(2) Hydraulic Mining.—Fig. 48 shows that after 1907 the pro duction of gold at Klondike began again to rise. This was because of new methods. In the hydraulic method, for example, great streams of water are shot against gravel banks. The water the gravel into sluices where the heavy gold lodges in corrugations like those of a washboard. In California hydraulic mining has caused the bottoms of many mountain valleys to be stripped to the naked rock, for all the gravel has been washed down to the lowlands, where it does much harm to the farms. Where gold placers border navigable rivers as in the plain of California, great floating dredges scoopup the gravel and extract the gold. Such a dredge digs its own channel ahead of it, and fills the space behind itself with great heaps of washed pebbles and cobble stones.
(3) Mines in Solid Rock.—The particles of gold in placer deposits come from veins in the solid rock. There—far under ground—hot mineralized water long ago deposited the gold as thin plates or scat tered bits in the midst of such minerals as quartz. After the excite ment of a new gold field is over, prospectors begin to search for the veins that have been exposed at the surface by uplift and prolonged erosion. Then comes the more permanent stage of mining. The process of getting either gold or silver from the veins demands much capital and is impossible for' the ordinary miner. Large companies are formed and towns grow up.
A good sample of such a town is Virginia City in Nevada. At first the ignorant miners there searched only for gold, and threw away a black silver ore which formed the great Comstock Lode, the richest ore deposit in the world in proportion to its size. From 1859 to 1880 the Lode produced metals valued at $305,000,000. In 1877 the value was over $36,000,000. At that time Nevada alone pro duced more gold and silver than all the rest of the United States. Virginia City prospered, although its food, timber, and other sup plies had to be hauled up steep mountain roads to a height of 6200 feet. Although the town has lately revived somewhat because of the consolidation of properties and the discovery of more ore, Vir ginia City is typical of what happens when veins of precious metals become exhausted. For years the streets were almost empty, the hotels boarded up, most of the houses untenanted and falling to ruin, while fine schoolhouses stood abandoned.
Economic Importance of Gold and Silver.—Although gold and silver are not one-thousandth as useful as iron, their attractiveness and rarity have made them the world's standard of value. In 1800
A.D. a piece of a given size would purchase almost as much wheat, barley, or milk as had been the case centuries earlier. Then the invention of the steam engine enabled civilized man to travel easily to all parts of the earth and to discover many new mineral deposits. Moreover, the use of machinery and the invention of improved proc esses for extracting the metals so cheapened gold and especially silver that in the latter half of the nineteenth century most of the great countries ceased to use silver as a standard of money. In 1914 the price of silver had fallen so low that a silver dollar when melted was worth less than half a dollar. Silver coins, to be sure, were still used, but the silver in them was not worth its face value. Thus gold became the single standard of value in practically all parts of the civil ized world.
Gold Supply and the Increased Cost of Living.—The fact that gold is the sole standard of value causes great trouble, for man is still exploring new regions and discovering new supplies. At the same time he is also inventing easier ways of recovering the metal from the rocks. Both the discoveries and the inventions tend to decrease the value of the metal. Figs. 51 and 52 show how the production of gold has varied. The ten-fold increase between 1850 and 1855 was due to the discovery of great deposits in California and Australia. After that there was almost enough gold to serve as money everywhere. Of course in most countries the gold itself does not circulate, but is kept in reserve by the government and is represented by paper money which can at any time be exchanged for gold.
From 1855 to 1890 gold production changed little. Then geo graphical discoveries opened enormous new fields in Alaska, Australia, and especially South Africa. The supply of gold increased about five-fold in thirty years. At the same time the cyanide process made it possible to use low-grade ores that previously were consid ered valueless. Gold became so common that its value fell greatly. Hence a dollar that would previously purchase two bushels of wheat would purchase only one, and an income of $1000 would buy only as much as $500 a few decades earlier. Thus even before the rise in prices due to the Great War the cost of living kept going up, which means in large part that the value of gold went down.