be robbed of the richer exposed ore before they can be recovered by the owners.

_India_ has long been regarded as a land of riches. Philologists have proved, to their own satisfaction, that Ophir, the source of the stores of gold of Solomon, was located there. In the deserts of northern India lived the gold-digging ants, described by the Greek historians and later writers and as yet unexplained. Present facts do not bear out legend and tradition. In 1913 India contributed only 2.6 per cent. of the world’s total production of gold, an amount hardly proportionate to the extent of the country. The land offers to the prospector an extremely uninviting field. It has been carefully prospected and its deposits have been worked assiduously for at least twenty-five centuries by a people possessing great patience and considerable mining skill.[171] The principal modern producing gold mines of India are in the Kolar field, where the main reef carries five large mines along its strike.

[171] MACLAREN, J. MALCOLM: “Gold: Its Geological Occurrence and
Geographical Distribution,” p. 238-240.

_Japan_ was one of the chief contributors to the stream of gold that poured into Europe during the sixteenth century. Portuguese and Dutch traders came to the islands to exchange European products for the gold mined by thousands of natives. The Japanese finally revolted against this domination of their trade and expelled the last of the Portuguese in 1624. A few Dutch were permitted to remain and to trade through certain ports, but under most humiliating conditions. Between the years 1601 and 1764, it is estimated that about 3,763,572 ounces of gold was exported from Japan. At the present the annual gold production of Japan, including Formosa, is about $6,000,000.

Most of the gold-quartz veins of Japan have been worked for many generations and only the poorer sulphide zones remain.

The Island of Formosa, which was acquired by Japan in 1895, had been represented by early European travelers as a storehouse of untold riches. Not until 1890 were the sites of the old workings rediscovered, the discovery of flakes of gold during the construction of a railway precipitating a rush of Chinese miners to the island.[172]

[172] “Mining in Japan, Past and Present,” the Bureau of Mines,
Department of Agriculture and Commerce, Japan, 1909, pp. 17 and 64.

The total output of gold in _Chosen_ (_Korea_) in 1914 approximated $5,000,000, but at present the output is declining because of the abnormal rise in the price of chemicals and materials necessary for mining. The yield for 1918 will probably not exceed $3,500,000, 60 per cent. of which will be obtained from three mines operated by foreign capital. The chief gold-quartz mines of Chosen are included in the American concession at Unsan in North Pyong-an Province, northwestern Korea. From these mines is derived about half of the annual gold production of Chosen. Korea also contains a large number of placer deposits, mostly small, that have been extensively mined by Koreans. The placer deposits of the Unsan district have not yet been worked, but those of the Chiksan district are being exploited by the Japanese.[173]

[173] U. S. Commerce Reports, February 26, 1914.

The small, scattered gold deposits of _China_, both vein and placer, are worked almost exclusively by the Chinese, as none has been discovered of sufficient richness to attract foreign capital. On the Island of Hainan, southeast of the mainland, the Chinese government is operating mines.

Exploration work carried on in China up to the present does not indicate that the country will ever become an important producer of gold. Even in the provinces contributing most of the present output--Manchuria, Yunnan, and Szechuen--the gold industry gives little promise of growth. During the years 1911, 1912, and 1913, 700 streams were examined in the last two provinces and gold was found in 430, but in no case in sufficient quantity to pay for working.

There have been many rumors concerning the gold deposits of the vast and unexplored territory of Tibet since the very earliest expeditions to that country but the field is still closed to modern enterprise and even to careful scientific examination. Despite previous reports, it has been stated by the geologist accompanying a British expedition about 10 years ago that the mineral value of Tibet was not easily apparent. Near the frontier of the State of Bhutan there are many colonies of gold washers. The Tibetan gold is found in nuggets as well as in spangles and dust, but the Tibetans are said to be careful to leave the nuggets intact, or to replace them if disturbed, under the belief that they are living and are the parents of the spangles and dust, or the roots from which new gold grows, which latter would disappear were the lumps removed.[174]

[174] U. S. Commerce Reports, February 26, 1914.

