te Bs IGINEERING EM G} i el aN RN | | IN gm ce | Kt Mexican Mining Law j | Under the New Constitution of 1917 I By D. A. Richardson h i ! a ! a , LY Ny | ( i ) \ h Wy ! | th Diamond Drilling In Seven Deils Mountains ' j The Valuation of Gold ! | ) By H.R. Sleeman |

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Engineering and Mining Journal-Press


With this feeder, large diameter rollers take the place of the usual rail track and support the carrying run of the chain. The rollers are carried on cross shafts mounted in solid bearings which rest on the steel framework. Spaced at. close intervals the rollers are placed and so designed that the load is carried thru the side links of the chain. This arrangement relieves the otherwise severe wear on the small chain rollers.

With this design the rollers are engaged only when:

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For severe service choose an S-A Feeder. If the stand- ard types do not meet the needs, our engineers will alter the design to meet the needs of the customer.

Write Immediately for Specifications and Prices

Vol. 113, No. 13

Roller Track Type

Stephens-Adamson Mfg. Co., Aurora, Illinois




Contributing Editor

G. J. YOUNG, Western Editor

D. E. A. CHARLTON, Managing Editor A. H. HUBBELL, News Editor

E. H. ROBIE, Metallurgical Editor


J. E. SPURR, Editor

F. E. WORMSER W.N.P. REED A. W. ALLEN A.B. PARSONS Assistant Editors


Special Consulting Editors

Volume 113

New York, April 1, 192

Number 13

Need for Organization Among Miners

E HAVE before dwelt upon the apparent need

for more complete co-operation and greater

organization in the mining industries; and we have cited particularly the farmers as in similar plight to the miners, but more actively striving, more evi- dently combining, to remedy their disadvantages by joint action.

What form of co-operation or combined effort should the mining industries take? Have we such organizations at hand, must we create new ones, or are there old ones we can patch up and build on to, so that they may be able to function more beneficially ?

We have before enumerated many times the national organizations having to do with mining. Will they serve us for the purpose we have in mind? The American Institute of Mining and Metallurgical Engi- neers? No: it is concerned with the technique of min- ing; the problems we must attack are industrial. These problems are concerned mainly with marketing and allied subjects. The American Mining Congress? No: it is concerned. with political problems, and therefore will be useful when it comes to legislation aimed to benefit the mining industries, or the im- minence of laws adverse to their prosperity. But the problems we have in mind, we repeat, are indus- trial.

Industrial: and we have not a single mining indus- try, but many separate industries, each with its own individual needs, its own traditions and peculiar com- position; each forming a group more or less apart, and demanding quite separate consideration.

The “Trade Association”

There is a form of co-operative association which confines itself to individual industries. These indus- trial associations are commonly called trade associa- tions, “trades” being in this conne-tion used substan- tially as synonymous with “industries.” These trade associations have come into a great deal of prom- inence lately; some of them have misused their posi- tion for illegal and monopolistic heightening of prices, prevention of competition, and consequent extortion from the buying public, and they have therefore been made the objects of legal procedure, and of condemna- tion by the authorities of the Government.

This, however, only proves that there are bad as well as good trade associations, just as there are bad and good men; but if a bad man is caught at extor- tion, or robbery, or swindling, it does not follow that all men should be outlawed. And so the cases men- tioned do not necessarily discredit the idea of trade associations. Indeed, such associations appear, on consideration, advisable, proper, and inevitable. Through them may become possible intelligent and co-operative action in an industry, which may pro-

mote efficiency, effect economies, increase the grade and quality of the product, and reduce the price to the consumers, as well as protect the industry itself. It is, morever, good business for the public to have industries well managed and prosperous. Failures and shutdowns react on the whole people.

What May a Trade Association Lawfully Do?

