The World's Gold Supply Again Considered

Abstract

QOME fifteen years ago, the writer had the pleasure of undertaking for the Harvard University Committee on Economic Research (predecessor organization of the Harvard Economic Society) a somewhat comprehensive and detailed study of the subject now under consideration; it appeared in this REVIEW for July I920.' The present purpose is simply to review subsequent developments, and to outline the major forces likely to affect future trends therein. For the present survey, it is not essential to dwell upon the detailed geological, mineralogical, and other considerations which have for so long influenced the history of gold production and of course still do so. A fairly detailed analysis of those considerations both in general, and for particular gold fields is already on record in the earlier study. Another reason why such physical factors can properly be given much less emphasis than before is that geological and mineralogical considerations are in a sense dominated, for the time being at least, by a single economic fact: the depreciation and devaluation of important currencies --among them, the United States dollar and the effect of that movement upon the profit margins of gold mining and refining. To deal comprehensively with these matters of currency depreciation and devaluation, the related matters of inflation of bank credit and price levels, and the curious Warren theory of the relationship between gold production and price levels, would lead us too far afield at this time; and they are therefore dealt with only in such incidental manner as is essential to the immediate question under review. Various analyses and critiques of these related economic matters have appeared elsewhere, particularly in the articles by Professor Bullock and Dr. Tucker, in previous issues of this REVIEW.2