_Siam_, _Burma_, _Indo-China_, and the _Federated Malay States_ at present contribute only a small part of the gold production of Asia. Exploration and prospecting are proceeding actively and the results to date are favorable. Future developments may substantiate the statements of the ancient writers and cartographers that there was much gold in this region. Gold and other minerals are known to exist in _Afghanistan_, but with the exception of a gold mine near Kandahar, in charge of a European, the mineral resources are almost entirely undeveloped.

AFRICA

Since 1905 _South Africa_, including Transvaal, Cape Colony, and Natal, has been the leading gold producer of the world, a position that would have been attained several years earlier had not the Boer War interfered. In 1917, gold valued at $186,255,000, or nearly half of the world’s output, was produced, the greater part being derived from the Witwatersrand, or Rand, near Johannesburg, Transvaal. Production in 1918 fell to $174,068,000.

Gold was first discovered in the _Transvaal_ in 1870, but production was not important previous to the discovery of gold on the farm Langlaagte, Witwatersrand, in 1885. The mines are spread along a belt extending some 62 miles from Randfontein on the west to Holfontein on the east. This belt contains the largest deposit of gold that has ever been found in one place, and its gold content probably equals that of all the other known gold fields of the world combined. The ore is not exceptionally high grade, but can be economically treated in large quantities. The deposit, it has been estimated, may represent $3,000,000,000 to $4,000,000,000 from about 40 square miles, of which about half had been extracted by 1916.

Gold occurs both in vein and placer deposits in _Natal_ and _Cape Colony_, but the output is small.

_Rhodesia_, in seventh place in 1913, has developed rapidly in recent years as a producer of gold and now outranks Mexico. According to Portuguese records, gold was mined in Rhodesia as early as 1788. The discovery in 1866 of ancient ruins and of ancient gold mines at Zimbabwe gave rise to the hypothesis that Rhodesia was the Ophir of the Scriptures. Although numerous attempts were made to open the gold fields, no measure of success was obtained until 1891, and only during the present century has the true character of the Rhodesian gold-quartz veins been recognized. The settlement of the country and the development of the mines is the result of the efforts of Cecil Rhodes and the Charter Company.

The gold is widely distributed and most of the mines are small. The future of the country as a gold producer would seem to depend upon the operation of the lower-grade ore bodies by large companies. The Shamva mine is a conspicuous example.

_West Africa_, especially the Gold Coast, is the only region of Africa, other than the Transvaal and Rhodesia, producing gold in important quantities. The output of the British West Africa colonies in 1917 amounted to about $7,500,000. The unhealthful climate of the region will probably prevent for some years any extensive mining operations by white men.

Gold mines are also worked in _Abyssinia_, _Belgian Congo_, _Egypt_, _French East Africa_, the former _German East Africa_, _Madagascar_, and the _Sudan_, but the total annual production from all these countries is little more than $2,000,000. The rock carvings and the hieroglyphics of ancient Egypt indicate that northern Africa and the region along the Nile River were important sources of the gold of the ancient world.

AUSTRALASIA

For many years Australasia was a close rival of the United States as a gold producer, frequently outranking this country. Since 1903 there has been a rapid decline, and Australasian production in 1917 was less than one-half the production of the United States. However, Australasia still ranks third and produced 11.3 per cent. of the world’s output in 1913 and about 8.3 per cent. in 1917.

=Australia.=--Gold was discovered in Australia in 1839 and perhaps even as early as 1823. Fearing the unsettling effect of gold-seeking on the progress of the colony, the government authorities kept these early discoveries a secret for a number of years. In 1851, however, a miner recently returned from California, discovered gold near Bathurst, in New South Wales, and a rush similar to the Californian rush began. Discoveries in other parts of the country followed. The vein deposits of Australia occur in two distinct areas, well separated both geographically and geologically. The first includes the gold fields of the west and northwest and the other lies along the great Eastern Cordillera of Australia and stretches northward from Tasmania through Victoria, New South Wales, and Queensland.

