MEASURE TO AID GOLD MINERS DEBATED BEFORE SENATE COMMITTEE
By Colm Mick
In the face of solid opposition
from the Treasury, State and
Interior Departments and the
Bureau of the Budget, Senate
subcommittee meetings were
held recently on a measure in
troduced by Senator Clair Engle
and co-sponsored by Senator
Ernest Gruening to provide
subsidy payments of up to $35
per ounce for newly mined do
mestic gold.
Several Alaskans testified in
favor of the measure. Among those
testifying were Senators Bartlett
and Gruening and Congressman
Rivers, James A. Williams, Direc
tor of Alaska's Division of Mines
and Mining, and James T. Crowdy,
President of the New York-Alaska
Gold Dredging Corporation, mining
at Nyac.
Officials of the State Department
spoke out against the measure, stat
ing that. “The Department believes
that the enactment of this resolu
tion would be likely to be re
garded as a modification of the
existing U.S. monetary system.’’
Interior Objects
Interior Department officials also
objected because, “With an incentive
of $35 an ounce, gold production
might be doubled, but at this dou
Fanny May’ Acts
To Spur Alaskan
Mortgage Activity
The Federal National Mortgage
Association, which purchases and
underwrites federally-insured hous
ing mortgages recently took action
to extend its secondary market
operations to Alaska.
Although “Fanny May” has previ
ously participated in the financing
of Alaska mortgages through its spe
cial assistance fund program, where
by eligible mortgages were pur
chased directly by the government
instrumentality, the secondary mar
ket, which is the standard home fi
nancing operation more common in
other states, has not operated in
Alaska.
The action will immediately in
crease the speed at w’hich Alaska
mortgages will be sold, provided a
private secondary market does de
velop, as is hoped.
Communication:
Jessen’s Weekly
Fairbanks, Alaska
Gentlemen:
Many thanks for your fine edi
torial regarding the Pioneer Park
and Memorial project.
At our last regular meeting of
Igloo No. 4. Pioneers of Alaska, the
members and officers voted unani
mously to approve your editorial
and instructed the secretary to vrite
you a letter of thanks.
Your fine service in our behalf, is
appreciated by all of us.
Yours very truly
L. E. LINCK
Secretary, Igloo No. 4
Pioneers of Alaska
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[ bled rate it would take about 42
yeais to replace from domestic
sources the monetary gold reserve
loss since 1957.”
The Treasury department also
objected to the bill, stating, “The
Treasury Department does not be
lieve that the institution of a sys
tem of incentive payments to gold
producers would represent a de
sirable approach to the basic prob
lem of our balance payments.” |
James K.oiowuv, of the New
York-Alaska Gold Dredging Corp.,
in supporting the measure stated.
"U S. gold mines cannot continue !
to operate in the face of a 1934 1
Price for their product and 1962
costs. Crowdy also pointed out
that actually, using a 1939 base,
one ounce of gold is only worth
about $15 today. He also stated that j
he felt gold production would in- i
crease rapidly, were the measure
enacted.
Double Employment
James A. Williams, Director of
Alaska’s Division of Mines and
Minerals, estimated that the mea
sure would increase gold industry
employment in Alaska from its ;
present level of about 800 workers 1
to more than 1500. "Thus,” he said,
“the impact w-ithin the industry :
will be a doubling of present pro- j
duction. with a quadrupling of its i
dollar value, plus a doubling of the
working force.”
Williams stated that the subsidy
would increase Alaskan gold pro
duction after 1963 by an estimated
150,000 ounces per year.
Speaking in support of the mea
sure, Representative Ralph J. Riv
ers offered a number of sugges
tions, believing that the provisions
of the resolution might not be ade
quate.
“First,” Rivers said, “I would sug
gest the elimination of the 5-year
cut-off provision because I do not
see how such a short-lived program
could encourage the discovery, de
velopment, or increased production
of domestic gold.”
Not Feasible
“Second.” Rivers said, “it seems
to me that to require each incentive
payment to be determined by the
Secretary of the Interior on a dis
cretionary basis would not be ad
ministratively feasible. I believe
that under this discretionary
method, the Secretary of the Inter
ior would get bogged down in au
dits. mine rehabilitation estimates,
engineering problems, stock market
scrutinies, and explorations to de
termine the value of the paystreak.”
Rivers suggested that incentive
payments of $35 per ounce be made
to producers from newly developed
and reopened mines, $20 per ounce
to producers who are and have
been in production, and $20 per
ounce to producers who derive gold
as a by-product.
Rivers stated that he felt within
10 years, producers receiving the
$35 an ounce subsidy would be
firmly established and their sub
sidy could be reduced to $20.
Senator Ernest Gruening declared
; “Gold is a weapon; let us arm," and
urged the Senate to take positive
action to bolster the gold industry.
He pointed out that the Canadian
government has established such a
' subsidy and that it has assisted
that country s industry and eco
nomy.
' “Our good friends the Canadians.”
he said, ‘‘have met their problems
realistically and without earthshak
ing repercussions. I see no reason
why we may not be equally cap
able.”
Senator E. L. “Bob” Bartlett, a
former gold miner himself, pointed
: out that unless some action is taken,
i Sold mining in Alaska may become
“a thing of history.”
Asks Equality
“Something of justice and some
thing of equity ought to operate
here," he said. “Here in this land
of free enterprise, in this land of
competition, this is the only indu-.
try where the government s
‘Your selling price established ..
1934 must prevail. You sell to t.-.e
government, you don’t roll el- -
where. We won’t give you rr.
th;m $35 an ounce, but you are _ -
ing to operate under the high , -
duetion costs of 1962.''
“I have never heard of the An
ican government acting similarly in
any other instance," Bartlett re
marked. “It is unfair and it
wrong and it ought not to be
tolerated.”
In explaining why he did not c -
sponsor the bill Bartlett said, “f
guess it is that I have been washed
through the sluice boxes so often
that I am sitting on bedrock heal
ing my wounds."
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Classic Closes Tues. Midnt. Apr. 10, 1962