Lets Go Gold Mining By J.p. Hall

Foreword The treatment gold has received by the United States government in the past few decades . . . or ever since the first administration of FDR ... could easily be designated a crime, and the perpetrators traitors to the American people. During that era encouraged inflation has lost these same people close to 200 billion dollars' in purchasing power. At the same time our government has refused to revalue gold to meet the commodity inflation. Neither has it given consideration to the extra load gold has been forced to take in handling free world finances. Adding further injury the FDR administration made it impossible for America's gold mines to aid by shutting down domestic production. This was done by Roosevelt's infamous Gold Mine Closing Order L-20S. He also made it a crime to own or hold gold, ordering it all turned into the Treasury. One year later FDR raised the price, thus cheating the owners of the turned-in gold to the extent of $14.33 per ounce. Then came the Bretton Woods Agreement framed by Communists in our government employ. It made our donars spent in foreign countries convertible to U. S. Treasury gold. Our money spent guaranteeing the safety of foreigners gets like treatment. Likewise American investments building foreign industries leaves a trail of dollars subject to conversion to U. S. Treasury gold. Mter converting over nine billions of them there remains over $27 billion awaiting the conversion process when we don't have the gold for that purpose. Even using the $12.3 billions legally needed to back Federal Reserve Notes and Deposits we don't have enough to make the conversion. This is the plot agreed to by our socalled monetary managers. What a hold this gives foreign banking interests on our taxpayersl This volume, while partially fiction, as to its main characters, brings out undeniable evidence of the above charges. Monetary conditions described have been approved by Congress and past and present administrations. Specially named congressmen, by their own admissions have given their blessing to the Treasury getting rid of all U. S. gold and putting the nation's vast debt of $315 billion and inflationary losses on the taxpayers' property and savings. It is a story of a young New York newspaperman who wanted to go gold mining in California. It brings out what Washington has done to a basic industry while relating the mining adventures of its principal character. It is highly factual, the result of the author's thirty years' experience in mining publicity.

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The New York Newspaper Strike, Gold and Money. Love's Labor Lost. Off For California, E Clampus Vitus, John Collins - Gold Miner & Economist. Is The War Emergency Over? The Banker and the Miner, Devaluation and the Investor, Joe and The Mine Broker. Bureaucracy and The Miner. George Holmes, The Prospector. The Coloma Discovery. The Dogtown Nugget. Oroville, The City of Gold, Mining and The "Prudent Man". The Prospector and the Girl. Grass Valley, The Depression's "White Spot". The Mother Lode Gold Country. What Constitutes A "Discovery"? The Abandoned Mine Shaft, The Prospector's Letter To A Congressman, Geophysical Exploration in Mining. The Test Case on the War Emergency. Joe Hears About a Real Gold Mine. Master-Minding the Gold Drain. How Does Senator Barry Goldwater Stand? 'Governor Nelson Rockefeller and the Gold Miner. Prospector Joe Has A Visitor. The Plot To Give Away All U. S. Gold. Senator Bible About the Gold Give-Away. IMF Talks "Liquidity" But No Gold Raise. Joe Prepares For His Battle With Bureaucracy. Joe Faces the Bureaucrats and Wins. Prospector Joe Makes A Real Deal. U. S. Ignores Its Gold Wealth. Liberals Would Scrap All U. S. Gold. The Assassination of President Kennedy. Prospector Joe's Congressional Report. The Happy Event.

Any part of this book may be reproduced without permission, but with due credit. Copyright

®

1964 by J. P. Hall.

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CHAPTER 1

The New York Newspaper Strike

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ETURNING from a dismal day spent at Typographical Union head-

quarters on the 49th day of the New York newspaper strike, Harold Wilson and Joe Bacon, news writers on one of the nine struck newspapers, were more than disgusted with the situation. The lack of their weekly pay checks had run their savings accounts to low levels. They and their families had passed a dismal Christmas and entered a new year without any prospect of their jobs opening up. On that 49th day of the strike Harold took some encouragement out of an AP report reading: WAGNER STEPS INTO NEWSPAPER STRIKE NEW YORK - Mayor Robert F. Wagner offered yesterday to personally conduct marathon mediations aimed at settling the city newspaper strike now in its 49th day. Shortly after a two-hour joint negotiating session brought reports on no progress from striking printers and publishers, Wagner issued a call for the marathon sessions. ''I'll personally sit with both sides and will be available at all times and will emphasize that they must stay here until an equitable settlement is reached," Wagner said.

"I don't see much chance of the Mayor doing anything for us", moodily said Joe. "A politician can't take sides; he's got to take both sides and play the middle." "Well," responded Harold, <eHe may get some place. Anyway it's better than waiting for something to happen. I have a home and a family to support. I will say the folks did their best getting by Christmas with very little of the usual remembrances as far as presents are concerned. Mter almost two months and no pay check they realized that it will soon be a matter of eating with no money for the rent collector." "It's a tough dear, said Joe. "1 haven't a home and a family to support like you have and I don't like the deal we have to put up with going on a strike every time a bunch of hot head Labor leaders want to show their strength. The printers are now getting $145 a week - and a short week. How can they expect more? The newspapers are right; it isn't in the business to pay more. They have tried everything: using a lot of pictures, big headlines and a fatter linotype slug. Ad rates are out of sight and if the printers win they will have to go up. I for one am thinking of trying something else and not in New York. I think I can bid it Goodbye with a lot of pleasure." "Reh! What do you mean"? questioned Harold. "You have been a N ew York news hound so long that you could not make it at anything else or in any other place". «That's what you think"~ quickly responded Joe. "I'm fed up on depending on striking printers to make up their minds and with the Big City's everlasting snow. I am going to sunny California". 3

\Vhile Joe's decision was not exactly a bombshell it did take Harold by surprise. He had always known Joe to be rather impatient and a nonconformer. With a natural ability he, went through school with ease but not with high scholastic honors. He didn't appear to be interested. And while he made a good newsman he never felt happy complying with usages and customs particular to newspaper work. He loved outdoors and although the New York area did not supply locations for the hobby of rock hunting, Joe gathered quite a collection and in quest for specimens he began to get interested in mining. He read mining books and was especially intrigued with a gold-covered monthly magazine from California. With no real attachments holding him in New York, Joe had really been attacked by the gold bug. Reading of the many gold strikes on and off the famous ~1other Lode of California, he became an enthusiast. Of course the publications he read did not recount the hardships, the labor and the costs of the industry. It was the pictures they drew of the outdoor, free and easy life of the prospector in acquiring a gold claim on the land that was free, which more than offset disadvantages. He was sold on California and the seemingly unlimited prospects in gold mining. When he told of his plans, already made, Harold was ready with "J oe, you have been reading too many stories of the gold discoveries of the '4gers. Gold mining has been going on in California for 115 years - ever since James W. Marshall of Marshalltown, Iowa, made his discovery at Coloma, EI Dorado County, on January 25, 1848. The fortunes were made in the early 1850's when you could scoop the gold up off the surface. It wasn't many years before those who went to the gold fields had to turn their attention to other work. It was either that or start real digging into the bowels of the earth. It's a hard game when you consider the facts. If I were you, Joe, I'd do some more thinking". "My thinking is all done", responded Joe. "The reading that I have .. been doing tells me California has 90% of her gold still in the ground. The state has produced over two billion dollars worth which means there is still eighteen billions left. I'm going West to get my share". "Furthermore," continued Joe, "I don't want to work with any part of Labor that will bring upon the people of a city of the size and importance of New York such a catastrophe as the printers' union has done. It goes against my grain". «For once I can agree with President Kennedy when he says: strike has long passed the point of public tolerance' ".

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"1 too, agree with President Kennedy but more concerning the strike has come to light in a statement issued from the office of our typo president, Elmer Brown. It's in this evening's paper, read it". COLORADO SPRINGS, Colo. Elmer F. Brown, president of the International Typographical Union, said yesterday striking printers in the New York newspaper strike would have to vote on whether the dispute should be submitted

to arbitration. Brown issued his statement to newsmen after President Kennedy said at his news conference that the 75-day-old strike had «long passed the point of public toleration."

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«Ours is a democratic union," Brown said, Hand Mr. Powers shouldn't be condemned. He only acts in the way the membership of his local union wants him." He referred to Bertram A. Powers, president of the New York local, who was criticized by Kennedy. Brown said, HIt leaves me a little cold to have somebody (President Kennedy) condemn us and say we are wrong and then ask us to find a third man to concur with him (Kennedy)." «Anyone who attempts to lay the blame on our union or any attempt to say the black-out of newspapers was caused by the union has forgotten the facts or

didn't know them," Brown said. Brown reiterated that the union did not strike five of the metropolitan newspapers. "Ever since the strike took place our union has· constantly told the publishers of those five newspapers the printers are ready to go to work on these newspapers under terms of the expired contract." Brown asserted, "If there has been any lack of collective bargaining, it lies at the doorstep of the New York Publishers Association and not the typographical union. We are ready to start bargaining at once and stay bargaining until a contract is negotiated."

"No doubt there is considerable truth in what our union president, Mr. Brown, brings out; and he isn't scared to tell the White House about it, but that isn't settling matters in any way. I'm fed up and 1 am definitely off to California as soon as I can get ready," said Joe .

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CHAPTER 2

Gold and Money HI think, however, you'd better give the idea some more thought," suggested Harold. "I talked to a man the other day who has just made a trip all through the gold areas of California. He says there is no mining going on, the mill buildings are dilapidated with most of the mines marked only by dumps of rock that contained no gold. 'Waste dumps: he called them. He talked to a lot of people on the Mother Lode who gave the impression that there was no interest in gold mining.'? «That's just the time I want to get there", said Joe. "The time to go into any business is when everybody else is off on it.?' "'I don't think that will hold true in gold mining", responded Harold. "The administration has found out it can get along easier with paper money. Gold costs too much; too hard to get. When they can print money why do all that hard digging?" "That's the way it looks now but wait till the settling up time", responded Joe. "Even now when foreigners get our paper dollars they don't rest until Uncle Sam has converted those dollars into gold. They are smart and we are the dumb-bells. No nation can have a substantial money without gold. Look at China before the Commies took over. I remember what Clair Engle, the California congressman, told wh~n he and a party of government men came back from the Far East. They went out for an evening but first had to visit a bar for a drink. 'We had

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one round of drinks', said Clair,
<1 don't expect to stop the trend", answered Joe. "The Washington gold shifters will have to learn that lesson themselves. I can't get away from the idea that the country will be forced to get back on the gold standard, but it will be when gold is worth much more than it is now. I want to get into the business before U nele Sam quits his Rip Van Winkle. While Uncle sleeps somebody has done a good job of brainwashing most of our officials. Gold has been good for thousands of years and we can>t get away from it. That idea is pretty firmly set in my mind and I want to cash in on it." "But why California", said Harold. «They tell me they have been mining gold there for the last 115 years and the mines are all worked out", "That's communist and international propaganda which California people haven't done anything to offset. I don't say that California officials are fellow-travelers but they have let a lot of brain-washing get by without contradiction. They have been leaning too far to the left when a proper stand would have been very helpful. When in 1933 FDR called in all the gold at $20.67 per ounce and when he got it all, upped the price to $35, not a man in high office said a word. That move cheated the owners of the gold $14.33 per ounce. And when he issued his gold mine closing, order L-208, there wasn't a voice raised in the entire Congress, even though the order was unconstitutional. Roosevelt was a tool for those who would wreck the nation that had the most substantial monetary system of the world. The results of his acts are still at work. There's still a chance for us to pull out - if we can get a Conservative in the White House that isn't the tool of the Internationalists. And I'm telling you right now our Governor Rockefeller isn't the man." «Boy! For a sourballed newspaper hoy you are hitting the political road in great shape", said Harold. "If the hig boss knew you could talk like that he might have made you the number one columnist, and you'd now be forgetting all about California gold. And, Joe boy, Washington international politics doesn't change the gold mining situation in California, or in any other state. I'm afraid ifs washed up and you're in for the number one disappoinment of your life. There's no future for Western gold mining - and especially for a tenderfoot. You have been reading that gold-covered journal from California too long." "It's true," admitted Joe, «I've been a constant reader of that publication for more than the past ten years. I'd like to meet the fellow that puts ou~ The Journal. I think he's got plenty on the ball. He writes as if he gets around and gets real information about the gold possibilities of his state. And he isn't bashful about letting the folks in Congress 6

know how they are standing for the ruination of not only Western gold mining but also the monetary system of the USA:' «I can't help but agree with you that the present gold program is bad for all of us as well as for the gold miner, but I think that California publisher kind a strings a long bow sometimes. Some of his mine articles and discoveries may be stretched like the Treasury dollar. They may be circulation getters. You've been a news hound long enough to know how that is." Harold was having a hard time to shake Joe's confidence in the Golden State mining publisher. Joe was loaded with information he felt was true. He led off with a mining engineer's statement that 90% of Cal£ornia's gold was still in the ground. He quoted the late Walter Bradley, for many years State Mineralogist~ that there were only two places in the great Sierra Gold region where gold mines had reached any considerable depth - and they were still in are when Washington made them quit mining. When Joe got started there was no stopping him. He quoted another noted placer mining engineer, James D. Stewart of Gold Run, Placer County, who stated one small county had 600 miles of ancient river gold bearing channels that have never been touched. He told the story of the Western Pacific Railroad's Spring Garden tunnel in Plumas County. The tunnel cut right through an ancient gold bearing river channel. And it was loaded. Every time a tunnel worker picked up a good sized nugget, fearing his foreman would take it, away he went to another job. The contractor hired six different crews before the tunnel was completed. Even after that small boys panned the gravel under the rails when a watchman wasn't looking. Later to hold the flow of water and keep the panners out, the tunnel was heavily cemented. "But that didn't destroy the channel", added Joe. "It has been traced for over 300 miles and it still carries its gold. Much of this is government land, open to public entry, which means Y'?u can locate a mining claim on it. Of course the government boys are not saying much about this. They don't like mining claims. Washington's refusal to pay a world price for gold is part of the communist plot to stop private development of the gold mines."

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"Conditions right now are looking that way", admitted Harold, ~~but can you succeed when you have to face such conditions favored by your own government?" "Well, my Irish is up and I'm willing to take a chance. I just read about a man by the name of Baker, who with three Sacramento friends, out of work during the Big Depression, struck it rich. They started mining in Mariposa County with a combined capital of only $1,500. They had the Diltz mine, six miles out of Mariposa, and before their money was gone they hit it big. Their first strike brought them 46 pounds (not ounces) of gold. That mine is still there. I thhik I could find another Diltz in Mariposa County. I have a letter from a Hollis Anderson, Horse_ Creek, Siskiyou County, who says the nuggets up his way

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are as big as hen eggs. I'd like to get up that way and call on Hollis. And maybe you might think this is a joke. A miner, Francis Schultz, near Greenville, Plumas County, had to cut his operating season to 66 days because of his mounting income tax. He reported he and his wife took out $22,000 in that short season. He told a mining meeting at Quincy one evening he was getting $100.00 per ounce for his nuggets. He said ever so often a man came from Chicago to buy his gold. It was all put out on a table, he said, and separated into three piles: large nuggets, medium sized and smaller gold. For the first pile he was paid $100 per ounce; $85 for the second lot and $50 for the smaller gold. So you see, Harold, the government's price of $35.00, one thousand fine, doesn't apply to all gold. This man Schultz was mining and selling placer gold - gold in its native state - on which for price the sky is the limit." "It all sounds good", commented Harold, "but I'd take it with a grain of salt - not gold. Maybe it will be best for you to find out for yourself" .

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CHAPTER 3

"Love's Lablor Lost" hat evening Harold broached the subject of Joe's leaving to Evelyn, his wife, who for sometime past had been unsuccessful in getting Joe interested in some of her girl friends. She had him to dinner, along with eligible girls, on a number of occasions, but while Joe was good company the get-togethers were without the results Mrs. Wilson had hoped for. HI thmlght Joe had his mind on some far-away project when we had him meet Millie Manning. There's a girl who would make him a fine home and loving wife. I'd better give that boy a piece of my mind. If he goes to California it won't be long before one of the fast-working western gals will have him tied up for life.

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HI think Joe really liked Millie. I know she was impressed with him. I was talking to her today. She wanted to know what had become of him. She has her mind set on a show date for the end of this ,veek. Maybe we could have them to dinner that evening. A dinner and a show might give Joe something except California to think about. I know if I were a man Millie could cause me to forget a lot of things. Let's talk it over with Joe." "I'll try anything to get him to change his mind", answered Harold. ''I'll meet him this .morning and see what I can do. I can't promise anything as he is pretty well fed up on the strike and the winter. It will take some effort to change his mind about California. If Millie can do it I take my hat off to her." Admitting that it might be too late to switch Joe's plans the plotters went to work. Harold said he had one more ace in the hole about the

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gold situation, which, combined with what Millie might be able to do could do the trick. Continuing with Evelyn he said: "That gold-covered mining magazine that Joe reads has him sold on the idea that the price of gold must be raised. He wants to go west before that happens where he knows he can pick up a mine on his own deal. Our friend Congressman Ben Goodwin, for whom I plugged in our sheet last fall, is now on the Banking & Currency Committee. He should know what Congress is going to do about the gold situation. If he says, 'No soap' it might cause Joe to change his mind. He's been counting on that raise. Congressman Ben is home for the weekend. I'll call him. That's my last chance."

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The next day Harold thought he ,vas all set and primed to cure Joe of his desire to go gold mining in the far 'vest. He had spent two hours with his friend the congressman and taken on what he believed to be the inside information on what would happen to the gold price. He went to Joe's apartment and found him packing. He had planned an easy approach, but with the information he had gathered, direct from Washington, he felt that before he was finished he would have Joe considering a change of mind. "You remember Ben Goodwin who can really thank our paper for landing him his seat in Congress, representing our district. He now is a member of the House Banking & Currency Committee and although he would not commit himself on how he personally stood on what you would like done about the gold price, he gave me much information on which he judges there will be nothing done, not only in the present session but in any session to come. He says is just isn't in the cards. "The Republicans under Eisenhower refused to consider all the bills that had to do with gold and money. Then when Kennedy was elected, the powers that be - the Treasury and the Federal Reserve Bank wanted the same monetary program. They didn't want any changes so they induced Mr. Kennedy to appoint a Republican and an Eisenhower man, Mr. Douglas Dillon, Wall Street banker, to the post of Secretary of the Treasury. The management of our gold and money couldn't be trusted to a president so young as Mr. Kennedy. Harvard ideas on such an important function of our government as its monetary management couldn't be allowed to enter. The monetary program of the Eisenhower administration, framed by the Money Managers, had to go on. "There has been much talk of the gold drain during the first years of the Kennedy administration but it doesn't begin to compare with that of Ike's last two years. Mr. Goodwin is of the opinion that as this gold leaves for foreign shores it gets into Central Banks of Europe and will finally land in the coffers of the International Monetary Fund and its One World Bank. This was the real intention of the Internationalists when our Congress was induced to approve the infamous Bretton Woods Agreement, held at Bretton Woods, New Hampshire. When that deal was signed we had $243~ billion in gold in the U. S. Treasury. The internationalists who met at St. Simon's Island, off the coast of Georgia, had no other idea than to get control of America's gold, all but 6.8 billions 9

of which had been purchased from foreign countries at a price increased from $20.67 per fine ounce to $35.00. Those foreigners made a handsome profit of $14.33 per ounce. The same process is again working; the Internationalists want U. S. gold on the other side of the Atlantic; and they want it at no raise in price, even though it is worth much more in their countries. That is the monetary program now approved by our money managers and Congress has to take their orders. The Banking & Currency committees are not going to act on any bill that would upset that program." Joe listened attentively and was impressed with the information Harold had received from their friend in Congress. With Ben on the Banking & Currency Committee he should be on the inside. After all if there isn't going to be a raise in the price of gold all those closed gold mines in California are going to stay closed. And I don't want a closed gold mine, thought Joe. Maybe some more investigation won't hurt. In the meantime Evelyn and Millie were busy with their plans. They took Harold into their confidence who invited Joe to dinner for the following weekend, explaining that Millie was to be there too. As Joe had delayed his preparations for his trip West a slight diversion wouldn't hurt; any way, seeing Millie again would be enjoyable. She·s a nice girl but at the present time girls didn't £it into his plans. His immediate job was to get more inside information on what really was going to happen to gold. That was a problem as everybody in New York and Washington was either sold on the international plan or afraid to take a stand on keeping the nation's gold for what our founding fathers intended - the basis of our money. Joe had read of Dr. Franz Pick of Chicago in the gold-covered Journal. He recalled his statement that you can't believe the half truths the Treasury put out. He further had read in the Journal about the doctor's interest in gold. One California producer ha called on him for information on the world's gold situation. He got it but a half hour of it cost $150.00. He read also that Dr. Pick had conducted a symposium, attended by executives from all over the eastern states. The doctor collected $950.00 per hour for that session. Holy: cow, thought Joe, I couldn't listen to the doctor for five minutes. No doubt he has published his information. I will have to check. Evelyn's dinner date came. Millie had spent the afternoon with her, helping in the preparation, missing few opportunities to dscuss Harold's plans to prevent Joe from going to California. Joe really enjoyed again meeting Millie. With her he could forget about gold and California for one evening at least. He was surprised, however, when she began asking him about his plans to go mining. She had never before shown any in~ terest. He enjoyed telling her of what he had learned and of his plans. An interested listener was a novelty. It was a decided change from all his discussions with Harold. He really felt cheered. Occasionally Harold threw in some doubts about the future of gold, crediting his friend, Con~ gressman Ben Goodwin, but apparently they had no effect on Millie. There was no lag in her interest. In weeks Joe hadn't had such encouragement and wnen the discussion turned to a weekend show in which Millie was interested Joe felt happy in asking her to see it. He included 10

Harold and Evelyn in his invitation but they decided to forego the pleasure. Harold had a letter to write and Evelyn had the dishes to do.

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The show was good. Joe and Millie agreed that it was the very best they had seen for some time. On the way home they discussed it with a lot of interest. Joe admitted to himself that it had been a long time since he had had such an enjoyable evening. He was ready to agree with Evelyn that he~d go a long way before finding as nice a girl as Millie. His interest grew as she began asking him more about gold and California. By the time they reached her home she was still very much interested in Joe's plans. cCOutside of this mining magazine you read, have you any further information about the gold mines of California?" questioned Millie.

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Joe admitted it was his only source, statin~ it had been owned and operated by one person for the past 30 years. eI will admit that a beginner is apt to make some mistakes and put out misinformation but after 30 years a publisher could be depended upon to print the truth:' Millie agreed with Joe's deduction but said, «Nevertheless you will be a tenderfoot in California and there will be lots of sharpers ready to. take you. I do hope you will be careful:~ Joe was more than pleased with Millie's interest. He did not expect it. Perhaps in the past he had overlooked a friendship that would have meant much more. It was late but Millie didn't appear anxious to end the evening. ('Ies been a most enjoyable evening'" said Joe, ,ethe nicest I've spent for a long time. Before I leave I have matters to look up. If right with you I will see you again soon and let you know what conclusions I have reached. Harold has gained some information that may cause me to change my plans." «You know I'm interested, Joe. I've always been, so do call again. I want to thank you for a swell evening." With that Millie expectantly looked up at Joe who did not disappoint her. The kiss she returned.

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Joe promised to see her again soon but had his mind deep on determining where he was to dig up the information to off-set that given Harold by his friend, the congressman. He remembered reading in The Journal that Canadian mining favored devaluation (raising the price of gold) . Their country experienced a benefit when their dollar dropped from $1.06 to 92 cents. They favored further devaluation. Joe had often seen The Journal quote the Northern Miner of Toronto. Going to his favorite library he found a complete file of the Canadian paper. He was encouraged by noting that each month it carried a copyrighted article by Dr. Franz Pick, the man who said the Treasury Department can't tell the truth. Dr. Pick~s articles not only contained American monetary information but from all over the world. They showed how foreign conditions affected those locally. Joe soon discovered that Dr. Pick is a prime critic of the method in which the United States is handling her gold problem. He proved in each monthly article his statement about the Tre~sury 11

being unable to tell the truth. He brought out that in the Treasury's Daily Report it failed to deduct a huge loan of $800,000,000 in gold from the International Monetary Fund or the resultant gold losses from trading dollars for foreign convertible currencies. He brought out that no matter how the United States puts out dollars the only way they can be redeemed is by conversion to gold. The dollars that are now awaiting conversion have totalled up to over $27 billion, with less than two billions left for conversion. Dr. Pick held there was no way out for the United States except a raise in the price of Treasury Gold. Fortified with the information he had gained from a Canadian paper he went to see Harold. His July issue of California Mining Journal was in the mail that morning. A page one editorial backed up the N orthern Miner's findings. It sure hit the target, thought Joe. I'll feed Harold a dose of that. It read: ith its refusal to immediately consider a monetary reform that would include a raise in the price of gold, the Congress of the United States is in a disservice to national economy. Contrary to the Constitution, it is leaving the management of the taxpayer's dollar to a group of private money changers bent on selling us out to the International Monetary Fund. The planned sell-out is not to strengthen world finance but to gain private control of it. With such a move will go the American taxpayers' ability to pay. Congress as a whole must be charged with this outstanding sin of omission.

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on the measure, out of 437 votes only 60 favored the bill. Has there ever been a more outstanding example of what Congress is doing to the American people? Western and California Congressmen are the leading sinners. They are definitely afraid of taking steps to stop the Communist plot (framed by Communists Hiss & White) now shifting our gold into foreign hands. Last fall Western Congressmen tried to calm Western gold producers with bonus bills which would take away the jurisdiction of newly mined gold from the Banking and Currency Committees. They are afraid to openly oppose the «Invisible GovernmenC - Communist led - now wrecking the national monetary system and loading the results of the wreck on the taxpayer.

This is not mere talk but the result of 30 years of observation. One outstanding action in Congress will prove the above. Rep. Wright Patman of Texas, now Chairman of the House Banking & Currency In the meantime the administraCommittee, several yea r sago brought out that the Federal Re- tion, in order to substantiate its serve Bank was about to distribute claim that the gold drain has been to its 14,000 member banks a batch stopped, is trading dollars for forof $15 billions worth of cancellable eign 'convertible currency to meet bonds, - bonds On which you and the gold call. This deal wore out I are paying interest and will have as three of the foreign "swappers" to some day pay in principal also. became afraid of the dollar, and Patman introduced a bill to stop now the Treasury Dept. is trading the distribution and have the bonds bonds for IMF gold so it can furcancelled. When the House voted ther lie about the gold supply. This

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lie is told every day in the Treasury report, yet Congress is afraid to even whisper about it. Unless Congress is willing to put our Money Changers on record as selling out the nation in compliance

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with a proven Communist plot, the national economy is due for wrecking. Further, when the gold is gone, nothing remains but our taxpayers' properties and savings to meet the call of the Internationalists.

Joe asked Hal to review what his friend, the congressman, had told him. He was all set to show that either Congressman Ben didn't know the truth or like practically all other congressmen was taking orders from the 'Money Changers'. "Your friend has a good line", said Joe, "and one with which banking and business have brainwashed the public for a long time. The Eisenhower boys always made a big play for a 'Sound Dollar' and now with the present administration crowd it's ~(.Security and Prosperity'. Hal, old boy, do you think we can have these things if we let all our gold get into the hands of foreigners? Do you think we can have them with only paper money? Will our paper money be worth anything without a gold backing? I don't suppose Congressman Ben told you that right now foreigners are holding 27 billions of our dollars for which they can demand gold. Ben didn't tell you that as of now the Treasury hasn't much more than two billion in gold with which to pay off the 27 billion." «Y ou must be wrong about that, Joe," said Harold. «I checked on the Treasury's Daily Report this morning which states that Uncle Sam still has practically $16 billion in gold - $15,928,000,000 to be exact". "That sounds fine", responded Joe; "just more brainwash. Add the gold we have borrowed from the International Boys and several European countries: deduct $12.3 billion legally needed to back up Federal Reserve Notes and Deposits and the amount available to continue converting the dollars held by foreigners has dwindled to very close to only two billions. How long will that last with Mr. Kennedy stating that going in the hole about a billion and a half a year gives us a healthy economy? No, Ben didn't tell you the whole story." "If all that's true", admitted Harold, "I guess our friend, Ben, hasn't told me the whole story. Just what will happen when our gold gives out? Maybe you know more about it than Ben does."

"Well you just have to use your horse sense. As long as every nation in the world uses gold as the base of its money it will continue to be the most valuable part of our economy. If you don't have gold to back up your paper, your nation will not only have a weak system but eventually will collapse. That's been proven in every nation of the universe in the last two thousand years. It's a mystery to me why our Congress will continue to remain quiet while our gold continues to disappear. And don't depend upon the Treasury to tell you how much gold we have left. It doesn't even tell our congressmen the whole story; but I blame them for being afraid to dig into the truth." «I hope you are right", countered Harold, "'but I had no idea you had 13

gone so deep into the subject. And I don~t blame other folks for not knowing of the situation when even our congressmen keep us in the dark. If you still want to go to California don~t let me hinder you any longer. The strike is already nearly three months old with no change in the sit.. nation. I hear some of the New York papers will not be able to resume publication even if the strike does end, s'o the whole darned situation looks dark. You have my best wishes on your trip to the Golden West. Keep us in touch; maybe I could write a book on your adventures. If things don~t get better here I may be following you. Best of luck!" Joe felt much better that his pal, Harold, was seeing things his way. He wanted to call on Evelyn and Millie before leaving. He wondered how much there was to Millie~s interest in him 'and California. He talked it over with Evelyn who assured him she believed Millie liked him very much. Joe dated Millie for the following evening. The bright and cheerful manner in which she met him encouraged him to tell her he was leaving soon for the West. He told her of his final talk with Harold and after more talk about California and the gold mines, asked her how she felt about joining him when he had made a home for them. She was disappointed. C
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Joe was relieved. His interest in Millie hadn't grown to any great extent but still he thought he should find out how she felt. If she wasn't willing to join him in Califor~ia after he had established a home then she loved New York more than she did him. He could now leave for the West feeling that he hadn't broken any hearts. Before Joe left for California, Harold had some good news for both of them. Congressman Ben Goodwin lost his news writer in his Washington office and offered Harold the position. It paid far better than his newspaper job. "It's a Godsend and I'll take it", said Harold. "A strike settlement is just as far away as it was a month ago and I'm out of money. 111 leave the family here for a while and hit for Washington. It might be that I will have time to get on the outside of the gold situation while you are out West trying to locate something good. No doubt with the gold miners out in California giviI.lg up hope about Congress taking any action on the gold price you should be able to pick up something pretty good. Give the whole situation a good investigation before you get too deep. And keep me lined up with what you are doing. I might want to go to California myself."

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CHAPTER 4

Off For California as Joe loaded up his car for his Western trip Harold left for his new job in Washington. Joe read of a mining gathering in Denver and thinking he might learn something to his advantage he stopped over. Colorado is a leading gold mining state, thought Joe, and with the present urge from the West to get a better gold price no doubt the gold miners will be at their best in Denver. He sat through three days of speech making but what made the deepest impression on him was a talk by Leland Howard, director of the U. S. office of domestic gold and silver operations.

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In his first report to Harold he wrote: ~cI can>t see how those Western gold miners would waste their time and money listening to their worst enemy. And I suppose the group that engaged him to come out from Washington had to pay him plenty. And the newspaper printed all his bad news. I know you will be interested in knowing just how much opposed Washington is to giving the gold miners a raise. With the Treasury admitting that is has very lttle gold left to continue paying off foreigners, there was no answer from the miners to the speaker's ~made­ in-Washington' talk. I almost decided to turn back and forget about becoming a gold miner. Anyway, here's the way one of the western papers reported his talk - with not one word in comment or contradiction: By GEORGE WEEKS United Press International

The United States for more than a quarter of a century has bought and sold gold at $35 an ounce. The Kennedy administration has again reaffirmed its intention to hold to that price despite renewed pressure from the domestic industry for a subsidy, and continuing demands by foreign producers. for an increase in the basic price. The U. S. position is "to oppose any proposals that would lead anyone to believe we do not think the $35 price is the proper price for gold." Why this firm adherence to $35? Because, according to the U. S. Treasury, tampering with the price would raise the risk of disrupting the monetary system "which is so vital to the U. S. economy and the economy of the Free World: The administration's stand was spelled out in blunt terms to the domestic industry last week before the National West-

ern Mining Conference in Denver. Leland Howard, director of the U. S. office of domestic gold and silver operations, said gold must be considered from the standpoint of the national interest as a whole. And, in arguing against subsidies, he said: "Any effort to assist a relatively few people to keep or obtain jobs, no matter how desirable, would, instead of helping those in the gold industry, run the grave risk of disrupting the monetary system on which not only their own livelihood but the livelihood of all of us depends:' Howard acknowledged that gold production in the United States has been on the wane "while Free World production has been waxing strong," U. S. production was only 4,5 per cent of free world production in 1961. dropping from $65 million in 1955 to $55 million in 1961, while South Africa's production was increasing from $510 million to $803 million. Rhodesian and Ghanaian production also increased. while Mexico's declined

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and Australia's held about even, The U. S. dollar has become a «king_ pin" of international financial stability, Howard said. A fundamental reason for this has been the U. S, policy of buying and selling gold at a fixed price to foreign governments, central banks and others for settlement of international balances. "Other governments hold the dollar because of our policy of buying and selling gold at a fixed price:' Howard said, "The dollar is the only currency that maintains this link between money and

gold, and the monetary system of the entire free world is hinged to this convertibility which we maintain between gold and dollars at a fixed price." But what has this got to do with subsidies? After all, gold is subsidized in other countries, and agriculture and other industries are subsidized in the United States. «The answer is," Howard said, "that the monetary units of other countries do not have the status of the dollar, and other countries do not have the responsibility of mixed relations between their currencies and gold. "Cold in the United States is a monetary metal and cannot be treated as a commodity, as are products of other industries, or as gold is treated in some countries." Proposals now before congress would establish a $105-an-ounce price for gold to be used in the domestic market for such items as dental fillings. Gold sold for monetary use would remain at $35. But the treasury fears that even a price revision limited to industrial uses would encourage speculation for a higher price in the monetary uses. "We cannot take side excursions in gold that others will interpret as a sign we do not think the present price for gold is correct," Howard said, The treasury contends that this is an international as well as a domestic issue. "We must think of the dollar not only as involved in our domestic economy, but as a reserve currency held by others as a suppleme?t to}he world's gold supply," Howard saId. The dollar has attained this position internationally for a number of reasons. "But one essential aspect of maintaining confidence in the dollar and main-

taining a strong and stable international monetary system is to continue to stand ready to buy and sell gold at the fixed pri?e of $35 an ounce and to avoid any achons that would encourage speculation for a higher price of gold," The treasury is hyper-sensitive about any action that might lead to international speoulation on the price of gold. It fears that any price other than the ?fficial $35 would be construed by cred1tors those countries holding dollar balances - to mean that the United States had decided the official price is too low; that in some way, directly or indirectly, the U. S. was on the way to revising the official price. President Kennedy maintained during the first two years of his administration that the United States was not on the way to revising the official price. Earlier this week, Sen. Wayne Morse. D-Ore., asked for a treasury assessment of reports that France has been encouraging other countries to increase their demands on U. S. gold reserves. He released the text of a letter to Treasury Secretary Douglas Dillon asking him to ?omment on the reports. The letter said, III part: «There have been in the news recently reports that the French government is acquiring American obligations for which it could demand payment in gold. One report fixed the amount already in the hands of the French government at more than $1 billion. "Another related report has been to the effect that the Frenoh are seeking to encourage European banking houses and others holding U. S. assets to demand payment for them in gold. HI would appreciate your assessment of these reports. To what extent do you think they are true, and to what extent could they threaten our financial stability?" The technique of carrying out U. S. gold policy may vary under different administrations. But the basic policy of centralizing the U. S. gold reserves in the hands of the government and maintaining a fixed price of $35 an ounce has held for 29 years. And it appears that Kennedy is determined to continue it for at least another year.