Mr. Hoover, in his endeavor to assist industry through the Department of Commerce, found that to benefit industries he must get into close touch with them; he could not effect this unless they were organ- ized; he could not work with them unless they would work with him as units? Therefore, he came to the evidently correct conclusion that industrial associa- tions ‘were not only per se harmless but desirable. And about this time the Attorney General, influenced by the illegal activity of one trade association, ren- dered a decision which made it doubtful whether trade associations were not, per se, violations of the Sherman Act, considered to be combinations in restraint of trade, and hence unlawful. Therefore, Mr. Hoover, lest the Department of Commerce should come within the same category through its co-opera- tion with the trade associations, addressed a letter to Mr. Daugherty, inquiring specifically and sep- arately whether the main functions of trade associa- tions were illegal. In reply, Mr. Daugherty conceded the specific activities to be lawful. These activities comprise: (1) The preparation cf a uniform system of cost accounting; (2) the use of trade names; (3) co-operative standardization of product; (4) co-opera- tive credit service; (5) group insurance; (6) co-opera- tive advertising; (7) co-operative welfare work; (8) co-operative handling of legislative questions; (9) co-operative relation with the Government; (10) co-ope”ative compilation of statistics, including pro- duction, productive capacity, wages by districts, con- sumption by districts, distribution by districts, and stocks by districts; and such statistics may be issued publicly; (11) co-operative price statistics, provided that such statistics are made public. All these things, then, an industrial association may lawfully do, provided, as Mr. Hoover remarked and Mr. Dough- erty conceded, that in so doing it does not enter into an agreement whereby trade is actually restrained and the anti-trust laws are thereby violated.

A Forthcoming Trade Association Conference

In carrying out Mr. Hoover’s thought that the trade associations are to be encouraged rather than dis- couraged, and that industry in general may, in that way, best be aided by the Government, he has called



for April 12 a conference in Washington with repre- sentatives of trade associations the activities of which are national or international in their scope, in order that (1) there may be secured a list of trade asso- ciations which will furnish to the Department of Com- merce statistical information concerning their respec- tive industries, along the lines indicated above; (2) to discover the ways and means for collecting such statistics and (3) to discuss the distribution of such data to the members of the associations and to the public.

Mr. Hoover’s idea is plainly to make the Depart- ment of Commerce a big brother to the several trade associations; to encourage their organization and growth, to encourage them to co-operation in all law- ful ways, and warn them against unwittingly going further than the law permits and the common welfare warrants.

The Department of Commerce, and Mining

The mining industry comes within the Department of Commerce. The original act which created the department imposed upon the department the duty “to foster, promote, and develop the foreign and domestic commerce, the mining, manufacturing, and shipping industries, and the transportation facilities of the United States.” Note that it does not include the agricultural industries; a special department is allotted to them. Similarly, a separate department should be allotted to mining; and in such department a Bureau of Markets would cover the purely commer- cial phase of the mining industries. But for the moment the only Government department which, by law, covers the mining indus ries, and has the right to foster, promote, and develop them, appears to be the Department of Commerce. That covers the mar- keting field, the most neglected and little understood field in the mining industries, and the study of mar- keting involves many questions of standardization, price, and co-operative distribution.

Trade Associations in Mining

We have some slight acquaintance with the trade association in the several mining industries, but prob- ably not enough. The American Zinc Institute is perhaps the most conspicuous, although the American Iron and Steel Institute and the American Petroleum Institute are other examples. In copper, we have no active trade association or organized co-operation, ex- cept associations for specific purposes, like the Copper Export Association, under the Webb Act, which is another matter; and the Copper and Brass Research Association, which concerns itself only with advertising, as its name would not indicate. The lead industry has no association. The coal industry has, of course, in part been well organized. Other asso- ciations exist here and there. There is a Tale and Soapstone Producers’ Association, formed at the sug- gestions of Mr. R. B. Ladoo, of the Bureau of Mines, and Mr. Ladoo is secretary of that body. Here we see again the principle of Government guidance. There is a Graphite Producers’ Association, formed at the suggestion of J. E. Spurr, at that time executive of War Minerals investigations for the Bureau of Wines. No doubt there are others. There have been

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Vol. 113, No. 13

a number of regional associations like the California Dredge Operators’ Association, but our chief interest at present is with those which are national in their scope.