For many years _Victoria_, the smallest of the states, was the largest producer of gold, and up to 1908 had produced about half of the total output of the commonwealth. Among the earlier returns were some of the largest nuggets known. With the discovery in 1892 of the sensational field of Coolgardie, in Western Australia, a state previously believed to be without mineral wealth, Victoria dropped to second place. Kalgoorlie is the chief town and center of the gold-mining area in Western Australia.

_Queensland_ ranks next to Victoria. A disastrous rush occurred in 1858, and 15,000 to 20,000 men were left starving on the banks of the Fitzroy River. The men were rescued by steamers sent by the governments of New South Wales and Victoria. A few years later alluvial gold was found near Peak Down, Clermont, to the present day the principal placer region of Queensland. Charters Towers, the present leading field of the state, was discovered in 1872. The Mount Morgan mine is an isolated mine lying not far from the scene of the ill-fated rush of 1858. It is by far the most productive mine of Queensland, both in gold and copper. _New South Wales_, although the first Australian state to yield gold in any important quantity, now ranks fourth. _Tasmania_ and _South Australia_ produce only a small amount of gold.

=New Zealand.=--In 1852, the year following the rich discoveries in Australia, gold dust and gold enclosed in quartz were found in New Zealand, about 40 miles from Auckland, but this discovery proved to be of little importance. Ten years later the rich placers of Gabriel’s Gully were discovered, a discovery which attracted a rush from the Australian fields. The gold fields of New Zealand may be divided into three well-defined and well-separated areas: the Huaraki gold field, which contains valuable vein deposits but no placers; the West Coast area, in which the vein and alluvial occurrences are of equal importance; and the Otago area, in which the auriferous alluvial gravels are important and the few known quartz veins have little economic value.

Some gold is produced in other parts of Australasia, notably in the _British_ and _Dutch East Indies_, and in _British New Guinea_. Deposits of little importance are reported in _New Caledonia_, the _Fiji Islands_, and in the former _German New Guinea_.

PROBABLE CHANGES IN KNOWN GEOGRAPHICAL DISTRIBUTION IN THE NEAR FUTURE

Specific predictions regarding changes in the geographical distribution of the sources of the world’s gold seem valueless. During the last few years the gold production of the principal fields has decreased. Aside from any decline due to the war and the attending scarcity of labor and high mining costs, it seems probable that the gold output of the world has reached its zenith and that further decline is to be expected unless new ore bodies are added to known reserves or unless some revolutionary method of extracting gold from the low-grade ores is discovered.

Although the leading fields, South Africa, the United States, and Australia, seem to have reached or passed their period of greatest output, there are a number of fields in unsettled and unexplored regions of the world which may be expected to show increased production. The possibilities of Siberia have already been mentioned, and it is the opinion of many engineers that this region will eventually rival South Africa. South America has produced an enormous quantity of gold, chiefly alluvial, and is expected to yield an increased output in the future. The future of South Africa is problematical.

During the last half century the greatly increased gold production has been due largely to the exploitation of the low-grade properties, this being made possible by improvements in mining and metallurgy. It seems, however, that this development has reached a point where excessive labor costs prevent the use of ores of a still lower grade.

In general, therefore, the gold output of the world may be expected to remain static or to decline, at least until the level of prices is so changed that it is considered profitable to expend capital in the prospecting and developing of regions hitherto unexplored.

POLITICAL CONTROL

The political control may be summarized as follows:

Percentage of
Country 1913 production
British Empire 62.9
United States 19.3
Russia and Siberia 5.8
Japan 1.8
France 1.4
Belgium 0.2
Central Power 0.55
Mexico 4.2
Other Countries 3.7

_Great Britain_ controlled politically 62.9 per cent. of the 1913 production, through state sovereignty over the Transvaal, Australia, Rhodesia, Canada, and India. Other British possessions contributing small amounts to the world output are British Honduras, British Guiana, British West Africa, British New Guinea, New Zealand, British East Indies, Egypt, and the British Isles. All gold produced in the British Empire must be sent to England.

The _United States_ controlled politically 19.3 per cent. of the 1913 output, practically all of which came from continental United States. The Philippine Islands and Porto Rico produced small amounts.