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CHAPTER 5

The E Clampus Vitus oe pulled out of Denver, headed for California, little enthused with what he had learned in the "Mile-High" city. From all he had read he had made up his mind to make Placerville, El Dorado County, his first stop in the Golden State. It had been called that for many years. In 1885 it produced $88,000,000 in gold. In 1962 the records would be hard pressed to show five million. Coloma, the site of the Marshall Discovery is only eight miles away on Highway 49 which traverses the famous Mother Lode from a point in Madera County, the location of the town of Coarse Gold, to Northern El Dorado. The Sierra gold producing area does not quit with that information, but travels on northward through the counties of Nevada, Sierra, Butte, and Plumas. There is a skip in Tehama County, due to the lava filling all the ancient goldbearing streams, but gold crops out again in Shasta, Trinity and Siskiyou Counties, continuing on up into Oregon. It was Joe's intention to learn as much of these areas with Placerville as his headquarters. It is the center of the Sierra gold fields, including the Mother Lode.

J

In two days more he landed at his destination. Placerville was alive with a celebration. It was January 25th, the day Marshall made his discovery, one hundred and fifteen years previous. Now, believed Joe, here he would be greeted with a real gold atmosphere. He felt he had arrived at a time when he could absorb plenty of the real gold mining spirit. The celebration had started that day. The evening was set aside for a parade by that old time mining organization, the E Clampus Vitus. It was the lfangtown (Placerville's old name) group putting on the night's entertainment. Members from other towns and mining districts had arrived, bringing with them almost a hundred "poor blind candidates" to be initiated into the order. In his first report on Placerville, the Clampers and their celebration of Gold Discovery Day, Joe didn't spare the natives. He had to change his mind that all who came to Placerville on that day of all days should be out in front doing something about the re-opening of the gold mines. The Clampers in their parade were dressed in '49 miners' clothes. As they marched down Main Street, following a seven-piece band, they shouted to the by-standers and swigged on cans of beer. N a one knew what they were shouting about and apparently the band was intent only on adding to the noise. Not being a "poor blind candidate" Joe could not get into the closed meeting of the organization and the initiation but the stories of the gathering he heard next day didn't improve his opinion of the assemblage, even if it was attended by the Governor. several state Senators and other state officials. I guess they got to blow off sometime he thought. It was in the early hours of Sunday morning before the noise was brought to a conclusion and the imbibers rolled

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into bed or were helped to their slumbers. If this is gold mining, thought Joe, count me out. The next morning, Sunday, 'he had hopes of something better. The day's program was to be held in Coloma, the scene of the gold discovery. The printed program showed evidence of a sounder remembrance of the day. So he went to Coloma with higher hopes. There was a lunch in the Grangers' (not Miners') Hall. Participating were County notables, members of the State Legislature and officials of the State Division of Beaches and Parks, Coloma having been made a State Park. While it was James W. Marshall's Discovery that was being celebrated nobody mentioned the fact. The Governor, the main speaker of the day, forgot all about Marshall. He was more interested in his legislative program which included a $3,225,000,000 budget. Itemized in the budget, he reminded his hearers, was his new $875,000 home and his new $500,000 airplane. It was bad news to the citizenry who had to sit and take it. The Governor was followed by Beaches and Parks speakers. They 'wanted more money in the budget to increase the size of Coloma Park and buy up all private holdings. And they wanted more parks; the more parks the more jobs. Although they didn't say it, as soon as land was incorporated into a State Park, mining was strictly prohibited, no matter how rich in mineral. Joe drew this from an old miner on the edge of the crowd who didn't appear to be enjoying the occasion any better than he was. Here was one man from whom he might get some ideas about mining. He didn't object to opening up on the subject. He was about 70, hale and hearty and had the appearance of having had a liberal education in industry and politics. The first thing Joe wanted to know was what happened to the mining end of the day's program; were there any speakers present who could talk about gold and the advantages of having the state's gold mines again operating. Did he think there was enough national interest to set a price on gold that would reopen the mines? As long as there were no speakers to discuss such matters Joe decided to engage the old gentleman in as much conversation as he could. John Collins was not adverse to taking up the subject of Joe's questions. He appeared to be just waiting for the opportunity. "Yes, I know what you mean. I own a gold mine here in El Dorado County and by all reports by several engineers it is not 'worked out' by a long shot. I have two departments of the U. S. Government hounding me right now trying to get me to sign a statement that my claims are 'non-mineral.' I am located in the. EI Dorado National Forest and am therefore under the jurisdiction of the Department of Agriculture. And being interested in the mineral in my claims I have also to answer to the Bureau of Land Management of the Department of the Interior." Mr. Collins was getting beyond Joe who interrupted with, "What are they trying to do to you? Don't you own the claims and haven't you kept them legally yours? Don't we have mining laws which protect you?"

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"That's a long story," replied Collins. "My claims were located back in the 1870's under the General Mining Law of 1872. They have produced over $100,000 and as yet have not reached a depth of 300 feet. My grandfather was the original locator and operator. Mint records in San Francisco will back up the mine's production record. But now we operate under what's known as Public Law 167. Its intent was to provide for multiple use of the land on which my claims are located. We don't object to that, being interested only in what's under the surface. If somebody wants to build a summer cottage on my claims and fish in the stream which cuts through them I have no objection. I like company. But in order to grant multiple use I must agree with the government that there is no more gold in my mine. That I will not do. I'll give 'em the timber but I will not sign that there is no more gold in the mine. That would not only be silly but would be swearing to a lie." "That does start in like a long story," said Joe. "On what do the government boys base their contention that there is no more gold in your mine? Have they thoroughly examined the mine?" "No, they say they don't have to make an examination. They want to take advantage of present economic conditions, holding that if I am not willing to operate and sell my gold at the present low price I don't have a commercial property. And if not commercial they want to say I haven't made a
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out but would need his help. Perhaps the trouble was in Washington, District of Columbia.

It was late the next morning when Joe made his way down Main Street, seeking breakfast. He stopped at the "Bell Tower," famous since the early days for rousing the citizens for fires or when the hardy miners went on rampages. It wasn't often when they could get to town with their poke. But when they did they made a real celebration of the occasion, usually ending up in the town bastile when the City Marshall could get sufficient help from law-abiding citizens. A handy restaurant was located at the Tower. Waiting for his order, Joe picked up a copy of a local newspaper, the Placerville Democrat. He noted it was California's second oldest paper, established in 1852. In this he felt he could find something he was looking for. Scanning its columns he almost neglected his breakfast. . After breakfast he continued checking the paper, reading of new subdivisions to supply new home builders, schools bulging with attendance, their officials wondering if the taxpayers were willing to dig up more support or vote bond issues. There was news of Sacramento making application to take more of the County's water for their municipal utility district and the proposed new county government center to cost over Two tv1illion dollars. He continued to look for mention or news about gold. Finally in the news of "Fifty Years Ago" there was mention of a gold mine getting started. There were Ads of two banks and a prosperous Building & Loan Association, paying the top interest of 4.8 percenC Joe got a laugh out of one news item. A newly elected tax collector was taking over the office which had been held for years by the retiring official. The new collector found several month's of unopened mail, all containing checks for taxes. At least he could agree with the voters of the county that they did need a new tax collector. He made up his mind that he'd like to talk with the newsman on that paper, but it was time to keep his morning date with John Collins. It was a beautiful morning. Despite a few patches of snow up Cedar Ravine the bright sun was out with promise of a clear day. At an elevation of two thousand feet Placerville had only occasional snow, this year especially mild. Joe had already made up his mind that he had selected a nice location in which to forget his snow-bound and strikebound experience in New York. He was ready for another session with Mr. Collins, who met him at the door of a neat and well-built cottage. Mrs. Collins met him with a smile. "1 am glad," she said, "that John has somebody to talk gold mining to. All the old timers in the neighborhood can't keep up with him when it comes to gold talk so they usually pass him by. It's nice that you have dropped in." Joe let Mr. Collins ,know that he had assimilated most of the information he had given him the day before but he still wondered why Washington was so backward at not realizing the need of not only holding the gold it had but also urging the American gold miner to add to its reserves.

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"Well, you are getting into another deep subject," said Mr. Collins when Joe unburdened his thoughts. "Ever since Mr. Wilson was president the good old USA has been getting the feeling that our nation wasn't big enough. Our business and our banking wasn't extensive enough. We had to go international. A gentleman by the name of Montague Norman was sent here by the Bank of England to talk international banking. Chief Justice Hughes, a Republican, was lead man for the presidency. Norman tackled him about what he thought of throwing in our fin aces with England. Judge Hughes backed up so Mr. Montague went to see Woodrow Wilson who gave him more encouragement. However, it looked as if Hughes was still leading for the seat in the White House. So Mr. Norman made another trip. He went to Africa seeking Teddy Roosevelt, then hunting lions, proposing that the lion hunter return to his home in California and open up a campaign for the presidency, using his Bull Moose Party as his election vehicle. "Of course you don't remember that election; but I do. I'm still mad. Teddy split the vote in California and Wilson won the election by taking the golden state's electoral votes. Hughes was a cinch and we would have been free of much foreign entanglement had Teddy stayed out of the race. For a long time we Republicans called our state, 'the boob state of the union.' That's when our international troubles began, and it's getting worse ever since. "That's interesting but something we don't learn in history," said Joe. "And how does all that fit in with gold and our present situation. I know the gold is leaving us pretty fast - over $7 billion in Ike's last two years and with the Kennedy spending it's still going - and fast." "I note you are makng progress on what's in the wind but 1 must take you back for a few chapters in Franklin Delano Roosevelt's time. Wilson set the nation for international plunder and Franklin fiddled with the same bow," put in Collins .

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CHAPTER 6

JohnC·ollins - Gold Miner & Economist oe was really getting a basic education in U. S. gold and monetary matters. He was surprised that a man like Mr. Collins, whose interest mainly was in the production of gold, had been able to get such a grounding in a subject which most people passed up as beyond their comprehension. What if every congressman, or at least a majority of them, had the same understanding of the situation, he thought. He broached his thought to Mr. Collins.

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«Most of them may have," replied Collins. «However, they may not want to talk. One California Senator, Bill Knowland, shut off one inquirer

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who asked why he hadn't done something about gold with, 'It's too hot to handle: They just don't want to invoke the wrath of the Money Changers. Those who have grabbed the handling of our money have their plans and don't want them upset .. Those who are brave enough to stand up and question the Treasury and the Federal Reserve Bank soon find themselves voted out of Congress. Look what happened to the late Sen. George W. Malone of Nevada. His type of representative is badly needed in Washington. He stood up before Sen. Byrd's Senate Finance Committee and had some of the money lords on hot seats. It took 11 pages in the Senate records for the Nevadan to get one question answered. The whole record of the hearing occupied 1,606 pages; it accomplished nothing. I wouldn't call it 'Too hot to handle' but I say a lot of senators are rather cold on doing something for the financial benefit of the nation and their constituents.

...

"It all began back in Roosevelt's time, when Wall Street went broke and the banks began closing. FDR was one of those who would venture where angels fear to tread. The crash and the following depression was too much for congress to handle. It gave over its constitutional authority 'to coin money and fix its value' to a few individuals, including the bankers who were smart enough to hang on to the money while business went broke. Congress has never reassumed its rightful power. Several who have made the attempt have been banished. The Money Changers can reach out into the most remote congressional district and control elections; and the boys in Congress don't overlook this fact."

Joe wasn't missing a word. Giving Mr. Collins a breathing spell he said: Ult surely is a bad situation and as long as it's going to be allowed we can believe Mr. Kennedy's statement about one-third of the people of the United States being underfed. But why should men whom we allow to handle our money have so much power over the nation and its people?" "Did you ever stop to consider how few people and even the largest corporations can't run their businesses without borrowing? I note in today's San Francisco paper where one of the big telephone companies is planning to borrow two hundred and fifty million dollars. This kind of business puts the lenders in power. But we are getting off the track. I want to tell you more about what happened in FDR's time after the crash of '29 and during the depression." Joe settled back in a plush chair and was all ears. He still marvelled that Mr. Collins had such a grasp of national monetary matters. It's too bad he couldn't be sent to Congress. For one term, at least, he could make quite a dent in these Washington hard heads. ~'You

remember it was. Wilson who started the sell-out to foreign monetary powers'" resumed Collins. "The bank closing and depression gave Mr. Roosevelt an opportunity to step out as a financial expert, even though he had failed operating a company handling foreign bonds in the early 1920's. At that time and until 1945 the president had the power to set the price of gold. During his first term gold was leaving the 22

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nation fast. England was paying up to $28.00 per ounce, the United States price remaining at $20.67, the figure for many years previous. Our supply got down to only four billion dollars' worth, when without notice, Roosevelt raised the price to $35 per ounce.

if

Here Collins stopped suddenly with: "Whoa, I'm getting ahead of another thing that was pulled on our people before the price raise. In 1933, when it was legal to hold all the gold you desired and the gold, fives, tens and twenties were used in every day trading, Mr. FDR suddenly issued an order that all gold must be surrendered to the government, the holders being allowed $20.67 per ounce. In the following year,

1934, he convinced Congress it should pass the Gold Reserve Act, making it a crime to have gold coin or bullion in your possession. The Act also raised the U. S. price to $35.00 per ounce. Note that on all the gold he took away from American citizens the government pocketed $14.33 per ounce. Before the grab our government possessed four billions in gold. The 1934 raise was a clear seventy percent, or two billion, eight hundred million. That put our gold stake at $6,280,000,000. "With the United States price higher than in all the world money centers, the world's gold naturally gravitated to our shores, the movement keeping up until we had $24,500,000,000, tied up in Fort Knox. Somebody made a handsome profit on the more than eighteen billions that shifted to the United States. The American taxpayer paid that profit -not FDR. les true the new price opened a lot of gold mines in California and times were good until inflation caught up with that $35 gold price. Mter that you had to have high grade ore to keep operating. Every time cost of operation reached the amount of production there was nothing to do but close your mine. Any way our government had sixty percent of the world's gold, so why should it or Congress get interested in keeping the gold mines open. We even had men in Washington who held we had too much· gold and it would be better, as an encouragement to foreign trade, to give it away." Here Mrs. Collins entered the conversation, or rather discussion, with the cheery announcement that perhaps the lunch she had ready would be appropo. "Oh, I did not know it was that late; of course we'll partake, and thanks," responded Mr. Collins.

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Serving the lunch Mrs. Collins volunteered the thought: 4
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way 50. The trip was a steady climb on a modern highway which Collins explained was a well travelled transcontinental route, on up over the snow covered Sierra Nevada mountain range. "It's Placerville's way into Reno when they want to gamble or get a divorce," he volunteered. It was a beautiful day for the heart of winter. The highway, maintained by the State as a federal-aid road, was in excellent shape. On both sides of it were tall pines and ponderosas which scented the air with their pleasing fragrance. Coming to the village of Pollock Pines, the gold miner turned off to the south.

«I must tell you that we are entering a high grade gold producing area," volunteered Mr. Collins. "1 probably haven't told you that we are now off the main Mother Lode of California. Placerville is right on the Lode, noted for consistently wide veins and deposits. But here is what is known as the East Belt. The veins are not so wide but rich. My mine lies next to one that isn't the usual West Belter. It has wide veins and they are rich. As near as I can get its history it has produced close to three million dollars. It's one of those mines that can operate regardless of inflationary prices. It's had a real interesting history. Even though 1 should not do all the talking, I must tell you about it." "I'm listening and don't let me stop you," said Joe. "I came to California to learn and you are a good teacher." «Thanks," responded Collins, "I want to be as much help to you as possible. I don't suppose I will do much more mining myself, but at least I can be of help to others." "That rich mine that joins mine is known as the Myrtle Creek. We will come to it soon. It has no outcropping ore, that usually leads to a discovery. The land belongs to a lumbering firm. The discovery of ore, rich ore, was made when the lumber company's bulldozer was making a new road into a new block of timber. The timber firm was not interested so leased the property to some local miners. For several years they made it with ore that never ran below an ounce of gold to the ton of ore. Finally the partners had a disagreement so leased to a North Sacramento man. He continued operating until he took out a cool million dollars when suddenly he lost his are. He knew of no way of relocating it so sold out to a Reno group for eighty thousand dollars, half cash, the rest in a bum note. «Keeping quiet about the lost vein the Renoites induced a rich valley rice farmer to come in with them. They took him for plenty until he came to the conclusion he'd better forget his rice and take over the mine. He first got rid of the operator. He and his superintendent were at a loss as to how to proceed when along came a geophysical expert who said he could relocate their ore. And if they didn't believe he could he would prove his geophysical survey by drilling. Well, to make a long story short, the are was relocated, not very far from the shaft. Running a short drift and they were again milling are. The geophysical engineer was a whizz. I have reports on a number of mines he worked. I will be glad to let you read them."

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Collins and Joe made a check of the Collins mine and its equipment, all housed in weather-proof buildings . "We could start tomorrow if we could get the right price for gold: remarked the owner. "Congress is sure hurting California and the rest {)f the West by taking orders from those international bankers~ Sometimes I wonder if we are a free country. At that I don't think we put into singing the Star Spangled Banner the vigor and feeling we did when I was a kid. We certainly have lost n much of the freedom we used to be proud of. It's too bad.

.

Collins had a key to the assay office in which he knew Joe would be interested. "This is where you find out if you are making it," explained Mr. Collins. "Our assayer was also our watchman having his living quarters right back of the office. That gives me an idea. I know you want to get pretty close to the mines, so why couldn't you make this your home. I would like to have someone on the property. How about it?" "Sounds good and I won't force you to make another offer," quickly replied Joe. Two birds with one stone, thought Joe. My money won't last long stopping at that motel and living right on a mine, owned by a man as nice as Mr. Collins, I no doubt can learn about mining much faster. Before they went back to Placerville they took in the Myrtle Creek. It didn't look like three million dollars to Joe as a fire had cleaned out the mill and its buildings. Following the fire a dispute arose between the land owners and the operator and with new equipment and labor out of sight in cost, neither felt that the time was ripe to plan on a reopening, at least until Washington did something about a raise in the price of gold. Driving back to Placerville Joe felt he had a big day; he'd have much to report to Harold, especially his good fortune in having the help of Mr. Collins. The next day he planned on seeing the newspaper man and maybe a bank. Leaders of their type should know what was keeping gold mining almost a dead industry. He suggested the idea to Mr. Collins. "You'd just be wasting your time," remarked Collins. "I have spent hours with the newsmen and the bankers; they are just not interested. They even tell you, that is the bankers, what the Treasury or Congress wants to pay for gold is of no interest to them. They are only interested in running an institution that will properly handle the money you deposit with them. The price of gold is Washington's business. Anyway, the less they know about your business the better it is. "You haven't told me: continued Mr. Collins, "'but no doubt you will be interested in locating a claim when you find one you think will make . " a mIne. "That's true," answered Joe. "'However, I'm going to do a lot of looking and learning before I stake my claim. This California gold country is mighty big and if my finances will hold out I want to see a lot of it. From the little I know I think looking for a good gold prospect is like looking for a good wife; you got to look over a lot of them."

25

"That's one thing Mrs. Collins and I did not ask you: are you married," lightly queried Collins. "No, and I'm not looking, that is, not too hard," answered Joe. ~'Some day of course I may find the right one. But right now I'm looking for a gold mine. My pal back in New York is interested and I want to give the idea every break. He isn't sold on being a miner as I am, so if he and others are going in with me and taking my word for it, I got to be right. Perhaps I'm attempting too much, knowing practically nothing about mining, but I'm here and I'm going to make the best of it. At least I've made a good start by having a friend like you, Mr. Collins." "It's true you have much to learn but there's no reason you can't. I know you will be far ahead of some of the greenhorns who come here knowing it all." Next day was moving day for Joe. He wasn't losing any time in getting as close to mines as he could. He was also counting on Mr. Collins to be out to the mine often at which time he could continue mining discussions. He spent the day in making his new home liveable and then stocked up on food and household necessities. In New York he had had his batchelor headquarters so that kind of life was nothing new. However, he'd have to get used to being a great deal of his time by himself. It would be quite a change from the hurry and bustle of a large city. His companions would have to be the tall trees, birds and small animals, and sometimes a deer. It would be rather lonely in the winter but at other times of the year he would no doubt have plenty company judging from the many summer cottages around the mines. And he was only two miles from the lively settlement of Pollock Pines, his post office and base of supplies, when he did not want to go the longer distance into Placerville. Two days later Joe was busy typing out a full report of several days of his activity when a car drove up to his ~'office." He was g1ad to see some one. He was getting lonesome. It proved to be Mr. and Mrs. Collins who were also glad to see Joe. Their gladness was substantially expressed with the gift of a pie, a cake and a pot of ham and beans. nWell, it's nice to see you as it's been rather quiet around here but I did not expect these food gifts which will be more than welcome. I am finding out that I'm not as good a cook as I should be," exclaimed Joe. "That is what I suspected," replied Mrs. Collins. ~'We don't want you to become a hermit. As for the cooking, all our family is grown and gone so I have no one but John to cook for. You are always welcome at our home any time you come to town. I won't say anything about your needing company here at the mine as John has already warned me that you are looking for a gold mine." "That's true; the mine comes first," said Joe. '~And that reminds me, Mr. Collins, I want to get more information about the work of that geophysical expert. As little as I know about mining it does appear foolish

26

~~----~-----~-.-----.-~-------------~--~--~----~---

to do a lot of .blind· digging looking for ore when an instrument will guide you."

"I have all the reports of work he has done on several California mines and a few in Arizona which 1 will be glad to let you have:~ responded Collins. "I agree with you that it is the most 'reasonable method of exploring a deposit. A lot of mine operators won't listen to it. They are too used to their old methods and don't want to change. The engineers of the large mining corporations won't accept it as for years they have been paid for what they know and to change their methods would be an acknowledgement that there are better ways. N ope, they just could not do that." "Next time I'm in town I will drop around to your home and pick up these reports with many thanks," said Joe. "They could save me a lot of time and my backers plenty money. I can't understand why mining people have to be so pig-headed and backward not to immediately accept a method when it is proven. But, as you say, they stick to what they have learned in college and what has been getting them by. That seems to be the way with a lot of the experts; they don't want to change their ways. "

•

CHAPTER 7

Is The War Emergency Over? hat Joe had planned to do was to see as much as possible of the sta.te's gold producing area which stretched from the deserts of the South to the Oregon line. He wasn't going to be sold on anyone location until he had learned as much as he could about all the leading gold districts. It was going to take time and money and he didn't want to send too much of an expense account to Harold and their other backers.

W

He had read considerable about the quick returns from placering the American River. He'd have to question Mr. Collins. On his next trip to Placerville he did. Collins informed him that for the past 115 years all branches of the American River and many of their tributaries had been giving up their gold to those who knew where and how to mine. "There is still plenty gold for those who have the know-how," he said. "One of the simplest forms of mining is recovering it from the moss that grows on the canyon walls of the American. The process is simple: gather the moss; put it in an oil drum, and give it a good pounding. The gold, being heavy - 19.1 specific gravity - will drop to the bottom of the drum where it can be easily picked up. Most of it will be fine, but gold nevertheless. You won't get it all out of the moss, so dry the moss then burn it and you will get the rest." "That's so simple that I should be able to clean up on some of the yellow metal," said Joe. "That is if I know where the moss is."

27

"This winter we have had two very heavy rain storms; one of them with falls of as much as 16 to 20 inches of rain," volunteered Mr. CaBins. "It takes that kind of a winter to bring down new crops of gold. It's simply a matter of erosion. The heavy storms run rivulets down the canyon sides and the moss acts as a trap, collecting its share as the gold makes its way to the river. All the old-timers wait for the heavy winters before they think about doing some more placering. It's the simplest type of mining." Before Joe made his first trip, having planned to go south on State Highway 49 to Jackson, a now shutdown mining center, he tried out moss mining. FrOID his first drum of moss he tramped out a half ounce of fine gold, putting the moss aside to dry for his second clean-up. The going was so good that he put in the entire week, cleaning up four and a half ounces. If it would hold to a fineness of 900, Mr. Collins told" him, the Mint in San Francisco '\lould pay him $141.75, or $31.50 per ounce, his gold being nine-tenths pure. Well, thought Joe, that's just about what I was making dishing up news, and it will all be
28

Joe read the clipping with increasing interest. "What do you think of it?" he inquired of Mr. Collins. "I think the gold miners' attorney is right. That war emergency has been over long ago. The internationalists, aided by our Treasury and Federal Reserve Bank, are after our gold. And there's plenty of evidence that the unjust restrictions on gold, its producers and holders is 'communist inspired'.

..

"In fact it was two communists, Harry Dexter White and Alger Hiss, who franled the whole deal. They were both employees of the State

Department at the time. The former committed suicide while the latter stood trial, served a jail term and following his release was again taken back into our government. Dick Nixon, then a member of the House of Representatives, led in digging up the evidence against Hiss. The communists in our government have hated him ever since. His work was extremely difficult due to communist infiltration in our government, which began during the Roosevelt administration. You will remember that FDR was a close friend of Stalin. ('Good old Joe'). "And as far as the Roosevelt emergency proclamation being redeclared by the presidents following Franklin, I don't believe it. The others simply let the proclamation stand. Any judge and jury can now see what has happened to the nation's monetary system, due to the 'communist inspired' gold regulation. All our available gold has fled the country. Gold mining cannot be resumed in the United States. If this 'communist inspired' regulation continues Congress will be forced to pass the Multer Bill which will denude our monetary system of its last vestige of gold - the 25 per cent gold backing federal reserve notes and deposits. "There is plenty of evidence that the Roosevelt emergency proclaxpation is now wrecking the U. S. monetary system, the principal objective of the communist world."

..

"Boy, boy! You should be one of the witnesses at that hearing," enthused Joe. "You sure got it down pat. I just wonder if the gold miners of the West will take any interest in the proceedings. They should storm that hearing with all the legal help they can dig up. Let me have the clipping, please. I will mail it to Harold at once. He may be able to get his congressman, Ben Goodwin, to do something about it. I guess I forgot to tell you my pal, Hal Wilson, is secretary to a congressman."

"If he does do anything I will be surprised," responded Mr. Collins . "Outside of now and then introducing a bill and coming West to tell us what they are going to do, so far the score for gold in Washington is a big goose egg. We spent ten years educating Clair Engle when he was in the House of Representatives and we really believed he was our man but he finally chickened out. He spoke about gold less and less and when he got into the Senate, beating our ~Gold Governor' Goodie Knight, he completely forgot about .gold. I'll take that back; he did introduce one bill. I have no confidence in our Senators or Representatives. They don't represent us; they represent the international bankers, now getting

29

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- ---

-

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control of your Uncle Sam's gold and stashing it away as the capital of the International Monetary Fund. Our financial system is gone if Congress doesn't wake up very soon." "I just hope it isn't that bad in Congress," offered Joe. «I'm sure there are a few congressmen who really want to do something to keep our nation sound financially. Can't you name one who is for us and the good old USA? Surely that shouldn't be impossible." "Well, I can say a good word for Walter Baring, the lone representative from the mining state of Nevada. If Walter could just get a few more members to go along with him he would get places. But as my wife says:
30

CHAPTER 8

The Banker and the Miner oe was now ready to start his tour of the famous Mother Lode of California. He intended to hit for Jackson, the county seat of the first county south of EI Dorado. He was interested in visiting a district that had added so much gold to the United States Treasury, which had been squandered by our Congress agreeing to the Bretton Woods Agreement. He wanted to see the old Argonaut and Kennedy mines, the latter being the deepest in California - seven thousand, six hundred and forty feet, straight down. The Argonaut was close to that depth, only three hundred feet less.

J

As he was heading south out Main Street to hit the intersection of State Highway 49 (named in honor of the '4ger miners) he saw the Placerville office of the Bank of America. Although he had agreed to take Mr. Collins' advice and not waste any time with bankers he still had a hankering to try it, at least just once. With difficulty he found a place to park and then made his way to the bank. It was Monday morning and the bank was full of customers. However, in a few minutes he met the manager and after introducing himself was invited to a seat. He lost no time in telling of his business in California, inquiring, "Do you think gold mining in the West is going to make a comeback?" "Don't ask me that. Before you left N ew York you should have called on the Wall Street money powers. They are closer to the situation than we small bankers out here in the West," answerd the banker. "The New Yorkers, as you say, may be closer to the situation but none of them have the assets and influence as does the Bank of America. I'd think when it comes to monetary policy your world-wide institution would have quite a bit to say," volunteered Joe. While pleased that Joe recognized the strength and importance of his bank it was apparent that ,Mr. Banker wasn't going to be involved in a discussion as to whether gold mines should be allowed to resume operation. He countered with: 'We have new gold fields in California: our vast water supply, our vast farm produce, our climate and recreation constitute our gold mines. They bring in new residents faster than gold did in the days of '49. We don't need to reopen our gold mines." Joe studied him a moment, considering whether or not to go deeper into the gold situation and its effect on the country's economy. With the thought of now or never Joe said: 'What you say is all true about local conditions but what about the monetary safety of our economy? I presume you know ten billion dollars of our monetary gold has left the country and the rest is mortgaged to the hilt in favor of our foreign friends, subject to call at any time." "So I read in the financial publications," said the banker. However, don't you think the days of gold are over? Our wealth is in other fonns

31

which will back up the issuance of plenty of currency. The chairman of our House of Representatives Banking & Currency Committee, Mr. Wright Patman of Texas, said, ·You can throw all our gold into the ocean and we can get along very well'. Our paper is recognized all over the world. And if you want to bring in some of your New York bank paper and deposit it with us we will be glad to recognize it so that you can begin writing checks on it. I'm afraid I am very much like Mr. Patman." Joe saw there was no use carrying on the conversation any longer, so with thanks for the banker's time he left and started his trip to Jackson. Driving south on State Highway 49 Joe came to the conclusion that he'd need a few more sessions with John Collins before he could stand up to the banker's argument. Hearing the name of Congressman Wright Patman of Texas did ring a bell for him. He had read of the gentleman in the gold-covered magazine. As he reviewed it, it was this: Mr. Patman, about three years previous introduced a bill in the House to prevent the Federal Reserve Bank from distributing to their fourteen thousand member banks, a block of fifteen billion dollars worth of government bonds which could have been cancelled. The bill came up for a vote but out of the four hundred thirty-seven House members the bill received only sixty ·yes' votes. No wonder, thought Joe, my banker friend wants to discard gold and take to paper. He can create more debt with paper. Along the highway Joe noted many abandoned mines marked by ore dumps. He had visions of ten to a hundred men working in each. He had read of as nlany as twenty thousand such mines in California alone. One little county, Calaveras, on further south, has eleven hundred and two, according to State records. It's a crime, he thought, for Washington to keep that wealth hidden. Something must be done to correct that condition. Just what is Washington thinking about? In Jackson he wanted to meet some of the owners of the shutdown gold mines. He went to the Chamber of Commerce, met the managersecretary and lost no time getting a conversation started on gold. The chamber of commerce man assured him the organization was doing all it could to encourage their representative in Congress to pass some bill that would reopen Amador County's gold mines. But with the administration, Secretary of the Treasury and the Federal Reserve Bank out strong against a raise in the gold price the chamber of commerce man wasn't very hopeful. He appeared to be aware that the nation's gold was fast leaving the country and that when it was all gone maybe Washington would do something. Joe reminded him that would be the time we would be buying it back at a much higher price. Somebody was out to make a nice profit he suggested. Joe learned the name of a local businessman who with several others owned the Italian mine. He went to see the man, Bill Tam, a clothier. Bill met him, heartily glad that there were folks that were interested in gold mining. Tam spoke of their property, a big low grade, with a ledge 127 feet wide. It was one of those properties, he said, that would need a large mill, costing in these days a fortune. It wasn't a small man's deal

32

and was characteristic of the main Mother Lode - wide veins of low grade ore. He was of the opinion that Joe would be more interested in a higher grade property on the East Belt. Tam gave Joe some of the mining history of the Jackson district, dealing with the many mines now shut down. The Argonaut was not shut down by the government's Closing Order L-20S. Before that order was issued the mine, at a depth of one and a half mile, was milling seven dollar ore at a mining and milling cost of $7.50 per ton. Mr. Tam spoke of the Central Eureka at Sutter Creek, about four miles north of Jackson as one of the most profitable in the area. During one year the are made an average of $25.00 a ton. When that mine shut down, Tam said, it practically closed the town. It provided steady employment for one hundred and twenty-five men. "'Our town was a real live one in the gold mining days," he said. «Mter the closing we had to get along without them. It's been tough. I do hope we can get a Washington administration that will see the necessity of opening the gold mines in order to add more gold to the Treasury now losing its gold to foreign dollar holders." Joe purchased a handsome Pendleton shirt, thanked Mr. Tam and concluded his day's tour of the Lode, promising to go farther south on another day. Before going out to the mine at Pollock Pines he dropped in to see Mr. and ,Mrs. Collins. He found the former deeply involved in reading the latest issue of the Northern Miner, published in Toronto, Canada. The publication is definitely opposed to the United States government treatment of gold and was John Collin's bible. Mr. and Mrs. insisted on Joe staying for dinner after which the gold miners went over the lengthy article on what would happen to the investor if our government refused to raise the price of gold to make its value comparable to the present inflated price of every day commodities. Both Joe and Collins were taken with its straight-forward treatment of the situation. Joe vowed he would get a copy and mail it to Harold with instructions to take it up immediately with Congressman Goodwin. Here is the statement in full:

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~

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-~~~

CHAPTER 9

D'evaluation and the Investor WHAT ABOUT U. S. DEVALUATION AND WHAT ABOUT THE INVESTOR? Do Smaller Gold Losses Say U. S. Is Avoiding Cut In The Dollar? - But If Cut Comes, What Happens To Savings, Stocks, Bonds, Goods? 1 - I read a tremendous amount about the United States losing gold and notice the big annual deficits in the Government Budget and how the monetary business is upheld by the goodness of Europe and I am worried. Will we have to revalue gold and when will this happen? 2 - If the U. S. has to cut the dollar won't this cut the value of the money I have in the bank? What will it do to the bonds, and the stocks I have, and to my insurance policies? What about my pension cheques?

