Some Economic Aspects of the Gold Mining Industry

For a country that is as important a gold producer as Canada, the return to the gold standard of the major commercial countries of the world during the past five years is of particular significance. To the Canadian gold mining industry, the advantages of the gold standard are a matter of more than theoretical importance. According to economic theory, prices are determined by the relation between the demand for, and the supply of, money. The demand consists of the offering of goods for money; the more goods offered, the greater the demand. The supply consists of the total money available for the purchase of goods. The total supply of goods to be exchanged through the instrumentality of money remaining the same, an increase in the supply of money will, according to this theory, raise prices; conversely, a decrease in the supply of money will lower prices. Let us imagine that everyone in the world suddenly had twice as much money, and that the sum total of all goods remained the same. Is it not obvious that we would pay just double the price for these goods? In Canada today, most people have approximately 50 per cent grea.ter income than in 1913, and the average price for all articles sold in Canada is 50 per cent above those in 1913.