_Russia_ is one of the principal contributors to the world’s gold supply, producing 5.8 per cent. of the 1913 output. Most of this 5.8 per cent. came from the mines of Siberia, and the political control of that region is still unsettled. _Mexico_, with an output equal to 4.2 per cent. of the world total, was the largest producer among the neutral powers during the war. _France_ controlled 1.4 per cent. of the world total, a third coming from the mines in France and the remainder from the French colonies in South America and Africa. _Japan_ controlled 1.8 per cent., 1 per cent. coming from the Japanese islands and Formosa, and the remainder from Korea. The rest of the 1913 production, amounting to about 4 per cent., was widely scattered, and was controlled by a number of nations of South America, Europe and Asia.

It should be pointed out that although Great Britain and the United States control politically the important producing fields of the present, all of which seem to have reached their maximum output, the control of the fields expected to be important producers in the future is in different hands.

During the war, particularly during its later months, most of the belligerent nations and some of the neutrals placed restrictions on the exportation of gold, either as bullion or in manufactured form. In normal times gold is allowed to flow freely between nations, as needed to settle international trade balances.

COMMERCIAL CONTROL

The commercial control of the gold resources of the world is shown in Table 68 and in Figure 20. In examining the table and the diagram the reader should remember that the figures and percentages are at best only estimates. Most gold mines are owned by companies whose shares are bearer’s shares; these are bought and sold in the stock markets of many financial centers. Today the control may be in the hands of one group, tomorrow in the hands of another. Because of this ever-changing ownership, it is difficult to determine the nationality of the commercial control, particularly when there is any attempt to conceal the nationality of the capital invested. Table and diagram, however, are believed to be approximately correct. The information upon which they are based was obtained from mining manuals, the reports of mining companies, the reports of consular agents in the various countries, and by personal interviews with mining engineers.

Table 68 may be summarized as follows:

COMMERCIAL CONTROL OF GOLD RESOURCES

Percentage of
Country 1917 production
British Empire 63.0
United States 23.0
France 5.6
Russia 2.1
Japan 1.7
China 0.84
Belgium 0.5
Brazil 0.07
Germany 0.81
Mexico 0.21
Unclassified 1.9

It is interesting to note that political control and commercial control are closely identical in the case of the British Empire and the United States. French control is much more important commercially than politically. In other countries, little domestic capital is available, and political control is much greater than commercial control.

Commercial control, if different from political control, joins in a test of strength with it in periods of emergency or unrest, with the result that the stronger subdues the weaker. As regards governments that are strong and stable enough, the recent war has demonstrated that the elimination of foreign capital invested in a country is easy. The United States and Great Britain, in particular, have taken over a great number of companies formerly owned by German interests. Where the government is not so strong, however, the commercial control, backed in many instances by the more vigorous home governments from which the invested capital comes, wins the day, and political events are thus determined, even to the extent of overturning the weaker government. Thus the overturning of the Boer government and the birth of British South Africa was the result of the clash between British commercial control and Boer political control.

The question of the control of gold stocks is discussed in the report of the gold committee of the Department of the Interior.[175] The control of stocks in 1916 is shown graphically in Figure 21 and is discussed more in detail in the section following, “Position of Leading Commercial Nations.”

[175] Report of the committee appointed by the Secretary of the
Interior to study the gold situation.

The gold mines of the _United States_ are controlled mainly by American capital. A few of the mines are predominantly British, and shares in other mining companies are undoubtedly held in London, but the total production controlled by Great Britain is small. It has been estimated that in recent years 95 per cent. of the annual output was controlled by Americans and the remainder by British.

Over half of the gold mined in _Canada_ comes from the Province of Ontario, chiefly from the Porcupine district. In 1917 and 1918, the Hollinger mine, owned by the Hollinger Gold Mines, Ltd., was the main producer. It is one of the greatest gold mines in the world, having paid over $9,000,000 in dividends up to the end of 1918. The control of the company is held in the United States. Another mine of importance in the Porcupine district is the McIntyre, owned by the McIntyre Porcupine Mines, Ltd., also American. In the Province of British Columbia, the greatest producing camp is Rossland, operated by the Consolidated Mining & Smelting Co., controlled by United States and Canadian capital. It has been estimated that about two-thirds of the gold mines of Canada are controlled by United States capital and the remaining one-third by British capital, including Canadian.