The foregoing expresses the fears and feelings of a great many of the Northern Miner's readers. (We have the largest American subscription list of any Canadian paper.) People are worried, all right. While the gold loss this year has been smaller than last, so far, the potential for a big loss looms larger than it has since the American foreign situation became difficult. Indeed, why the American government has been able to run this long without devaluation of the dollar is the great enigma of our times. Other countries would have given up the ghost long ago. All we can say is that America is, as a nation and people, very, very rich, very industrious, most highly regarded in the world outside its borders. It has profound military might, upon which the rest of the West plants its hopes of sal~ vation in the storm of possible war. Americans are resourceful, ingenious, courageous. There is nothing wrong vvith the people. But there is much, much wrong with the way their successive governments have handled the international and domestic business affairs of the, country, and the way these governments have given in to the demands of selfseeking politioians, of business groups, labor leaders - all the kinds of folks who, in a free society, tend to rise to power. The Government is to blame, but

the people more so, and the same holds true of Canada, Britain, the countries of Europe, nOw that these have regained wealth lost during the war, and the world in general. We often ponder over what will be the outcome of the grand monetary and financial spree that has been so enjoyable, once the cold, grey dawn of the morning after, breaks. Devaluation Seems Certain

That the dollar will have to be devalued seems certain. Its official worth is false and indefensible. But in a rich country, headed by ingenious men, the process can go on a long time, especially when the foreign interests who have it in their power to topple the American currency are reluctant to do so, and join happily in every scheme and device that Washington proposes to stave off the day of reckoning. Devaluation of the dollar is coming. Next week? Perhaps. Next month? Perhaps. In 1964? Possibly. And we say this because it is incomprehensible that the Administration will embark upon an election campaign with the Damoclean sword of sudden devaluation hanging over its head - only a thin thread saving the government from the necessity of cutting its money and throwing the whole economy into a state of frantic uncertainty and probably costing it the campaign. From whence will danger strike? France possibly, or at least that seems a likely direction though there are myriad areas of attack. But France appears re· calcitrant. It has gained domination over Europe politically. De Gaulle has it in his power to dump the dollar overboard. and in the aot gain more power and prestige - of a dubious sort. We remember that it was France that dumped Britain's currency overboard in 1931, and brought about that stirring series of events which led to devaluations right and left and ended with the price of gold rising from the price - more than a century ago - of $20.67, to $35. Brief-

34

Orgy Of Debt ly, France then demanded that Britain Everybody from Washington on out pay her national current debts to France has been engaged in this piling up of not in pounds but in gold. The U. K. deficits, of buying more than they have ran out of gold and had to raise the price the ready money to pay for. It is easy to it would pay in order to attract gold with imagine that never in history have we which to refill its Treasury. Is there not seen such an orgy of debt. Big deficits an analogy for us to ponder today? There during a great war are to be expected. is. The national life is at stake and paying France Is Key France is the king pin in the money the bills is of secondary moment. How are war bills paid? By inflation. Those world overseas. She has mountains of bills are so huge that it is hopeless to dollars in hand or commandable. She can expect that they can be met at the old demand gold for those dollars. And the price of gold and the new value of labor. United States hasn't nearly enough gold to meet the demands - plus those that So, it's excusable when a government embarks upon deliberate inflation so that would crowd in from every side once the dollar becomes two dollars and the other countries, and the private currency war bonds are chopped in half and can jackals hovering around the edge for the thus be paid off. This is rather rough on big kill, see the United States in deep the people who kept the war bonds and trouble. Quite a few Americans realize bought more bonds and found upon rethat their country is sitting on a bomb demption date that they wouldn't buy with a short fuse - a bomb that could nearly as much groceries, or labor, or wreck, financially, as great a disaster as anything else. as they used to. the nuclear bomb could inflict physically. Is it in the power of Washington to We say war-caused inflation is exavoid monetary catastrophe? It is. Yet cusable. But inflation to make the voters all the reading of currency events of 30 feel good, long after the need of it is years and more say that governments past, is not excusable. It is robbery by hestitate to do the right and obvious government, and it is not to be condoned thing. They take half measures which simply because everybody yells for it so only reveal their plight to all beholders that they will seem to be getting richer and, in the end, necessitate measures faster, making higher profits in their and ensure events that are more bitter businesses, taking home bigger pay than those timidly failed to overcome. cheques. Unfortunately the spree has For instance, the United States might cut to be paid for in terrible headaches. its dollar by lOX. That would not re- There's quite a bit of queasiness around assure the outer world. It would only already. There is unempI0y.nent,. and a advertise the country's plight. It would shrinking of profits in business and innot bring in gold to replenish the dedustry - masked by remarkable l-rofits pleted stocks. It would only say to all in a few favored places - and there is the world that more cuts were to follow a slowing down in the rate of national and create at home a state of deep growth that frets people who do the anxiety and abroad an atmosphere of thinking for the rest. And, in very simple nervousness. language these anxities and troubles that beset so many Americans today are due America should devalue by a prompt to lack of confidence in a currency that 50%. But we are willing to bet they won't has become soft where it used to be - not until dire business difficulties force hard, and in a business atmosphere that action. And by such difficulties we need has become uneasy where it used to be only mention the '30s. They can come eager and bold. back. The difference between '29 and now is that previously the mass of specStrong Measures Needed ulators were out on a margin limb. (At What is seen today was long ago foretold by history students who insisted that least, that's the popular story but a great many other factors were in play.) Today, a country that does not maintain its it is governments of all kinds that are national credit at a peak level, that lets out on a limb. and millions and millions its gold stock slip away, that does not keep its money firm and steady. is asking of little people who may not owe money for trouble. What is seen today is just to their brokers but do owe it to' the car the beginnings - unless the government companies, to the companies that sell appliances, homes - all the innumerable turns completely around and installs companies that have provided the masses strong measures to rehabilitate the curwith easy credit. rency and the economy, and to end the

35

everlasting inflation that besets them. But, can anybody imagine the present Administration putting a full stop to inflation and arousing the ire of laborvoters, and business interests, and, indeed, the people at large? We can't. Therefore, we are afraid that it will take a terribly depressing experience to force a change to sound practices. In the meantime, Washington will continue to play around with schemes and stratagems to avoid and defer gold losses. One wise old European codger has likened these devices to the kiting of cheques - a game in which a delinquent writes a series of bum cheques, which he deposits, in order to meet the first of his worthless cheques. This is a business, looked upon balefully by good bankers and by the law, which comes to a rueful end. A government is the law, but it does appear that the United States is accumulating new and devious promises to pay which it will not have the gold to meet when the accounts are toted up. When Devaluation Comes

We should hark back to the question propounded by readers who wonder what will be the worth of their money come the day the U. S. devalues the currency. Some weird notions are held by some in this matter. Some actually think that on that day they will find their savings cut in half should the dollar be devalued by 50%, say. All stocks, they fear will drop by 50% and bonds, and goods on store shelves, etcetera. But, that's not the way it works in democracies. It works that way in Russia, but Russia is different. It simply expropriates a percentage of bank deposits and such-like wealth, and slaps on a new set of store prices and a new level of wages. But then, Russia is not a free economy. After devaluation the dollar will feel, look, act like a dollar. It will still buy a dollar's worth of goods in stores. Ten thousand dollars' worth of stocks or bonds will still be worth ten thousand. That goes for real estate, insurance, machinery, everything. And it will continue to hold good, this Tule, provided the government sets its face sternly against all acts of inflation and profiteering. That's quite a big if. But, in Canada, we had a devaluation last year and the rise in the cost of goods has been very small. And, this is interesting because Canada is a big importer of all manner of goods and the bills that have to be paid for these imports run roughly 10% more than pre-devaluation.

The big point is that when a country devalues its currency the effect of the action is largely external. Internally, the money is still the same old money - or should be unless the government runs wild and lets the people run wild. For America, the saving grace is that compared with its overall billions in annual business its imports are very smalL Internally made things need not be affected, money-wise. And on the other hand, the goods Americans export abroad will be cheaper to the foreign buyer and thus more attractive; thefll be cheaper because the foreigner s money will buy more dollars than they did before the latter were devalued. That ought to be good for business in the United States. It should boost employment and business in general. Our baby-devaluation has been good, that way, for Canada. Will Others Follow?

The whole proposition is "iffy," by its very nature. If other countries follow the American action to the same extent and devalue, too, then the goodness in the way of help to American business could be cancelled out - along with the American advantages in buying gold. If the U. S. devalues by 50% and the U. S. price of gold would rise to $70 an ounce and the metal would come flooding back, lured by this high figure to American shores. But will other countries stand placidly by while Uncle Sam grabs all the newly-mined gold and persuades the hoarders to sell him their metal. Not likely, it could be guessed. It all depends on how much leeway, or lead, the United States gets, and whether other countries can, or will, devalue as deeply. Some persons will say what's the sense of thinking of devaluing the Amerioan dollar, it will get the country nowhere. The response is that this is not true. And there is no other way out if the dollar is to hold the world's faith. And the fact that the dollar is not really worth 100 cents anyway, and the pretense of saying that 40 cents is 100, sets up stresses and abnormalities that intensify the money's difficulties. Anyway, the country can't go on the way it's going, piling up dollars abroad that are an overhanging claim on the eroded gold pile. Something has to be done. It is the hope that something constructive will be done that upholds the stock market. Effect On Savings

And that brings us back to the question of how devaluation will affect the savings and investments of Mr. Man on

36

...

the Street. There is a point worth noting. Devaluation will not be undertaken unless things look pretty bad. When they look bad markets will be going down because holders will be disturbed, and some frightened out. Or maybe they'll prudently anticipate such a state of affairs. The stock markets may be a buy around devaluation time. That's been the common experience during the scores and scores of devaluations that have taken place in the past SO odd years around the world. The usual thing has been that governments delay a devaluation until business and personal troubles are all but overwhelming. Gold shares have come back into traders' interest in recent weeks and the reason is that the failure of the U. S. Treasury to cure the imbalance of foreign payments despite their most earnest efforts. The people in that department have staunched the outflow of gold to a considerable extent. However, the measures they have employed in respect of gold have made their endeavors suspect, for they include steps ordinarily used only by banana republics and they move far away from the proven attitudes and actions of a strong and confident country. Payments Imbalance

It is the imbalance of payments that disturbs bankers and other monetary sophisticates. This grows, and the inability to check it contrasts sadly with the promises, or advertised attempts, of the Administration to have it stopped, and turned around, by this time. Presently, there are suggestions that American interest rates be raised to bring in more foreign capital and thus offset the American outflow of funds. But there is great fear in the land that higher interest charges would bring setbacks in busi., ness. Politically, a jump in interest rates would be anathema. A big factor in the payments deficit is, of course, the necessity to defend the country against an implacable foe that has the advantage of not being bound by democratic money principles, and that can confiscate its peoples' savings, and command their labor, at will. And the United States feels compelled to spend funds freely to rally its allies. It is scarcely to be wondered at that some of those allies, including Canada, seem to Americans not to act as enthusiastically as could be wished in the common defense. Another item among the many in the

payments question is the obstacles to expanding American exports. An example is the suggestion that American steel prices be inoreased. Such an action could cut down exports and increase imports - and thus add to the imbalance. This goes to show to what extent the national policy of inflation, and the grip it has gained on the economy and all political thinking, endangers the entire nation. But what party can be expected to impose the harsh measures that will stop inflation and turn the country around! Surpluses Are Few

The budgetary deficits, which every party has contributed to, have been cited as l:l. prime cause of inflation. Might it be better to say it is but a symptom of the economic philosophy that has seized the people. In the past 32 years the government has had a surplus over expenditures in only six years. The national debt in those years has risen from $16 billion to $305 billion and the dollar has dropped from 100 in buying power to a quoted 46 cents - although we should think it has fallen even lower, judging from the amount of labor the present dollar will bring compared with 1940; for just one thing. That inflation has helped produce the slow rate of growth that is such a commOn concern is beyond doubt. Yet a deficit of $8 billion is spoken of for this fiscal year, and if the tax cut goes through it will rise to $20 billion next year, so many economists insist. The gold stock has shrunk from almost $25 billion in 1950 to a net of $15 billion today. In that period the foreign net short-term claims on American gold have soared from $7 billion to over $20 billion. One writer likens the situation to a $16,000 house that carries a mortgage of $20,000, a mortgage due and payable whenever the holder decides to demand payment. There is the rub in the gold question. The demand for American gold is quiet just now and the losses small. But who can say when a wave of fear will sweep over some central banker who owns dollars but wants gold. The demand might mushroom to frantic proportions, and do so overnight. That is why we started off by saying devaluation might descend in a week, or a month, or wait years. The Cu re Is Known

Through any review, anywhere, of the monetary field the reader is bound to detect a thread of futility, almost of hopelessness. And it is no longer pos-

37

sible to oharge that such reviews are a product of the gold mining interests. They are to be seen on every hand in the American press, and heard on the air. Yet the outlook is not hopeless. The cures are available if the courage to administer them is summoned up. And all of us have this to give us heart and encouragement. An increase in the world's above-ground gold reserves, to meet the modern needs in these expan-

sionary times, would tremendously benefit trade arid business. It would make adequate defense supportable. It would finance the space age. It would permit something that is close to the heart of everyone: raise the living standards of human beings, and calm the cries that rise from the less fortunate. Mr. Kennedy has said that there is not enough gold to meet the needs of business. It is hopeful that he knows this .

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CHAPTER 10

Joe and the Mine Broker

B

oth Mr. Collins and Joe agreed that the Northern Miner article was an excellent exposure of the goldless monetary crisis facing the nation. The question was: would the President, who in other governmental departments has taken a decided leadership, continue to submit to having his Treasury department run by Internationalists. Mr. Collins held that surely the President must eventually admit that our monetary system, originated by Communists, and devoid of a gold backing, would eventually lead to an economic collapse. Even though the International Monetary Fund was gathering in our gold the U. S. system of which we have always been proud, would hereafter be subject to a one-world organization. We could no longer survive as an independent nation. The taxes we now pay for the operation of our own government would be collected by the One-Worlders. "That is the situation which faces us if we don't quit taking orders from the Internationalists," concluded Mr. Collins. "There was a start made in that direction in Congress in the summer of 1962. Congressman Carroll D. Kearns introduced his House Joint Resolution 816 that would have stopped the rape of our gold supply by foreign dollar holders. It would have put an embargo on the shifting of our gold to foreigners. It would have repudiated the Bretton Woods Agreement, a communist conspiracy. I don't see what our Congress is thinking about when it approves the loss of all our gold and an utter dependence on paper money. We still have enough gold left if a few leaders in Congress have enough guts and ability to turn the table. I forgot to note that the communists in our government and the foreign gold grabbers saw to it that Carroll Kearns was not reelected in the November election of 1962. They have so much influence in our elections that they can reach out into any state, no matter how remote from Washington. It's a situation that needs a national expose. If we don't get them they w:ill get us.» It was late when Joe left the Collins home and headed for his mining retreat. He'd have a lot to report to Harold and decided that he'd better put in another week at moss mining. He needed travel money. 38

He was finishing his letter to Harold, containing the Northern Miner monetary discussion, when he had a caller. He introdpced himself as John J. Clemens, a mine broker. He was well dressed, drove a Cadillac, and made a very snappy appearance. He knew all there was to know about gold mining and knew all the best properties, many of which he could deliver to buyers or leasers. Joe was curious to,know how Clemens got his name and found out where he was located. "Oh, Placerville is a small town and I get around," smiled the broker, immediately starting in on information regarding his stock in trade. ' He had the best gold mines and claims in EI Dorado County and in a number of other mining districts. Now was the t~me to get a property, he said, as everything pointed to the fact that Washington would soon be forced to raise the price of gold. It wouldn't do to wait until after the raise. Properties would 'be out of sight. He conCluded his oration by offering Joe one of his own claims, 20 acres, for a price of $7,000. He would give Joe an opportunity to get hold of one of his own personal claims; he wanted Joe to make good. "I question your idea that we are on the verge of getting a better price for gold," said Joe. "Before leaving New York I went into this matter with people who should know and came to the conclusion that Washington is no nearer to the change than it was five years ago, although I am forced to admit such a move has become a vital necessity; and not because the gold miner can't operate his property on the present gold price. Anyway, why is your claim any better than one I could locate myself at no cost?" 'Well, I'm located right next to one of the county's biggest producers, the famous Alhambra, which has produced well over two million dollars." "What work have you done on it?'> asked Joe. "Being that close to such a rich producer I don't have to do any work," was the answer. "'How about 'Discovery' and 'Assessment' work?" questioned Joe. "That's all done and proof of it recorded in the courthouse," said Clemens. "In doing this work what evidence of minerals did you find on the claim?" asked Joe.

~

"You don't have to find are," responded Clemens. "The law says you only have to do so much work. That has been done and the claim is in good legal order." "Have you been subjected to Public Law 167 as yet? When you don't have anything to show and the Bureau of Land Management wants to take over your tim her and the entire surface of your claim, how are you going to hold it without a mineral showing? I hav.e been reading up on that law and just yesterday came across one of the Bureau's statements

39

on just what we are discussing. Here it is." He let Clemens read it. lt stated: Numerous recent inquiries on the sale and purchase of unpatented mining claims have resulted in an admonition of caution from Henry Branagh, supervisor of Tahoe National Forest, who stated that purchase of mining claims without a careful check of their validity often leads to financial loss and disappointment. "A quit claim deed is worthless if the claim on which it is based is invalid," Branagh said. "A claim may be invalid for a number of reasons, including improper location procedures, location on withdrawn lands or lands already filed upon, absence of a valid discovery, and occupancy and use for purposes other than mining." Prospective purchasers are urged to inspect the claim site, verify discovery of valuable minerals, and inspect land status and location records at the county recorder's office. A check with the local forest ranger should also be made for additional information. . Branagh emphasized that it is the poliCy of the forest service to encourage legitimate prospecting and mining on open National Forest land. Rangers are available to assist and cooperate with all persons engaged in suoh endeavors.

The forest supervisor advised that it is illegal to stake or hold a mining claim for purposes other than mining. During a recent survey on Tahoe National Forest, numerous mining claims of doubtful validity were found. Mineral examinations are currently being scheduled for those claims occupied by buildings. Where examinations indicate the claims are not valid, contesting action will be initiated to restore the land to ~~,""""use.

Those interested in correct procedures under the mining laws may obtain, fr«::e of charge, several circulars pertaining. to United States mining laws from the Land Office of the Bureau of Land Management at Sacramento. Circular 1941 with the following additions. Circulars 1961, 1970, 1993 and 2007 are most useful. An excellent publication, "Legal Guide for California Prospectors and Miners," is available from the State of California. Department of Natural Resources, Division of Mines, Ferry Building, San Francisco II, for $1 plus sales tax. Also, rangers on the forest are generally located so they are readily available for mining infonna tion.

"Oh shucks, that's just for people who don't know any better'" said Clemens. "They can't fool me with that kind of stuff. When it comes to mining claim laws I know better. If you are going to let them scare you out, you might as well go back to New York. We want miners out here willing to stand and fight for their rights. A government boy will tell you anything he thinks you will swallow. They have ruined a lot of good milling ground.» "N evertheless without a good mineral showing, and a commercial supply, I don't think you can hold that claim when they get to working P. L. 167 on you. If you think you have rich ore you better get to digging and expose it. Then I might be interested," said Joe, giving his visitor to understand the visit was over. The next day Joe called on the Collins, telling of his mining visitor. He repeated the conversation and was pleased when John commended him for the way he handled the situation. "That fellow is a Number One slicker. He~s tried to unload claims on a lot of folks and, as you suspect, I don't think he can hold them. The Bureau of Land Management will get to him soon so we won't worry about him. However, the government boys do pull just about as many tricks on honest -claimholdersas the phony ones do on the government. They hold if you don't happen to have a market for your mineral you haven't made a discovery and there-

40

fore don't have a valid claim. They won't let you build a road to your claims and then because you have no access they tell you you haven't made a discovery. They won't let you build a cabin on your claim which makes it impossible for some to develop a claim when they live at a great distance. Yes, the G-Boys are giving us a bad deal. I note Congressman Baring of Nevada and some of the Colorado House members want to investigate. the Bureau's policies but with Congress spending all its time trying to pass legislation that will keep the spenders in power for another term, what can a few members do?" Mr. Collins continued his statements about government interference with claimholders by bringing out late copies of California Mining Journal which he suggested that Joe read. Joe thanked him and that night gave the pages several readings, desiring a thorough understanding of just what the claimholder was up against. This is what he read: The Forestry Service now claims that the occupants of mining claims must be booted out so they can properly administer the surface rights given to them by Public Law 167. Although they admit that the law does not permit them to interfere in any way with mining, prospecting or operations pertaining to these, they are by-passing this law by declaring all mining claims null and void. The top officials of the Forestry Service now place the ejection of these people from their homes in the same category as bug and disease eradication, and are asking the state and county officials to assist them in this diabolical plan. The program for evicting these claimholders, allegedly written by a B. of L.M. man on loan to the F.S. in San Francisco, is contained in a Forest Service Handbook called "National· Forest Minerals Management," prepared by Mineral Section Division of Lands, Region 5, and we quote:

two questions. The first is whether. in light of having the right to harvest vegetative resources on mining claims having right of access across them and authorization to manage other surface resources of land involved by mining claims, we are individually and collectively convinced that occupancy is a problem. Secondly. whether, on an individual and collective basis, there is willingness to provide the time and money needed to do a job. comparable to that being done in other fields such as in fire, in bug and disease control, in timber harvesting and reforestation, in road construction, etc." Heading Off New Occupants

Mineral Management

"The Bureau of Land Management administers the general mining laws through the Lode and Placer Regulations ( 43 CFR Part 185) and the Rules of Practice (43 CFR Part 221). An agreement between the Bureau of Land Management and the Forest Service provides for joint administration of the mining laws and mineral leasing regulations on national forest lands," Suggestions "'On the assumption that you are in

more or less agreement with these observations we come to a facet of the mining law operation with which We are most concerned, namely that of occupancy. Before the matter can be logically dealt with, however, answers are required for

«For the present, it would be our recommendation that primarv consideration be given to one part of the problem. namely the prevention and heading off of new occupanCies. Once we get on top of that job, attention can be diverted to that of resolving old occupanCies on a case by case basis and as time and Circumstances permit." "Briefly and broadly our thoughts, and we feel sure ·some of yours, are that ways and means must be devised for determining where and when new occupancies are likely to come into existence. For instance, county records could be periodically searched and whereabouts of new filings and place of residence or owners thereof ascertained; arrangements might be made with county offiCials issuing building permits to furnish you with a duplicate copy of permit or notice of where and when construction is imminent; all forest personnel, patrolmen, etc., should be alerted to immediately report evidence of mining claims and indication of possible intention of construction thereon, etc."

41

A Far Cry For Taxpayers "We are sure your efforts in this regard can and will become an interesting and rewarding experience. By no means do we wish to imply that you are going to prevent all unauthorized occupancy. We

can say, however, that you are in a position to save the taxpayers a substantial amount of money and yourself and the Forest Service a lot of time and effort through timely and judicious effort on your part."

•

CHAPTER 11

Bureaucracy and the Mio·er n reporting all the mess created by the Bureaucrats in their management of mining on public lands to Harold, Joe could not overlook stating that it looked very much like our United States government is definitely against mining despite the statements of the two deparments - Agriculture and Interior - that they encourage mining. He wrote that he had about come to the conclusion that the mines, the prospects and future discoveries were what the Bureau of Land Management was after - and by hook or by crook.

I

In further discussing this matter with Mr. Collins, the latter said he knew of many instances of "dirty work at the crossroads:' He knew of a boy who had been paid money by a Forest Service official for knocking down claim monuments, and tearing up notices. Another instance down Sonora way: A very old miner, too old to have to do a job over twice, told of his shaft having been filled with rocks. The Forest Service boys at Sonora blamed the thing on boys but, as Mr. Collins held, no boys would care to work that hard. Along the same line Collins brought forth a printed statement by a Mr. Glen Cole of Rialto, California, which showed the duplicity of the Bureau of Land Management and that as for encouraging mining, their claims were just so much Indian bush-wah. Cole's statement was as follows: For the past seven years I have watched the Bureau of Land Management and the related U. S. Forest Service spreading out through the fateful loophole known as Public Law No. 167. I have watched them expanding and observed them growing more bold and brazen with each passing month until they now boast that their goal is the stamping out of all private mining and the revocation of the mining laws of our country. In recent conversations with Edward F. Kruskie, "Valuation Engineer (Mining)" out of the Riverside office of the B.L.M., in the presence of witnesses, he verified the goal of the B.L.M. and stated that there was nothing we could do to stop them inasmuch as their actions

were in line with the "Policies of our President." Kruskie had been sent to the Blythe area where the conversations took place, because of the large tonnage of building stone being shipped from this area. The primary target of the B.L.M. was to convince the owners of mining claims that they must relinquish their mining claims and apply for a permit giving them the right to pay the B.L.M. a .royalty for the stone and other saleable minerals from their former mining claims. Kruskie's standard procedure in accomplishing this goal has been to contact the claim holders separately and importune them to relinqui~h their mining claims, offering them: (1) The "protection" of the Gov. while purchasing the materials from the Gov., (2) They would not have

42

to pay income tax on the royalties paid to the Gov., (3) They could operate on much larger acreages than they had under mining claims, ( 4) They could have material sales pennits right over the best deposits of other claim owners because they were able to apply first, ( 5 ) They would not have to pay "possessory right" taxes upon the large acreages involved. If the many promises of «advantages" failed to get the claimholder to sign away his mining claim rights, then threats of imperium followed swiftly. Kruskie would declare the claims to be invalid under the common variety clause of P.L. No. 167 and have the Riverside office issue a notice of trespass against the claimholder, with the threat that the U. S. Govt. would take action against the individual if he did not immediately vaoate and relinquish his mining claims and pay retroactive royalty on all materials removed or sold from his claims. I have proof of this on file and also proof that the B.L.M. has issued Material Sales permits right over valid mining claims in the Blythe area, many of which were located prior to the passage of P. L. No. 167. The B.L.M. pressure in the Blythe area is because true "Driftwood» building stone, an eroded alluvial Wollastonite, occurring only in the Blythe area, is now the largest selling building

stone produced West of the Mississippi and our Public Parasites sensed an opportunity to obtain substantial additional royalty payments for their dept. while simultaneously setting a precedent for declaring all building stone a "common variety" in their intent to use P. L. No. 167 to destroy all private ownership of mineral deposits. Khrushchev should award them Hero badges for their dedicated efforts in the conversion of our country to become the U. S. S. R. To date, the only consistent objection to this communistic encroachment upon our free enterprise system has been the articles published in the California Mining Joumal, which has been discredited as much as possible by the B.L.M. I represent a growng group of individuals who wish we could ignore the monstrous leech that has been fattening upon our tax money and now even more upon the royalties paid by the blood and sweat of the people who work for a living, but it is grimly evident that we must fight or surrender, with surrender being a substitute for suicide. To fight, we need weapons, men, and money. The weapons we need are overwhelming files of facts and proofs of the cold war that is being waged within our midst, using our tax money to destroy our way of life.

Joe called at the Collins home the next day, wishing further to discuss this treatment of claimholders by the Forest Service and the Bureau of Land Management. Collins brought out another California Mining Journal clipped page dealing with the matter. He explained that the claimholder within a National Forest had two bosses, the Secretary of Agriculture and the Secretary of the Interior, the former having charge of the surface growth and the latter being mainly concerned with the minerals. "'Between the two of them and their thousands of field men the claimholder doesn't have an easy bed to lie in," volunteered Miner Collins. "'Take a good reading of this second clipping. It was fine for the Mining Council president to send that page out of the Forest Service Handbook to a Congres~man# especially a Westerner who no doubt would be interested in how his mining constituents were being treated by hjs government, but just how much good it did I will leave to you after you have read the page. Simply changing the wording of the text in the Handbook isn't going to change the ways of the field men, bent on eradicating the c1aimholders. Looks to me as if the brass in Washington tell the field men: CWhat we put out here is for the general public; you're supposed to proceed and get control of those claims and with the quickest and best method you know. It's public land and should 43

be held for the benefit of the public, not for just a few claimholders pretending to mine.' If that isn't creeping socialism what is? And it looks as if Orville Freeman has put one over on Congressman Wayne N. Aspinall who passed it on to the miners." Joe took a quick reading of the Journal page with, "Looks like you are right. Merely changing a word here and there in that infernal Handbook is just a blind. They have put it over on the claimholder again~ with the help of a congressman." This is how it was done as stated in the Mining Journal page: Recently, Western Mining Council obtained a copy of the Forest Service handbook, wherein it is stated that the occupants of all mining claims would be evicted. (See page six of our August issue). The President of WMC, Ino. took exception to the language used and sent the manual to Hon. Wayne Aspinall, Chainnan of the House Interior and Insular Affairs Committee. The Chairman concurred with WMC as to the language used, and in a prompt and efficient manmer straightened the situation out with the Secretary of Agriculture. We are reproducing these letters below in hopes that the miners appreciate the actions of Hon. Wayne Aspinall enough to drop him a letter of thanks. #

#

•

Mr. Newell H. Leppert, President Western Mining Council, Inc. 631 Eden Ave., San Jose, California Dear Mr. Leppert: ,Further reference is made to our correspondence relative to the statements contained in a training booklet issued by the Mineral Section, Division of Lands, Region 5 of the Forest Service titled «National Forest Minerals Management" which you submitted for our consideration. I think you will find of interest the enclosed copy of a .letter from the Secretary of Agriculture. As indicated in the letter, the action we took resulted in the Secretary directing a revision of the manual in order to remove the statements that· indicated a possible Department program to preclude new occupants, including those under the mining laws. I appreciate your calling this to our attention and the result demonstrates what can 'be accomplished if these matters are given consideration at Secretary level in the Department. Sincerely yours, WAYNE

N.

000

DEPARTMENT OF AGRICULTURE Washington 25, D. C.

August 28, 1962 Honorable Wayne N. Aspinall, Chairman Committee on Interior & Insular Affairg House of Representatives Dear Mr. Aspinall: This is in response to your letter of August 9 with which you enclosed copies of pages 8 and 9 of the Training Booklet entitled "National Forest Minerals Management," published by the California Region of the Forest Service. You question the clarity of the third paragraph under "Suggestions." This booklet has been re-mimeographed and the material you mentioned now appears on pages 9, 10, and 11. The latest issue dated 1962, is enclosed. We agree with you that this paragraph could be misinterpreted if taken by itself, and we are asking the Chief of the Forest Service to have the Region revise it, so that it will be clearly in line with our regular procedures. This Department has always recognized the rights of the owners of valid milling claims to occupy and use their claims, in accordance with the provisions of the Mining Laws. You will find this clearly sta ted in the enclosed copy of the revised Training Booklet of our California Region, dated 1962, under D, page 7, and E, page 8. These. policy statements make it quite olear that the rights of claimants are fully recognized. We regret the possible ambiguity of the statement you refer to and appreciate your calling it to our attention. Sincerely yours, ORVILLE

ASPINALL

L.

FREEMAN

Secretary.

Chairman.

