No estimates are available for the amount of gold in monetary use in Brazil in the years 1889 or 1899, but it was probably not in excess of $10,000,000 at either time. On December 31, 1910, the stock in the conversion fund was $98,500,000.

According to the customs records of Great Britain and the United States, Uruguay has imported large amounts of gold. Their records indicate an excess of exports to Uruguay over imports from that country of $128,000,000. There are no published figures for Uruguay either of customs records or bank reserves. The country is on a gold basis, but its population, banking business, and trade are all too small for such an absorption of gold. Probably most of these imports ultimately reached Argentina.

There have been small gains in other South American countries and it is probably fair to estimate that altogether South America during the second period has increased its gold holdings by the amounts now in the conversion funds of Argentina and Brazil, or, in round figures, $343,000,000. . . .

Summary of foregoing [page 277]. During the first period Asia and South America took comparatively little gold. Where they had any metallic standard or currency, it was silver, and for many countries the currency was inconvertible and depreciated paper.

Reviewing the second period, in which the production of gold amounted to approximately $4,037,000,000, the following amounts appear to have been diverted from monetary use, or so employed that apparently they would not be directly effective upon world prices:

Gold Stocks In Sight In Europe, The United States, Canada, Australasia, And South African Colonies. [Table Comprest] In Million Dollars.

Circulating Notes And Loans And Discounts.

Industrial consumption

$ 958,000,000

India

433,000,000

Egypt

146,000.000

Japan

69,000,000

South America

343,000,000

Mexico

28,500,000

Total

1,977,500,000

Banks and treasuries.

Dec. 31

1889

Dec. 31 1899

Dec. 31 1910

Increase

1899 over

1889

Increase

1910 over

1889

Total United States

423

683

1,410

259

726

 

914

1,601

2,464

686

863

Total Australia, Canada,

S.Africa

102

161

343

59

181

Grand total

1,440

2,447

4,218

1,006

1,771

 

Notes in circulation

Loans and discounts

Institutions.

Dec. 31 1889

Dec. 31 1899

Dec. 31 1910

Dec. 31 1889

Dec. 31 1899

Dec. 31 1910

Total Europe

2,818

2,973

4,324

3,031

4,184

5,146

Total United States

126

199

684

3,842

5,167

12,855

Total Australia, Canada, S.

Africa and Japan

145

197

398

909

1,351

2,591

Grand Total

3,089

3,369

5,407

7,782

10,704

20,593

The total represents nearly one-half of the production of the period. The demand outside of the old circle of gold-using nations is a growing one, greater in the last half of the period than in the first, still increasing in the countries named and spreading to other countries that in the past have not been accustomed to use gold as money. . . .

Relative value of factors in the calculation. In considering the figures for production, consumption, and distribution, those for the holdings of banks and treasuries are, of course, of first importance, there being no element of uncertainty in them. Next to them in order of credibility are the figures for production, which for all the more important mining districts are reported by responsible authorities. The figures for consumption in the arts must be allowed a larger margin for error, and have been fully explained. The official statements of the exports and imports of different countries, which might be supposed to be from trustworthy records, in fact must be used with great caution, as they are frequently contradictory, or inconsistent with more credible evidence. . . . It is generally understood that exports are given a less strict surveillance than imports, and that movements by sea are more accurately recorded than those between adjacent countries by rail.

The first period, 1890-1899. The production of the first period was estimated in round numbers at $1,960,000,000, which from the best data available seems to have been distributed about as follows:

. . The production of gold during this decade was approximately $900,000,000 greater than in the preceding one, and the increase was largely taken for the reorganization of monetary systems and for strengthening bank reserves. The gold reserves of European banks increased 75 per cent, while the paper issues increased less than 5 per cent. The world over it was a decade in which enterprise was at a low ebb, although the years 1890-1892 were very prosperous in the United

Industrial arts ........................................................................................

$ 570,000,000

Banks and treasury of United States ...................................................

260,000,000

European banks ..................................................................................

686,800,000

Banks of Canada, Australasia, and South Africa ...

59,700,000

Total .................................

1,576,500,000

Other banks, circulation, private holdings, etc...

383,500,000

Total .................................

1,960,000,000

Again, the amount unaccounted for, and which is considered to have been gained by other banks or to have entered into circulation and private hoards, may seem small for the volume of production. In the United States a calculation based upon coinage and the exports and imports of domestic coin, indicates a net gain of gold coin in circulation of $71,-000,000. It is to be considered that there is an undoubted tendency in all countries to use banks more than formerly, and it is probable that the stock of gold in banks has been recruited not only from new production but to some extent from gold heretofore held in private hoards and out of use. In every country the younger generation to whom these hoards descend is likely to put them to some use.

The table shows that banks of issue in Europe in the second period increased their gold stocks by about 50 per cent and their note issues about the same. Their advances or loans and discounts increased about 25 per cent, or by a lower percentage than during the previous period.

An examination of the individual gains of these instituStates, and there was a general revival in the last two years of the period. Prices reached the lowest 10-years level for which records are existent.

Second period, 1900-1910. According to the figures given the distribution of new gold during the second period was apparently about as follows:

Industrial consumption ......................................................................

$ 958,000,000

India ..................................................................................................

433,000,000

Egypt ................................................................................................

146,000,000

Bank of Japan .................................................................................

69,000,000

Banks and conversion funds of South America..

343,000,000

Banks of Mexico .............................................................................

28,500,000

Banks and treasury of the United States ........................................

726,800,000

Banks and treasury of Canada .....................................................

85,700,000

Banks, Australasia and South Africa ...........................................

95,600,000

Banks of issue of Europe ............................................................

863,200,000

Total .................................

3,748,800,000

Other banks, circulation, private holdings, etc...

288,200,000

Grand total .......................................................................

4,037,000,000

tions will show that a large amount of the new gold taken by Europe has been devoted to the same purpose as in the preceding period, to wit, the rehabilitation of monetary systems and to strengthen and buttress the institutions of issue. . . .

The outlook for gold production [page 286]. It has been a theory of writers on the subject that the rise of commodities and wages would automatically check the production of gold, thus providing its own corrective, but the gold-mining industry furnishes an illustration of how invention, organization, and the use of capital are able to accomplish a reduction in costs when every factor in the calculation shows an advancing tendency. The cost of handling ore and extracting gold in the Transvaal mines per ton of ore treated has steadily declined and made a new low record in 1910.

The cost of mining gold, however, unless revolutionary changes are accomplished, does not have as great an influence upon production as in the case of common commodities for which there is an unlimited supply of raw materials. It is a fact already alluded to in this paper, and familiar to all who have followed developments in the gold-mining industry, that the great increase in the output since 1890 has been due in the main to two contributing discoveries that were directly related to each other, to wit, the discovery of the Transvaal field and the discovery of the cyanide process. Of course, it is possible at any time for both of these discoveries to be repeated in others as important, but until such new discoveries are made there will be no similar leap in production. Since 1906 the rate of production in the United States, including Alaska, has been practically at a standstill. There is nothing to indicate a considerable change in either direction. Australasia has been on a declining scale since 1903, the annual yield being now about $28,000,000 below the high year. Russia, Canada, and Mexico have shown an increase of late about sufficient to offset Australasia. The Transvaal has been pushed up to a new record in 1911, but the deposit is well defined, and the increased production of recent years has been due to an enlargement of the crushing plants rather than to any extension of the field. This policy of increasing the investments in order to exhaust the mines more rapidly has probably gone nearly as far as it can be profitably followed. . . .