TABLE 68.--FINANCIAL CONTROL OF THE GOLD PRODUCTION OF THE WORLD, 1917

(Percentages are only approximate)

-----------+------------+-------------------------------------
| | 1917 Production controlled
| | financially by...
| Production +-----------+------------+-----------+
| 1917 | United | United | |
Country |(in dollars)| States | Kingdom | France |
-----------+------------+-----------+------------+-----------+
North | | | | |
America: | | | | |
United | | | | |
States | $83,750,700|$79,563,165| $4,187,535| ...|
Canada | 15,200,000| 10,000,000| 5,200,000| ...|
| | | | |
Mexico | 9,000,000| 2,700,000| 3,600,000| $900,000|
| | | | |
| | | | |
| | | | |
Central | | | | |
America | 3,122,000| 750,000| 750,000| ...|
| | | | |
South | | | | |
America: | | | | |
Argentina| 4,600| ...| ...| ...|
Bolivia | 115,000| ...| ...| ...|
Chile | 200,000| 200,000| ...| ...|
Brazil | 2,958,000| ...| 2,662,200| ...|
Colombia | 6,200,000| 620,000| 3,000,000| 900,000|
| | | | |
| | | | |
| | | | |
Guiana: | | | | |
British| 600,000| ...| 600,000| ...|
Dutch | 400,000| ...| 125,000| 125,000|
French | 1,500,000| ...| ...| 1,500,000|
Peru | 1,300,000| 1,300,000| ...| ...|
Other S. | | | | |
America | 1,357,000| ...| ...| ...|
| | | | |
Europe: | | | | |
Austria- | 2,179,000| | | |
Hungary | [176]| ...| ...| ...|
France | 700,000| ...| ...| 700,000|
Germany | 135,600| ...| ...| ...|
| [176]| | | |
Great | | | | |
Britain | 5,000| ...| 5,000| ...|
Italy | 2,000| ...| ...| ...|
Russia | | | | |
and | | | | |
Siberia | 18,000,000| ...| 9,000,000| ...|
| | | | |
Serbia | 328,000| ...| ...| ...|
| [176]| | | |
Sweden | 10,000| ...| ...| ...|
Turkey | [176]500| ...| ...| ...|
| | | | |
Asia: | | | | |
China | $3,600,000| ...| ...| ...|
| | | | |
Chosen | | | | |
(Korea) | 4,444,000| $2,500,000| ...| ...|
Dutch | | | | |
East | | | | |
Indies | 2,818,000| ...| $2,100,000| ...|
Federated| | | | |
Malay | | | | |
States | 342,300| ...| 342,300| ...|
French | | | | |
Indo- | | | | |
China | 50,000| ...| ...| $50,000|
Japan and| | | | |
Formosa | 5,595,200| ...| ...| ...|
India and| | | | |
British | | | | |
Indies | 10,756,800| ...| 10,756,800| ...|
Australa-| | | | |
sia | 35,945,500| ...| 35,945,500| ...|
| | | | |
Africa: | | | | |
Belgian | | | | |
Congo | 2,000,000| 500,000| ...| ...|
Egypt and| | | | |
Sudan | 150,000| ...| 150,000| ...|
German | | | | |
East | 253,200| | | |
Africa | [176]| ...| ...| ...|
Madagas- | | | | |
car | 1,000,000| ...| ...| 1,000,000|
Rhodesia | 14,988,600| ...| 14,988,600| ...|
Transvaal| 186,254,256| ...| 167,629,256| 18,625,000|
| | | | |
West | | | | |
Africa | | | | |
(British)| 7,435,488| ...| 7,435,488| ...|
| | | | |
Undis- | | | | |
tributed | 2,785,656| ...| ...| ...|
-----------+------------+-----------+------------+-----------+
Total | | | | |
(1917) |$422,590,100|$98,133,165|$268,477,679|$23,800,000|
Total (in- | | | | |
cluding | | | | |
1913 | | | | |
figures) |$425,486,400| | | |
-----------+------------+-----------+------------+-----------+
Per cent. | | | | |
of world | | | | |
production | 100 | 23 | 63 | 5.6 |
-----------+------------+-----------+------------+-----------+