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CHAPTER 12

George Holmes, The Prospector oe was very much afraid Harold would get discouraged after having to read so much about what the government hirelings do to claimholders so in his next report, mailed in a real prospecting story about a discovery that brought the prospector $3,117,000. Mr. Collins had clipped it out of the Los Angeles Times about George Holmes who brought a gold rush to Mojave. Here's the story~

J

Holmes Now 60 Holmes is 60 now, but still lean, hardhanded and calculating of eye. This is his story of how he found the Silver Queen and the reasons why he fears it may p~ove the last of the big bonanzas: ''I've been mining since I was 16:' he says. "Worked underground in most of the glory holes of the West - Grass Valley, Randsburg, Tonopah, Jerome . . "When I found the Queen I was leasing on Soledad (mining independently for a percentage of his production) in Jess Knight's Elephant Eagle." . Knight, father of fonner Gov. GOOdWIn J. Knight and a veteran of the Utah and Nevada gold fields, sold his Soledad Mountain claims for a reported $520,000 after the Mojave rush.

BY HENRY SUTHERLAND Los Angeles Times News Service

YUMA - Thirty years after his discovery of the Silver Queen Mine, latest in a long line of California gold bonanzas hard-rock miner George I. Holmes sho'ok his head Saturday and said of his find: «It may be the last." In a comfortable Yuma residence Holmes divides his time between California and Arizona - he fingered mementoes of his 1933 Soledad Mountain strike that launched the Mojave gold rush. "The gold is still in the ground," he said. "As much as ever has been mined. Any cloudburst may uncover a vein or a telltale piece of float in east Kern County, Calif.

Nobody looking "But nobody is looking for it any more. Very few know how. ~nd. the n~mber of those who do is dwmdUng. GlVe uS another 20 years and all of the gold miners will be dead." If Holmes foreboding proves correct he may be the last of a line, too - last of the discoverers who stretch back to John Marshall, knee-deep in Sutter's, mill race, last of the piok and shovel mmers who "struck it rich." Holmes dug $600,000 worth of ore out of the Silver Queen before selling out for $3.17 million plus royalties on Jan. 11, 1935. The buyer was Consolidated Gold Fields of South Africa, founded by Cecil Rhodes, fabulous 19th-century British Empire builder called the "uncrowned King of Africa." During the seven year!! before gold mining was halted as a war, measure in 1942 Consolidated took a million tons Df o;e worth $13 to $15 million from the flank of Soledad Mountain.

Association Echoes The association echoed years later when Gov. Knight, himself a one-time hard-rock miner, appointed Holmes to the California Horse Racing Board for an eight-year term whioh ended in 1960. "You have to know that gold miners are always prospecting," Holmes continued. "Either while at work underground or in their spare time. It's like a reflex. "'That Sunday, Sept. 17, 1933, I decided to go up a draw on the north face of Soledad and look at a couple of feet of open ground (unpatented public land) which I heard might run $12 to $14 a ton. "It was high up, toward the top, and near a small side draw forking to the left I found this piece of float." Rock Shown Holmes pOinted to an ordinary-looking chunk of rock on his coffee table. a frag ment broken from a similar vein by accident thousands of years ago and. in the course of time, "floated" to the surface. "It's argentite," he said. "Very heavy.

45

4

This piece weighed about 300 Ibs. before

1 sawed parts of it off. UI knocked off samples, up there in the draw, and when 1 got home 1 pounded some to dust in a mortar and panned it in an egg skillet. It was high-grade. I figured it at $1,800 a ton." Assays confirmed his conclusions a few days later, Holmes reoalled. The high-grade streak, about 18 in. wide in the center of the vein, assayed at 45 oz. of gold and 377 of silver. Called Largest "The main vein of the Queen was 1,100 ft. long," Holmes recalled. "At its narrowest point, on the 200-ft. level, it was 20 ft. wide, and at its widest, 100 ft." After finding the rich float, Holmes said, his problem was to locate the vein from which it came. "If I hadn't found it, r d have been there yet," he said. "But it wasn't hard. I trenched only about 15 ft. before I came on it, 6 ft. under the over-burden. "Then it was a question of development. It took me six weeks to get out 30 .sacks of high-grade with a pick and shovel and haul them about a mile and a half down the mountain on my back. Got $2,000

"But after I shipped them to the American Smelting & Refining smelter at Selby, I had $2,000, and that was enough to bulldoze a rough road up to the mine. I moved in a small compressor and stripped out the first carload . . ." Working with typical secrecy, Holmes mined and shipped 300 carloads during the first 11 months of 1934, and the pick and shovel miner became a mining magnate with a $600,000 fortune. But whispers of the bonanza spread like ripples. On Dec. 4, 1934, The Los Angeles Times banner-lined the story under an eight-column, "HUGE GOLD STRIKE REPORTED," and the Mojave rush was on. "Several sizable strikes were made within five or six miles of the Silver Queen," Holmes recalls. "Mines like Harvey Mudd's 'Cactus Queen' and Dr. (A. H. ) Giannini's "Midale Butte: But the Queen was the biggest." Why does Holmes fear the like may never happen again? "Because gold mining is about dead," he says. "Except for the Homestake in South Dakota, I don't know of a single gold mine operating in the United States. "The old prospectors are dying off. :and no young ones are replacing them.

Without mmmg, young men have no opportunity to work underground and learn to know ore. And there is no substitute for practical experience." But surely schools of mines can produce prospectors? "Did you ever hear of a geologist finding anything?" Holmes scoffs. "No. And neither did anyone else. Geologists never tell you where it is. Just how it happened to be there after you've found it. "A prospector has to know what ore looks like, and how to judge what it's worth right now. There's no time to wait for assays. I don't suppose I ever missed (the value of) a car load of ore by over $5 a ton." Basis of Currency

But gold is the basis of our currency. Why has gold mining declined to almost nothing? "Simple economics," Holmes explains. "Under present conditions it would be unprofitable to mine any but extremely high grade ore. "In January of 1934 the government pegged the price of gold at $35 an ounce. At that time miners' wages were $7 or $8 a day. Mine timbering, 8 by 8s and 2 by 2s, were $40 a thousand board-feet. Powder (dynamite) was $8 a case~ and everything else similarly priced. UN ow wages are $25 and up, timber is around $200 a thousand and power $18, but the price of gold is still $35. The price would just about have to double to restore things as they were. Double on Market

"It would double. too. on a free market. Dozens of mines would reopen and thousands of miners would go to work. A whole industry would be revived, but gold miners don't look for that to happen. Recently Holmes developed a Yuma shopping center in association with Lewis W. Douglas, former ambassador to England and one-time U.S. budget director. "But I'm still a prospector," he insists. "Right now I'm wearing out my third Jeep." What would Holmes do if he found the Silver Queen today instead of 30 years ago. "I'd never find anything like that again in 50 lifetimes," he says. "And neither would anyone else."

..

Small Hope Found

Musing, Holmes found a new small flame of hope:

46

"We just might find out some day," he said. "I have some ideas about a place over in the Chocolate Mountains. Going to do some diamond drilling this summer.

·'And last week an old-timer brought

me some samples from He'd been single-jacking up there in the rhyolite. "0£ course you can't samples. But they looked

farther north. (hand drilling) tell, just from

pretty good .."

"So there you have the story of George Holmes and his Mojave discovery," said John Collins. "Do you think he is right about there won't be any more bonanza discoveries?" queried Joe. "He says it might be another 20 years before there would be another discovery like his Soledad Mountain."

"1'd say two years," answered Collins. "It won't take more than that, or less for Banker Douglas Dillon, the Treasury Secretary, to admit the jig is up and we have no more gold in our legal reserve. Congress might wake up then and decide to do something about it. Anyway two years is the limit I put on the time the administration can keep on fooling the brainwashed public. The worm's got to turn some time soon. So I would not believe George Holmes that there are no more discoveries to be made. The first discovery to be made is by Congress that the nation is out of gold. The International Monetary Fund, now collecting our gold as it is converted by foreign dollar holders, will give the signal. At anywhere between Seventy and One Hundred Dollars somebody is due for the biggest clean-up in the history of gold. The United States will be forced to buy it back and then gold mining will thrive again ... and it won't be twenty years from now. The hand writing is on the wall." "During the lull in lode or underground mining George Holmes had forgotten the new gold rush made by the thousands of users of suction dredges. With an expenditure of from three to six hundred dollars a tenderfoot can get into gold mining with one of these little dredges. It's true he has to know something about how and where to work his dredge but after drawing a few blanks he will get on to the game and begin to have clean-ups. I'd say there are ten thousand of these dredges at work in the West right now. The fact that their gold is free from government control and will bring prices up as high as $140 per ounce is the big factor that has. kept folks interested in gold mining. Our friend, .. ,,.George Holmes, appears to overlook that interesting branch of mIning. ~
one I have to learn about myself," said Joe. «I might be able to make the old American River give up some of its gold."

...-

«Yes, that would open up a new type of mining for you but like all others there is considerable to learn about it/' responded John. "Placerville has been quite a dredge manufacturing center. I have talked a lot with the makers. and the users and they all think their equipment is the best. Some operate with the sluice under water. I tried to find out why they were any better than those with the sluice on the surface. Nobody seemed to know so I had to come to my own conclusion, that the gravel under water would weigh less and perhaps handle faster. "Some makers talked long sluice and others· short sluice, but 1 believe

47

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the water is moving slower at the end and would be better for saving he long sluice is less apt to let any gold get away. In the longer sluice the finer gold. Most of the dredges are light and portable making it possible to get into regions where you couldn t make it with heavy equipment. 7

«One interesting fact about the dredges is that they can be operated by girls - and do they like it. The smallest capacity is a two-incher, one with an intake hose of 2 inches in dianieter. They are called the 'vacationers' as they usually accompany folks on their vacations. The users can usually pay for their vacations if they know where to try their dredges. •

48


..:

«I am sure you are right," said Joe. "1 am glad to know the Burton Brothers story. I am sure every gold mining district would be far ahead in development and production if they had operators like the Burton Brothers. I want to remember their story.n When Joe suggested a trip south to visit the mining districts, especially Kern, San Bernardino and Riverside Counties, Collins urged that he put off going south till next winter. ~
ment to domestic mining the interest in the area's minerals, outside of a few very large operations, is now mainly confined to rockbound clubs. ~'Recently some miners in the area located and began mining dolomite for roof granules. Of course that may be termed a 'common' usage by the bureaucrats, but dolomite is very ·uncommon.' Kaiser Chemical uses it, combined with sea water, to make magnesium metal. I would say that takes it out of what the Bureau of Land Management is pleased to classify as 'common: Their law says you can't locate on the 'common varieties'. So the miners who saw an opportunity of making a little money off of the home builders were forced off their claims. That is common in San Bernardino County with no aid from state or county officials. The same is true with decorative stone which most anybody would cal] ·uncommon'. So in case you consider going into the area don't overlook the Bureaucrats. Recently they had so much business in Riverside and San Bernardino Counties they moved their Los Angeles office to Riverside. The move put them that much closer to the prospectors, claimholders and miners. <

"This morning I have been reading about the annual AFL-CIO convention in New York. The main squawk was the lack of jobs. There didn't seem to be any mention of 'the export of labor to foreign nations and the vast sums of American taxpayers' money spent in foreign development. Not one word, or even whisper, was heard about government action that would open the West's gold mines. No doubt the AFL-CIO is going along with the Treasury's gold shift program. President George Meany was urged to work with business and governmental agencies to create more work. To accomplish that objective he said he'd work with all groups, 'even the devil himself if necessary to find a solution." "If you ask me," cut in Joe, "there's been too much work with the devil already." Continuing John Collins said: "You can't by-pass Kern County, especially the eastern section, around Randsburg, in case you go South. RandsDurg, like San Bernardino, has many minerals, strong on gold and tungsten. When I read that article about George Holmes getting $3,177~ 000 for his discovery, the Silver Queen, I remember what Goodwin J. Knight had to say about the deal, while he was Governor. It appears the purchasers were disappointed in the amount of ore they found in the mine. They needed adjoining property. It belonged to Jess Knight and his son, Goodwin. After considerable bargaining the company bought it for $525,000. 'If it hadn't been for that deal: said Goodie,
50

-

•

be elsewhere Della drove the tractor herself. You can always get a lineup of what they have on those claims by checking the prize winners in minerals at the Kern County Fair, as they win most of the awards, sometimes first and second in the same mineral. "And before leaving that area be sure and call on Judge James B. Nosser at Johannesburg. The judge has been interested in mining for many years, owning mining properties of his own.

I

~ -very prolific district, Pinto Basin, is located in the southeastern portion of San Bernardino and running into. Riverside County. At first this area was included in the Joshua Tree National Monument, in which mining is forbidden. The basin is highly mineralized which caused the miners to demand its exclusion from the Monument. Mter several years work on their part 289,000 acres was deleted. To former Congressman John Phillips goes the credit for introducing the bill in the House of Representatives to open that portion of the Monument. I have seen assays of gold-copper ore from Pinto Basin that ran as high as $223.00 per ton; and that right off the surface. And while those two government engineers who examined over a half million acres in the balance of the Monument reported it non-mineral; I have seen reports to the contrary. "Bill Keys has gold mines inside the Monument. His Desert Queen has two ounce ore. Lately he has been beset with Park Service engineers who are out to take his claims. Every time they bring him to a hearing he (yes, I said HE) is charged $100.00. I don't know how they get by with it. I've met a prospector who said he could make it packing lead ore out of the monument on his back. He reported his discovery running 60% lead. And during the uranium rush prospectors found 5 and 7% ore in the Monument. One fellow made a rich find close to the Monument boundary but before he reported it he went to the Park Service office in 29 Palms where he was told he was safely outside, but after he announced his discovery the Park Service changed its mind. They ruled him inside the Monument. And so goes Bureaucracy. Don't get tangled up with them unless you can't help it. ----l

~'Above

all when you are down south you must meet Annie Rose Briggs. She owns the Lost Padre gold mine, located in Los Angeles County, somewhere along the old State Highway after leaving Gorman, now on new 99. That mu~t be a rich piece of ground. I suggest you read Howard Clark's story appearing in the May, 1963 issue of The Journal. Especially read the part I have marked, as it records the property to be one of the state~s richest. And Annie doesn't want to sell it, but she will lease. When you get down that way be sure and see her. You might make a deal with her. She's got a rich mine." This is the portion of the story !\'fr. Collins wanted Joe Picture a great canyon, its floor wide enough to form a valley of proportions. walled by steep mountains and more than two miles of it marked with much mineralization. This is the region which the Spanish learned of through Coastal In-

51

/ !

!

to'~--

mans. It is not too likely that any of these were the first in this secluded place. It could have been the source of gold before the continent was discovered by Europeans. But these left impressive signs and their exploration parties mean1

I

J

while placed markers for miles around which hint of plans for further investigation. But the main work was in one canyon chosen for its rich ore which could he mined with native workers. Some word of that came from an American prospector who got lost and wandered into camp by mistake. Held prisoner for a time, he was then blindfolded and taken by horse out into the desert so far to the eastward that he had no idea where he had been. But he had obtained a grandstand view of what went on and related it in an understanding report to Adolph Sutro - a big name in Western mining history - in San Francisco. According to the prospector, a crew estimated at 200 Indians was busy under direction of Spanish and Indian overseers. To his report may be added the stories handed down through three generations of settlers along the passes enroute to the Coast, of burro trains at night, their burdens of casks said to contain tallow - heavy tallow. Spanish Departed In 1840 For reasons known to history and not pertinent here, the Spanish departed during the 1840s. The point is that their dumps and camps told a story as did also their miners' symbols known through the centuries in the Americas, adapted to their own secret code. In the seventeen years that I have been in and in touch with this place I have seen the six-pointed star of perfectly laid stone, one point longer, the overall width fourteen feet. The long point aimed in the direction of a massive layout of stones forming a Hsunburst" on a high flat, miles through and on the other side of a mountain. I have seen the serpent symbol - two of them - curved lines sixty feet long of stones in single file, the heads circles. Many stone forms have been disturbed by hunters, cattlemen and unobservant persons to whom they meant nothing. These, I may add, are the bane of all treasure and lost mine hunters. Parts of triangles, bars, pointers, crescents, arrows had helped someone's campfire. The Mystery of the Sixteen Skeletons The rusty dumps have finally been washed away in canyon floods. The padres went in where possible at the lowest points so that the packers walked in and out on inclines or gradual steps, one line filing in and one coming out with loaded bags. On departure the actual points of work were filled in and camouflaged so perfectly that they have

been passed unnoticed for many years. They were masters of this art of deception. A century of weather and acts of nature have enhanced the effect of nat.. uralness - one which the miners knew well how to prepare for. No effort was too mu"ch in that direction. Only the secret symbols remained in case they came back. One of the most persistent traditions, if it may be called one, which surrounds the Spanish evacuation is that One man remained behind with sixteen Indians to give the final touches of concealment. In due time 'he showed up alone with word that the Indians had been caught in a landslide or cave-in and thus -were buried beyond hope. It's too late to argue the point but in 1930 Mrs. Briggs, owner of the claims, found sixteen skeletons in a shallow pit. Better verification of the main story could hardly be asked. The next chapter was to be markedly different. Dr. B. F. Bragg Begins Mining It did not come for about thirty years. Then in the 1870s a Dr. B. F. Bragg was active in horse racing at the Lucky Baldwin tracks when an Indian approached him on the subject of fine horseflesh. What the Indian lacked in money he made up in knowledge of where the white man could find much gold. Considerably skeptical, Bragg accompanied the Indian on the long trek to the scene and heard something of the operations once carried on. As it turned out, the Indian in his younger days had been a foreman of sorts for the early miners, and as interpreter he had received a good education from them. True to Indian tradition, technically' at least, he would not point out any concealed shafts or tunnels but indicated a stringer which would lead into the same kind of enrichment. With four trusted associates, Dr. Bragg moved in secretly and the stringer proved out at least equal to the costs of work,· perhaps more. But at the outset it was unavoidable that another member had to be included in the party. A fugitive from the law was living in his shack on a hill almost overlooking the canyon, safe in such an isolated hunter's paradise. In the interests of secrecy he had to be out in with them. So work went on from spring to fall for about four years. $800,000 Deposit Was One-Fifth Of the Take As Dr. Bragg told Mrs. Annie Rose Briggs, the claim owner, many years later,

52

..

they went down on an angle for about forty feet, then on an incline not very far, all the way in gold that became richer with depth. Trouble with water caused them to suspend operations while Bragg looked for the kind of pump required. In New York he arranged with Fairbanks Morse to design one which could be operated by donkey power, made to special order. It is reported on good authority that the records of the old Hellman Banks in Los Angeles showed deposits of as much as $800,000 by Dr. Bragg as his share of the undertaking, presumably a fifth of the total take. They had worked with only hand tools into an eleven foot vein of rotted quartz and granite where the rock could be shaken from web and wire gold. But trouble could not be postponed long enough.

It's not clear as to who started the

shooting but the only survivors were the outlaw and Dr. Bragg, with open season on each other until Bragg managed his escape, the outlaw also intact. It might have come about because of that day's cleanup, a pot weighing in for about $92,000. It is plausible that the outlaw, Broncho Charley Riley, was too long bedeviled by the ribaldry of the others because he could not go to town with his share of the loot for an all-winter jag like they did. Inste.ld he had to listen to tall tales and go back to his coldhearted roost. Whatever the cause, it marked the end of their labors here, and permanently for some. Whoever reopens the shaft may expect to find their bone8. Riley blocked the shaft with the largest stones, filled it and removed all traces, as he said later, and dared anyone to find it. Later after he had shot several of the seekers he was found in his cabin full of bullets .

• CHAPTER 13

The Coloma Discovery fter putting in another week at moss mining and doing someinvesti· gation of suction dredging Joe decided to make a trip north to A Auburn, the thriving county seat of Placer County, so named because of early day placer mining. Auburn was twenty-eight miles to the north by way of State Highway 49. He had to go through Coloma. This was his second visit to the Gold Discovery town. He stopped a short while to see if there was any of the old gold rush excitement of one hundred and fifteen years ago, but he concluded it could now be called Sleepy Hollow. However, a keeper of one of the little stores there gave him a pamphlet which told the story of SUTTER~S SAW MILL AND- THE DISCOVERY OF GOLD, which he was glad to have and mail to Harold. Here's the story that started California on its way up. It took one hundred and fifteen years to reach Number One state in the Union. From the CALIFORNIA HISTORICAL SOCIETY QUARTERLY Vol. XXVI, No.2, June, 1947 <"This day some kind at mettle was found in the tail race that looks like

goald." Thus was first recorded James W.

Marshall's discovery of gold at Sutter's sawmill, Coloma, California, Monday, January 24, 1848; simple words to record the most significant event in the history of the entire west. Lumber for Sacramento

The story of Marshall's gold discovery is largely that of the construction in 1847-'48 of the sawmill long contem-

53

plated by Sutter who recognized the need for more lumber in rus building operations at his fort in New Helvetia, now within Sacramento's city limits. After several years of scouting, the site at Coloma was selected as fitting the requirements of plenty of available sugar pine and a stream to power the mill and for rafting his lumber down to the Fort. On August 27, 1847, a contract was signed whereby Marshall was to erect and operate the mill and Sutter was to supply labor, tools, supplies and equip~ ment. The sawmill site was staked out, and was called simply the "sawmill seat," the name Coloma, or even Colluma, or other Indian variants, not yet being in use. Marshall chose the site with the idea of digging a ditch of several hundred feet across a bend in the river, thereby diverting the water with the aid of a dam through a headrace into the forebay, through the mill's entire length by aid of a waterwheel, and thence through the tail race back to the river, powering on its trip an undershot flutter~type waterwheel for the saw. At Christmas, 1847, Marshall decided to expand the mill's· partial operation by deepening the tailrace, his labor troubles having been solved by employing a party of Mormons, Bigler, Smith, Barger, Johnson, Brown and Stevens. The Discovery

On January 24, 1848, Marshall, on his usual morning inspection of the excava~ ting, saw something glittering in the shallow water on the north bank of the race. He gathered several more similar pieces, carried them to the mill yard and announced to the crew, "'Boys, I believe I've found a gold mine." The metal reacted favorably to simple tests, and the entire crew spent the day picking up gold flakes to the extent of several ounces, which was further tested by boiling in lye water and heating in a hot manzanita wood fire. On January 28, 1848, Sutter and Mar~ shall carried on secret tests at Sutter's fort, testing with acids and for specific gravity. Fully convinced that the metal was gold, the partners decided to keep the secret, at least until the mill was finished. On January 29, Marshall returned to the millseat, where he confided the results of the tests to his workers, after pledging them to secreoy. January 19th

Such is the story of the discovery of

gold on the morning of January 24, 1848. Another version places the date of the discovery as January 19th, which is difficult to believe in face of the evidence of Bigler's, Smith's and Sutter's diaries, which all place the date as January 24. Added to this are statements by both Brown and Bigler that Marshall sent an Indian to their cabin to borrow a tin plate to use in panning the metal; and the Monnons had not moved into their newly-completed cabin until the evening of January 23. Sutter and Marshall proceeded at once legally to bind their title to the sawmill property and the surrounding area, by consummating an agreement with the local Indians to insure peace, and signing a three-year lease on mining privileges; the Indians to receive $200 worth of goods yearly for joint occupation of the land, and to refrain from killing livestock and burning grass within the area fixed by the agreement. Continued Building the Mill

True to their promise. the men at the sawmill pushed the work at all possible speed. They had no idea of the value of the discovery and steady work at the mill appealed to them more than the risks involved in looking for gold. However, on days off and evenings, they did hunt for the metal, giving Marshall half their find in return for provisions. Construction work consisted mainly of deepening the tailrace, erecting the upper frame of the mill structure, putting in a new waterwheel, machinery and saw. Two cabins were built, one on a quartersection below the mill, to confirm Marshall's and Sutter's title to the land. By March, 1848, the mill was ready for full operation, but testings showed that further deepening of the tailrace was needed to reduce the backwater which was slowing the saw. This was done, the mill gave fair promise of being a success, and with the arrival of the first few planks at Sutter's Fort on March 22, Sutter's dream of abundant lumber had materialized. Gold for Whiskey Broke the News

Having faithfully finished the mill, Marshall's workers now devoted more and more time searching for gold. ranging ever f ~rther from the Original find in the tailrace. Bigler found nuggets to the value of $6.00 in out-cropping a half mile below the mill, picked up $22.50 worth in a few minutes, and eventually the secret became too big to be kept. The;

54

~~

____

~--

__--------____

......

~_~----~4P~------------

last pretense of secrecy was shattered when Marshall's teamster, Jacob Wittmer, offered gold in payment for a bottle of whiskey, to George Smith, storekeeper at Sutter's Fort, who wrote of it to his partner, Samuel Brannan, in San Francisco. Also, Sutter had been unable to keep his own secret, having written to General Vallejo of it previously. The Mormons wrote their friends at Sutter's grist mill to come and see for themselves. And by these various means the news spread, until parties began to appear at the mill in search of gold. Permission to hunt in the tailrace was readily given by Marshall. Hunt for Gold in Earnest

The personnel at the sawmill dispersed rapidly as the hunt for gold began in earnest. By April, 1848, many were on their way to the gold fields of Coloma. Sutter experienced increasing difficulties in getting laborers for his sawmill, and by the end of May was forced to close it, and also his grist mill at Natoma. May 25th, 1848, is the last day recorded in his diary. That day's entry, "A number of people continue travelling to the mountains," is revelation enough of the gold fever that had set in. Local then, before a year had passed, it was to have its reverberations in the far corners of the earth. The, Rocker I. Invented

Mining methods improved from the crude pocket-knife mining, to Indian basket, pan, and finally Alexander Stevens, unable to find an Indian basket, devised a wooden dish from a log. Round-bottomed, it was easier to rock than to shake, and thus the rocker was born. Sutter, in partnership with Hastings and Henry Chever, started a store in one of his sawmill bunkhouses. Brannan had also opened a store and laid out the booming town of Coloma. First Mining Report

In July, 1848, Colonel R. B. Mason arrived, and made a thorough examination of the gold-bearing placers, complete with maps, and ended his official report to Washington, D. C. thus "My

..----__

~------

q~

_ _. .~~_ _ _ _~----_ __

most moderate estimate is that upwards of 4,000 men are working in the disbict, and that from $30,000 to $50,000 worth of gold, if not more, is daily obtained." This report, incorporated in President Polk's annual message of December 5. 1848, was featured in eastern newspapers. Publicity increased. The gold rush to California had begun. Coloma became the chief distribution point for the area. Buildings mushroomed into being. With this growth came a demand for lumber. Sutter's sawmill reopened under new owners, Sutter and Marshall having sold their interests for $6,000 and $2.000 respectively. Lumber sold for $500 per thousand. By July, 1849, gold seekers were arriving by way of Cape Horn and Isthmus of Panama. Marshall Driven From Coloma

In 1849 the mill closed from depletion of timber. Marshall was driven from Coloma for trying to save an Indian from a lynch mob, his cabin burned and his claims jumped. By 1853, Sutter's sawmill stood as mute testimony of a dream of former days. Then Coloma settled down to more normal activity. The gold fever levelled off. Other sawmills 'opened and closed or were converted to grist mills, and agriculture was challenging gold. Sutter's sawmill did not even become a grist mill. An object of curiosity. it had seemingly passed into obliVion, as it was tom down by vandals, its timbers to be used in new buildings, and various parts made into souvenirs. Only the iron crankcase of the mill was saved by Marshall, and presented by him to the Society of California Pioneers of San Francisco. Hangtown In 1857

The moving of the county seat to Placerville ( Hangtown ) 1857, showed that Coloma was on the down-grade. Marshall's death in 1885 further marked the end of the era. Floodwaters entirely covered the mill site with silt and gravel. But the site of the sawmill was not entirely forgotten. A huge bronze statue of Marshall in miner's garb, pointing to it, stands above Coloma.

So that's the story of Coloma and I'm told there were many more eolomas in the Golden State by the time the Gold Rush of the 4gers was on in earnest, thought Joe. Harold will get a real kick out of that. N ext stop Auburn. I wonder who I can see there, thought Joe. I 55

~-~-~~-----------------------------

could try the Chamber of Commerce or perhaps I'd better see a newspaper man. He will understand my language. So into the front office of the Auburn lournal he went. He met a chunky and bald Vernon McCann, Joe getting off on the right foot by first talking newspaper~ switching to gold mining as soon as he could. "Oh, gold mining is all through here long ago," volunteered McCann. "Water is now our gold and that Placer County fruit that you used to eat in New York is more of our gold. Gold mining is all washed up. We had a small rush here back in the early '30's after the price was raised from $20.67 to $35.00. At that time we had a mining magazine published here. It's editor kept interest alive until Old Man Inflation took the profit out of $35 gold and the mines closed down. If you are thinking about going into gold mining you'd better change your mind and stick to newspapers." "You don't think the gold price will be changed?" asked Joe. "They have been trying to change it for the past 20 years. All the brass in Washington appears to be against it so the miners have to make their living some other way. Right now its real estate, recreation and water development. That's our future. We can't think gold any more," answered McCann. With that the telephone rang and the interview was over. Not much encouragement thought Joe. He'd try somebody else. He thought he remembered seeing a lumber Ad in the gold covered magazine. Yes, it was the Auburn Lumber Company. Why not try them. Here he met, very pleasantly, Wendell T. Robie, company head and of a pioneer Placer County family. Robie was not afraid to admit he owned a gold mine, a placer, located up the American River. He wouldn't ~ount much on it right now the way the President and his money man3.gers were continually denying that the gold price was to be upped. However, he admitted that one hundred dollar gold would bring on another gold rush. There's plenty of gold left in Placer County. "My old friend and Mining Engineer Jim Stewart of Gold Run states there are 600 miles of ancient golden river channels in this area that are still to be touched by a miner~s pick. We used to have it on the surface. The highway you drove into town on, Highway 40, used to be known as Auburn Ravine. It paid the'4gers one thousand dollars per lineal foot. It's been washed to the bedrock so most of the future mining will be underground. Howeyer, there ate still some placers which the suction dredges are now working. Each hard winter like the last will always bring down a new crop of gold in our rivers. We don't like to see our national finances get bad but as they do there is one good that comes of it: we'll have to go back on gold and we will need so much of it that only a high price Will do the trick." ~,

HWell, outside of one, my friend John Collins of Placerville, you, Mr. Robie, are the first person to give me any encouragement. I ani thankful.'~ Robie thought Joe would be interested in the story of Pike Bell;. known as the wad 's most successful gold pocket hunter, who was one, of the early miners of the Auburn district. He explained that some min56

4

....

ing people don't like what's called a "pocket" country, but despite all the pockets that Pike Bell found, the lode and other placer mining proved the county to be a real gold mining district. Here Mr. Robie pulled a page clipped from that mining magazine that told the story of Pike Bell's rich findings. This will be great stuff for Harold, thought Joe, especially the fact that the Auburn area still had undiscovered pockets, or "enrichments," the term mine operators like to use to get away from the idea that the word "pocket" hurts a mining area. Here follows the story. ' - -___ 3 miles in width. The writer believes thi rich mineral 'area still oarries more gold than has been recovered in rich strikes and later underground operations·. In only a few instances did Bell's operations ch a depth of greater than 50 feet. 'needs onl well directed ca ital to pro uce go m pro lta e quan be. ~

By IVAN H. PARKER .....,.Heproduced from our Issue, Jan. 1934) r" A. O. Bell, who came to Placer County in 1852 from Pike County, Missouri, soon became known as the most successful gold pocket hunter of the early California days. Bell, who was familiarly known as "Pike," located on Bald Hill, two miles north of Auburn, where he raised a large family. In his younger days in Missouri he was not able to attend school, but soon after he settled in Placer County he became expert as a free gold pocket hunter. He seemed to be a veritable wizard in finding the yellow metal, but in all his operations he never went below the surface. As his prospect shafts deepened he sold to others who usually took out small fortunes. Bell always would remark in a lighter vein that he «didn't want the hole so deep that he couldn't jump out of it."

n' e.

Knew His Formations "Pike" knew the formations that carried gold and was a thorough and practical operator in his line. With his pick, pan and shovel he would follow surface float colors, sometimes for weeks and months until he found the gold carrying seam in place. The writer, in collaboration with Mr. Bell's sons, has been supplied with a list of amounts, the names given to the mines and the locations. The circumstances under which many of the discoveries were made would make many an interesting story. From the time he arrived in Placer County, Bell's only occupation and means of livelihood was his work as a pocket -hunter. In his operations he recovered a number of fortunes, but his motto was: "Come easy, go easy:' and departed this life in moderate circumstances in 1895. ,Found Gold on Auburn Town Lots "Pike's" major operations were on the town lots within the limits of Auburn and the quartz mineral belt, reaching northwest about 7* miles, a district about

.

