THE Wairarapa Age MORNING DAILY. FRIDAY, AUGUST 12, 1910. THE COST OF LIVING.

Wairarapa Age, Volume XXXII, Issue 10065, 12 August 1910, Page 4

THE Wairarapa Age MORNING DAILY. FRIDAY, AUGUST 12, 1910. THE COST OF LIVING.

People are wondering wliy, with wages so liigli in proportion to what the* were a few years back, they are no better off now than then. The wage earners find that to-day they have to pay dearer for their requirements in proportion to wages, than they previously did; whereas wages have advanced probably 20 per cent., commodities have risen 60 per cent. The trouble is more acute in America than with us as, with them, the advances in both cijises have been greater. The why and the wlierefor are being earnestly discussed in the States, and the conclusion arrived at is that the purchasing power of gold is lessened. Statistics show that the output of gold is now ten times what it was 60 years ago, and four times what it was in 1890. Today gold has lost 50 per t. of its value in relation to other commodities, and, as wages have not

increased proportionately, the world is faced with a pretty big economical problem, and one that it will tajie some of the hardest legislation and economical thinking to solve. In their daily transactions, most men either do not think of gold at all, or they think of it as having a fixed and stable value. It is easier for us to say the price of any particular article has gone up than it is to say gold has declined in relation thereto. "But what causes gold to depreciate—that is, prices to rise? The cause is the same in the case of gold as in that of any other commodity—relatively cheaper cost of production. This cheaper cost shows in an increased supply of gold, and results in making it necessary to give a greater quantity of gold to get the same quantities of other things. It is very difficult to determine the relative cost of producing an ounce of gold, a bushel of wheat, or a ton of steel. If, however, we see the output of gold increasing more rapidly than that of wheat or of steel, we may be certain that there are greater profits in producing gold than in producing wheat or steel; and that the output of gold will continue to increase more rapidly than the output of wheat or steel, until the exchange value of gold, in relation to wheat or steel, has declined sufficiently to equalise the profits and costs, of production for these two commodities. There is, in fact, a constant economic contest between gold and other commodities, because of improved methods of production." There is an eternal race between commodities. The average man ranges gold on one side against all other commodities. He forgets that gold itself, appointed a standard, has also become a commodity. As long as the production of gold keeps pace with the increase in production, the world of values goes on very well; but it has outstripped its partners—they are half a lap behind. The improved metallurgical processes used in extracting gold from low grade ores has upset the "balance of power." In the fifties only alluvial gold was worked, then came the Californian method of "hosing" mountains away, and today we have the steam and electric dredges which originated in Australia. But amalgamation—gold extraction by means of mercury—was the beginning of a new era in gold mining. It is "followed by the " chlorination" and cyanide processes, by means of which low grade ores, contaminated by sulphur, arsenic, bismuth and lead, have been successfully treated. Cyanide is the modern Midas. Without it the mines of the Rand could not be worked at a profit, so low is the grade of the ore worked. With it they produce annually £30,000,000 -worth of gold at a profit "of 22 per cent., and in America' the Homsstake mine is worked at big profits, the ore producing less than eight shillings to the ton. The world may never fear a gold famine, as the supply of low grade ores is inexhaustible.