Let Us Investigate Further

We would urge such mining industry associations to send representatives to Mr. Hoover’s conference on April 12 to ascertain whether they may not receive further inspiration which might strengthen their par- ticular industry. It might be that in this way through the medium of trade associations we shall achieve intelligent, scientific, and co-operative marketing of the products of our mines, which the fruit growers of California have perfectly achieved, and which the farmers in general have been advised to attempt by no less an authority than the President. Intelligent marketing is the chief need of the mining industries at the present time; and one industry can learn from the marketing methods of another which happens to have blazed the trail further and mapped the route.

Many of the principles and methods of the scientific and efficient marketing of one group of commodities apply as well to others.

The Mining Journal-Press will have a representative at the conference and will report.

Mathewson in Japan

ISITORS TO ANACONDA, including many thou-

V sand persons from foreign countries, will not be surprised to learn that Mr. E. P. Mathewson re- ceived numerous tokens of hospitality and good will when passing through Japan recently on his return from Burma. He attended the meeting of the Mining Institute of Japan and delivered an address, which ap- pears to have been understood by most of those present. When visiting Nikko, he saw the electrolytic copper re- finery and wire-works, where the Elmore process for depositing copper in sheet form on rotating cathodes is in successful operation. He was entertained at dinner in a tea-house in the national style and was the recipient of many presents, including a bronze statue of a work- man firing cloisonné ware—this being a piece of statuary most nearly approaching a metallurgical subject. Our friend was hailed as the Buddha of Metallurgy! So when next we go to Japan we shall expect to see a com- fortable statue of him guarding the entrance of some big copper smelter. At the Imperial University at Tokyo he saw the seismological museum and heard a fascinating talk on earthquakes from Professor F. Omori. Many Japanese technicians came from long distances to greet him—one came 450-miles to acknowl- edge the kindness received at Anaconda. We are not surprised; on the contrary, it seems entirely proper that the mental and physical hospitality extended to visitors by the Anaconda company should have been reciprocated in the person of its most distinguished

manager. $< __—_—.

Anti-Thought Legislation

Y ONE VOTE a bill was recently defeated in the Banses Legislature proposing to prohibit the teaching of the doctrine of evolution in the educa- tional institutions supported by the state. In these days of intensified prohibition the individual has become more or less calloused to legislative restriction upon his habits

April 1, 1922

and ordinary conduct, but attempts to control thinking processes may become the straw to break the camel’s back.

Imagine the youth of Kentucky growing up without becoming aware of the great strides in scientific knowl- edge due to geological and paleontological research of the last fifty or seventy-five years. How can historical geology be taught without giving profound attention to former life on the globe as indicated by fossil re- mains? Possibly it can be taught by making the word “evolution” tabu, but surely that will not prevent some students from thinking about the subject. Perhaps fossil collections might have been ordered destroyed. Even that would be ineffectual unless the Kentucky coal miner is blindfolded to keep him from looking at fossil flora.

But the saddest thought of all.is the joy future stu- dents would miss in failing to learn all about the flying cockroaches of the Paleozoic, mentioned in Wells’ “Outline of History,” and some cf the other interesting extinct creatures. We suppose that such a volume as Wells’ would be destroyed, not to mention the works of Huxley and Darwin; and hundreds of other books would have to be carefully censored.

The most pernicious legislation is perhaps that which attempts to control men’s thoughts. Futile it is bound to be, as it has been in the past. Such “Dark Age” legis- lation would have no more effect on the doctrine of evolution than the raising of King Canute’s hand upon the tide.

<a ——_—_—_—_.

Remarks by the Editor

JE HAVE BEEN IN RECEIPT of many letters W concerning the consolidation of the two mining weeklies into the Journal-Press. We are glad that the sentiment is almost entirely one of approval. Subscribers are glad that they will be able to economize in the time necessary to run over current mining litera- ture, and also to economize in the money required. For those who need both papers, a saving of $5 a year; for those who need only Engineering and Mining Journal, one of a dollar a year—enough to hire a mining engineer in Washington during the war; and for readers of Mining and Scientific Press .alone, no increase of ex- pense. All this is a real contribution to the mining industries in the way of lessened expenses.