The present lc;>catlOn o. the ill Ice o . plant .on HI~h St., m .Auburn, pro- , Vlded an mterestmg story m the annals of .the famous pocket hunter. There was b~m~ erec~ed ~m the lot a home and .from hIs mvestigabons Bell ;-yas conv!,uced t?at on tha.t lot was a hot spot. He fmally c~nvmc.ed the owner who agreed ~? le~ him ~hg for half the recovery. Pl~e put m three unsuccessful, days gettmg m the way o.f carpenters "Ylth nO results, but on t~e mght of the thlrd day h~ awoke from hIS sleep and made. up hIS mmd. that what he had been hunting for was In one corner of the cellar. He went there the next morning and took out $8,000. And the owner's share paid,for his house. 'Took Out Nearly Half a Million Bell recovered almost a half million dollars in gold almost completely from his own individual efforts. Mter many of his best successes his modest cabin on Bald Hill took on the appearan{;!e of a jewelry store. Following is a list of some of the more inportant locations: Green Emigrant, Bald Hill ...... $167,000 Crutcher Lot, Auburn .............. 1,500 Black Lead, Collins land ........ 70,000 Bonanza, Snowden land .......... 45,000 Calf Pasture .............................. 85,000 Mary Bell, near airport .. .......... 6,000 Reed, Brokaw place ................ 9,900 Bull Whang, Bean ranch ........ 2,000 Red Hill, Sullivan place ........ 3,500 Temperance Flat ...................... 10,000 Yolo, McCarty ranch ........... _... 20,000 Broken Shovel, Wilson ranoh .. 1,700 Red, \Vhite & Blue, Walsh place 750 Peter Frink, Jack Walsh ........ 9,000 Wire Diggings, Bald Hill "'_'_" 1,500

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Slate, Bald Hill ._ ........ _........... . Blanchard, Wilson ranch ....... . Yonder, Bald Hill ................... . Homestead, Bald Hill ..... ,....... . Hammer, Bald Hill ................. . Horse T, Bald Hill ................... . Big Rock ................................... . Ellen ......................................... . Sunday Diggings, Goard ranch Big Clabber, J. T. Walsh ....... . Little Clabber. J. T. Walsh ..... . Flour Diggings, Columbia ....... . My Lizzie, Fulweiler ............... . Johnnie Comes Marching Home Missouri Lead, Columbia ....... . Tangle A, Spealman .. __ ...... _. ___ . Wizzard .......... _. __ ._ ....... _........... . Big By Gad, J. T. Walsh ._ ..... . Little By Cad, W. T. Walsh ... . Merich _._ .. ___ .... _................ _... __ .... _

550 2,200 825 375 400 2,000 580 1,000 125 250 100 320 8,000 400 8.000 8.000

3,000 390 175 180

Blatting Nannie ............. _._._ ..... . Fulweiler Eighty .... _._ ... _..... _... _. Gree Mine, Sec. 17 ..... _...... _... _. My Darling, Bissett place _._ ... _. Ravine, . Wilson ranch _....... ~ .... . Blue Lead ......... _._._ ...... _.. _...... ..

180 13,000 7,350 425

1,700 275.

Total .. _.................. _.......... $480,195 Editor's Notes! Bald Hill is just ~ mile' north of De Witt Hospital. As encouragement to amateur pocket hunters we might add tha:t Ed Bell, son of the fanious pocket hunter, who makes his home in Auburn, has knowledge of the location of 8 different pockets in and around Auburn. He would have taken them out long ago if he had been able to make deals with the owners of the properties.

"'Now before returning to EI Dorado County you will no doubt want to see some of those suction dredges in operation,>7 reminded Mr. Robie. ~'Carl Miller, a Sacramento manufacturer, is demonstrating on the Bear '. River, near Colfax." So that was Joe's next point of his mining education. When he arrived he was surprised to see a large crowd interested. Miller and his two sons had operations going. The spectators crowded around when clean-up time was announced. The mechanism was rather simple. A gasoline pump supplied the power which sucked up the water and gold-bearing gravel from the river into a sluice box fitted with riffles which caught the gold, the gravel and water being discharged at the end of the sluice. In cleaning the riffles the gold was recovered. The day's demonstration brought five and a half ounces of gold for. which Miller announced he had been receiving $100. per ounce, practically three times what the government would pay. Joe returned to Placerville feeling he had spent a rewarding day .

•

CHAPTER 14

The Dogtown Nugget n his investigation Joe hac( been hearing a lot about Butte County, located about ninety to one hundred miles not:th of Placerville. He had heard about the Dogtown nugget, a fifty-four pound hunk' of solid gold found in that district. So to Butte County he went the next day. He tried the Chamber of Commerce, where everybody was talking about the Feather River dam, the big project that was to store Feather River water and transport it almost a thousand miles to the most southerly

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end of the state, San Diego County, at fint taking care of parched areas throughout the Sacramento and San Joaquin Valleys. It was to cost one billion, seven hundred and fifty million dollars and the engineers could not tell how much more. Already in the desert areas of the southern part of the state the price of land had jumped from a few dollars per acre to over one thousand on the strength of being supplied with Feather River water. The real estate men saw to that. Subdivisions were springing up all over even though the state government hadn't promised water for at least ten years. So nobody had any time to talk about gold mining. However, at Oroville the young lady assistant secretary did give Joe a little time and presented him a short history of Gold Production in Butte County. She explained it was written by Capt. John D. Hubbard, a mining engineer who had passed away two years previous. Joe thanked her for it, politely, and went his way. It would be more grist for Harold. Here was Butte County's story: By Capt. John D. Hubbard. E. M. Paradise, Butte County, California

Butte County, Cahfornia, has a remarkable record of gold production in the 100 years of its history. If records had been kept from the start, on the discovery of gold, there is little doubt that Butte County would lead all the Counties of the State, with its $300,000,000 in gold. Up to 1884, when the State Bureau of Mines first started keeping records of gold production, the bulk of the placer gold had been produced. Single Pans Ran $1,500

After discovery, the first men to come were the Oregonians, our next door neighbors, who had first ne':Vs. They had the cream, not without work however. Many of them stayed less than a week and went home loaded with all the gold they could carry. Single pans, as at Rich Bar on the Feather River, ran as high as $1500 to the pan. Rich runs, where gold was even· picked up on the surface, pockets, and concentrations of gold nuggets, made these early comers rich, and in a short time. The following year, 1849, the hordes arrived and settled down to business. Claims staked, side by side, extended along every stream in Butte County. Many streams yielded five to six ounces of gold per man per day, with only pick and pan. This held for yearS': As diggings became more elusive, new methods were invented. Sluice boxes, Long Toms, and in May, 1854, miners in the Bidwell Bar area were using canvas and rubber hoses to wash dirt out of the hills. This prim-

itive hose was the inception of the great hydraulic mines and giants that soon were tearing down the hills for their golden content. Starting with a two-inch duck canvas hose with a nozzle scarcely an inch in diameter, soon increased to a four-inch pipe with a two-inch nozzle. From this, to the famous Cherokee Mine which in 1880, used sixteen "Giants" with five to twelve-inch nozzles, using 40 million gallons of water daily, operating around the clock for twelve years. But more of this in its place. One Nugget Raised a Mortgage

In Butte County many nuggets of considerable size have been found. The kind of gold found at the old town of Evansville, in Wyandotte Township, was invariably "coarse" being found in nuggets of greater or less size. Some specimens found there have run over a thousand dollars each, and a great many have ranged among the hundreds, one piece weighing some $1,500, taken out near Stringtown in the spring of 1853 was never mentioned in print until alluded to by G. H. Crosette in his paper in 1878. It was found by an elderly man whose name is not remembered and who had left his family in the eastern states in 1849 to try his fortune in the California mines. He had mined and prospected from the time of his arrival in the mines until the spring of 1853 with no more success than was necessary for a bare subsistence. His worldly goods were packed in a sack and carried on his shoulder. One day he trundled into a spot where a shaft had been sunk to a depth of about twelve feet and abandon-

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ed. He let down into the hole and almost the first blow of his pick turned up a huge piece of gold the shape of a beef heart of the value above stated. Of cours~ he was greatly excited, and expected to be robbed of his treasure before reaching a bank where he could safely deposit it. Putting his prize in his sack and telling no one of his good luck, he started for Marysville, where he arrived in due course and safely deposited his treasure in the bank there. The money he received for his nugget was sufficient for him to raise a troublesome mortgage on his farm in Michigan, and the old man immediately left for his home in the east. California had worn him down and he had enough. But it was a Butte County nugget that helped him to this end.

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: .

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Fluming Operations Returns Big

During the years 1855, '56 and '57, heavy fluming operations were carried on along the Feather River between Oroville and Bidwell Bar. The Rough and Ready and Sailor claims near White Rock, panned out largely, but the Cape Claim of 1857 produced richer dirt and more of it for the season than any other. The River was £lumed about a mile and a half above Oroville, A. S. Hart being the contractor on this work. One day during the season with six sluice boxes running, 142 pounds of pure gold were taken out in twenty-four hours. The day's work netted $30,672.00 of which $24,000.00 came from one sluice. On the same day John P. Norton washed from one pan of dirt 52 ounces of gold. There were taken out and reported during the season up' ward of $330,000. The gold produced in Butte County for four months in the year 1873 was $1,036,000, showing that the County's resources were but little depleted by the huge drain of former years. The Dogtown Nugget -

54 Pounds

The Dogtown (Sargent) Nugget, was the crowning glory of the big chunk order produced in Butte County. In 1853 Phineas Willard 10caThti---a-t!laim two miles east of what is now Magalia and worked it alone for some time. It was always pretty rich and paid well, although a "high bench" about half way up from the river to Sawmill Peak. In 1858 a company was formed consisting of Willard, Ira Wetherbee and Wyatt M. Smith. The claim was operated by hyraulic methods and they had one giant in

operation. On the 14th day of August, 1859, while the proprietors were absent, Chauncey Wright, one of the men employed, piped out a chunk weighing 54 pounds in the rough. The piece was in a slide from the side of the mountain. Ira Wetherbee was spending the day in Dogtown, when, in the afternoon, several of his men came in hurriedly, picked him up from his chair and set him on the counter. Thinking a terrible calamity had befallen somebody, Wetherbee inquired in alarmed tones, what was the matter. They told him he would have to treat before he could find out. This preliminary matter being adjusted, the news was broken gently to him, after which high carnival was held all night. In fact, when the word spread rapidly, for three days and nights, by the hilarious miners from all the creeks. The «big chunk" was left to fare for itself out in the middle of the road while the celebration went on. At intervals the miners went out and formed a ring around the nugget, started with a single ring to the right and all men in motion, and when some individual shoved close enough to tag the nugget with his foot, his was the enviable position to "set them up" for the crowd. These tough eggs stood this for three days and nights around the clock and then returned to their claims, while the nugget was retrieved and dusted off. Dr. A. K. Stearns was superintendent of the mine and the following notice was sent to George H. Crossette at Oroville: «Dogtown, 14th, August, 1859, Editor of Butte Record; Sir: Messrs. Willard & Co. today took out of their claim one small nugget weighing the small sum of fifty-four pounds and five ounces of fine gold. Pretty good pay this. Beat it who can! The claim is superintended by our worthy citizen, Dr. A. K. Stearns." The chunk was taken to San Francisco and melted into a bar weighing 4m~ pounds and netted $10,690. The fine gold taken out that day amounted to $3,000, making an entire yield for the day, $13,690. This claim was owned by Wetherbee, Willard and Smith until 1861. California produced many other nuggets far larger than the Sargent Nugget, but as this was the first one uncovered it made a great stir. Cherokee Hydraulic Produces 13 Million

The famous Cherokee Hydraulic Mine, the largest in the world, produced some $13,000,000 in gold in its history. A

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book could be written on this mine, but we must be content with a few of the highlights. Supplied with water from 92 miles of ditches and reservoirs, Concow, Wasteweir, Hutchinson, and Round Valley, and numerous local reservoirs, in all holding 355,000,000 cubic yards of water. Forty million gallons of water were used daily, or three times the supply required by the city of San Francisco at that time. The ditches and pipes cost $750,000. About 180 men were employed, around the clock, and an excellent system of electric lighting was employed. The mine ran every day for twelve years and lost only one shift, September 19, 1881, when President Garfield was buried. In 1880 President and Mrs. Rutherford B. Hayes, and General William T. Sherman and Mrs. Sherman, visited the mines. Many other notable visitors were guests of the Cherokee Mine. Sixteen giants ran day and night, with nozzles from 5 to 12 inches in diameter. The gold was very pure, running from 973 to 983 fine. One bar cast (for fun) weighed 317 pounds and was valued at $74,400.63. The gold produced in the Spring Valley Claim alone, from 1870 to 1880, was $2,650,809.18. In 1878, $315,000 was taken out. The Cherokee Mine is not yet worked out and the immense tailing pile can be reworked at a profit. Also the pipe clay in Cherokee hill produces diamonds that are very pure and valuable. In May. 1864, a miner found three diamonds in Cherokee Flat. The first five diamonds produced were worth $375. Sixty were found up to 1882, from to 2}~ karats in weight.

*

Butte Quartz Mines

a shutdown. There is much galena in this ore. The Surcease Mine produced $200,000 to date, by various owners, up to the time it was taken over by HoeHing Brothers. This mine also produced some zinc and copper during the war. Other quartz mines, such as the Banner, Challenge, Vernon, Princess, Yank6e Hill and others, added to this total. The Mathewson Mine, part quartz and part placer, produced some $1,500,000 to date. Mostly pocket formation, some 300 feet wide and ninety miles long, partly covered by lava Haws, and really a continuation of the Mother Lode on the strike Northwest. In 1916 the Springer Consolidated Mining Company set up a plant and produced 700 tons per day, but on account of faulty tailing disposal were shut down by Government order until such condition was corrected. It was not corrected, so stayed shut.

Channel Mining Ancient river ohannel mines in Butte County have a great record of gold production. The Perschbaker Mine was probably the richest in the world in its class. This mine, together with the Emma, Indian Springs, Oro Fino, Mineral Slide, and others, were rich producers over a long period of years. Many other smaller mines added their quota. Within a radius of ten miles of Magalia some fifty millions in placer gold was recovered. Dredges Produced Over 40 Million

The lone Shore Line deltas from ancient river channels in Butte County built up the richest dredge field in the world. From 1900 to 1910 Butte County dredges produced some three million dollars in gold per year. At one time there were 35 dredges operating by twelve companies. Three dredges were in operation in Butte County in 1947. Up to 1916 some 40 million dollars in gold had been produced by the Butte County dredgers.

Butte County has produced some five million dollars in gold from its quartz mines, notably in the vicinity of Forbestown. The Gold Bank Mine of Forbestown produced about two millions in gold, of which $500,000 was net profit; worked from 100 to 125 men; shut down Summary by strike about 1900 that was never Butte County could easily be made the settled, and «grass grew in the streets subject of a book, but summing up we· of Forbestown" (even trees) as one side . have: The richest hydraulio mine in the had predicted. In this case everybody world, the richest dredge field in the lost, miners, owners, merchants. The world, the richest ancient river channel last work in the Gold Bank in 1916 by in the world, and the greatest gold proA. J. Eagle produced about $20,000. duction of any county in California, The Shakespeare Mine, also in Forbes- which also includes the world. Production town, produced some $137,000 in gold of this rich county was about as follows: Quartz gold production $ 5,000,000 and silver, but lower grade ore forced

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Dredger gold production 55,000,000 Ancient river channel pro45,000,000 duction

Placer gold production from 1848 to 1947 200,000,000 For a Grand Total of $300,000,000

In mailing in the Butte County story to Harold he stated that Mr. Collins assured him that there were more Dogtown nuggets to be found, the only trouble being that there were so few prospectors. If they could retire and live off the government, what is the use to provide transportation, grub, a pick and a pan and endure the heat of the summer and the cold of the winter. When there will be more prospectors, there will be more discoveries. The present-day prospectors, however, won't have to encounter the dangers that sometimes beset the 4gers. To illustrate, Joe included th€ following story, clipped from the Feather River Bulletin, Quincy, Calif.: By Bill Shepard It has been reported that during the early 1850's when migration to California was booming, one miner adventured off alone to the rugged Del Norte country along California's north coast. He prospected the foothills of the coast and struck a rich gold deposit along a stream in the redwood country. The miner worked hard all day and many times into the night digging gravel on his claim and panning the rich gold, until he gathered what is supposed to have been a fortune. His goal had been to accumulate enough until he could return to his eastern home and live the good life. Everything went well with the miner until a band of Indians found him. They left him lying on the ground, presumably dead. The Indians went to burn the mao's wilderness cabin to the ground, but left without finding his cached gold supply. The miner recovered after the Indians left and wandered out of the deep forest and down the coast until he came to a settlement. The attack had left his mind a blank. and he had no memory of the gold he had accumulated nor of his wilderness claim site. He was somehow sent back East to his family where he lived for a short time before his death. The man is said to have recovered his senses just before his death in time to tell his friends about the rich strike in the golden state. He described the claim in minute detail. but none of his friends were able to locate it. There were other similar stories during the gold rush. -and they all helped spur the development of the north coast and particularly the settlement of Crescent City, which served as gateway to the southern Oregon and northwestern Cali-

fornia gold fields. It's enough to make us suspect that a land promoter with city lots to sell might have had a hand in encouraging the stories. They still talk about the Lost Cabin mine in Crescent City and a few people think they know about where the cabin could have been. Another story in that area is about two brothers who had a cabin in the wilderness of the north coast. Only one of the brothers was woodsman enough to pick his way through the canyons, deep forests and towering redwoods to get from the settlement to the mine. Needless to say, the brother who could not find his way was never sent off alone to town to fetch back supplies. While at their claim one of the brothers suffered a heart attack and died. It turned out that he was the woodswise brother who knew how to locate the claim. The remaining brother managed to get back to civilization. but had no recollection of how to find his way back to the cabin and gold left there. The Lost Brother mine is another that is still searched for now and then in Del Norte county. Miners along the Smith river and along Myrtle creek were making from -$12 to $15 a day digging gold in 1854 and 1855 and the area had a great influx of prospectors. The frontier merchants followed the area prospected as a gold center for awhile. Jackson in southern Oregon was one of the richest gold mining" camps in that region, and for awhile the southern Oregon miners figured they. were Californians. They voted in both states and paid taxes to neither until it was made official that Jackson and its neighboring camps belonged to Oregon. Crescent City, the jumping off point for

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all the northern mibers, is still a thrivip.g community. The rivers and beaches attract people today, but noW' the visitors are enjoying the golden life of leisure in the beautiful North Coast country. Coupled with the ideas about prospectors and non-prospectors, Joe couldn't resist sending this to Harold:

. Hymn to the Welfare State The Government is my Shepherd. Therefore, I need not work. It alloweth.me to lie down on a good job. It leadeth me beside still factories. It destroyeth my initiative. It leadeth me in the path of a parasite for politics' sake.

Yea, though I walk through the valley of laziness and defiCit-spending I will fear no evjI, for the Government is with me. It prepareth an economic utopia for me, by appropriating the earnings of my own grandchildren. It filleth my head with false security. My inefficiency runneth over. Surely the Government should care for me all the days of my life, And I shall d,well in a fool's paradise forever. -Anonymous. (Sent in by Sid Boise, Rt. 3, Box 596, Salem, Oregon.) .

• CHAPTER 15

Oroville" The City of Gold hile Joe knew Harold and associates were far more interested in the 1963 possibilities in gold mining than in the old mining history, he felt that as a newspaper man Harold, at least, would be interested in the story of Oroville, located on the Feather River and in the heart of some of the richest'4ger ,gold fields of the state. While in that city he picked up a copy of The Oroville Press, conta~ning a page from the Old North Californian, which was a going newspaper in Oroville in 1855. It contained a lively story of the old gold mining days as follows: .

W

The Feather River and its tributaries Ophir Flat, christened for the Biblical below Table Mountain made shadows of city by James M. Burt~ a pioneer attorother territories in the Far West as re- ney. In 1855 the name would be changed ports concerning fabulously rich de- to Oroville. posits of gold spread across the contiPrices were high, and a banel of nent. Assays revealed the placers dug whiskey, no trivial possession on the from ravines and .river beds in the area frontier, sold for $4,000. However, the to be the highest grade in the United claims paid fantastic returns}, and thouStates, ranging between 900 and 990 on sands Hocked to the gold ttelds below a scale of 1,000 pure. It was incredible Table Mountain in the spring of 1850. to believe that two miles of· river-bed What once was a rugged, section just above Oroville would yield the rich- of California, covered withlonely pines, manest placer deposits in the world. As the zanita and oaks. became a booming, Argonauts prospected for placers, they bustling bonanza lode. Mining camps. soon unearthed some of the largest and sprang up almost over night. Within richest quartz deposits in the state. walking distance of one another were In October of 1849, the first claims Stringtown, BidweR Longs Bar, Oregon were staked ou~, and· the Long brothers City, Thompson Flat,.. New Philadelphia, opened a store on a bar, which still bears Adamstown aJ1.d Baghdad. There were their names, two miles above Oroville. Centerville, J,..ynchburg, Veazie City, During the same month, Alexander Simp- Yatestown, Union Bar, Rich Bar. Natchez, son and James Law erected a store at and of course,. Ophir. Nature had been

the

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lavish in her deposits of gold in this region, and man at last began to scrape the thin surface of earth to pocket for his own economic and social gain the most precious and beautiful metal in the galaxy of nature's handiwork. But gold was not the only mineral which saturated the earth. Soon the miners found diamonds, iron ore, coal and platinum. First Mining Camps

Longs Bar sprouted several saloons and gambling halls firsf, and heaps of pure gold were won and lost over the tables every night. On Sundays the happy miners would spread blankets out on the ground and divide their gold by the soup ladle. But there was continuous shifting to new diggins, and what was the leading town one day might be deserted the next, only to become the center of activity once again no more than a week later. About this same time Oregon City was founded by the first immigrant party from Oregon. Peter Burnett, first Governor of California. came with this party and resided in the busy town on top of Table Mountain. However, one town was making steady gains throughout these infant years of turmoil and bonanza. Someday it would survive all its ambitious competitors. Of all the colorful gold camps in western folklore, none was to become more notorious than Ophir City, now Oroville. Along the banks of the Feather River grew the wildest and most dazzling frontier metropolis of the entire early West. By 1856 it had absorbed the other towns already 'mentioned and developed into a western citadel of considerable prominence in the affairs of California. Its reputation as the «devil's nest of California" was thoroughly known throughout the state and was. strangely enough, guarded zealously by the denizens of Oroville. Reform circulars, in criticizing other towns for their "wicked ways" invariably concluded with, "Why, it's another Oroville!" One journal even went so far as to call the city a «drunk mill." Granted, there were all of 65 saloons in 1855, and that number would increase to well over a hundred a year later. However, despite the low groggeries, bordellos, frequent killings and general high living of the gold-seeking Argonauts, the grand city possessed far more of the so-called civilized qualities than most towns basking in the dull Victorian manners of the day.

Charlie Lincoln published the rousing "North Californian," when George Crossette edited the crusading «Butte Record." In 1855 Bela N. Seymour, a young Congregational missionary, and his bride Emily, arrived in Oroville to' found and build one' of the first churches in the state. Over eight lodges met regularly, among them, E Clampus Vitus, whose singular reputation for good times was unsurpassed. It was said that a man was so embarrassed after his initiation into the lodge that he left town until he could bring another prospect to endure the same. However, what may oause even more surprise for a community of such admittedly slovenly and obstreperous habits, it boasted a debate club and two theaters, which catered to the finest thespian troupes from San Francisco and New York. In no other northern mining town was the avid pursuit of the theater evidenced more than in Oroville. One of the largest theaters in the West was built to prove it. The Oroville Musical Hall on Lincoln Street was built to emphasize another cultural entertainment, featuring opera and the Ophir Orchestra. A City Is Born -

1855

Oroville was a busy place in the year 1855. Dewitt Downer, Ralph Bird and Jacob Morse secured title to most of the town and laid out streets, naming them after themselves and friends. New buildings were going up all over the place, and lots sold at exorbitant prices. Human activity ran thick, and the two newspapers complained daily about the piles of bricks and lumber which blocked the boardwalks and streets. Still, amidst frantic construction, the citizens found time to erect the fashionable Metropolitan Theater in the fall of that year to accommodate the increased population which would no longer fit into the American Theater on Montgomery Street. The Metropolitan was a handsome, two-story frame structure of notable dimensions, on the corner of Bird and Huntoon streets, directly across, from the Courthouse. It boasted a commodious stage, large gallery and ornate decorations of the period. Upon its elegant stage would appear the finest theatrical companies which trouped the West, in spite of the fact that it was thirty miles off the beaten track- which took in Sacramento, Marysville, Nevada City and Downieville.

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Joe, returning to Placerville, submitted the Oroville story to ~1r. Collins. He read it with interest but cautioned Joe to refrain from getting too interested in the more-than-hundred-year-old news. Most of the old •4ger stories had one bad effect, he said, of leading most people to believe that all California gold has already been mined. These stories are used, he added by the Internationalists who are now getting control of Uncle Sam's gold.

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For Joe's benefit he told of some late gold mining in the Oroville District. At Morris Ravine, a few miles north of the city of Oroville, all during the last war a rich gold mine was able to operate even though production was limited to only 100 cubic yards of gravel per month, and the operator could only use miners who had reached the age of 46 years. Production was $3,500 per month, as the gravel ran $35.00 per yard. So there are still bonanzas in California. Collins spoke of the millions that had been dredged in the Oroville district. Some of the dredges could not reach bedrock where always is the richest gravel. Some day, he said, those fields ,vill again be mined as bucketline dredges can dig now to a depth of 120 feet below the water line. They will get the riches off the abandoned bedrock. At one time in the last gold rush, when gold was raised to $35.00 per ounce, consideration was given to dredging. the present site of the city of Oroville. Mining engineers estimated there is enough gold under the city to pay for its move to a new site and leave a handsome profit. A former mayor of the city bored a well in his yard, panning the gravel as it was brought to the surface by the drill. The gold he recovered, he said, bore out the contention of the engineers. Of course all mining ventures are not successful, said Collins. Some of those who do not get very enthusiastic about the industry even say more money had gone into the ground in search of the yellow metal than has been taken out. However, he said, to be a success in any business you got to know it. Then he brought out a story of the investment of twelve million dollars jn Butte County on the famous Feather River that turned out a total loss. Here it is:

THE McLAUGHLIN STORY .... Santa Cruz Beach Hill Mansion linked to A $12,000,000 Feather River Gold Project In two weekly installments the Oroville Press has run a very interesting story on a gold mining project, the remains of which can still be seen at Bidwell Bar, 8 miles up the Feather River from the city of Oroville. It has to deal with what is now known as "McLaughlin's Wall," built by Major Frank McLaughlin, with the aid of $12,000,000 of British capital; object: to mine the bottom of"lhe Feather River. The plan: put in two miles of concrete wall through the center of the river to divert the water to half of the stream

bed while the golden riches were recovered from the other half. With this introduction, The Journal is herewith running the last installment of the Oroville Press story. It is of special interest to Santa Cruz as McLaughlin spent the last years of his life in Santa Cruz in a Beach Hill mansion, now known as Monte Carlo, which he built with British money. One interesting feature of the mansion is its dining room, the walls of which are covered with elephant hide. There are perhaps folks still living

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in Santa Cruz who remember the sad ending of this story. It runs as follows:

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Along about 1888 McLaughlin took to visiting the stretch of river north of Oroville and staring at it for hours at a time. To him it seemed that the gold being taken from the banks and shallows of the stream was only a small portion of what must surely lie in the bed of the river itself. The big problem lay in getting to it and the Major thought he had a way of doing just that. All he needed was to find a few parties with enough of the gold ready to finance the job. One bright morning he checked out of his hotel, shook a couple of hands in the lobby and grabbed a stage heading south. The next thing anybody knew, McLaughlin was in Merrie Old England. It wasn't by accident that he landed there. The woods of the Sacramento Valley were full of Englishmen who had their hooks in the mining industry. Most of them, after getting their hooks set tight, left these "Colonies" and returned home. They spiced their tea with tales of the gold fields of Northern California. These were times when their guests all but choked on their crumpets as they listened to the stories of the fabulous golden fleece. They didn't know it then but the fleece, or at least a fleecing, was around the corner. It got there when Major McLaughlin stepped off the boat at Liverpool. The Major set about convincing some of the more loaded residents of the isles that there was still more than just a smidgin of gold to be picked up on the Feather. All it would take, he said, would be for some smart fellow to divert the river and then wade probably hip deep in gold in the original bed of the stream. To the British, notoriously slow at catching on to a gag there was nothing funny about this proposition. They pungled up the pound notes almost before the Major had time to decide how many lumps he wanted in his tea. In no time at all, he was assured of all the financing he would need to perform the task that was to make him famous. McLaughlin promptly took the next boat back to the United States. Back in Oroville, the Major began to make his plans. He talked of his idea over the bar at the hotel and he discussed it on street corners with the more prominent residents of the town.

Had he looked real close, he might have seen some of the original u4gers" grin out of the sides of their mouths and wink at each other. But McLaughlin had no eyes and no thought for anything except the project ahead. In addition to his English investors, he let his old friend Edison in on the deal. He also sold a slice of the proposition to Dr. James Pearce, the news of whoseuGolden Medical Discovery" a miraculous physic - was shouted from every barn in the country for over half a century. As it turned out, Dr. Pearce should have stuck with his first discovery. Finally, in 1892, McLaughlin got his project underway, with George Mathews, the foreman of one of his mines. Mathews began recruiting workmen and soon had several hundred signed up. The Major would pay top wages, but no weaklings need apply. This was to be "The Golden Feather," the greatest mining project in the West. And so the job got off to a hustling start. A thousand men toiled in the sizzling canyon and a wall that resembled the meandering Great Wall of China began to take shape. Huge boulders, handled in the primitive fashion of almost all construction work in the gold country of that day, were blasted and tom from the walls of the oanyon and then horsed into position by sheer brute strength. Through the summer of 1892 and into the spring of 1893 the work continued. By then the outline of the wall serpentined its way downstream for almost two miles. The high water of the spring of '93 slowed the work but didn't halt it. Into the hot summer of 1894 the work continued and now Edison came to McLaughlin's aid. The great inventor provided electric lights for the job, the first time electricity had ever been used on a construction job anywhere in the world. McLaughlin promptly put on another shift so that work could go on around the clock. News of the project spread and it became one of the nation's wonders. Engineers from all parts of the country and· the world visited the job. The nation's metropolitan newspaper,s carried detailed accounts of the operation. By tpe fall of 1894 the project was a well-organized affair. The men had built themselves a town at the head of Morris Ravine, complete ,,.;,ith postoilice and naturally saloons. And so the work went on, throu~h

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1894 and 1895 and then into 1896 when the huge log dam and the great spillway were finished. The wall was completed for its full two miles. The time was near when the bowels of the river were to be laid open. In the summer of 1896, the great day arrived, when the river was diverted. With a rush and a roar the water poured through the flume and into the bypass behind the great stone wall. Excitement grew by the hour. Business suspended in the town of Oroville, as the residents rushed to the scene for the historic occasion. Among them stood the group of old-timers, smirking and winking at oach other. At last the bed of the Feather lay naked. This was it! However, this was not it. It was the shock McLaughlin and his investors got when the men began to delve into the sands and the rocks at the bottom of the river. It wasn't gold they found, at least not muoh gold, but did find a lot of other things. Old picks and shovels, buckets and wheel-barrows; the trappings of an earlier mining operation. It was then the old-timers who had confined themselves for years to grins and Winks, let loose some gusty belly laughs. It was the laugh they had waited for - the last laugh. For, almost 50 years before, they had diverted the river with a wooden flume and had taken the cream off the bed of the stream. When a flood hit the diggins one spring and washed out their flume, they didn't rebuild, having already come to the conclusion that they had taken out all that was worth taking. Oh, there was gold there, several million dollars worth, the experts declared. But there also was quite a problem. The corporation already had sunk $12,000,000 into the construction of the wall and other work. The best available estimates said there was not that much gold in the river bed. What little there was lay so deep in the rocks it would have to be mined. Obviouly the most logical thing to do was to forget the whole deal as quickly as possible. The investors had taken a bath and they weren't happy about it. Only McLaughlin seemed to come out of the deal with a financially whole skin. The

reason for that turned up very shortly. It seemed that the Major was not a stockholder but only a salaried man. And what a salary I It became clear that the Major was loaded and that fact caused some of the Englishmen to point the ugly finger of suspicion in his direction. They didn't call him a thief or even come right out and say he had taken them for a ride. They confined their feelings to loud wails that reached the ears of Her Royal Majesty, who called on Scotland Yard to investigate. The Yard sent a dapper little investigator to Oroville to check out the operation, much to McLaughlin's vigorous indignation. He brooded about the insult for some time and passed the broad hint that the town was not large enough to hold him and the detective at the same time. The investigator left ahnost immediately. About that time another mining company notified the Major that a portion of the Golden Feather was located on its claim. On top of that, the dark suggestion continued to be bandied that McLaughlin had feathered his nest at the expense of the other birdies. It was time for drastic action, and the Major acted. He planted 1,000 pounds of dynamite under the Hume and another half-ton at the log dam. Then he stretched out a fuse, lit a match and turned his back on one of the wonders of the mining world as a dream vanished in a rush of Harne and black smoke. The Golden Feather was no more. And, as it turned out, neither was the Major. He left Oroville and lived ten years after that in a majestic mansion he had built at Santa Cruz while the Golden Feather project was under way. He entered politics and quickly became head of the state's Republican Party. He was asked to run for governor but refused. In 1898 he was credited with carrying the state for President McKinley. As a reward, he was offered a seat in the cabinet, but turned it down. Then, on November 17, 1905, Mrs. McLaughlin died and a little more of the light went out of the Major's eyes. He and his adopted daughter, Aggie, still unmarried, lived on in the great mansion, but life was not the same.

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The Major could not get over the death of his wife. Neither, it seemed could he forget the disappointment that had been his on the Feather; nor could he entirely shut out the sound of those ohortling old-timers. Too, the California he had known was passing, and he was only the shadow of a past that people no longer seemed willing even to talk about. The flowing tides of industry and new populations were drowning one of the West's really great personali ties. The Major had just about all he could stand. On Nov. 17, 1907, two years to the day after the death of his wife, he grasped the gun he had carried for so

many years, and with one pull on the trigger sent a bullet crashing through his daughter's brain. Then the Major sat down for a drink, a real strong drink - a highball of strychnine and lemon juice. It probably didn't taste any worse than some of the drinks he'd had with Masterson in Dodge City, nor was it any more bitter than the gall of defeat he had suffered on the Feather. ...

But it did what the Major intended it to do. As he slumped back in his favorite easy chair the sound of those oldtimers as they cackled in their beards and slapped their bony knees probably echoed in his ears to the very last.

