July 29, 1949 (8 pages)

iiorieaiessnheaidlies 2—The Nevada City Nugget, Friday, July 29, 1949 SEARLS THINKS SOUTH AFRICA TO HIKE GOLD (continued from page. 1) solely for the production of gold, and that means from placers and dry and siliceous ores. It includes Alaska but not the Philippines. There is additional production of about 20 per cent over these figures in 1946 of what I call byproduct gold, which arises from the treatment of copper and lead ores, chiefly. ‘ As the result of always having been in the gold-mining industry, I became president and am now chairman of the Empire Star Mining Co., Ltd., which operates “mines in Grass Valley that have been in continuous operation for 98 years, and where they have attained a depth of 11,000 feet on the dip of the veins, and have open and accessible, now, about 120 miles of workings. To maintain those mines and keep them from filling with water and being ruined during L208, we expended $2,500,000. We are still keeping them open by a leasing operation, but it is a very tough proposition, and for that reason in 1946, just before I went to Bikini I talked to Judge Vinson, who was then secretary of the treasury, and pointed out to him that in our opinion at least, the Secretary could license newly mined gold for export and proposed to him that he do so. He considered the matter favorably, and I thought he was going to do it; but he asked me. to have the matter presented in proper form as a memorandum from. counsel of the company, and that was done. Before Judge Vinson, however, could give this much. consideration, and to my surprise, he was replaced as secretary of treasury by John Snyder, and when his boys got through with it why there was no favorable response. About the only other thing we could do then was to take advantage of the treasury regulations which permit the production and sale of gold in its natural form. And I exhibit to you here—although I am sorry I cannot leave it here because it belongs to me and I paid $4,100 for it—100 ounces of fine gold in its natural state. You cannot hold or sell gold in any other condition excépt in its natural state. Then the regulations go on to say that it may not be treated with mercury or acid or melted. . We sell this gold for $41 an ounce accompanied by a certificate that this container has exactly 100 ounces of fine gold, and that at any time the treasury gives permission we will melt it into bars; but if we melt it to a bar now, then we have to sell it to the treasury. We make a small profit at $41 an ounce. It costs about $1 an ounce to put the gold in this a but we cannot get by at avo: I will go on to say that the sale of this kind of gold, while permitted by. the treasury, is not big business. We have sold perhaps, 10,000 ounces, or less. The reason we cannot sell more is that the buyers—and there are a good many of them—are afraid that the treasury will change the rules again. The_ regulations could: be changed by the secretary, and aia mas eters tt COMPETENT CARE For Your CHERISHED BEST We understand how you feel about your best bib and tucker . that’s why we give it our very best treatment! Grass Valley Laundry & Dry Cleaners are considerate to fine fabrics. It will not harm color or texture: We care for your cloths! * GRASS VALLEY LAUNDRY and 111 BENNETT STREET PHONE 108 this sort of thing forbidden. It is even possible—it was done in 1934—they would ordered to bring the gold in and sell it to the Treasury for $35, notwithstanding the fact they paid $41 an ounce for it. . That is what makes this traffic difficult, and if there were a law passed permitting this traffic, not only a regulation, then I guaranty we could sell a million ounces very shortly. The queer thing during the time the price of gold was going up, when Mr. Roosevelt raised the price of gold, the treasury regulations then permitted you— not to sell natural gold but you could sell cyanide precipitate or amalgam, which are the very things that under the present regulations you cannot sell. We did sell several millions of dollars worth of those products in England because the price there was higher than in the United States. Now, such.a situation will come about very soon again. Whatever the United States will do, I am. convinced that the Union of South Africa is going to put the gold price up. You see, here the gold ore business is a very small part, a. fraction of 1 per cent, of our national income. There are now engaged in gold mining in the United States— and the type of gold mines I speak of are the mines that are engaged in the production of gold only from gold ore—only about 5,000 men. There used to be 20,000. Of course, that is not all the employment involved; the business of gold mining leads to very much additional business improvement in the way of creation of demand for tools and all those facilities that are required in the mining of gold. In Africa the situation is. different. In Africa they mined last year 55,000,000 tons of gold ore with nothing else in it. That is more Aonnage than the whole operation of the Kennecott Copper Corp. mined last year with steam shovels at all their properties including other methods, and including Utah Copper. It is twice —more than twice—as much as Phelps Dodge mined in their enormous pits in Arizona. It is within 20 per cent of as much tonnage as that produced of iron: ore in the