A GOLD BOOM

Evening Post, Volume CXVII, Issue 106, 7 May 1934, Page 11

A GOLD BOOM

BUT KOT AS OF YOKE

NO RICH STRIKE; YET

AND NO "SEEING .YELLOW"

All over-.-the'world a much larger sum of money, has been expended; •in goldmining in the last two years. But, an Australian observer points .out,.iio new gieat."find" lias been, ma.de—no Kalgoorlie^ \Nevertheless, there 'is a, mining boom on'the Stock Exchanges. Why?' '-.. :■-■■/■ '■•-' : ■-:■■■ i:J. ■■■';. .'■ , The answer is: ■ Because ; gold as a commodity-h 9s greatly increased in price. '■ - '•.■;' ;..... The discovery of a new Kalgoorlie would cause a wild rush. *to : West Australia.; .. .Huge portions of West Australia; would be pegged out.;, Most of if would, .be worthless.: ;, Ttnjs," the new; Kaigoorlie, while" greatly" adding to the gold output in a.'sensational local way, ; would at the' same time cause niueh excited, iesultless expenditure. But the' discovery of an tipper .storey in the value of;gold:isa;differcnt sort of discovery altogether; .; It is.inota "find" localised to. oiie. i'ieh spot. It is a "find" which acts as a subsidy .to goldmining- wherever' goldihining is producing any gold at - all, much or little. Gold at over £6. an ounce, instead of .at about &% an ounce, is a 50 per cent.' boost to. every kind of 'goldmine and .lifts the marginal producer to affluence—so long as it lasts. The gold-miner . who barely made "tucker "(food) at the old .price makes at least wages at the new price. The low-grade big mine that -ceased working half its reefs at the old price may now be working 'every one of them. ..■' . , ':/'■:■ ■■ ,-. • . A really rich gold discovery in any locality,- if it happened now,, would become super-rich at the ' new price. But would it be a better basis for a goldmining revival than the . basis (higher price) that now exists? The .'' Sydney Morning Herald suggests that the latter is the sounder basis, far sounder than; "the, spectacular discovery of gold in any particular place, which, under the name of a.boom, stimulates gambling for easy money in mines where the only reason for imagining gold to exist is that a reef supposed to. be richly impregnated with the .precious metal has been plainly drawn on a; plan by someone "calling himself a mining expert.. Erom booms ,o£ that kind,' which- are. amOngst the 'chief drawbacks to our mining industry, the country may at all times pray, to be delivered." - ■ - ~ ■- : GOLD-RUSH FEVER MAY ALSO BE --■-.. ■■: ■'■ '■■ DUE. -' ■--. ■■ ':-':■ ■-. " .Nevertheless, the ''sensationally rich discovery," and the 'evil exaggerations thereof, may.not be far away.. It is a fever, whiehj once, started, ;infeets nearly everybody, ''it has been said that this kind of mining, boom, the excitement of which? stirs- more or less the whole Community of 'Adam's sons and daughters^ can occur only • once in a generation. And: some./ observers note that the time for another boom, according to this method of. calculation, is coming close. ..All;, .that is: wanted is. the: discovery of a/new Hill End or Kalgoorlie." But nothing of that kind has given the present, mining movement its start. . The cause has. been'? the. increased price of gold, which has the same effect as if- new mines had been discovered in all parts of the Commonwealth. Eor some deposits that were barely payable to work, before are now Tich'in contents, while • others which, could- -.4 ibe worked, only'"at a'ioss.'cau'Eecmade -to yield profitable returns-. ' - Thi? applies specially to big low-grade mines^ where a matter of two or three pennyweights to the ton meant the difference between making calls'-and; paying dividends. Many ohi mines of this description that were dead are coming to life again, and others that, at previous gold values would never have been started are becoming attractive ■ In short, the cause- of the stir has been at, the paying end, rather than at the -producing: end. The former causes the public. t<> scent dividends, but "the '<rich strike* would, be something far more electrical, and it can cause whole" populations to "see yellow." .;.' . ;'. \_.' ■ AND -WIiAT OP THE GOLD STANDARD? / "Since Great Britain went off tlie gold standard, the price of the metal has been subject to- the influences' affecting the market value of an ordinary commodity. But it has" been made plain that the British gold standard has not been abandoned; permanently; ■•'•"' That it will be restored is humanly certain; but when and on what terms time lias to tell. -Therefore, how: the -restoration will affect the price of gold and incidentally the" stability 'of the mining revival here cannot be- foreseen. AH that can" be said is that, with, things as they are, the increased price of the metal, aided by the exchange ■• rate, should prove a veritable windfall for Australia. '■' The pity would be either to let such an' epportunity slip, or abuse it by making the chance'that has come for revivifying our gold-producing industry the ] occasion] for .merely; starting the kind of gamble, known as a mining boom." .............. ' .-...■■:•'■ :