• CHAPTER 16

Mining and The "Prudent Man"

R

eturning from his Butte County trip, Joe called at the Collins home to report back and discuss his trip discoveries. Mr. Collins explained that the Dogtown nugget was found in massive white quartz with a surface washing operation. Apparently it was a lone enrichment or pocket as not much more value was recovered. Of late, Collins added, a promoter got hold of the ground, planning to use the story of the fifty-four pound nugget to sell stock. The scheme didn't work. Collins cautioned Joe that he would always have to be on the lookout for schemes of this kind. Even the State Corporation Department, which iss1)es stock selling permits, can't guarantee the worth of any project, the mining knowledge of the proposed operators or their business ability or honesty. There are just too many angles to be considered by an investor. The fact that the State has given a company a permit to sell stock is no guarantee. "'If you don't know the property - and few people do,- the operators and governmental conditions under which the operation must be conducted, you might as well forget it,» added Mr. Collins. «It's much safer to be a prospector like George Holmes of Mojave." <~It

looks like the gold miner does need a lot of information and guts. Mining is no place for the Interior Department's ~prudent man'''' laughingly responded Joe. "With all that the miner is up against and with our government nOw in dire need of gold you would think the administration, Congress, and every department of government would not only offer encouragment but security to the man with fortitude enough to put in his

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money and labor to improve the government's financial security with more gold." "Boy, you got a lot to learn about our Government. It's strong for helping the ~under-privileged/ but not for the m~n who helps himself and digs up tax money to support a lot of those receiving government checks. Furthermore, our Government would rather help the larger and more influential individuals and corporations. It takes the attitude that a small man should not be in mining. That's why the Bureau of Land Management is now driving to eliminate claims and take over our prospectors' "discoveries of the last one hundred and fifteen years. They want control so that they can lease to those whom they consider fitted to carry on the nation~s mining according to a government yardstick. And the Bureau even goes beyond the law, (Public Law, 167) to put over their stuff. I just received a beautiful postcard from the Swank gold mine, Kittitas County, Washington, picturing almost solid gold in calcite - a hundred pounds of it. The mine is on an unpatented claim which the U.S. Forest Service has declared Non-Mineral. The U.S. Mint can prove otherwise as the mine has been in' operation since 1890. The card offers this advice to those federal department officials concerned in the claims: U.S. Forest Service District Ranger has said: "The Forest Service is in favor of prospecting and mining conducted according to the Mining Law. The question then is: Mr. Secretary of the Interior, Mr. Secretary of Agriculture, Mr. Assistant Secretary John A. Carver, Jr., Mr. Public Lands Management Director Karl S. Landstrom, ARE yOU GENTLEMEN SELF APPOINTED JUDGE, JURY AND INTERPRETORS OF THE MINING LAW in the matter of dispossessing Swank Gold miners of their mining claims?

"Every congressman should get a copy of that postcard," finished Mr. Collins. Joe was right back at him with: "I got an idea I might be able to do some good. You know the Republicans are now giving the Democrats hell for present conditions and especially on the gold situation. In yesterday's paper I noted Han. William E. Martin, a congressman and chairman of the Republican National Committee, was in Los Angeles stirring up the minority party. I was surprised that he talked about the drain of our gold to .foreign dollar holders, so I sat down and wrote him. Here~s a copy of the letter:

..

Hon. William E. Martin, House Office Building, Washington 25, D.C. Dear Mr. Martin: We read in the Los Angeles Times an interesting account of your talk in that city, bringing out that there is but four billion dollars in gold in the U.S. Treasu~y with which to meet the provision of the Bretton Woods Agreement-the conversion of foreign held dollars into gold, of which there is now outstanding over $27 billion.

How is it that in order to head off the Democrats we Republicans never use what's happening to our gold as the real crisis in our government? The Democrats themselves admit it to be their Number I headache. yet we Republicans make no "hay" of the situation. We think it OUT best bet. Under Democrat rule it will be impossible to have a sound dollar, always the boast of our Party. For your infonnation I would like to comment on your $4 billion estimate of gold we have left to meet the conversion

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of foreign-held dollars. That figure, even with the meager information we get out of our money managers, is less than two billion dollars. In the same issue of the Los Angeles Times that contained the account of your talk was a Paris dispatch by Gaston Coblentz of the New York Herald-Tribune which showed how Treasury Secretary Dillon had been able to apparently stop the Gold Drain. During the months of November and December, 1962, he has !l:350,OOO,OOO in hard (gold convertible) currencies from West Germany, Italy and Switzerland. He has met the call on our Treasury gold with this money and led us to believe the drain on the Treasury gold has been checked and therefore times are getting better.

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months of 1963 was met in the same manner, and an $800,000,000 gold loan from the International Monetary Fund has never been accounted for as additional loss of gold. Thus the Treasury's daily gold balance is a downright untruth; further evidence that the administration believes that it is alright to lie about our most important government function. Why won't your Republican N ationa}' Committee go into the matter and reveal the real truth of our dangerous gold situation to the American public? It appears to me to be a Number One policy for your strategy committee. Thanking you for an early reply, I am, Sincerely yours, JOSEPH

C.

..

BACON,

General Delivery, Placerville, California.

This three hundred and fifty million plu8~ as the drain during the early

Listening with interest Mr. Collins said: "That's a good letter~ but I don't think it will get you results. I don't think you will even get an answer~ unless it is one of those~ 'I am glad to receive your letter and to have your views on this most important subject, etc.' If you can get a congressman to commit himself on the loss of our gold, where it is going and who is getting it, I'll buy you a new hat. And when it comes to monetary matters the Republicans get their orders from the same source as do the Democrats. Just remember who named the Treasury Secretary." (Later Joe had to admit that Mr. Martin failed to answer.) «But," interjected Joe, c~aren't the Republicans the ~SoundMoney Party'? Do you mean to tell me they will let all the gold leave the country and not do anything about it?" "Thafs just what I mean," responded Collins. "It's all cut and dried. The One World Bank of the International Monetary Fund wants our gold for their paper backing. In fact, it will have to have it if it carries out its plan to be the World Banker and serve its 101 free nations. "But that will leave us dependent on a foreign monetary power," "Worse than that. Unless we repudiate the Bretton Woods Agreement, when we run out of gold (and that will be very soon) we will be paying our taxes to that One World organization. That's the commie deal to reduce America to the level of the poorer countries, with the One-World bankers following in their wake to be our money masters. But we are getting into heavy matters. I have something more pleasant. The Missus has asked me to invite you to dinner and to meet a nice girl who works on the local paper. She wants to meet aNew York newspaper man. "Now, you've gone and done it,» said Joe. You know I haven't any time for girls. I'm looking for a gold mine, not a girl. Anyway, Mrs. Collins has been so nice to me that no doubt I will have to accept. Don't tell her I was grouchy about it." So it was arranged. Joe would meet his first California girl.

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CHAPTER 17

The Prospector and The Girl ven though Joe didn't worry much about making an impression at: Mrs. Collins' dinner he did worry about shedding some of his mine clothes and appearance. He was already used to the prospector's life, and batching as was at the mining camp, he did not feel prepared to accept dinner invitations to meet "nice girls." He had to admit to John Collins that his education along that line had been sadly neglected.

E

He dug up the best suit he had brought from New York and proceeded to the Hangtown barber shop for the works, and arrived at the Collins home on Cedar Ravine refuSing to look forward to an enjoyable evening. He was welcomed by Mr. and Mrs. Collins and a nice appearing young lady by the name of Constance Morrison. "Connie," as Mrs. Collins called her, was sure to be interested in hearing all. a bout the making of a newspaper in the big city, was the way Mrs. Collins put it. While Joe, in his pursuit of a good paying gold mine, was glad to forget all about newspapers. He liked Connie's looks and her pleasing manner. Add to that the excellent home-cooked meal and Prospector Joe was forced to admit he was in for a pleasant evening. Joe was mostly interested in the Hangtown newspaper business, Connie explaining that she was a sort of all-work girl doing news writing, proof reading and helping in the business office when there was no rush going to press. She did the social page, re-write stuff, and was sometimes given a feature story to write. She liked the work and looked forward to sometime owning her own paper -"Not a big one, just a small-town sheet," she said. She wasn't backward in telling one on her proof reading. The item was telling of some new work ext~nding the city's water lines. It read: "The new line is hooked up to the old main on Pacific Street." When the readers got hold of the paper it read: "The new line is hooked up to the old maid on Pacific Street." uThat one cost me quite a treat to the force out of that week's pay check/' related Connie. Joe was reluctant to talk much about New York papers. He said he wanted to forget the hurry and bustle, deadlines in meeting editions, having beats to cover in winter snows and summer heat. And if he never found a gold mine he would never return to the Empire City. He did want to talk to Connie~ however, on why there never was any mining news in her boss~s paper. He related haVing gone through every line of one issue on his second day in Placerville, looking for news of the mines. But he found nothing but an item in the One-Hundred-Year-Old news~ when mining hadn't yet got over the 4ger gold rush. Connie was quick to defend her paper. ~~You must remember," she said, «that's history. You read that in a book. It's for historical societies to pour over. We now need all our space to tell of EI Dorado County7s water wealth -~white gold,' and about Sacramento's Utility District COID-

71

ing into the county, taking our water and power and making wealth out of it serving the capital city. We have our tourism to promote. Some of our Supervisors think a new County government center, costing over two million dollars is needed. We've got to go pro and con on that. Our schools are bursting with attendance; what to do about it makes gal1~ys of type. Our orchardist readers demand to know what our Horticultural Commissioner is doing to stop the 'pear decline' that's cost the pear growers millions of dollars. Our United States Highway 50, leading into the Nevada gambling centers, is always a source of news. So you see we just haven't time and our readers haven't the interest to go back to an industry thafs practically washed up:' That expression, "washed up" waked Joe out of a good listening mood. "'That's what I thought you'd come to. 'Washed up" eh? That sounds like the money managers in Washington who want paper money only. Has your paper ever considered what would happen to the nation's economy if we lose all our gold and there is no more gold mining to supply what I call the 'new solid wealth: Has your paper ever run an editorial on this situation when there is still at least a billion dollars worth of gold left right here in your own county? Before I get steamed up on this matter I better cool off as I know you are not responsible. But I can't help but think the newspapers of the Golden State are overlooking a bet. They are letting an uninformed and misled group of Congressmen sell the whole West down the river:'

...

Connie saw that Joe really meant all he had said and was quick to retort with: "From the little I know about the gold mines I know what you mean. Mr. Collins has told me plenty about what gold mining has done and still can do for us, but newspapers have to go along with the doings of the day. I'll bet you, Joe, you are the only prospector working in the county today. If you make a big discovery - a bonanzaI'll be the first one to give you a front page forty-two paint head. We did run several about the Alhambra mine when they were taking high grade are out of it. By the way, wouldn't you like to take a trip out to the village of Kelsey, where the Alhambra is located? Maybelle and Wilber Timm, the original owners, still live on the property. I know you'd like to meet them. Tomorrow is my day off. How'd you like to wheel me out to the mine in your trusty Chevy?" , Joe hadn't planned any such headway in a social line, but when he saw an opportunity to get some more gold mining information, especially from a producer, he accepted and made a date for ten o'clock the next morning. Before leaving he got some advance information from Mr. Collins. Wilber Timm retired from the Oakland, California, police force, came to Placerville and bought what he thought was a stock ranch, some twelve miles or more northeast of Placerville, in the Kelsey Mining District. Whether Wilber bought it to raise cattle, or knew it was high grade ground, Mr. Collins did not know. It cost but $10,000 and already had produced close to three million -"and there is plenty mineable ground remaining," assured Collins. With this pre-approach Joe coneluded Connie and the Timms could provide the rest. 72

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A beautiful spring day, a nice county no-traffic road, bordered by tall Pondarosa pines, and agreeable company pleased Joe to the extent that he though his avoidance of female company in the past might have been a mistake. Connie was agreeable company even to a confirmed bachelor. However, Joe could not hold for California newspapers over~ looking the fact that their silence on the gold situation was aiding and a betting the Communist plan to destroy gold as the basis of our money. He said that what might be termed selfishness on the part of the gold mine owners could well be overlooked considering what new wealth and employment operating gold mines would bring. "I can't understand," he said, "why the Washington administration and Congress have been so backward in taking steps to correct a bad and dangerous condition." "Perhaps most newspaper publishers don't understand the situation," said Connie. ~<With our paper it's a weekly grind and with others in the larger places a daily grind. Keeping up with going events, conditions and local politics is about our limit, although I do admit the conditions you describe should be of interest to everybody. But who or what will wake them up?" '''1 have given up asking that question," responded Joe. "'I hate to say it but another depression - not just a recession - I am afraid is the only answer. In a time of debt and deficits the politicians are pushing the taxpayer too fast and to too great an extent. It can't last much longer. It gets me down and the more I understand the situation I feel that our government - the people - will again be compelled to learn the mean~ ing of economy. Our political leaders and government officials have completely forgotten the existence of such a word." Arriving at the spacious Timm home Connie was pleasantly greeted by both Mr. and Mrs. Timm. Connie introduced her friend Joe as an exnewspaper man looking for a gold mine. "I don't know why you'd want one now," immediately offered Mrs. Timm. "Of course we've had one, and a good one, but the way WasWngton is treating us now a gold mine is no longer an asset on which we have to pay taxes. And Washington is giving no indication that there's going to be a change. Like Andy of the movies and television, ~I'm regusted'. ,. While the remark brought a laugh it was their thought that is was not a laughing matter. Connie explained that Joe was out to gain all he could about gold mining and if he could find a property that would stand up against present conditions and costs he would be interested. "If one could get by now,n Joe added, "I should be able to bank on it when the gold price is raised." "Oh, you think the price will be raised?" queried both Maybelle and Wilber Timm. ·'What else can happen?" asked Joe. "There isn't anything that shakes the Washington confidence like the loss of Treasury gold, despite all the talk by Wall Street banker Douglas Dillon, whom JFK had to ap73

•

point his Treasury secretary. The Amerioan gold mines are closed. With twenty-seven billions of foreign held dollars that must be converted to gold and the available amount for convertibility down to bedrock there's no way for Washington to turn except to do something to stop the gold drain. And to do that the road is rather narrow. Congress must take one of two moves: repudiate the Bretton Woods Agreement, which tied us to the conversion of foreign held paper dollars, or raise the gold price. And the time for action is not far off:' 'Well, on the face of it that does appear to be the situation, but for years we have been waiting for Washington to take the action that would cause our mines and properties to again be of value to us," put in Mr. Timm. "And I don't put all the blame on the President, except that he allowed Ike to name his Treasury Secretary. Ike, although posing as a Republican, the supposed ~Hard Money' party, was never the friend of the gold miner. I remember when Plumas County sent a gold nugget to Clair Engle, then our Congressional District Number Two Representative, to present to Ike, then president. He accepted the gold with the statement: 'I'm glad to have a souvenir of a past industry'. That sure got my goat. "Ike had a lot to say about financial conditions under President Kennedy. However, he doesn't say a word about the loss of seven billion, four hundred million dollars in foreign balances during his last two years in the White House. And he and Nixon didn't say a word about the gold drain until after Nixon was defeated. All this proves to me that both Republicans and Democrats are taking orders from the Money Changers, whom 'Mah Friend' Franklin .promised to 'drive out of the temple'. The. whole kit and kaboddle of them are puppets Qf the bankers who have gone international. If we don't get a change for the better in Washington soon we not only won't have gold mines but all our properties will be in s!oak to the Internationalists. That's what is in line for us in the buildup of the International Monetary Fund and its present harvest of your Uncle Sam's gold." Both Joe and Connie were impressed with what Mr. Timm had to say, Joe remarking that Timm and his friend, Collins, should be sent to Washington to inform Congressmen of what was going on. Congress, he said, appears to. be interested only in trivialities. Joe did add that he hoped Connie was getting some information that might be used in the Placerville paper. However, Connie gave a doubtful shake of her blond head. After a delightful lunch presided over by Mrs. Timm the party made a tour of Alhambra mine during which Joe gathered a great deal of information about one of El Dorado County's richest mines. Shortly after the Timms purchased the property they found that an old report told of $400,000 being taken from a very shallow working on the property. They began remaking a mine of it when a company which took the name of Alhambra-Shumway made an offer of $100,000 for it. The Timms accepted giving the company only a portion of the property.

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It wasn't long before the Alhambra-Shumway was making strikes of high grade variety. They delivered their gold to the Mint in San Francisco, having a pennit to make shipments up to $20,000. One day they alarmed the mint and the State Division of Mines with six ore sacks containing $120,000 of practically pure gold. The Division's high grade derectiY"e held that there was no such mine in California. So the detective and the late Walter Bradley, then head of the Division, made a trip to the mine and found that the mine really had it and the company officials who made the delivery were not members of a highgrading ring.

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The Alhambra-Shumway had a production of over two million dollars. No reason for its shutdown was given but evet: since it has had legal trouble. The Timms made another deal for another portion of their land, known as the Atlanta, a company offering to pay Two Hundred and Fifty Thousand dollars in royalty for the property. They never got operating, the Atlanta still being available. Mr. Thrun and a few men did some development work on it and as winter was on decided to shut down until spring. The last day of work was an unlucky one for Timm. The shaft had been sunk to a depth of 185 feet. Timm entered the cage to make the descent when it broke loose from the cable and plunged to the bottom. Wilber was frightfully injured, many bones broken and badly bruised. He was six months in a Placerville sanitarium before he could be taken home. Joe made up his mind that the Timm property was in a high grade area and one of the best in the Mother Lode~s East Belt. There are still no deep holes on the property, it not being an out-of-the-way conclusion that there is still plenty of gold in the ground. He made up his mind to question Mr. Timm on the use of a geophysical instrument to locate the high grade enrichments. Timm had heard and read a lot about geophysical reports but was skeptical. Being a tenderfoot Joe did not press the matter but made up his mind that before he ever put in a lot of shaft sinking or drifting he'd work with the benefit of a geophysical report on his mine. He had heard of miners driving tunnels for several years with nothing ahead of them but more barren rock to penetrate. Before Joe and Connie left the spacious Timm home Maybelle told of the difficulty they had in getting a patent on the claim on which their home was located. It took sixteen years, she said, before the Bureau of Land Management, then known as the U. S. Land Office, was convinced that their home claim was mineral bearing - sufficient for the granting of a patent. The short spring day was nearing an end as Joe and Connie drove back to Placerville, discussing all they had learned on their visit. "It does seem o,ut of reason that our government is keeping our gold mines closed when the gold is needed so much,'~ said Connie. ~'I wonder what it's all about." '~The

next time you visit the Collins home just get J obn started on that," replied Joe. "That good old guy has all the answers~ I am surprised that a miner would have such an understanding of national and 75

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international money matters. If your boss would let you use it John Collins could supply you with a column each week that might wake up your brain-washed readers. I hate to use that term but that's just what has happened to the American people. As long as the employed continue to get raises as the cost of living goes up and as long as our government continues to make relief a career there won't be an awakening. The wage and relief wells have got to run dry. And that means another depression. I'm afraid that will be when the Internationalists with their One-World bank get most of the world's gold. And what a crash that will be when the world bankers begin to put on the screws. Here's hoping that America will wake up before that happens.>' "Joe, you scare me. I think things are going along pretty good. With the help of the boys in the office I have learned my job. I get a raise every six months. I am paying for my little roadster. And although it's small I can aHord an apartment. And I have a nice friend by the name of Joe Bacon."

..

That put a sudden stop to Joe's monetary and gold thoughts. What's going on in that little newspaper girl's head, he thought. Disregarding his driving he took a hurried glance at his companion hoping to find out just how serious she was with that last statement. He concluded not to open up any discussion, like the angels who fear to tread, but did say, c'Well, thanks for those kind words and for your company on this nice spring day. Got to get back on the job tomorrow. Been here three months now and all I have been doing is listening to the raw deal the gold miners are getting from their government. Tomorrow I leave for the mines of the Grass Valley district and on up into Sierra County, where they tell me are the richest mines in the West.» ~'I wish I could go with you:' said Connie. "But I must get back to work myself. Why don't you drop around to the office occasionally. I know my boss would be glad to see you and talk about New Yo.rk newspapers. I don't think you even have had your name in o.ur paper. How come?'~

~~Now,

now, none of that," quickly responded Joe. "No. publicity. I don't want to meet any. sharks with gold mines to sell. I am hoping I can find it myself. With the help of our mutual friend, John Collins, I think I will make it. However, thanks for the invitation to call. If I do show up it wo.n't be on press day." Reaching Connie's apartment she inquired, ··Want to see my little nest? It isn't much but it's comfortable and easily taken care of." Joe agreed it was. "Some evening if you don't mind I could have dinner for you," said Connie. «For myself I don't cook much but I could promise not to send you away hungry." c
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too before I leave to get some ideas about the mines up that way.» Connie opening the door for Joe, held out her hand as a goodbye gesture and then suddenly gave him a kiss that was more than a mere peck. Startled Joe was speechless and walked to his car in a daze. This had never happened to him before. He didn't want to see Mr. Collins just then. He had to do some thinking by himself. Was Connie already falling in love? She was a nice girl, an agreeable companion but love was something else - something which was practically a stranger to Joe. He drove out Coloma street a mile or two till he found a parking place under a large pine tree and parked to do his thinking. After an hour or two all that his thinking amounted to was he was getting no place. He liked Connie but as for a deeper and lasting aHection, which he had an idea love should be, he was completely lost. With that he gave up trying to think it out and drove back to the Collins home.

• CHAPTER 18

Grass Valley, The Depression "White Spot" n discussing his trip to the Alhambra, Joe was able to get Connie off his mind. Collins was very familiar with the mine's history and verified the information Joe had gained. They then started talking about Grass Valley and the high grade mines of little Sierra County. John stated he had been checking up on back issues of the gold-covered Journal and in the March, 1957 issue found a lot of interesUng items about the Northern Mines. Of course, he said, some of it is out of date but it would give Joe information of the leading gold mines of the area. Joe was glad to get the clippings and planned to send them to Harold in his next mailing. Here is what a Los Angeles Times article had to state about what had been called the ~~White Spot' of California during depression of the early '80s:

I

By BILL MURPHY In L. A. Times, Jan. 7, 1957

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John Sutter, baron of the vast Sacramento Valley, reached for the brandy decanter with a trembling hand. The news James Marshall had brought him this January night in 1848 came as a shock. Marshall had been building a sawmill for Sutter on the American River. He observed a few flakes of gold on the bedrock of the tailrace, anCl hurried back to Sutter's sprawling fort and trading

post at Sacramento to convey the news. Sutter knew the consequences. During the 1840s his fort had been the supply center of the western frontier. His vast herds furnished the settlers with beet while his mills supplied flour and lumber. News of the gold strike would send his own workers stampeding in search of the yellow metal, while strangers would swarm across the lands he had developed. Empire Collapses Marshall's discovery was soon known throughout the nation. Gold seekers came

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by the thousands, trampling Sutter's crops and killing his cattle. He was pushed ruthlessly aside and his empire collapsed. Today Sutter would derive some measure of satisfaction in knowing that the industry he opposed is now engaged in a downhill battle for survival. Mine operators, who are sitting on top of a treasure which would have astounded the Spanish plunderers of Mexico, are going broke. Prior to World War II, there were 1600 gold mines in California. By 1953, 98% of the State's output was coming from 10 mines, and today these mines are closing one by one. The miners, faced with rising costs, can no longer economically afford to extract gold from the earth at the rate of $35 an ounce established by the government in 1934. By law, the gold mined in the United States must be sold to the Treasury at the fixed rate, that is except Placer Gold. At Grass Valley, On the northern fringe of the Sierra Nevada's famed Mother Lode, Jack Clark, superintendent of the Idaho Maryland Mine, surveyed a deserted shaft. High Costs Blamed

"Before the war, we had 1000 men working here," he said. "We closed down in December of 1955 and it will be impossible to resume operations under existing economic conditions." Increased costs of labor, steel, blasting powder and lumber used for shoring have been instrumental in bringing gold mining operations to a standstill, while a fortune in the precious metal remains beneath the earth. "We'll have to let the mine Hood itself," Clark explained. "We're down 2000 feet and you can divide that off in 140-foot levels where we can follow the veins of the are. You've got to be taking gold out of the ground to afford to keep your pumps going. "We're trying to salvage some of the machinery before it's under water, but sometimes it's cheaper to leave it down below:' Another To Quit

At the nearby Empire-Star Mines Co. in Grass Valley, Hopkins R. Fitzpatrick, general manager of the concern, awaits reports from his few remaining workers who were struggling thousands of feet underground to dismantle valuable equipment before floodwaters submerged it.

The North Star portion of the Empire Star Mine is 11,800 feet deep, on a 30 deg. incline, the Empire section 8050 feet, and an adjacent shaft, the Pennsylvania mine, reaches a depth of 5,100 feet. In July a strike brought all activity to a halt. "This mine has been in operation for 105 years," Fitzpatrick said. "Now we're at an impasse. At the present time there appears no reason for any optimism concerning an early settlement of strike conditions." L. L. Huelsdonk, secretary-treasurer and general manager of the Best Mines Co. examined a discouraging report on his firm's Brush Creek Mine at Downieville. "In order to maintain an operation at all, we have been forced to select our are and take only those higher grade portions which will pay us to mill," he pointed out. "In doing this we have to leave our marginal ores behind to the detriment of our are reserves. During our operation over the last several years, we have been depleting these ore reserves to an estimated amount of 90%. Even with a 100% increase in the price of gold ore, this lost are could never be recovered. In recent years the Best Mines Co. abandoned work on three other mines. "We have also been compelled to sell the Ruby Mine from which we mined the finest collection of placer gold in the world," Huelsdonk added. "To sum things up, we are not operating on what could be classified a prosperous manner, but we are rather marking time in the best way we know in order to hold our organization to~ether until such time that things may change:~ Donald H. McLaughlin, president of the Homestake Mining Co., San Francisco, and considered one of the country's leading authorities on gold, has some interesting observations on the plight of his industry. The Homestake Mine his company operates in the Black Hills of South Dakota is the large~t in the United States, with an annual output of $20,000,000 in gold. "Cold is now grossly undervalued in terms of the already depreciated paper dollar," he declared. "Foreign holders of dollars can convert them into gold through Central Banks abroad, but this privilege is denied the American citizens who are still not allowed to own gold except under many restrictions.

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"The gold miner is in a partiCularly difficult position, for he must accept paper dollars for his gold at a rate set in 1934, and yet is denied the protection against inflation that his gold could give if he and other citizens could own· and retain it. He must meet his payroll and buy his supplies with the paper dollars he receives and each year they buy less and less. Profits Are Low

"We are still running at full capacity, but in spite of continued technical improvements, our profits are not what they should be. I am proud of our record but, as I have commented before, we are simply running faster in order to stand still." McLaughlin advocates a restoration of the gold standard, with the dollar and gold freely convertible at a ratio that would be determined by the present purchasinl power of the dollar and the stable value of gold. This would mean a much higher price for gold - probably not less than $70 per ounce. Huelsdonk is a member of the State Mining Board. He has just returned from an extensive trip to Europe, where he talked to leading bankers in France, England, Switzerland, Italy, Spain and other countries. Eu ropean View

II.

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"The European bankers have built up a solid wall against any official increase in the price of gold," he said. "They are all agreed that the United States is holding the price down and must do so as a responsibility to the rest of the world in order that monetary management and balance of payments will not be upset. Their reasoning is that increasing the price would be inflationary. "These same bankers were amazed to think that the United States would allow 95% of her gold mines to close without some kind of internal help that would not affect the official price. They pointed out tax relief in South Africa and subsidies in other countries." Huelsdonk is in favor of a government subsidy as the only solution to the problems which face the mining industry today. «I am wholly convinced that it could be almost wholly financed through a tax levied on the industrial gold sold from our monetary stock. Let me explain.

Industrial gold is that metal which is used in the fashioning of jewelry, electronics and for many other purposes in manufacturing. The dental profession uses a considerable amount," he said. "Prior to World War II, the amount of gold required for industrial use was less than $1,000,000. During the war this required amount steadily rose to amounts above $100,000,000 annually, and was issued through special licenses to the industrial users for $35 per ounce minus }4% handling char~e. Industrial Picture "This same gold was supplied to the Treasury Department by the gold operators under law for $35 an ounce, less the handling charge. Once this gold is obtained by the industrial users, the increased price for its sale is not regulated and the industrial user is able to multiply his profit many times. "It is nO more than fair that he should be required to pay a tax which would not interfere with the official price upon acquiring this monetary gold. This tax in tum should go to subsidize the gold operator's increased production costs and thereby guarantee a continued flow of badly needed gold to support our monetary needs." The gold miners want the restrictions on the purchase, ownership and sale of gold by United States citizens to be abolished. They would encourage use of gold coins once more, pointing out that although Americans cannot buy gold in their own country, they can legally buy and hold it in many foreign countries. Increase Foreseen

In concluding an address before the American Mining Congress in Los Angeles last October, B. F. Pitman Jr., president of the Yuba Consolidated Gold Fields, a San Francisco concern, said: "Is a higher price for gold around the corner? Probably not, but it might be. In my judgment, it will come without warning." In Grass Valley, a veteran miner gazed· at the rusting equipment of a deserted shaft and shook his head sadly. "Something better happen," he said, "and it had better be quick. Otherwise, we may as well leave all this ,aId to the ages." - (Sent in by Harry C. Williams, 9709 - 6th Ave., Inglewood, Cal.)

Handing the clipping to Joe, Mr. Collins could not resist having his usual comment. He said: 79

«While much of the contents of the accompanying story is not news to those of us who live in the gold fields of Northern California it is of interest to know what the L. A. folks read about the gold miner' and his troubles. "But while attempting to suggest a cure for the sad situation the Times does not bring out that neglect of gold is not only wrecking the gold miner and a portion of the state's wealth, but also giving the nonminer a bad case of inflation jitters. Every American has just as much at stake in the situation as does the owner or stockholder in a gold mine. This, taking orders from the Money Changers, is hidden from the Times readers."

..

John, too was very much interested in the comment of a member of the State Mining Board, Lew Huelsdonk, manager of the Best 1\1ines, Inc., Downieville, California. It was the first time he noted, that a state official was brave enough to place the blame for lack of action on adjusting the gold price at the door of the real culprits. He told Joe: «The findings of Mining Board member, Lew Huelsdonk of Sierra County, bear out my statement, made time and again, that there is just one aim of international bankers - the control of U. S. gold. Legally it is known as a
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alone at Grass Valley, the Empire-Star and the Idaho Maryland, worked 2,200 miners, the total gold mine payroll of Nevada County being close to three thousand. The Grass Valley payroll ran $475,000 per month and everybody wanted to go to Grass Valley. These two mines have been closed for years, now being filled with water. Perhaps gold at $105.00 per ounce might be incentive enough for their reopening. The Empire-Star is really a deep mine. It was entered by a 3D-degree incline shaft for a depth of 10,800 feet. After a ride on the skip to that depth the miners who worked the fartherest from the end of the incline walked 4}'~ miles to work, with portal-to-portal pay. There is still plenty of good ore at the bottom of those two big mines. They are often cited as evidence that the Great Sierra gold mining area will produce gold for centuries. The area has been mined for over a century and only in two places for any great depth, Grass Valley, Nevada County, and Jackson, Amador County. Joe picked up a pamphlet telling of the discovery of gold in Grass Valley. It appears that a man by the name of Knight was looking for a lost cow. He stumbled over a rock and found it to contain high grade gold. It wasn't long before a mine was opened on that spot. The spot is now marked by a monument. As the gold mines of the district opened the operator found they had few men who knew mining. To offset the shortage tin miners from Cornwall, England, were imported. With the Cornish men came their songs. They always went to work singing, finding gold mining in America far more profitable than working in the tin mines in England. They always had a large choral group which still sings. One Christmas before the Idaho Maryland closed they sang their chorals on the 5,000-foot level of the mine, the singing being broadcast by radio. The late Errol MacBoyle owned a 54% interest in the Idaho Maryland. It was financed with the sale of stock, mostly in San Francisco, at $1.50 per share. In the early '40s it was rated as a $35,000,000 project, the stock selling at $8.00 per share. It paid regular and extra dividends. The Washington monetary program has rendered it valueless as of today. Attracted by the many reports of the high grade mines of Sierra County Joe made Alleghany, in that county, his next stop. Alleghany is the home of the famous Original 16-to-1 mine, rated as the state's richest. This mine is one of the best examples of placer deposits being evidence that at some place not too distant is the lode origin of the placer gold. A man by the name of Johnson used this theory to trace and locate the I6-to-l. It appears to be a very simple theory as all placer gold originates from lode deposits from which it erodes and gravitates to some stream. Every heavy rain brings down a new crop. Getting into Alleghany Joe was sorry to hear that the state's richest mine was closed down. Here he intended to get a lot of history of gold production. That mine, theOriginalI6-to-1, for years known as a leading high grade property, had been shut down several months previous to 81

Joe's visit. It had been for years one of the few mines that could remain operating despite the inflated prices of material, machinery and wages. For years it had been Alleghany's payroll and the source of many newspaper stories of its riches. During its early operation it paid monthly dividends. The shutdown caused the little town to which it owed its existence to shudder. It took heart again, Joe was told, when it was announced by the management that a maintenance crew of ten miners would remain on the payroll. Previously the town lost heart when two lower levels, containing $500.00 to $1,000 gold ore were allowed to be submerged by water. «Perhaps:~ one old time miner was reported to have said, "there~s method in the madness of the engineer; mine timbers are preserved better under water than when exposed to air."