iron ranges last. year. That is big business, Senators. They cannot go ahead at the present price. The Africans have developed 700,000,000 tons of ore and a large part of it cannot be produced .at the South African pound equivalent of $35. I fully believe that because of the importance of this to the South ~African Government that whatever we say about it or the economists say about it, or the Monetary Fund, says about it, that that is going to come about, that is the price is going to be raised in sterling, and. that is after first being raised in South pric edinlolemfwy Wego price in dollars may be. I think this matter which Dr. Lawrence referred to yesterday is a matter of some interest, and I would be very pleased to see this committee find out from the treasury whether actually the $80,000,000 worth of British sovereigns that the treasury assisted the oil company and the National City bank to buy from Peron was purchased at par; that is to say, at the equivalent of $35 gold plus 305 Broad Street, Nevada City—Telephone 36 A legal newspaper, as defined by statute : RT -H. and DONALD W. WRAY, Publishers Kenner W. WRAY, Editor and Advertising Manager i i lishers Association ° Member California Newspaper Pub tion Published every Tuesday and Friday at Nevada City, California, and entered as matter of the second class in the postoffice at Nevada City Cc ess, March 3, 1879. fe eee SUBSCRIPTION RATES One year outside county (in advance) One year in county (in advance). Four months (in advance) One month (in advance) one-fourth of 1 per cent. I am assured that was so. But having been quite familiar Searls’ testimony will be congovernment with negotiations and the difficulties of dealing with the Argentinians, I think it would be a matter of interest to this committee to find out from the treasury whether actually some concession of one kind or another was paid to the Argentine for this $80,000,000 worth of gold. I suspect, although I cannot give any grounds for it, that the government has paid to a foreign nation or permitted payment to a foreign nation of something more than $35 an ounce, although they will only pay their own citizens $35 an. ounce. Searls’ Testimony will be: continued in our Tuesday edition. . TERETE TE F Amazing Special Value KROEHLER } August Furniture Sale Going Full Blast! Nation Wide! This Is the Sale You’ve Read About in Life and The Saturday Evening Post! $499.50 Thick Piled Mohair Freizes, Sofa and Chair Set only $1 59. 50 Sculptured Boucle, Séfa and Chair Set onty $179.50 Ask About Our Liberal Terms The Furniture Center OPPOSITE VETERANS MEMORIAL BUILDING 250 So. Auburn Street — Open Tuesdays and Fridays ’til 9:00 P.M. — Phone 36 om a ct

iiorieaiessnheaidlies 2—The Nevada City Nugget, Friday, July 29, 1949 SEARLS THINKS SOUTH AFRICA TO HIKE GOLD (continued from page. 1) solely for the production of gold, and that means from placers and dry and siliceous ores. It includes Alaska but not the Philippines. There is additional production of about 20 per cent over these figures in 1946 of what I call byproduct gold, which arises from the treatment of copper and lead ores, chiefly. ‘ As the result of always having been in the gold-mining industry, I became president and am now chairman of the Empire Star Mining Co., Ltd., which operates “mines in Grass Valley that have been in continuous operation for 98 years, and where they have attained a depth of 11,000 feet on the dip of the veins, and have open and accessible, now, about 120 miles of workings. To maintain those mines and keep them from filling with water and being ruined during L208, we expended $2,500,000. We are still keeping them open by a leasing operation, but it is a very tough proposition, and for that reason in 1946, just before I went to Bikini I talked to Judge Vinson, who was then secretary of the treasury, and pointed out to him that in our opinion at least, the Secretary could license newly mined gold for export and proposed to him that he do so. He considered the matter favorably, and I thought he was going to do it; but he asked me. to have the matter presented in proper form as a memorandum from. counsel of the company, and that was done. Before Judge Vinson, however, could give this much. consideration, and to my surprise, he was replaced as secretary of treasury by John Snyder, and when his boys got through with it why there was no favorable response. About the only other thing we could do then was to take advantage of the treasury regulations which permit the production and sale of gold in its natural form. And I exhibit to you here—although I am sorry I cannot leave it here because it belongs to me and I paid $4,100 for it—100 ounces of fine gold in its natural state. You cannot hold or sell gold in any other condition excépt in its natural state. Then the regulations go on to say that it may not be treated with mercury or acid or melted. . We sell this gold for $41 an ounce accompanied by a certificate that this container has exactly 100 ounces of fine gold, and that at any time the treasury gives permission we will melt it into bars; but if we melt it to a bar now, then we have to sell it to the treasury. We make a small profit at $41 an ounce. It costs about $1 an ounce to put the gold in this a but we cannot get by at avo: I will go on to say that the sale of this kind of gold, while permitted by. the