The remaining countries of the world are of little importance as gold producers; hence a discussion of the commercial control of their mines would be of little value. In most of them the mining properties are owned and operated by domestic capital, the former Empire of Austria-Hungary being one exception to this general statement. Prior to the war, British capital controlled gold mines in Transylvania.
The ownership of smelters and reduction plants has little influence upon the commercial control of the gold industry. Most of the large gold-mining companies have their own refineries at the mines, and smelter control is therefore identical with mine control. Some gold is produced as a by-product in the smelting of lead, silver, and copper, particularly in the United States, where the smelters are controlled almost entirely by American capital. Further discussion of the commercial control of smelters and refineries will be found in [Chapters XIV], [XV], and [XXX].
The control of secret processes and patents is of less importance in the commercial control of the gold-mining industry than that of any other mineral. The industry is peculiar in that the price of gold is always fixed and there is no competition for a market. Control of an improved method of extracting or refining gold might enable one company to reduce mining and refining costs and thus insure a larger profit, but giving the improved process to a second company would not necessarily reduce the profits of the company that had discovered it.
POSITION OF LEADING COMMERCIAL NATIONS
The United States controlled politically through state sovereignty 19.3 per cent. of the gold production in 1913, ranking next to Great Britain. Commercial control was somewhat greater, amounting to approximately 23 per cent. of the 1917 production. The mines of the United States are owned almost exclusively by Americans, and American capital is invested in many foreign fields. Over half, perhaps as much as two-thirds, of the mines of Canada are owned by United States corporations. The largest of the Korean companies are owned or managed by American capital. Two American companies were established recently in the Transvaal. Probably 30 to 40 per cent. of the gold produced in Mexico in normal times comes from the United States owned mines. The production of Central and South America, although at present relatively unimportant, is largely controlled by Americans.
Although outranked in production by Great Britain, the United States controls by far the largest stocks of gold coin and bullion of any nation. In 1916 there was in the banks, the national treasuries, and in circulation in the United States $2,299,454,000, or almost twice the amount possessed by any other nation. In 1918 this amount had increased to $3,050,000,000. The monetary reserve probably exceeds the total gold output of the United States since the recording of statistics of production began.
In view of the fact that the national debt of the United States is low as compared with the debts of the other principal nations, the financial system of this country is on a relatively sound basis. When the time comes to redeem the outstanding bonds and other forms of indebtedness that have accrued during the war, the United States will undoubtedly be in a more favorable position than any of the other belligerents.
The stocks of gold in the chief gold-producing countries in 1916 are shown diagrammatically in [Figure 21].
Great Britain is the leading gold-producing nation of the world. The British Empire controlled politically 62.9 per cent. of the 1913 production, and British commercial control approximated 63 per cent. An insignificant amount of gold is produced in the British Isles, but the empire includes such important gold producers as South Africa, Australia, Rhodesia, India, and Canada. British capital also controls gold mines in Siberia, in Mexico, in South America, and in the United States.
Despite the large political and commercial control exercised by the British, the gold stocks of the British Empire have been much smaller than those of the United States and in 1916 were surpassed by those of France.