So the noted mine was again to see operation, Joe learning it was common gossip that a new group was quietly buying up company stock. One report stated the mine~s transportation was to be completely rehabilitated and modernized, the first improvement to be a several compartment main shaft. It had been determined that are haulage had been too costly of late. The system dated back to the time when a mule, which was stabled underground all the time, pulled the ore cars to the main shaft. Some of the highgrading stories appeared fantastic, but it was supposed that the installation of a modern "change room" cut down considerable of the management's losses. One driller tells this story on himself. While busy drilling he could tell he had hit into solid gold by the manner in which his drill stuck. The miners, he said, hadn't had a high grade party for some time. Ordinarily he placed his shots so that the are would fall out on a steel plate from which it was easily shoveled by muckers into cars, but this time he changed the pattern of the shots to throw the are high, wide and handsome, along the drift. And so the high grade party was held, some of the miners going home that night with rich are specimens. Higrading has always been a problem for management in the richer gold mines. A Nevada City (county seat of ::Nevada County) court story brings out how difficult it was for management and the courts to handle. A highgrading arrest was made. Exhibit A was a powder box of rich specimen ore recovered from the accused, who demanded a jury trial. The box was passed around among the jurors for inspection. It came back to the prosecutor empty and the jury found the prisoners UNot Guilty:~

Joe could not quit Sierra County until he had visited the county seat, Downieville, one of the state's real pioneer towns. Here he met Gene Stowe, editor, publisher and printer of the Mountain Messenger. They swapped newspaper stories a while and in between Gene dug up some reports of the local mines. He took Joe in to see the county~s famous gold collection which is borrowed for fairs whenever the fair managements can supply enough theft insurance. It formerly belonged to Mrs. C. L. Best, widow of the inventor of the well-known Best Tractor. After Best sold to Caterpillar Tractor he engaged in mining in Sierra County.

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He kept the best of his nuggets for a private collection. Mrs. Best received offers up to $80,000 for it but felt that the County should have it for exhibit purposes, so let it go for $32,000, the government price. And so Joe found out why Sierra County is called the "High Grade County."

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CHAPTER 19

The Mother Lode Gold Country eturning to Placerville, Joe called on the Collins to report on his Sierra County trip. His enthusiasm was somewhat dulled when John told him the Sierra Miners had too many ups and down. They were either rich as Croesus or as poor as Job's turkey, he said. They never know when they are going to hit it, he added.

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"Well, wouldn't that be an ideal spot to do some geophysical exploration," questioned Joe. Why all the hard and costly work of sinking a shaft then driving drifts when you don't know where you're going?" «That's a good question that very few mining people have answered for themselves," responded Collins. "Many of them don't believe in it and many more are not ready to accept it. Just think what an upset it would make in mining engineering. Hundreds have spent money and years in time learning their profession and if a man can come along with an instrument that will tell one dumbbell miner where to find his gold, how do you think that would fit into their profession?" "That does look rough on a hard-working profession, but nevertheless we all have to keep up with new discoveries and inventions or we soon get left behind," said Joe. "And furthermore, I'm going to get more information on geophysical exploration. Gold is too low priced to waste a lot of money in looking for it blindly." CCI can agree with you, but what are you going to do when mine operators won't listen," responded John. "They are like the old dogs that won't learn new tricks." Before really getting down to the business of locating a mining property Joe wanted to make one more trip south on the Mother Lode on Highway 49 .. He had heard a lot about Calaveras County (Calaveras means skulls) which, according to State records had 1,102 known gold mines and prospects. In his mind he multiplied that by ten, as each could stand a working force of at least that many. Opening those properties would put at least eleven thousand men to work. Such a program would create real development, populate the bare hills and commence rebuilding the U.S. Treasury's gold reserve. The money for such a program,- well, that is a question, thought Joe. How about this: Governor Brown wants development. He has 83

created a state organization for the purpose. Why doesn~t he ask the Legislature to vote a sufficient sum of money to open up a few of California's gold mines? Operated by efficient engineers and managers the State could stockpile the gold and sell it to the Treasury as soon as Congress is forced to raise the price of gold to $105 per ounce. With good management the State could make a profit on the deal. But, thought Joe, Governor Brown's only idea, like the President's, is spending money. On the road to Mariposa County Joe passed through Jackson, Amador County, San Andreas, Altaville and Angels Camp, Calaveras County. It is at the last-named that each year is held the World's Championship Frog Jumping contest. Far more effort is put into that, Joe learned, than in trying to get the county's 1,102 gold mines reopened. One lone citizen who tries to keep the gold spirit alive is Charles Crespi, a retired manager of the Angels Camp branch of the Bank of America. He has a collection of high grade gold specimens worth at least $50,000.00. Different counties borrow it for exhibition at their fairs. Just lately Mr. Crespi sold the collection to the bank's home office in San Francisco. Continuing south on Highway 49 Joe passed through the thriving city of Sonora, Tuolumne County, which has a gold history since 1850. Here more attention is being paid to attracting tourists than getting the gold mines reopened. One operaing gold mine, Joe observed to himself, might be a leading attraction for tourists, especially if they could purchase a gold nugget or some high grade gold quartz. Joe entered Mariposa County near Coulterville, where Mariposite (green stone), one of the walls of the Mother Lode gold vein, was first discovered. The green, streaked with white quartz, makes beautiful building stone. Due to its adjoining the gold bearing quartz it usually contains some gold. Not long ago it was selling in Los Angeles for $40.00 per ton. One shipment, however, contained $28.00 to the ton in gold. It had to go into building as to take out the gold would have destroyed it for that purpose. Proceeding along Highway 49 Joe passed the ruins of the State's first mint at Princeton. It minted the ' 4ger gold into $50.00 slugs, used as legal tender. The story is told that an early day tax collector was making his rounds taking in taxes with which to operate the county government. It was winter time and he had to cross a swollen stream. He didn~t make it and was drowned. With him went his pouch of fifty dollar slugs. Ever since the region of his drowning has been searched for the golden treasure. Previously Joe had heard the story of the Diltz mine, located about six miles out of the town of Mariposa, now owned by John J. Fulham, Sr. and Jr. In the last gold rush starting just as President Roosevelt was a bout to raise the gold price four Sacramento men out of work concluded to try their hands at gold mining. They raked together all the funds they had, one of them, a Mr. Baker, later saying, ~~We were crazy enough to think we could go gold mining with fifteen hundred dollars." However, they got hold of the Diltz and before their meager funds were

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spent they hit a bonanza. When the quartz was cleaned out of a seventy pound hunk they had 42 pounds of pure gold. That start kept them mining until the depression was over. Joe made a side trip to the little town of Hornitos, where Henry and Molly Kowitz, with their restaurant and service station, keep the town from going ghost. This is an extra rich old time gold mining center with ninety per cent of its gold still in the ground. The M t. Gaines mine there has a great production record followed by years of litigation. When the early 30's gold rush began the mine was bought for $50,000. The operator was doing well with it when a San Francisco attorney convinced the original owners that they had been cheated in the deal. They started suit and in order to get the operator out of the way had him jailed on a trumped-up charge of using the mails to defraud. The poor man lost the mine which was kept in litigation until the Closing Order L-208 and inflation shut it down. Years later it was bought for a song by an insider. Joe was interested in the old buildings at Hornitos, most of which are now in ruins. Parts of the building where Ghirardelli made his first chocolate still stand. Only a few years ago an old three story hotel, where President Grant spent a night while on a tour of the nation, was burned to the ground. Seeking additional information Joe picked up the story of the bandit, Joaquin Murietta. It was an interesting story of a man who was lawabiding until he and his girl friend were brutally attacked by a group of hard hearted American miners. When Joe got back to Placerville he spoke of Murietta to Connie, wishing that he had the complete story. "Me to the rescue," said Connie. r can take care of that order. One of our weekly contributors, J. Barton Hasslet, has written that story in his Portals of the Past. I'll check the file and clip it out for you." "You are a life saver, Connie. My Mariposa trip would not be complete without it. Happenings of a hundred years ago are now hard to pick up." The next day Connie brought in the Joaquin Murietta story as printed by the Mountain Democrat and Placerville Times. It completed Joe's report on his Mariposa trip, being as follows:

"

When John Rollin Ridge wrote the story of Joaquin Murietta he was after a sure-fire best seller and he knew what the public of that day liked to 'read. Californians relished well-spiced reading and Ridge gave it to them. The small paper-covered book was an immediate hit. Joaquin Murietta, according to Ridge, was a young man of excellent reputation, "gracefully built and active as a young tiger.» He came from a good family and had a school education. In his 17th year he fell in love with Rosita, a young Mexi-

can girl who was ··dark-eyed and voluptuous." The two were able to be alone quite frequently and. "given such a condition. and the passionate Spanish natures of such a boy and girl, the evil must inevitably result. Rosita realized this only when her honor was compromised." The young couple stole away from home and crossed the border from Mexico to California and settled in the gold regions. Here they were doing well until one night a party of America!lS fell upon their camp and struck Joaquin re-

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peatedly with a whip. 'When Rosita protested they bound Joaquin and then "
With all this slaughter and theft, Joaquin still manages to find time to help maidens in distress and steal from the rich and give to the poor. Even the cutthroat "Three-Fingered Jack" quails before the young chief. From time to time Ridge writes in a little extra gore for his eager readers. Says Three-Fingered Jack, HAb, Murietta, this has been a great day. I have been hanging up Chinese miners by their queues and slitting their throats. Damn 'em!. How my knife lapped up their blood!" The story runs on and on and finally concludes with Joaquin's death and decapitation at the hands of Captain Harry Love and his Rangers. This came just in time. hints Ridge, since Murietta was almost ready to execute his grand plan for a full dress revolution against the hated whites. How much of this story was accepted as fact will never be known. At any rate the little book was headed for great success when something happened - a bit of bad luck that changed a best seller into a forgotten volume.

Joe picked up another part of the Murietta story while he was at Hornitos. There was a saloon there that had a cellar. From the cellar ran a tunnel which ended across a road in a thicket of willows. When Joaquin was being chased he usually headed for this saloon. He would wait in the saloon until it was surrounded and as his would-be captors broke into the saloon, into the cellar went Joaquin to make his way by way of the tunnel to his horse secreted across the road in the willows. By the time those who gave chase learned that their bird was not in the saloon Joaquin was miles away on a fast horse .

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CHAPTER 20

What Constitutes A "Discovery"? eturning from his Southern Mother Lode trip Joe was of the opinion that it was almost time for him to be doing something toward getting hold of a property. First, however, he thought he'd better have a consultation with Mr. Collins. He had learned this much, many mistakes can be made by a tenderfoot and advice from a man with as much experience as John has had is invaluable. The evening after he returned from Mariposa he dropped in for a ~isit with the Collins. They. we~e b~th glad to see him, as usual, and lIstened to the account of hIS t.np WIth interest. He broached the idea of it being time he was getting hold of a claim.

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Buying a deeded property, he thought was out of the question, Mr. Collins agreeing. «Every mine owner thinks his property is worth a million dollars," he said. "They won't realize that a prospective purchaser is going to need practically all of his money, and more, to reopen a mine. They tell you of the thousands of dollars the property has produced and can only guess at what might be taken from the mine in a new operation. And their guesses run into high figures. Further, if you. do take over, get the property in shape for operation with conditions looking favorable, and get short on money the owner is going to let you do the worrying. I think you are wise in looking for a claim - but get a good one: one that the Bureau of Land Management can't take away from you. I suggest you read over my copy of "Legal Guide for California Prospectors and Miners," published by the State Division of Mines and revised in 1960." Mr. Collins explained that the Division had no legal authority on its staff and in its 1960 edition used legal opinions of the late Charles L. Gilmore of Sacramento, considered by many to be the state's leading mining attorney. "It is my belief that he has never lost a case involving claimholders and their problems with either the Forest Service and the Bureau of Land Management," said Collins. "rve watched those cases for years," he added. Mr. Collins went on to explain that the most trouble a miner has with the two bureaucratic governmental divisions is over the meaning .of a "discovery." "If we take their definition it is almost impossible to mine and comply with their legal findings," added Collins. He explained that the government boys used a court decision to get their definition of a "discovery." "It's known as the 'Prudent Man' decision and very cleverly explained by Attorney Gilmore in the State Division of Mines Legal Guide with the following:

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«I am well aware that the definition of «Discovery" as given to the general public by both the Forest Service and the Bureau of Land Management is as set forth in the 'prudent man' concept. However, in actual practice and under the method of enforcement of that rule, both departments of government depart from it a considerable distance. Today in any hearing held to determine the question of the character of the land and to determine whether a valid discovery has been made on' that claim, and in every case that 1 have had (and 1 have handled many.) and in every other one that 1 have heard of or have seen, the decision concerning it, the rule is that the discovery must be of sufficient value to prove that the mine may be operated at a profit, however small." ". . . If the location is for gold, the locator is faced with an almost impossible condition. For example, a location '-:"'en made in 1934 with gold at $35.00

per ounce, might easily have been a paying proposition in the earlier stages of development. In 1959 a far different condition faces the locator. The inflation of the dollar and greatly increased costs of mining make the 1934 ounce of gold worth about $16.00 in 1959 purchasing power. So the paying mine of 1934 would now be found nonmineral in character by the Bureau of Land Management, because it would not now pay to work." And further, «1 have never seen an official definition of a 'prudent man" nor have I ever seen a prudent man rule applied except in the most arbitrary manner, simply because of the fact that it is incapable of being defined. No hearing examiner that 1 have seen and no judge on the bench in any court before whom I have practiced during the last 40-odd years, has ever been able to look into the mind of any man and determine whether that

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man is a prudent man or not. Finally, I never saw a prudent prospector nor did I ever see a prudent miner." " ... Some of the best mines in the west, and particularly in California, that were pro-

ducers before 1942, were operated, not by prudent men, but men who were at the time described as the greatest fools that ever adorned God's green footstool."

ForJoe's benefit Mr. Collins brought up other ways both the Bureau of Lan Management and the Forest Service have of stopping mining on valid claims. Public Law 167, passed in 1955 was for the purpose of getting multiple use out of public lands, and turning over to the Forest Service the control and management of timber and all other vegeta hIe growth. It also turned over to government control specified non-minerals: sand, stone, gravel, pumice, pumicite,cinders and clay, unless such nonminerals contained valuable minerals. "The poor claimholder can always depend upon having plenty of trouble convincing the bureaucrats of the occurrence of values in the non-minerals," assured Mr. Collins. «The government boys can always work the 'prudent man' decision on the miner," he added. John went into further ways the bureaucrats have of stopping mining on public lands. "If you don't happen to have a market for your mineral at the time they take a notion to get interested in your business, they hold that you haven't made a 'discovery':~ declared Collins. "Your claim will get the same treatment if you have no road to it; and in most cases they won't let you build a road to your claim. I know of one case where a thousand dollars worth of bulldozing would have given two claimholders a road but in a hearing a government boy stood up and swore that a passable road would cost $20,000. Even if it did that has no bearing on the mineral value of the claims." "Those G-boys also make hay with their 'common varietY ruling," went on Mr. Collins. "Their own Director in Washington strictly defined 'common variety' as substances that had no special use. I read of many claimholders down in San Bernardino County being run off their dolomite claims, the bureaucrats holding it to be a common substance. They would not be influenced by the fact that Kaiser Chemical mixes dolomite with sea water in making magnesium metal. So you see, Joe, you have plenty to contend with if you are going to be a claimholder. "Well, it's either battle with the bureaucrats or listen to mine owners peddle reports about the wealth of their properties and maybe in the end get a gypping:' answered Joe. "That Mt. Gaines story I picked up at Hornitos is a sample. Some day I want to get all the facts on that deal. So now, John, I'm going to need your help on where and how to pick up a good gold claim." Joe seemed bent on doing his mining in El Dorado County, so Mr. Collins suggested he consult the State Division of Mines' El Dorado report. Published in October, 1956, it is known as Volume 52, Number 4, California Journal of Mines and Geology. "This report won't tell you the best place to mine, or how much gold there is still left in EI Dorado County, but it will tell you of the last 115 years of mining in the county and the condition of the mines when last operated," volunteered Collins. 88

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you don't find anything in the report that looks good I have a notion I might steer you on to something. However, I will not guarantee it. It will be up to you to make a mine of it." "I'm not bent on doing much mining myself," replied Joe. What \ve want is a property large and rich enough to interest a large companywhen and if Washington ever does something about the gold price. We don't expect to find an Alhambra, a Myrtle Creek or a Black Oak, but no doubt there are available properties that could be assembled into a workable deal." "There's a property not far from mine and near the Myrtle Creek that I believe has promise," offered John. "When Myrtle Creek was at its best it was located by two men close by. Of course they banked on its closeness to Myrtle Creek but after they shut down I spent some time looking it over. It's got a good out-crop down with a shaft only 50 feet, sunk on the vein, when they quit. I saw their assays, some of them well over $30.00, from a 4-foot vein. The original locators did not keep lip their assessment work or their taxes. It's wide open for relocation. I suggest, however, you hold off filing on it till after September 1; then your '63-'64 assessment work of $100 to the claim does not have to be done until September 1, 1964. But you have 90 days in which to do discovery work, which in this property will be to sink the shaft an additional 10 feet. In your discovery work you must take out at least seven cubic yards of material. As this will be on the 4-foot vein you can have it assayed as you go down." "As I get it," said Joe, "locating after September 1st all I have to do to hold the claim is to sink the shaft another 10 feet; no assessment work till in 1964. When can we take a look at the property?" "I can meet you out at your camp tomorrow morning," responded Mr. Collins. «rn expect you to furnish lunch." «Agreed," said Joe.

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CHAPTER 21

The Abandoned Mine Shaft ohn Collins always enjoyed driving out to his mine. He enjoyed that real feeling of actual possession which no government bureaucrat could take from him. The intent of the law at that time of location was the settlement and development of the West. The transcontinental railroad had been completed, with the driving of the golden spike, three years previous. The road needed work to do; the mines could supply ore hauling into the manufacturing centers. The U.S. Land Office cooperated with the U.S. Bureau of Mines in showing operators where to mine. There was no Bureau of Land Management and Forest Service

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field men breathing down the miner's neck. It was a pleasure to do business with the Federal Government in those days. Prospectors were encouraged, made their discoveries and turned them over to developers who made mines of them. Now with the Department of Agriculture in charge of timber and other vegetable growth and the Department of the Interior in charge of the minerals the miner had two bosses, each with their own set of laws, rules and regulations with which to comply. Further, the State has its own mining laws.

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The abandoned prospect was but a short distance from the Collins camp, between it and Myrtle Creek. It was apparently in good prolific territory. Its quartz outcrop was easily traced. The surface wasn't too rough, making it easy to walk over the ground in tracing out a claim, 1,500 feet along the outcrop and 600 feet across the ends, a regular rectangle. Mr. Collins explained that when actually locating, monuments must be established at each corner and in the middle of the ends. He also explained about the written location notices, one to be posted on the claim and the other to be recorded with the County Recorder in the Courthouse at Placerville.

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The small single compartment shaft, going down vertically on the outcrop was in good shape, the work having been done only a few years previously. With Mr. Collins' recommendation Joe decided to give it some investigation before locating. The only record of the 50 feet of shaft work he had to go on was that which John had learned while the former locators were at work. He would have to establish his own record. The only way of entering the shaft was by a wooden ladder. The former operators hadn't got to a point were they thought it was necessary to install a hoist. It was evident that are was brought to the surface by a rope and bucket. "} oe, you will have to get a little more modern if you're going to operate that hole," said John Collins. It had been some time since Joe had been entertained at dinner by

Constance Morrison. He felt rather guilty at not having at least called to see her or gotten in touch with her at the newspaper office. He'd have to make amends. He went to the office shortly before quitting time- and found her ready to make her way home. She was pleased to see him with a 'Where have you been since I last saw you? I began to think you had quit California and returned to the salt mine in New York." "Don't you ever think it," replied }oe. rm in California for good, even if I don't ever find a gold mine. I don't know why I stayed in New York as long as I did. But I should have called you after you took pity on the bachelor-miner with that nice dinner. And I want to have the pleasure of returning the compliment. How about dinner with me tomorrow evening? And may I walk home with you?" It was Yes to both questions from Connie, with; '·Now I want to

know where you have been and all about your travels. And have you found a gold mine? Perhaps I could write some stories for the paper if you approve. " "No publicity," quickly responded Joe. "I don't want the mine own-

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ers or the bureaucrats to know what I am doing or that I am even in the State. 'Mum's' the word." However, Joe told of his trip south, taking in the southern Mother Lode area and especially about the Diltz mine. "That would make a good story any time even though it happened SO years ago," remarked Connie. "Forty-six pounds of gold in one chunk! Just think of it! I wonder if there are more like that."

"It will take another two hundred years of prospecting to answer that, and after that they will be still finding gold in the West." Joe was pleased to note that Connie was getting a touch of the fever. "Got to get back to the camp before dark so I'll get along," said Joe. "I'll be in town early tomorrow afternoon and see you about 4:30. See you at the office at that time," Thinking of his last parting with Connie he hadn't made up his mind as to just what was expected of him. He liked Connie. She was a nice girl. Perhaps he'd better not presume; so with a hurried "I'll see you tomorrow," he headed for the camp. Although it wasn't time to locate his claim he did want to get a look at the walls of that shaft and see if there was pay-dirt on the bottom. John Collins had told him if are would pan it was rich enough to pass up paying the expense of assays. However, if it would not pan and he still wanted to know what was in the are he should take it to an assayer. So next morning, armed with an are sack and a miner's pick and pan he ventured into the shaft. He didn't trust the ladder too much, treading as lightly as possible. He noted some are still in the sides of the shaft in spots, concluding that in places it proved wider than the shaft. That was encouraging. He reached the bottom. He chiselled and picked at the ore and finally Blled his sack. Loaded he began the ascent. It was no easy task. He made up his mind that if he located on the claim he'd see to it that the shaft would be equipped for transportation for men and are. He had just about reached the top when the ladder rung he was standing on gave way. The break was so sudden that he didn't have time to get a firm hand hold and down he went to the bottom. It was a long and hard fall. Doubled up in the bottom of the shaft, at first he was unable to determine the extent of his injuries, but when he tried to get up his leg gave way, and he knew it was broken.

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Alone in the bottom of a 50-foot hole with a broken leg, he remembered what Mr. Collins had warned him: C
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4:30 he would have been here at least by four o'clock. He must be in trouble. We'll have to get out there as soon as possible." «1 will go too, if ifs all right with you, Mr~ Collins," said Connie. "If he's hurt, 1 want to help." On the way to the camp John was of the opinion that if Joe was hurt it would be at the shaft on which he intended to file his location. The last talk they had together about the shaft Joe had wondered about when he should do some sampling. "I'll bet a dime to a dollar Joe went into that old shaft to get a sample," said John. "And 1 told him not to go into that shaft alone. He's so anxious, about not letting anyone know what he is doing that he no doubt has gone out there alone. It's too bad." Mr. Collins drove straight to the shaft in which Joe was interested. His guess was a good one. Joe heard the approach of the car and was shouting for help as John and Connie approached the shaft. Shouting down the shaft John questioned, nAre you badly hurt, Joe?" Up from the bottom of the shaft came Joe's answer, "My leg is broken and I can't get around. If you could let down a rope I could get a hitch on myself and I could be pulled out of here." "We knew something had happened to you but we did not know it was this bad," replied Collins. "We didn't come prepared as a rescue crew but I'll drive over to Pollock Pines, get plenty of rope and some more help. Miss Morrison is with me. If she likes she can stay here. I can be back in less than a half hour. O.K., Joe?" "O.K.," responded Joe. "But will Connie stay? I've been hours down in the bottom of this hole. Maybe if she will talk to me it might ease the pain." "I'll stay and be glad to/' quickly responded Connie. "You go, Mr. Collins. I will be all right. Nobody will bother me here. I'll do my best to be company to poor Joe. But do hurry, Mr. Collins." John left hurriedly for Pollock Pines. ·'Don't get too near the shaft opening, Connie, cautioned Joe. One of us down in the bottom of this hole is enough. How did you and Mr. Collins figure to come looking for me here?" "Well, you said you would be at the office at 4:30. I waited until after 5:00; then went to the Collins home. I didn't know you kept your best suit there. Mr. Collins said you would have called there by not later than 4:00 and immediately concluded that you were in trouble. So out we came and here I am. I am sorry I can't get any closer to you than fifty feet. We are lucky that we had that date for this evening:' "And I am lucky that I know a nice girl like you who would come all the way out here to find out what's wrong. And you're going to miss dinner, too:~ 'We can have dinner any time, but it isn't every day that I can help rescue a nice boy from the bottom of a mine shaft. And don~t get to

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worrying about my writing up your accident for the Mountain-Democrat. I know you want to keep your doings quiet so I will let you know in advance, so you won't be worrying. There'll be no publicity. We'll just keep it to ourselves." "That's the good girl, Connie; and thanks. I hope Mr. Collins gets here soon. This old leg of mine is giving me fits. Keep talking." Just then Mr. Collins drove up. Two men hurriedly jumped out of the car. John followed with a coil of rope. It was uncoiled and let down to Joe. "Get it around you and under your armpits," instructed John. "And tie it tight. We can't have any more accidents." In a short time Joe called out that he was ready to go. The three men started to pull slowly. Connie cautioned them to take it easy to prevent Joe from being bumped on the side of the shaft. She thought of his broken leg and the pain he was suffering. The men pulled slowly and steadily and shortly Joe, his pick, pan and sack of ore were on top. He was carried to the car, put in the rear seat with Connie who made it as comfortable as possible for him. Joe thanked his rescuers who were taken back to Pollock Pines and then Mr. Collins headed for the Placerville Sanitarium. A doctor took charge. Connie didn't want to leave. "We can't be of any more help to him now," urged Mr. Collins. «Let me take you home. I know Joe will be glad to see you tomorrow." John wanted to give Joe another lecture about going into a mine alone but he reserved that for some other time. Joe felt rather pleased at Connie's concern but assured her that Mr. Collins would have told her of his move. "It's nice of you to be thinking of me. When I left New York I didn't know I could find such nice friends as you and Mr. and Mrs. Collins out here among the gold mines. I thought everybody would be so interested in getting some of the gold that they wouldn't have much time for the other fellow. It sure is nice."

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The next morning Joe was stirring around early, as much as his crippled leg would allow. "We've got to establish a research department. As long as I can't do any leg work, at least I can learn something about this mining industry," said Joe. "The first thing I want to get hold of is all the information about that firm that does the geophysical work. I have looked high and dry for some advertising of the firms that do that type of engineering. I wrote to Harold in Washington, D.C., about it. He went to the Commerce Department. Before getting an answer they had to check with a number of other officials. Their answer was that there is no such authorized advertising because the government holds there is no instrument that can locate gold underground. That, of course, doesn't check with what we read in our favorite mining publication. It has made complete investigations at every mine engaging the geophysical surveyor. So to get the actual facts we will have to consult the publication's reports." "That should not be any trouble," responded Mr. Collins. "I have

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-. the complete file of the publication. Let's dig it up." "1 want to first call your attention to a letter I wrote this morning while you were up town after the mail," said Joe. "I got all riled up at the way the Los Angeles Times reported the gold drain hearing held by the Congressional Joint Economic Committee. One Washington AP article was headed: DILLON OUTLINES FIGHT AGAINST DOLLAR DRAIN. Another leads off with: DEMOCRATS AND REPUBLICANS GANG UP ON TREASURY. If you did not know how serious the situation is those headlines would make you laugh. Dillon isn't doing any fighting as our gold is going where it was planned - into the coffers of the International Monetary Fund. And that "gang-up"- those Congressmen don't know what a "gang-up" is. They surely missed the boat, and I am telling one of them so. Here's what I wrote him: Hon. Thomas B. Curtis, House Office Building, Washington 25, D.C. Dear Congressman: I have been watching the plans of the International Monetary Fund to take over U.S. gold. As you know by now that plan was foisted upon us by two known Communists, Harry Dexter White and Alger Hiss. We are glad you questioned the Treasury Assistant Seoretary Roosa, on expenditure control. However, this is only a minor matter as compared with what the Administration and Secretary Dillon, with the approval of the Federal Reserve Bank, are doing to bring about the Communist plan to denude U.S. of its gold. The Treasury Department is putting out a lie every day in its daily report on the gold balance. It fails to deduct $800,000,000 borrowed from the IMF; also amounts involved in "'swapping dollars with foreign countries for their convertible currencies to meet the foreign gold call, and further, the amount in bonds we have turned over to the IMF to satisfy other foreign gold calls. These deductions, the amount of which the Treasury refuses to make known to Congress, would greatly reduce the Daily Gold Balance. They are being used as "cover-ups" in order to show a decent balance. Your Joint Economic Committee should force the Treasury to bring these deductions to light so that the taxpayers will know just what the condition of our monetary system is. Your committee is allowing the Treasury to keep us in the dark. Mter all, when the foreign dominated IMF gets all our gold, plus other obligations, our taxpayers will be subject to its call. We don't mind paying high taxes to our own government, but we do object to going through with the Alger Hiss-Harry Dexter White deal of paying tribute to a foreign dominated monetary organization. We don't believe Congress realizes what is going on. The gold drain is a matter of fact. It must continue as there is no other way to meet the call of foreign dollar holders. Different schemes of the Treasury listed above have worn out. The Administration's plan of using $75 million of foreign currencies in the Treasury is only a drop in the bucket as compared with the $27 billion of foreign dollar holdings. We must repudiate the Bretton Woods Agreemenr by raising the price of the Treasury gold we have left. That is out only way out. Sincerely, JOSEPH

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• "That's good stuff, but I'm afraid it's Love's labor lost," said Mr. Collins. "You are right when you stated to the Congressman that you are of the opinion he and his co-members did not know what was going on. You remember the letter you wrote in June to Senator Harry Byrd, head of the Senate's Finance Committee? Well, anyway you have an answer in today's mail. What do you say we first review your letter so we will know just what you wrote. It takes so long to get a letter from Washington that you forget what you have written. That's what the boys on Capitol Hill figure on, I guess." Joe dug up the copy of the letter to Senator Byrd. It read:

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Hon. Harry F. Byrd, U.S. Senate, Washington 25, D.C .

Dear Senator: Have read with interest the article, "Promises of 1932 Never Kept: in the May 4 issue of Human Events. We are glad to note that you did not swallow the New Deal as planned by FOR. On the other hand we, the taxpayers, are getting a worse deal than they did under Roosevelt. This is especially noted in what the Senate is allowing to happen to our Gold Reserve, with the Treasury's daily report failing to give the actual condition. This is due to several schemes that have been used in order to show no losses from the Treasury's supply. We refer to what was called "swapping" U.S. paper dollars for West Germany, Italy and Switzerland convertible currencies. This does not show on our daily Treasury balance but will have to be met with gold in the eventual settlement. There's no doubt that the swapped dollars will have to be converted to gold. Would like to have you check me on this. The "swapping" was started in the fall of last year, $350,000,000 going out in November and December. No further figures were given out as the "swapping" went on in the first months of 1963. There was evidence that the plan played out when in May the Treasury announced bonds would be issued to the International Monetary Fund for gold to meet the call of foreign dollar holders. Could you let us know to what extent such bonds have been issued? We would like to call your attention to the fact that a gold loan from IMF is never aoknowledged by the Treasury in its daily reports. It is well known that the IMF will never accept anything but gold for settlement. The loan was for $800,000,000. As chairman of the Senate Finance Committee we desire an answer direct from you. We have received answers from the Treasury which were very unsatisfactory. It has ways of dodging the truth, we are sorry to state. In today's paper we read of your birthday. Congratulations, with well wishes for your continued good health. Sincerely yours, June 11, 1963

JOSEPH

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CHAPTER 22

A Prospector's Letters to Congressmen

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fter several days at the sanitarium Mr. Collins suggested that Joe could avoid the expense if he would consent to come to their home and use their spare bedroom. Joe wouldn't hear to it. "1 can't be such a burden to you and Mrs. Collins," he said. "It wouldn't be right for me to impose on you. You live simply in your pleasant home which you don't want cluttered up with a broken-legged invalid." "Now listen, Joe," answered John, «we do lead a quiet life; too quiet. We never told you but we had a son who died in an auto wreck. Home has never been the same since. Both Mrs. Collins and 1 would like to have you. You won't be a burden. You can get around on your crutches; we can talk some more mining and by the time you are able to be out again you will know where you want to locate your claim.

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«We had to laugh at you when you showed up out of that shaft; you still were hanging on to your sack of are. And, by the way, we had it assayed. It went $70 to the ton - two ounces of gold to each ton of are. Not bad at all. I hope your fall will not scare you away from giving that hole some more attention. And now about coming to the house; what do you say?" «Well, John, the way you put it I guess I can make it, but listen, I don't want to be a moocher. I want to pay my share of the household expense. I wouldn't feel right any other way. "All right~ you will have your way. I'll notify the sanitarium manager. I have the car outside. We will gather up your things and tote you over to the house. I'm glad that's settled. The next day after work, Connie stormed into the Collins' home ready for a fight. She had gone to the sanitarium for her usual visit and was told the patient had left, bag and baggage. They didn't know where but thought the doctor might know as they presumed Joe would need some further attention. The doctor was out. Connie's next guess was that Mr. Collins might know. She went that way and found Joe established in a lounging chair. "You never told me you were leaving the sanitarium when I saw you last night. How corne?"