treasury, is not big business. We have sold perhaps, 10,000 ounces, or less. The reason we cannot sell more is that the buyers—and there are a good many of them—are afraid that the treasury will change the rules again. The_ regulations could: be changed by the secretary, and aia mas eters tt COMPETENT CARE For Your CHERISHED BEST We understand how you feel about your best bib and tucker .. that’s why we give it our very best treatment! Grass Valley Laundry & Dry Cleaners are considerate to fine fabrics. It will not harm color or texture: We care for your cloths! * GRASS VALLEY LAUNDRY and 111 BENNETT STREET PHONE 108 this sort of thing forbidden. It is even possible—it was done in 1934—they would ordered to bring the gold in and sell it to the Treasury for $35, notwithstanding the fact they paid $41 an ounce for it. . That is what makes this traffic difficult, and if there were a law passed permitting this traffic, not only a regulation, then I guaranty we could sell a million ounces very shortly. The queer thing during the time the price of gold was going up, when Mr. Roosevelt raised the price of gold, the treasury regulations then permitted you— not to sell natural gold but you could sell cyanide precipitate or amalgam, which are the very things that under the present regulations you cannot sell. We did sell several millions of dollars worth of those products in England because the price

there was higher than in the United States. Now, such.a situation will come about very soon again. Whatever the United States will do, I am. convinced that the Union of South Africa is going to put the gold price up. You see, here the gold ore business is a very small part, a. fraction of 1 per cent, of our national income. There are now engaged in gold mining in the United States— and the type of gold mines I speak of are the mines that are engaged in the production of gold only from gold ore—only about 5,000 men. There used to be 20,000. Of course, that is not all the employment involved; the business of gold mining leads to very much additional business improvement in the way of creation of demand for tools and all those facilities that are required in the mining of gold. In Africa the situation is. different. In Africa they mined last year 55,000,000 tons of gold ore with nothing else in it. That is more Aonnage than the whole operation of the Kennecott Copper Corp. mined last year with steam shovels at all their properties including other methods, and including Utah Copper. It is twice —more than twice—as much as Phelps Dodge mined in their enormous pits in Arizona. It is within 20 per cent of as much tonnage as that produced of iron: ore in the iron ranges last. year. That is big business, Senators. They cannot go ahead at the present price. The Africans have developed 700,000,000 tons of ore and a large part of it cannot be produced .at the South African pound equivalent of $35. I fully believe that because of the importance of this to the South ~African Government that whatever we say about it or the economists say about it, or the Monetary Fund, says about it, that that is going to come about, that is the price is going to be raised in sterling, and. that is after first being raised in South pric edinlolemfwy Wego price in dollars may be. I think this matter which Dr. Lawrence referred to yesterday is a matter of some interest, and I would be very pleased to see this committee find out from the treasury whether actually the $80,000,000 worth of British sovereigns that the treasury assisted the oil company and the National City bank to buy from Peron was purchased at par; that is to say, at the equivalent of $35 gold plus 305 Broad Street, Nevada City—Telephone 36 A legal newspaper, as defined by statute : RT -H. and DONALD W. WRAY, Publishers Kenner W. WRAY, Editor and Advertising Manager i i lishers Association ° Member California Newspaper Pub tion Published every Tuesday and Friday at Nevada City, California, and entered as matter of the second class in the postoffice at Nevada City Cc ess, March 3, 1879. fe eee SUBSCRIPTION RATES One year outside county (in advance) One year in county (in advance).. Four months (in advance) One month (in advance) one-fourth of 1 per cent. I am assured that was so. But having been quite familiar Searls’ testimony will be congovernment with negotiations and the difficulties of dealing with the Argentinians, I think it would be a matter of interest to this committee to find out from the treasury whether actually some concession of one kind or another was paid to the Argentine for this $80,000,000 worth of gold. I suspect, although I cannot give any grounds for it, that the government has paid to a foreign nation or permitted payment to a foreign nation of something more than $35 an ounce, although they will only pay their own citizens $35 an. ounce. Searls’ Testimony will be: continued in our Tuesday edition. . TERETE TE F Amazing Special Value KROEHLER } August Furniture Sale Going Full Blast! Nation Wide! This Is the Sale You’ve Read About in Life and The Saturday Evening Post! $499.50 Thick Piled Mohair Freizes, Sofa and Chair Set only $1 59. 50 Sculptured Boucle, Séfa and Chair Set onty $179.50 Ask About Our Liberal Terms The Furniture Center OPPOSITE VETERANS MEMORIAL BUILDING 250 So. Auburn Street — Open Tuesdays and Fridays ’til 9:00 P.M. — Phone 36 om a ct