And our advertisers are glad that they have now one undisputed medium which will weekly carry the message of what they have to contribute in the way of equipment and supplies toward making mining more efficient and more economical. And we are not advancing our adver- tising rates. They remain the same, despite the com- bined circulation, as the previous Engineering and Min- ing Journal rates.

Still, we are going to give more expensively instead of retrenching. The Journal-Press is larger than either of the papers which have been combined. The entire editorial staff of Mining and Scientific Press has been consolidated with that of Engineering and Mining Jour- nal. We have ten regular full-time, hard-working trained editors—men who know the mining industry— on our staff. They form a faculty-like group, each with his own department and responsibilities. You will meet them in the field as well as in the town. They will all

be very busy in the program we have mapped out, to

Engineering and Mining Journal-Press


expound to you the mining industries. We are not going to give you quantity so much as quality.

Then we are going to install a new departure. In San Francisco we are going to edit, print, and dis- tribute a monthly supplement to Engineering and Min- ing Journal-Press; and we shall call the supplement the Pacific Mining News. The first number will come out about May 1. Mr. George J. Young will be editor and Mr. Arthur W. Allen associate editor. These gentlemen need no introduction to you. At least you know Mr. Young’s “Elements of Mining” and Mr. Allen’s “Hand- book of Ore Dressing.” Mr. Young, as Western editor of Engineering and Mining Journal, and Mr. Allen, as associate editor of Mining and Scientific Press, have their homes in San Francisco. Mr. Young was born there. This supplement will be a regional publication; it will confine its field to the Pacific Coast belt repre- sented by California, Nevada, Arizona, Oregon, Wash- ington, British Columbia, and Alaska; and will be sent only to the subscribers of the Mining Journal-Press in those states. It will be part of the Mining Journal-Press —a regional supplement. Do you get the idea? It seems to us a happy one.

What some of our friends are saying to us is that we surely are doing ourselves proud, in the way of exten- sions and improvements, and all at a less cost all around; but how, they ask, are we going to be able to do it? How, they ask, if both mining journals found it close figuring to get along during the present period of depression in mining and in business in general, so that we had to consolidate for strength—how are we going to pay the bills now? Well, if we can do a larger business on a smaller margin of profit we shall make the riffle, as we used to say in Alaska. Certainly, it will not cost so much to run one paper as to run two papers; so these economies ought to result in a larger margin over neces- sary expense, which margin we have already shared in advance with our subscribers and advertisers. But if we should show a balance on the wrong side of the ledger, for a few months, we shall not worry unduly. We know that the plan is a good one, and will work out.

Mr. Rickard has remarked that this is a wedding, not a wake; and we are going to find out whether the motto of young folks who are considering matrimony, to the effect that two can live more cheaply than one, is justifiable. Of course, there may be children; but our first, which we shall call, as we observed, the Pacific Mining News, we hope will very soon be able to walk and even earn his own board, selling papers.


Our Contemporaries

[x RECENT MEETING of East and West arouses mixed feeling in our contemporaries. The Salt Lake Mining Review, a long-established pub- lication with a good record of usefulness, is irritated and sarcastic. Evidently it does not like the move. On the other hand, the Canadian Mining Journal greets the an- nouncement with frank good will. This is especially pleasant to us, as the Canadian Mining Journal has al- ways maintained our respect, and we should be sorry if its editor felt otherwise. We have not yet heard from Mining and Metallurgy. We shall be disappointed if it does not register disapproval. We are opposed to it on principle, but not to the high-class men who edit it,

