Exit Gold

The Government finally put an end to a piece of 100% nonsense: digging gold in wartime out of the California and Dakota hills for $35 per ounce and then laboriously reburying it at Fort Knox. The War Production Board last week decreed that gold mines must stop breaking out new ore this week, stop all operations within 60 days. The War Manpower Commission simultaneously moved to force gold miners to take jobs in other non-ferrous mines--notably copper--which are desperately short of manpower (TIME, Aug. 24).

Manpower Commissioner Paul McNutt directed employers (although he has no power to enforce his directive) not to hire any gold miner unless he was referred to them by the U.S. Employment Service. McNutt promised that the men would be given a choice between the other mining jobs available, would be given every help, including transportation if necessary. If 4,000 gold miners go into copper mining, there should be almost 16,000 tons more copper produced each month.

Many gold men scoffed at such hopes, said that no more than six or seven hundred miners would be set free. One reason is that some gold companies will be allowed to continue operating because their gold ore also yields war-needed metals, and because they have developed other types of mines. Alaska Juneau, for instance, is developing a chrome mine in California. Hardest-hit of all the gold companies is Homestake Mining, which paid spectacular stock and cash dividends through the '30s. From a high of $60.25 per share in 1940 Homestake dropped to $22 in anticipation of the order. Last week investors could take cold comfort in the fact that the company sits on $15,000,000 in cash and equivalent.

Meanwhile two precious metals groups continue to prosper. Since Ihe U.S. remains technically on a gold bullion standard, the Treasury must accept gold at $35 per ounce when offered. Biggest offerer remains South Africa, where production has not been restricted for fear of political repercussions. Much less excusably, the Government also maintains its silver purchase scheme, which holds the domestic price at an artificial 71-c-. However tough it may get about nonessential gold mining in the U.S., the Administration is still not tough enough to cope with the Congressional Silver bloc.

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