The Economics of Canadian Gold Production

The present discussions throughout the civilized world on the subject of gold for monetary purposes may seem due to general economic conditions during the past year. But for some years previously a small group of authorities had warned the world against the continued disregard of an equitable distribution of existing gold reserves, and had urged the necessity of keeping the supply of new gold equal to the monetary demand, which, according to world production and trade figures, increases on the average about 3 per cent per annum. In 1927, Sir John Aird, the President of The Canadian Bank of Commerce, stated that the United States could spare a billion dollars of the supply it then held, 4 ½ billion dollars. About a year and a half ago the Professor of Banking and Currency in the University of London, Mr. T. E. Gregory, said, "If the world finds it impossible to modify its habits so far as to make an organized effort to economize gold seem less Utopian, it must be prepared to pay for its bad habits, in this and other respects, by a possible loss of material welfare." These clear-cut statements were not heeded, perhaps for one reason because most countries were in the flush of prosperity, and making such great demands upon the mining fraternity for industrial materials as to distract attention, at least to some degree, from gold mining. Now the world knows it faces serious problems, first, of making? fully effective its present monetary reserves, which, although badly distributed, are as a whole ample for the needs of the present, and secondly, of preventing a shortage in the supply of new gold, one that may come within the next few years if the present sources of supply are not enlarged, and if there is no marked change in the technique of gold production.