Engineering and Mining Journal-Press

Vol. 113, No. 13

An Apologia


number of leading members of the mining pro-

fession, thereby eliciting the salient facts in careers rich in human interest and full of useful sug- gestion to the younger men. Each interview has been accompanied by an editorial appreciation written by myself, for the purpose of rounding the story told in the interview and of pointing the moral of it—also perhaps for the sake of saying something that was both true and kind concerning men whom I liked. Twenty-seven of these had been published when three of my “victims” came to me with the suggestion that I ought to submit myself to similar cross-examination. This seemed to me neither unfair nor inappropriate; besides, it would give me an opportunity for saying a few things that could not be said in any other context. The interview appears in this issue. It was to have been published in the Mining and Scientific Press, but it may seem not inappropriate to the first issue of the Journal-Press, as a greeting to a new circle of readers. In lieu of the editorial appreciation that accompanied the other interviews, I have prepared an apologia—which is not an apology—wherein I comment upon the inter- view and explain some of the motives that have actu- ated me in my work as an editor.

I am proud of my Cornish ancestry and of my descent from the mine-captains of “the delectable Duchy.” Our people, like many of the Cornish, are of Breton origin, for Brittany is much closer to Cornwall than most people realize, and many family names are common to St. Malo and Penzance. This sentimental tie with France pleases me, for I love France. Chacun a deux patries, la sienne et la France. The interview shows that as the son of a mining engineer I began to travel early and learned two foreign languages before I became fluent in my own. All this has tended to check provincidlism or a narrow prejudice against the peoples of other countries. A cynic has said, “Patriotism is your conviction that your country is superior to all others because you were born in it.” The cynic was G. B. Shaw, whom I dislike intensely and with whom I am glad to disagree. I was not born in the United States, and therefore my belief in its superiority “to all others” is not based upon an accident; but it does coincide with my self-determination in the matter of citizenship. As a boy, in my visits to Cornwall, I used to look from the cliffs at Newquay across the Atlantic with the fixed intention of going to America, of which I had heard much from my father, who had been here many times on professional work. Besides, I met many Americans at our home, and I liked their cheery ways and expansive manner. As soon as I graduated I came across. Besides my father, four of my seniors—relatives —were in mining practice; fortunately I went to the youngest of my uncles, the one in Colorado, for, apart from his attractive personality, the State of Colorado in the mid-eighties was an intensely interesting mining region, especially in its geologic aspect. My first visit to Leadville in 1886 was a great event. So was my first acquaintance with 8S. F. Emmons, whose later friend- ship I treasure among my happiest memories. Another man to whom I am indebted mentally is Mr. Richard Pearce, a Cornishman of the best type, a keen miner-

[DD = the last five years I have interviewed a

alogist and geologist, as well as a highly successful metal- lurgist. He used to welcome me to his house in Denver when I was in my twenties and would talk on vein- structure and ore-deposition. He is now living in England, and I am glad to send him this expression of my gratitude.

The interview tells the story of my travels. The two years in Australia and New Zealand—1889 to 1891— were rich in experience, especially of economic geology, which, in a measure, became my special study as a min- ing engineer. At that time the science of ore deposits was in an early stage of development, and one did not have to know much in order to know more than most people. Since then my friends Kemp, Spurr, and Lind- gren, as well as Messrs. C. K. Leith and H. V. Winchell, have applied geology to mining in a manner and with a success few of us could have anticipated thirty years ago. Of my work as a mining engineer I can say that the geologic aspect of it was intensely interesting—that is, the finding of ore; also the appraisal and manage- ment of mines. But the contact with promoters and their wily ways I did not like, and before long I became disgusted with them, partly because they involved me in a fiasco that was the direct consequence of disregard- ing my advice. Of that I need say no more here except that it was one of the reasons for my becoming an editor, a result for which I am grateful, for undoubtedly my life has been made happier, and possibly more use- ful, thereby.

A man is fortunate if he can find scope for his abil- ities, however moderate. The square peg in a round hole is the symbol of discomfort; the round peg snugly filling the round hole is the type of fitness. I have enjoyed the work that I have done now for twenty years. All normal men like power; some get it by means of muscle, others by the aid of wealth, others by the exercise of various arts. Of these, the art of writing makes its strongest appeal to educated men because it gives them power over their own kind; they became leaders of thought and moulders of public opin- ion, and that in a civilized community, especially one based on democratic ideals, is a splendid function.