----------------------------------------------------------------
1917 Production controlled
financially by...
+----------+----------+----------+----------+--------+
| | | | | |
Country | Belgium | Japan | China | Russia | Brazil |
-----------+----------+----------+----------+----------+--------+
North | | | | | |
America: | | | | | |
United | | | | | |
States | ...| ...| ...| ...| ...|
Canada | ...| ...| ...| ...| ...|
| | | | | |
Mexico | ...| ...| ...| ...| ...|
| | | | | |
| | | | | |
| | | | | |
Central | | | | | |
America | ...| ...| ...| ...| ...|
| | | | | |
South | | | | | |
America: | | | | | |
Argentina| ...| ...| ...| ...| ...|
Bolivia | ...| ...| ...| ...| ...|
Chile | ...| ...| ...| ...| ...|
Brazil | ...| ...| ...| ...|$295,800|
Colombia | $620,000| ...| ...| ...| ...|
| | | | | |
| | | | | |
| | | | | |
Guiana: | | | | | |
British| ...| ...| ...| ...| ...|
Dutch | ...| ...| ...| ...| ...|
French | ...| ...| ...| ...| ...|
Peru | ...| ...| ...| ...| ...|
Other S. | | | | | |
America | ...| ...| ...| ...| ...|
| | | | | |
Europe: | | | | | |
Austria- | | | | | |
Hungary | ...| ...| ...| ...| ...|
France | ...| ...| ...| ...| ...|
Germany | ...| ...| ...| ...| ...|
| | | | | |
Great | | | | | |
Britain | ...| ...| ...| ...| ...|
Italy | ...| ...| ...| ...| ...|
Russia | | | | | |
and | | | | | |
Siberia | ...| ...| ...|$9,000,000| ...|
| | | | | |
Serbia | ...| ...| ...| ...| ...|
| | | | | |
Sweden | ...| ...| ...| ...| ...|
Turkey | ...| ...| ...| ...| ...|
| | | | | |
Asia: | | | | | |
China | ...| ...|$3,600,000| ...| ...|
| | | | | |
Chosen | | | | | |
(Korea) | ...|$1,944,000| ...| ...| ...|
Dutch | | | | | |
East | | | | | |
Indies | ...| ...| ...| ...| ...|
Federated| | | | | |
Malay | | | | | |
States | ...| ...| ...| ...| ...|
French | | | | | |
Indo- | | | | | |
China | ...| ...| ...| ...| ...|
Japan and| | | | | |
Formosa | ...| 5,595,200| ...| ...| ...|
India and| | | | | |
British | | | | | |
Indies | ...| ...| ...| ...| ...|
Australa-| | | | | |
sia | ...| ...| ...| ...| ...|
| | | | | |
Africa: | | | | | |
Belgian | | | | | |
Congo | 1,500,000| ...| ...| ...| ...|
Egypt and| | | | | |
Sudan | ...| ...| ...| ...| ...|
German | | | | | |
East | | | | | |
Africa | ...| ...| ...| ...| ...|
Madagas- | | | | | |
car | ...| ...| ...| ...| ...|
Rhodesia | ...| ...| ...| ...| ...|
Transvaal| ...| ...| ...| ...| ...|
| | | | |
West | | | | | |
Africa | | | | | |
(British)| ...| ...| ...| ...| ...|
| | | | | |
Undis- | | | | | |
tributed | ...| ...| ...| ...| ...|
-----------+----------+----------+----------+----------+--------+
Total | | | | | |
(1917) |$2,120,000|$7,539,200|$3,600,000|$9,000,000|$295,800|
Total (in- | | | | | |
cluding | | | | | |
1913 | | | | | |
figures) | | | | | |
-----------+----------+----------+----------+----------+--------+
Per cent. | | | | | |
of world | | | | | |
production | 0.5 | 1.7 | 0.84 | 2.1 | 0.07 |
-----------+----------+----------+----------+----------+--------+