As a mining engineer I wrote a great deal. My con- tributions to the Institute are equal in bulk to a volume of its Transactions. I used to write frequently for the Engineering and Mining Journal and occasionally for the Mining and Scientific Press. Raymond and Rothwell, both identified with the Journal, were my honored friends, and I kept in close touch with them. My first experience as an editor in New York was ren- dered uncomfortable by the changes of proprietorship that followed the tangle into which Johnston involved the business affairs of the Journal, but I found that I liked the work. I formed the idea that an editor ought to control his paper in order to be independent. As a matter of fact the successive controllers of the Journal while I was editor did not interfere with the editorial policy, nor have they interfered with it since in the slightest so far as I know; but I had just money enough to acquire control of the Mining and Scientific Press, and the lure of California was strong. If the earth- quake had visited San Francisco a year earlier, I might have turned to Canada as a field for my journalistic

April 1, 1922

activities; but I have no grudge against the earthquake. It was a stimulating experience, for it was great fun to carry the Press through the period of stress and to reorganize our business successfully. The Mining Magazine was an interesting adventure, for it gave me many new friends in the engineering profession and enlarged my knowledge of mining in its world-wide aspect. The Press suffered by my absence in London, and for three years earned no profit. It was losing money in 1915, when I returned to San Francisco and put my shoulder to the wheel in an effort to move it forward. For two years I worked so hard that I en- dangered my health and very nearly succumbed; but fortunately the stimulus given to the mining industry by the War came in the nick of time and carried the Press forward to renewed prosperity. Nevertheless, I have been compelled to recognize the fact that the personal kind of journalism for which I have stood has the serious defects of being measured by the energies of an individual. Men think all mines will peter out except their own. Even Methuselah died. These are phrases that I have used in discussing the persistence of ore; they apply to the persistence of an editor. Indeed, I fear that the days of editor-publishers are gone. The business of publishing is becoming so big and so costly that the kind of man likely to be fitted for editor is unlikely to be the kiza of man fitted to direct ccncurrently the workings of a big industrial ostablishme: * I+ seemed wise therefore to accept the opportunity .. -:nsolidate the Press with the Journal, ©specialiy when the consolidation was effected on honor- able terms and under conditions that promise a wider field of activity not only for myself, but also for my two latest associates, whose skill and loyalty tempted me more than once to continue the Press despite urgings to the contrary. It is a pleasure now to be associated with Mr. Spurr and to be connected with a paper that perpetuates the traditions of two papers of which I have been the editor.

The urge to write is the moving spirit of journalism and the impulse to criticize is the very life of editorial writing. Of patter and comment there is more than

Engineering and Mining Journal-Press


enough; the world needs criticism—the criticism of ideas, of methods, and of men. The true editor is driven by the demon of criticism, and I use the word “demon” to mean not an evil prompter but an indwelling spirit. Sometimes his criticism hurts the feelings of the editor’s friends, and he is sorry that it should, but that will not stay his hand, for if he once started to abstain from the performance of his self-imposed duty for fear of giving umbrage to one or two individuals, his usefulness would be at an end. Willingness to be unpopular and readiness to incur something much more unpleasant—the temporary estrangement from a friend —are the penalties of forceful journalism of the kind to which I am referring. An editor must learn to hold his friends “without capitulation” of his convictions. Indeed, if a man’s friends are engaged in the industrial and professional activities that are the subjects of his critical faculty as an editor he is sure to annoy almost all of them sooner or later. That is the penalty of his position, and it is one that prevents many kindly spirits from becoming effective editors. One must have the courage of one’s opinions to sit squarely in the editorial chair. I have tried to do so, and in doing it I have had to disagree with some of my friends, regretfully, but temporarily in most cases. I have accepted the penalty as part of the game—an honest and sportsman- like game when played properly. And it is one that must be played. The development of a wholesome public opinion is essential to the health of our demo- cratic institutions. My own interest is mainly in that part of the public that is engaged in mining and its allied operations. Friends have suggested that I ought to be on a daily newspaper, just because I write occasionally on current non-technical topics. The sug- gestion finds no response, because, by experience and by sympathy, I am an exponent of class journalism—of the journalism meant for a particular class, not the general public. In a mining paper I reach people with whom I have much in common, whom I understand, who are to me, as the Mexicans say, muy simpdtico. In short, although a journalist, I am still a mining engineer.


The Valuation of Gold

T VARIOUS TIMES comments and letters have ap- peared in the technical press regarding the value of gold. The Mining and Scientific Press of Aug. 15, 1921, contains several. The question involves that of cur- rency and is one of world-wide importance. Though the issue concerns America in her over-seas trade and in her gold-mining industry, it is not in America that action regarding the relationship of gold to currency is needed. She has re-established gold as the standard of exchange, and her paper is again interchangeable with gold. I do not purpose, therefore, any attempt to cover the ground generally, but I think that certain features of the question are worth diagnosis. The sub- ject is one that appears to have received little serious

consideration, to judge from many comments made thereon.

In some quarters there appears a belief that in Britain the currencies are still on a gold basis. This is not so. Immediately gold is withdrawn from circula- tion, and paper currency cannot freely be exchanged for gold, the gold basis disappears. The only things in com- mon between the operating currency (notes) and the gold coins are the names. Presumably it is this fact that leads to misconception. The British pound and the

French france of today (notes) have no practical rela- tionship to the gold pound and the gold franc.

The paper pound and the paper franc are pieces of paper indorsed by the state as legal tender. Their value (purchasing power) depends absolutely upon the num- ber of them in circulation relatively to the circulation


of commodities in the country concerned. They have no connection with the paper notes which, during a pre- vious period, were freely redeemable in gold. Their value now is just what the authorities in each country choose to make it. Such was not the condition with their namesakes the earlier notes. Their number was decided almost entirely by economic laws and their value was the gold in the coins they represented and which they could command.

A term that seems to be responsible for common mis- conception as to present currencies is “rate of ex- change.” This at one time was used to indicate the small charges made by financial institutions for services rendered, in making money available where needed. But it was the same money—gold. The term is now used to indicate the purchasing power of currency units relatively to those of other countries. The “rate of exchange” today includes no doubt allowance for the said services, but this is a small factor compared with the relative values of the currencies. Probably the present “rates of exchange” are not precise indexes of the domestic purchasing power of the various curren- cies. They probably are more the indexes of the pur- chasing power of the respective currencies in goods that are wanted in foreign markets. This, however, does not affect the fact that “rates of exchange” today indicate something quite different from what they did when the nations were on a gold basis.

The “premium on gold” is another much misunder- stood term. The real situation is that certain countries have discontinued the use of gold as their basis of currency. For a time these countries commandeered all gold produced within their territories and paid for it in notes bearing the same name as the gold currency units. These notes, not being redeemable in the gold units, and having been made more numerous, had become less valuable. Thus, while other commodities rose in nomi- nal value (as expressed in terms of the said notes) gold was commandeered at a reduced real valuation—i.e., the old nominal value (price).

As regards the real market value of gold, two factors came into existence. One was the removal of a large part of its previous market—the mints of the various nations, except at reduced valuations. This was a real and serious decrease in the market. Many mines (working and prospective) became unpayable, and the output fell. The other factor was that, in countries still using gold, the price, expressed in terms of cur- rency in the countries of production, rose. The value did not rise in the former countries. The value of the currency units (notes), in the countries of produc- tion fell.

When export of gold from producing countries was permitted, the gold flowed to the countries using gold, and there secured its real market value. The excess of that value, translated into terms of the currency units of the producing (exporting) countries, over the price paid by the mints of the latter, was miscalled the “premium on gold.” For a time it seems that all gold produced in the paper-currency countries, except that used in the arts and industries, was exported to those using gold.

Gold thus secured its real market value. That value, however, was not the pre-war value—value being the measure of a commodity relatively to other commodities. A large part of its pre-war market had disappeared, as explained previously. But, in so far as these purchasing

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Vol. 113, No. 13

countries had been unable to secure gold for some time, it is probable that for a while the market value was not far from the pre-war value.

Later the demand for gold from these countries abated, but America re-established the interchangeabil- ity of her paper with gold. This she was able to do for two reasons: she had not inflated her currency to the extent that other countries had done, and the fact that other countries had discontinued the use of gold as currency made gold cheaper for her to obtain, and to retain in circulation.

The wealthiest country in the world having re-estab- lished the interchangeability of gold, its value naturally became based on her currency. There is no need for anyone to pay more than, or to accept less than, $20.67 for gold, because all desiring to do so can buy or sell gold at that price in America.

The assumption that America is paying too dearly for gold, and that she is maintaining foreign gold pro- duction by paying a premium on it, is absurd. She is buying gold at its present market value—neither more nor less. She is, however, buying it at under its pre- war value, and she is buying it at a value less than it would possess if the European nations re-established the interchangeability of their paper with gold.

In that sense the British Empire is selling its gold to America at under its real value. If the Empire were to re-establish interchangeability, it would have to buy such gold as it needed, over its, present reserves, at a higher value than that at which it is now selling to America—higher pro-rata to the amount she needed relatively to the total available gold stocks. If other nations re-establish interchangeability, the value will again go higher.

It is incorrect to say that those producing gold in foreign countries, such as South Africa, have an ad- vantage in the discount on the pound sterling. There is no such advantage. If the pound sterling appreciated so as to lose its “discount,” gold would have a less nomi- nal value in British currency but would have the same real value. The general price level would fall rela- tively to the appreciation of the pound and gold would have the same purchasing power as now. An ounce would still be worth 20.67 dollars, but the pound would be worth 4.86 dollars.

There is no “premium on gold.” Gold has its market value. That value, measured in the existing European currencies, varies with their variations. As regards real value, it is the currencies that are varying, not gold.

Another fallacy that apparently has some acceptance is that the value of gold is ordained by the cost of producing it. This no doubt applies in the ultimate sense. It does not apply to any particular time. The “value” of gold depends on the total amount of it in use relatively to the total volume of circulating commodi- ties. Its “price” depends on this factor and on the value of the currency units in which its price is expressed.

It cannot be too often stated that one of the causes of the world’s present industrial upset is the lack of a common medium of exchange. This lack is hampering international trade. The only visible practicable world’s medium is gold. It is, therefore, to the benefit of all mankind that the nations should re-establish the gold basis. America has done it. Britain should now do it. If others will do it simultaneously, so much the better. To effect it these will apparently have to put a higher nominal value (in terms of their currencies) on gold.

April 1, 1922

There is nothing insuperable in that, but space forbids discussion here.

As gold producers are concerned specially (the mar- ket value of their product being at stake) as well as generally (being world citizens), it is fitting that they should give this matter their earnest attention. Rever- sion to the gold basis is practicable, through govern- ment action. Recognition by the educated public of the principles involved might lead to, and should certainly help toward, that action being taken.

Perth, Western Australia. H. R. SLEEMAN.


Kick vs. Rittinger

Arthur O. Gates deserves the thanks of many ore dressers who have neither the time nor the opportunity to specialize successfully on the theory of crushing, for his informative article on “Crushing-Surface Diagrams and Rittinger’s Law,” which appeared in your issue of Feb. 25. It will serve to clarify a much-debated subject.

I agree with Mr. Gates that writers of textbooks should strive to avoid what he calls a neutral attitude in matters of dispute, but I hasten to explain that the “Handbook of Ore Dressing” is, I believe, what it pur- ports to be; it certainly is not a textbook. Had I attempted to pass definite judgment on the