"I didn't know it myself till about two hours ago. And I wouldn't have been here if Mr. Collins hadn't been such a good talker. 1 don't think these kind folks will object to you visiting the patient. You won't have to be restricted to visitors' hours." <'Well, I'll forgive you this time, but don't let it happen again. 1 didn't know what to think when the sanitarium folks couldn't tell me what had happened to you." 96

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"Thanks for bringing my mail, Mr. Collins. Let's see what good old Harry has to say. Oops, he doesn't say much but sends one of those cover-up letters from the Treasury. Anyway, let's read it," said Joe. My dear Bacon: This is in further reference to your letter relative to Treasury financing practices. I have received the enclosed material from the Treasury Department in connection with your inquiries. I hope that it provides fuller information on the subject. You may be assured that I am closely watching the Treasury gold situation, as well as our balance of payments situation. I regard this as one of the most serious problems confronting this nation today. I greatly appreciate your interest and hope you will not hesitate to communicate with me whenever there are matters of mutual interest. With my very best wishes. Faithfully yours, HARRY F. BYRD. July 11, 1963 Dear Senator Byrd: I am happy to supply you with information which will assist you in responding to the inquiry quoted in your letter of June 25, 1963. The purpose of "swap" transactions is in reality the opposite of that described in the statement made by your correspondent. Dollars swapped with foreign central banks provide the United States with foreign exchange which is used to mop up dollars which would go or have gone into the hands of the foreign monetary authority and which would likely result in purchases of gold from the United States. The dollars originating through swap transactions are repurchasable by the United States with the same foreign ourrencies originally drawn and at the same exchange rates. The central bank credited with swap dollars is thus protected in terms of its own currency and is willing to hold these dollars where it might not hold dollars otherwise obtained. The swap transactions are especially designed to offset temporary flows of funds which it is expected will be reversed within a fairly short period of time. When the reversal takes place, the United States can then acquire the necessary foreign exchange and reverse the swap without loss of gold. All of the swap transactions completed to date have been fully successful in this respect. There are enclosed copies of two reports by the Federal Reserve Bank of New York on HThe Treasury and Federal Reserves Foreign Exchange Operations" which explain the nature of swap transactions and the actual results of those completed through February of this year. Treasury borrowings in foreign cur" rency. which in SOme respect are similar to swap transactions but are designed to cover longer term flows of funds, are also discussed. Swap arrangements were first made in March of last year, reaching a total of $1,150 million by year-end and $1,550 million at present. I cannot reconcile the figure of $350 million given by the writer for the amount of swap transaotions in November and December of last year with our records. It may interest your correspondent to know that an announcement of each swap arrangement has been made at the time of its institution. A copy of the most recent Federal Reserve press release dealing with this subject is attached. The arrangement of a swap does not, of course, mean that any amount is automatically drawn or used and, in practice, only a small part of the total availability has ever been outstanding at anyone time. Reports on the use of swaps have been made in the articles previously referred to.

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The reference to an announcement in May concerning the issuance of bonds to the International Monetary Fund for gold is incorrect. There was no such announcement. The writer, may perhaps be referring to press speculation on the possibility of a U.S. drawing from the Fund. The final reference to an $800 million loan from the IMF is also incorrect. What is probably referred to here is the sale of $800 million in gold by the IMF to the Treasury with the right of repurchase. These sales, not loans, totaling $800 million, took place in 1956, 1959 and 1960 and the right of repurchase of the IMF is noted in the monthly Treasury Bulletin. I trust this information will prove useful. It is always a pleasure to be of assistance. Sincerely yours, JOSEPH W. BARR, Assistant to the Secretary.

"You were right the first time, Joe. The senator apparently doesn't know anything about the Gold Drain, or at least he won't commit himself. It's too bad that we have to be represented by bureaucrats. This nation is sunk if we don't get a change soon. Anyway, let's see what the gentleman from the Treasury means in his two-page letter. «He doesn't appear to agree with you on that "swapping" deal. Of course it does save the Treasury from having to dig up some immediate gold, but I agree with you that the ~swapping' sends more dollars out of the nation and they all become subject to the Bretton Woods Deal. I note the honorable assistant secretary shys away from writing anything about that ·commie' deal. I have read that the foreign exchange that the Treasury gets in the 'swapping" deals is all convertible to gold. You can bet your last dollar that those foreign countries are not going to let their convertibles go unless they know they are to be replaced by gold. So I just can't believe Mr. Barr's explanation. His 'swapping' does relieve the Treasury of digging up some immediate gold but it does add to the amount of foreign-held dollars which eventually will have to be met with gold. These 'swapped' dollars are no different than any other dollars that get out of our hands. «And note what Mr. Barr says about the 'temporary flow of our funds expected to be reversed in their flow .' Hell's bells I There's nothing temporary about that flow of our dollars and our gold. It's 'planned that way: It's a steady flow~ all in one direction. It will never start back until we are entirely out of gold~ and then in order to give our currency some sort of standing in the commercial world we will have to buy it back at a much greater price than that at which we are now letting it leave the country. That's just common horse sense, and Mr. Barr should know that he can't put over that stuff of his. As long as we insist on keeping our gold price at the low figure of $35.00 per ounce the flow is going to be out. Europe is now hoarding much of your Uncle Sam's gold because they got it at a low price, and as soon as we run out it is going to be worth much more than $35.00 ' «Mr. Barr pokes one at you because you did not know how much his 'swappings' deals amounted to. You had it at only $350 million when he admits to over one and a half billion dollars. Anyway we are glad

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to know that. He tries to put it over that the 'swapped' dollars won't meet the same fate as the dollars that we are spending in foreign aid. I can't 'swallow that. "Mr. Barr has a queer explanation of the $800,000,000 in gold the Treasury borrowed from the International Monetary Fund. He calls it a 'sale' with the right of repurchase. That's a hot way of explaining a loan. The IMF will not only have the 'right of repurchase' but it will be a demand for repayment. The IMF is not in the business of letting any country play with its gold:~ "That's sure good stuff, Mr. Collins," said Joe enthusiastically. "It's too darned bad we don't have you as a Congressman for this Mother Lode Gold District. 1 don't think that 'Bizz' Johnson understands what's happening to our poor old dollar. Anyway, when all our gold is gone he, like a lot of others in Washington, is going to have a sad awakening. But it will be tough on the taxpayer. He will have to buy back all the gold our Washington folks have squandered. I see what you mean when you say we are not getting representation at the national capital. When you write a letter to a Congressman you get a reply from a bureaucrat. Time for another Boston Tea Party. But let us get on to finding out more about Harold Ferrin and what he has done for the gold miners with his geophysical instrument."

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CHAPTER 23

Geophysics in Mining r. Collins had gathered up all the back issues of California Mining Journal in which appeared reports of Ferrin's findings on a number of gold mines.

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Collins told Joe that Ferrin was first located at Mesa, Arizona, advertising under the firm name of Ferrin Geophysical Exploration Company. Later when he had many calls from California and Oregon he made his headquarters at Reno, 105 Lake Street. "I first met Mr. Ferrin when he was called to a mine close to my property and somewhat closer to that shaft you fell into/' said Collins. It always was a good producer of high grade are. It had no outcrop but was discovered when a lumber firm, which owns the ground, was bulldozing a road. The lumber firm leased the property and then began the history of one of California's best gold mines. "The first operators, a cooperative group, never handled less than ounce ore. Their production was never given out. After several years they sold to a single operator who, according to his own word, took out a million dollars. All of a sudden he lost his ore and concluded the mine was through. He sold out to a Reno, Nevada,. company, which paid him 99

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$80,000, half down. They needed operation money so took in a wealthy rice grower who knew nothing about mining. The head of the company was involved in litigation elsewhere where he was required to refund money or sweat it out in jail. The rice grower kept putting up money, most of it going to keep the company head a free man. The rice man finally got on to the deal and took over. It was at this time that Ferrin entered the picture. I "Ferrin's geophysical instrument showed that the are loss was due to a fault but that it could again be encountered not very far from the shaft. To convince the operator a drill hole was put down which produced the are. So pleased was the operator that Ferrin was given an interest and a cash contract to report on the entire propery. «After trying his instrument on the next location Ferrin announced that the gold are would be found at a depth of 200 feet. His drill picked up the ore at 203 feet. In the second hole he encountered ore at 202 feet. Several other holes were drilled on the property, after geophysical tests, the cores of which assayed well. About that time a Denver, Colorado, engineer came representing a Canadian company. He spent three weeks in Placerville trying to make a deal to purchase the mine, offering $1,100,000 for it. The operator and the owners got to figuring the possible income tax. As the property had no cost to deduct, the tax would be skyhigh, so the offer was turned down." Joe took in every word Mr. Collins had to say. He was intrigued with all details of the Ferrin geophysical surveys. "Why don't more mining companies use these surveys and save a lot of cost, trouble and hard work?" "They don't believe in it," responded Collins. ~~Their engineers have steered them along certain lines for years, and to accept anything new would be to find much of their mining education was wasted. That wouldn't do." "You once told me you met Mr. Ferrin when he was working on that mine; what did he have to say about what his instrument can do?" questioned Joe. "He didn't say a great deal and I don't blame him. There isn't another instrument exactly like his that anybody knows of. It is made over according to his ideas, and I know of nobody that gets proven results as he does. There might be others claiming to do it but I have never heard of or seen any proof:~ "When you talked to Mr. Ferrin how did he explain the working of his instrument?" questioned Joe. "The only explanation he gave me was this: every metal or mineral has its individual wave length. You can note that when you examine a picture taken in a spectrographic analysis. There are lines on the photo for each mineral separated from each other. When he is testing ground for a certain mineral he tunes out all others so any reaction he gets is

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due to the presence of the mineral he is looking for. A geologist who had given Ferrin's methods a lot of study went for advice to Cal Tech. The professor there in charge of geophysical engineering agreed that Ferrin can do what he claims but the professor was at a loss to know how Ferrin could determine at what depth the are would occur. That was the only thing that stymied the professor. I'd say Mr. Ferrin really has something." "Outside of our favorite mining publication what do the others have to print about Ferrin and his instrument?" queried Joe.

a

"As far as I know, nothing. I guess it is too revolutionary for them. It's too far beyond what they can learn in the mining schools, I guess. The Journal made a close check with all the mines that employed Ferrin and went to a great deal of trouble to get all the details of each job. One of the last The Journal published was one up in Sierra County at that gold town of Alleghany. Everyone who has a claim in and around Alleghany is privileged to believe they have another Sixteen-to-One. Production of a number of the camp's gold mines has proven it to be the state's richest. "Well, for sixteen years the owner of four claims in the Alleghany district tried to get a patent on them. Apparently he had the goods because at one time the office of the Bureau of Land Management at Sacramento approved the patent and sent its report on to Washington. Here the Agricultural Departmenfs Forest Service objected. The claim owner, Thomas J. P. Shannon of Redlands, California, to their notion hadn't made a discovery sufficient to cause the 'prudent man' to throw up his job and start mining. At this juncture Mr. Shannon employed Mr. Ferrin. His instrument told him where to drill. Under 45 feet of overburden he encountered the gold vein. Proceeding a short distance deeper he produced a core which he turned over to the engineers of the Forest Service. Ferrin wanted the Forest Service to make their own assays. The assay came back $266.00 to the ton in gold, rich enough for a half dozen good mines. "Mr. Shannon got his patent but only a short time ago I read in The Journal that he passed away." As Joe checked on the accomplishments of the Ferrin Geophysical Exploration Company he made up his mind that to start gold mining without a Ferrin survey was out of the question. He was intent on getting more· data on the subject and made up his mind to meet Ferrin at his first opportunity. He broached the matter to Mr. Collins. "That would be fine but first I have another pressing job for you," said Collins. "Day by day the gold critics become more pressing in Washington. You read about it in the papers every day, and furthermore they are getting closer to the real truth about the situation. In today's mail I received my copy of Charley Willis's Pay Dirt, the Arizona Small Miners' organ, published in Phoenix. It runs a story that Sen. Mike Mansfield of Montana, the administration's number one man in the

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Senate, has come out for a raise in the gold price, stating 'the $35.00 price should be scrapped.' I think we should get out an air mail letter to the senator at once, backing him up to the fullest extent. With what he has done for the Democrats he should have a lot of influence. \Vhat do you say?" "Sounds all right," responded Joe. However, what I learned before I left New York from our congressman is that the President doesn't have the say about the gold price. He isn't running the show; he's only the mouthpiece for the Secretary of the Treasury and the Federal Reserve Bank. He gets his orders from those two agencies. No doubt the President thinks a lot of Senator Mike but does he have influence with Treasury Secretary Dillon?" "That no doubt is true, Joe, but there could be such a thing as the President kicking over the traces. He will have to do something. He can't face the election of next year with the gold situation as it is today. I move you write to Sen. Mansfield." «1 second the motion," approved Joe. I'll unlimber my trusty typewriter." So Joe wrote the following letter: Hon. Mike Mansfield, U.S. Senate, Washington 25, D.C. Dear Senator: We 11-0te in an Arizona publication you have come out for "scrapping the $35. gold price in favor of $65. or $70." It quotes you as stating this at Butte, Montana. Why not advocate this in the Senate, which has just gone through a week in which the Gold Drain was a Number 1 problem? I believe you will agree with me that this is the Administration's Number 1 headache. As a majority leader you have done the President a good job, and the time has come when he should listen to you on this most important problem. I think you will admit that is the nation's Number 1 problem although Congress is letting others have precedence. I further think you will agree with me that the President can~t face the 1964 election with the gold problem unsettled. Right now all he thinks about is the annual imbalance of the trade outgo of dollars. That appears to be a sin of omission by the whole of Washington. They ignore that $27 billions of foreign-held dollars, standing ready to be converted to gold that we don't have. Your Administration thinks it can quiet the nation by slowing down the imbalance when those foreigners are eagerly awaiting gold. It thinks it can feed them their own currencies when they want and can have convertible currencies. Those nations who give up their convertibles must have convertible dollars when being repaid. The Administration's plan will only~ slightly delay the smash. As a majority leader you should enlighten them. You should tell them that an immediate raise as you advocate would stop the drain and force foreign -dollar holders to use those dollars to purchase our produce. That would also solve our slipping foreign trade. We hope you note that there is danger in delay. Thanking you. for your attention, I am, Sincerely, JOSEPH A. BACON. July 22, 1963

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"Well, here's the letter, Mr. Collins. I'll bet a dollar to a hole in a doughnut that Sen. Mansfield does not answer. Those senators have a habit of talking for home consumption. Take notice that Sen. Mike does not talk that way in the Senate." Later, Joe had to admit there was no answer.

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"1 guess you are right, Joe, but we got to keep at 'em. As long as we know we are right and the nation needs a gold raise that will stop the How of our Treasury gold into the hands of foreigners we must continue our fight. There are none so blind as those who won't see. Sen. Mansfield should be able to convince his administration that if Congress would put the price of gold at $105 per ounce it would have a triple accomplishment. The outflow would stop; the $15 billion of gold we can now lay our hands on would be worth $45 billion, and those foreign dollar , holders would not take out gold at that price; they'd use their dollars \ to buy our produce. I wonder if that's too simple for Washington to \ understand." I .~._ .. _______ / UAs I said before, Mr. Collins, you should be in Washington I wonder of the good people of the Mother Lode country would recall cBizz' Johnson and send you in his place." cel wouldn't think of it," replied John. "Congressman
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CHAPTER 24

Is the War Emergency Over?

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ith Joe's willingness to put aside his geophysical studies Collins brought forth a July 12, 1963 copy of the Coin World which gave a complete account of the handling of the New York case by Judge Sugarman as follows: T\VO NEW YORK MEN TO FACE TRIAL FOR VIOLATION OF U.S. GOLD LAWS A New York District Court judge- which is another statutory basis for gold taking an opposite stand from that of a regulation was not involved in Judge fellow judge in California in interpreting Mathes' ruling. the nation's gold regulations - has ruled Judge Sugarman studied the United that two New Yorkers must face trial in States versus Briddle case in California criminal court for violation of gold laws as he considered the Lane-Valle motion and executive orders. for dismissal, and he pointed out that Sidney Sugarman, United States dis- the defendants were relying on the Bridtrict judge, United States District Court, dIe decision. Southern District of New York, has deHowever, he said in his opinion, the nied a motion to dismiss a three-count indictment in the Briddle case differed indictment against Stanley Lane and Jo- from the Lane-Valle case in two respects. seph Valle, returned August 3, 1962, by The New York men were indicted on a New York grand jury. two "substantive" counts, one for acThe two men were charged by the quiring and the second for possessing government with unlawfully acquiring gold in violation of Title 12, United and holding approximately $7,500 in gold States Code, Section gSa. The California bullion without a license and with con- case contained only one count, charging spiracy to defraud the government. both acquisition and possession of gold Judge Sugarman's decision pointed up in violation of that statute. the fact that the east-west judioial twain The second difference, Judge Sugardoes not meet: William C. Mathes, judge man pointed out, is that there was no of the Federal District court of the count in the Briddle indictment charging, Southern District of California, central as in the third count against the New division, in an August 16, 1962, decision York men, a conspiracy to violate Title declared it was legal for Americans, 31, United States code. sections 440-443. other than collectors of coins issued be"If I were to follow the holding in fore 1933, to hold or possess gold. Briddle, the defendant's motion would The California case was filed under have to be granted as to both the first United States of America, plaintiff, vs. and second counts of this indictment," James Briddle and Harold Donald Mit- said Judge Sugarman. "Finding myself~ chell, defendants. The court dismissed unable to agree with Briddle insofar as the criminal indictment against the Cali- that decision affects the two substantive fornians who acquired, }:leld and trans- counts of the indictment before me, I ported 21 ounces of gold bullion without state my reasons . . . :" a license. The Judge then proceeded to review Dr. Leland Howard, direotor, Office of the history and reasoning behind the Domestic Gold and Silver Operations, regulations involving gold, starting with said earlier the California case· had no World War I, and said in the light of bearing on the holding of gold bullion .this history he could not accept the Caliby .private individuals. He pointed out fornia judge's thinking that President that on March 25 the government re- Truman and President Eisenhower's pronewed the court battle to declare the clamation and executive orders merely gold holding illegal a~d that legislation prolonged the great depression of 1933. Judge Sugarman summed up the gold of 1933-1934 and executive orders of four presidents, f,rom Franklin D. Roosevelt regulations of the nation in his opinion as follows, as he spelled them out in conto John F. Kennedy still stand. Dr. Howard said the Gold Reserve act, densed form:

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«Based upon a presidential proclamation on April 5, 1933, of a national emergency in banking, President Roosevelt invoked the control of gold permitted by the Trading with the enemy Act and on August 28, 1933 in Executive Order No. 6260 set forth the method of establishing and maintaining that control. "President Truman proclaimed a new and different national emergency on December 16, 1950 caused by the world conquest of communist imperialism. "President Eisenhower, on November 29, 1960 and again on January 14, 1961, because of and to meet the continuing national emergency declared by President Truman continued the control of gold in the manner adopted by President Roosevelt originally, on August 28, 1933 with certain amendments thereto, not here pertinent. "The criminal sanctions contained in Section 5 (b) of the Trading with the enemy Act as amended, Title 12 U.S.C. No. 95a were applicable to violations of Executive Orders No. 10896 and No. 10905 and were in full force on May 23, 1962, the date of the crimes charged in counts one and two of the indictment herein. "By the March 9, 1933 amendment to the Trading with the enemy Act, the Congress delegated to the President the power, by the proclamation of a national emergency, to make operable in the various ways mentioned in Section 5 ( b) of that Act, Titile 12 U.S.C. No. 95a, the control of gold and made the violation of any such presidential orders punishable by fine and imprisonment or both. This, the House Judicial Committee accepted as a postulate by its conunittee prints of March 18, 1958 and January 25, 1962, the latter as recently as three and one-half months before the crimes charged in the first and second counts of this indictment. I discern no persuasive reason to do otherwise. "Had President Eisenhower simply repeated the appropriate language of Proclamation No. 2914 and that of Executive Order No. 6260 it could not be seriously agreed that the effect would have

been to prolong the 'Great Depression: "On the contrary it would have been clearly the proclamation of a distinct national emergency caused by communist imperialism and the activation of the provisions of Section 5 ( b) of the Trading with the enemy Act as amended, Title 12 U.S.C. No. 95a, including the criminal sanctions therein contained. "That he chose to incorporate them by reference does not, in my view, alter the result. Accordingly, the first two counts of the indictment each state a public offense. "As to the third count, charging a conspiracy to violate the Gold Reserve Act of 1934 as amended, defendants' sole reliance upon Fuller vs. United States, 114 F.2d 693 (9th Cir. 1940) is misplaced. The indictment in that case did "not charge a conspiracy to defraud the United States as does the present indictment. It simply charged a conspiracy to acquire and transport gold without the license required by the Gold Reserve Act of 1934. "In that form, as the Fuller decision emphasizes, it charged a conspiracy to commit an offense against and not to defraud the United States. Inasmuch as the Act permitted, by certain exceptions therein contained, the acquisition and possession of certain gold without a license, the indictment was held defective for failure to allege that defendant was not within those exceptions, for if he was, his acquisition and possession of gold was not an offense. The present indictment charges a conspiracy to violate the Gold Reserve Act of 1934 and the regulations issued thereunder and thereby "to defraud the United States in the exercise of its governmental functions of regulating the value of money, stabilizing the exchange value of the dollar and regulating the acquisition . . . (and) holding . . • of gold" without a license. It states the crime of conspiring to defraud the government under Title 18 U.S. code, section 371 and it is therefore unnecessary to allege that defendants were not within thosen excepted from the license requirement.

~·W ell,

thaes that,n said Joe. You could not expect anything else from a New York grand jury or a New York federal judge. They are under the thumbs of Wall Street bankers, the Treasury Department and the Federal Reserve bankers. We even have a Wall Streeter for Treasury Secretary, Mr. Douglas Dillon. What can we expect?"

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«It does look like we are sewed up pretty tight," responded Mr. Collins. "The Eastern banker knows little of the Western producer's problems and cares less. The Eastern 'money changers' are not willing to give the Western gold producers any say in what their gold is worth in these days of inflation. The price of everything else has tripled. The bankers have a reason for holding the price of gold to the 1933 level. When their international conspirators, the International Monetary Fund and its aneWorld Bank, get all our gold you will know their reason. But let's no\v look over those California cases and the decision of the California judge with which our New York friend, Judge Sugarman does not agree. We will find it in The Journal. It's on page 15 of its October, 1962 issue and reads: FEDERAL COURT VOIDS GOLD RESERVE LAW; HELD NO LONGER NECESSARY (From Los Angeles Herald-Examiner) Los Angeles, Aug. 17-A Federal judge here today threw out of court charges brought under the anti-gold hoarding presidential decree dating back to FDR's bank holiday of March, 1933.

Had Gold Bullion Federal Judge Willian Mathes dismissed charges of possession of 21 ounces of gold bullion, brought against James Briddle, 32 and Harold D. Mitchell, 44. The two business men had been engaged in what they thought was a perfectly legal plan to bring Mexican gold into the United States. Was for Emergency Only The "gold reserve" presidential order was issued in a time of national emergency. President Truman later kept it on the books because he said the Communist threat constituted a national emergency. Judge Mathes took today the attitude that the national emergency no longer exists. He said: "If we use the Communist menace in

this fashion as an emergency and declare ourselves in a crisis. I think it improper to act like a Communist just to fight the Communists.

Treasury Using Red Tactics "In Communist countries the executive oan declare a violation to be a crime and it is a crime, but here it is up to Congress to declare an act to be a crime." Quotes Kennedy: IiNo Crisis" W. Bryan Osborne, attorney for the two men, read the court from a recent issue of The Los Angele~ Herald-Examiner quoting President Kennedy as saying that we have no national crisis.(Sent in by H. R. Hildebrand, 1319 Orange Grove, Glendale 5, Calif.) Editor's Note.- The federal judge who several years ago handled an appeal in a similar case in Portland, Ore., ended his opinion with the statement that the emergency being over and our government refusing to repeal the law, was not only damaging our monetary system but also holding back the development of our gold producing states.

«So there you have the California case," said Collins. ~'I can't see that it is any different than the New York case. In both, men are accused of 'acquiring and holding gold bullion.' I think Judge Sugarman's decision is just a lot of words to satisfy the, 'money changers' and the Justice Department. He has to live with them so he can't go far afield from their usual thinking. "There was a follow-up story in The Journal on the same matter, taken from The Los Angeles Times, telling of the decision of the Justice Department not to appeal the case handled in Los Angeles by Judge Mathes. It's rather important especially when the Justice Department shows a change of heart. Here's what it said:

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FEDERAL COURT VOIDS ANTI-GOLD LAW; JUSTICE DEPARTMENT WILL NOT APPEAL

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In the October issue of The Journal we printed an article concerning a court case in Los Angeles. The defendants were accused of having 21 ounces of gold bullion in their possession. The Judge threw the case out of court and held that the law no longer applies. Now comes the announcement in The Los Angeles Times that the Justice Department will not appeal the case. So, if you have any gold bullion buried in the backyard, you'll be happy to know there is now some question whether Uncle Sam can send you to jail if he finds out. The government has been able to punish gold hoarders as felons on the basis of President Roosevelt's 1933 executive ord er issue d during the d ark days of the bank holiday. A depression-born congressional act still stands unchalleneged as authority for the government to sue gold hoarders in civil proceedings _ for triple damages. But in the field of criminal prosecution it· appears the government has thrown in the towel, at least, for the time being. Appeal Withdrawn

The Justice Department has filed notice in Federal District Court here that it is withdrawing its appeal to the U.S. Supreme Court in a case involving two Southern California businessmen. The men, James Briddle, 32, of Bak-

ersfield, and Harold Donald Mitchell, 44. of 2259 Santa Rosa Dr., Altadena, were named in a grand jury felony indictment charging that they "acquired, held and transported" 21 oz. of gold bullion. No Criminal Violation

However, U.S. District Judge William C. Mathes threw the case out of court, agreeing with defense attorney W. Bryan Osborne that Mr. Roosevelt's 1933 executive order was no longer in effect. Therefore, the judge ruled, there is no criminal law for the men to violate in possessing gold bullion. May Ask for New Law

The Justice Department. which first filed notice of appeal to 'the Supreme Court, by-passing the Circuit Court of Appeals, by scrapping the appeal may be indicating that it agrees with Mathes. Or it may simply be indicating it is planning to ask Congress for a new law. Where did Briddle and Mitohell get the bullion? Osborne said it was an assay sample in a business arrangement wherein they planned to buy gold in Mexico for $32.50 an ounce, f.o.b. Tiajuana and sell it to the U.S. Mint in San Francisco for the official price of jl,lst under $35 an ounce. An order issued last year banning U.S. citizens from possessing gold in foreign countries torpedoed the plan.

"While it would appear that we are getting places when it comes to the rights of gold miners, it is a significant fact that only two newspapers in the whole United States printed he news of the Justice Department backing up on that case handled by the California Judge," volunteered Mr. Collins. "That came out in the April, 1963 issue of the American Mercury, page 65. Can i~ be that the international gold grabbers have that much influence with the American newspapers? I saved the American Mercury's statement. Here it is:" Y.

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WHY THE SILENCE? JUDGE RULES THAT AMERICANS CAN LAWFULLY OWN GOLD Los Angeles - Is it still unlawful for American citizens to possess gold (except for certain jewelry, tooth crowns and collector's coins)? Only one or two U.S. newspapers have carried reports on an important federal court decision which now gives Americans freedom enjoyed by residents of most other nations. The federal court of the southern district of California on August 16, 1962, held that the federal government no longer has the right to confiscate gold.

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Since 1933, U.S. presidents - to cooperate with international banking interests and the Soviet Union - have issued presidential «decrees" prohibiting Americans from «holding" gold. Judge Mathes of the California court pOinted out that there is nothing in the Constitution which would permit "the Congress to delegate to the executive the power to make criminal what was theretofore lawful" - the private ownership of gold - except in a national emergency. As a matter of fact, the Roosevelt Administration seized gold during the depression under the so-call 1917 "Trading With the Enemy Act.» President Kennedy's order against holding gold, (officially known as Executive Order No. 6260) is supposedly based upon the Korean hostilities which came to an end more than ten years ago. To use such far-fetched excuses, says Judge Mathes, "would be to condone the methods of the enemy. For if the President of the United States is permitted to create crimes by fiat and ukase, without Constitutional mandate, there is little to choose between their system and ours. " It is notewarthy that Bobby Kennedy's Justice Department began an appeal of this decision and then dropped the appeal. Because this case is extremely important to American freedom and to our national economy, the lack of publicity it has received suggests an official program of silence.

«That 'Why silence' of the American Mercury is a logical question," said Joe. "It no doubt is more news management of the administration. And foxy Bobby Kennedy is pretty smart in dropping the appeal. He could not put it on without a lot of publicity and thafs just what the administration wants to avoid until its foreign friends get all our gold at the world's lowest figure. "When the American people wake up and find all that gold gone and in a further awakening find their monetary system is no good without gold backing, what do you think will be their next move, Mr. Collns?" CCNothing more than what I have been saying for years. For thousands of years the world financiers have learned that it takes gold to make a substantial monetary system. We willieam that too but it will be too late to hold on to any of our $35.00 gold. We will pay through the nose to get it back from our foreign friends. And we won't get it back for less than $100.00 per ounce. And who do you suppose will. make the $65 per ounce profit? I just can't see why our Congress can be so dumb and so involved in follOWing the administration into national bankruptcy." "It's got me guessing too," said Joe. "Will there be an awakening before it is too late?" "That should be up to our newspapers;" answered Mr. Collins. "Those published in the Gold Mining districts should be the first to lead, as their economy needs operating gold. mines. The others, especially the big city

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dailies, should follow on behalf of a sound national monetary system. None of them appear to realize what gold means to a sound dollar and a Number One aid to foreign trade. Do you think we could get Connie to sell this to her boss?" "I hardly think the local paper would see it even though this gold region of EI Dorado needs it more than any other part of the nation,,' responded Joe. '
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"N at a line," answered Joe. 'Writing Congressmen is just a waste of time, eHort and money - since an air-mail stamp has gone up to eight cents. I sometimes wonder what we would have to do to get a group in Congress who would really oppose the rape of our gold supply. They all seem to be sold on turning all our gold over to foreigners. And that's what will happen if Congress still continues to obey the Bretton Woods Agreement. Further, they won't let us mine any new gold. It's beyond me. How~ver, I feel there is one hope: The Democrats can't face reelection with our present montary situation. And there isn't a ghost of a chance of it getting better under present policies. If the Republicans don't use it in 1964 they don't know how to win an election. Perhaps we should sound them oue' "In one breath you say it's no use to write, and in the next you want to write some more letters," said Mr. Collins. "1 have the same thoughts

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myself; we can't give up. The only thing that's helpful in gaining our purpose is that conditions are as bad as they are." "'In the meantime I must get back to my geophysical investigation. If Harold Ferrin keeps on proving his system anyone is foolish to start mining without first engaging his services," said Joe .

• CHAPTER 25

J!oe Hears About A Real Gold Mine oe got out Mr. Collins' Journal file to check further on the work of the Ferrin Geophysical Exploration Company. He was especially intrigued with the work done in EI Dorado County. He was drawn to that location after carefully reading of Ferrin's work, and was pleased to note it was near Mr. Collins' mine.

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In checking the June, 1961 issue of The Journal, Joe read the report of a company making arrangements to lease the property. Concerning the mine The Journal said: In reporting on the geophysical work, followed by drilling, done by Harold Ferrin of Sierra Diamond Drill Company. The Journal in past issues revealed the property to be one of California's richest. The January. 1950 issue contains the following: Proves Up Two More Ore Locations

Mr. Ferrin was in The Journal office November 16. He brought maps showing the resultg of two more drill holes, one in which his instrument said he would get the gold ore at a depth of 200 feet and another at 270. One of these is 1,400 feet away from the nearest of the original three drillings, the drill passing into a gold vein at exactly 200 feet of depth. It cut this vein at an angle, computation later giving it a width of 12 feet and ore assay as high as $24. The center 5 feet is rich. After passing through the first vein there was a footage of broken gold hearing ground, not as rich as the veins, of approximately 20 feet, when a similar and parallel vein of like richness was encountered. The entire area of approximately 46 feet wide is all gold bearing. either of the veins being big and rich enough to support a highly commercial operation, the entire 46 feet being an ideal open pit operation once uncovered.

Not a Characteristic East Belt Mine

The property is located in the East Belt of the Mother Lode, in many other locations not noted for wide veins or long ore shoots. To date the operators have run one shoot over 700 fee+ and are still in ore. This, Ferrin states, is remarkable. for the East Belt. The veins run eastwest. At no place is there any outcrop. When a former operator ran out of ore, due to a fault, a bulldozer was worked overtime looking for new ore unsuccessfully. It was only when Ferrin was called in that he located the faulted ore and put down two more holes, 303 and 302 feet deep, that put the mine back in buiness. An estimate of the additional ore located may he gained by the fact that the owners of the mineral rights are asking $300,000 for it. They are now receiving 10 per cent gross royalty, with the amount of production to date well past two million dollars. Government Take Hurts Deal

Two months ago a Canadian company offered $1,100,000 for the property and operation and are willing to up this price with the location of new ore reserves. However, the proposed sellers would be hit for so much capital gain that they would come out of the deal with only a

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shoe string. A Canadian geophysicist has been on the ground lately and begging Ferrin to go to Canada with his instrument. We

believe Harold is pretty well satisfied with the fact the Mother Lode in the future will do its share· in paying off the national debt.

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Reading over the above Joe was further intrigued: Who ever heard of a rich body of gold ore 46 feet wide. He'd have to consult Mr. Collins on it. To a greenhorn it looked as if working the 46 feet of ore in connection with the mine would be the thing to do. This needs investigation, thought Joe. The day's mail was of much interest to Joe. In it was the long-Iookedfor letter from Congressman Walter Baring of Nevada, and a very unexpected one from Millie Manning. The Congressman wrote:

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"I have been traveling for the last twelve days and, consequently did not get your letter until my return to Washington. I appreoiate your comments relating to the urban affairs bill, so I am sending you copies of my releases whi<:h I know did some good toward defeating this bill which would lead us into centralized control. "Even though I attended the gold hearings at Sacramento, I myself,_ do not believe we can get the bill out of the Interior Committee and signed by the President. All four of my gold bills are before the Banking and Currency Committee, and I have been to the Treasury, as you know, and I know where the opposition comes from. Backdoor Spending

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"Actually, the route via the Interior Committee would be labeled backdoor spending, for we bypass the Treasury Department, and therefore, I think this would be enough to kill it. "With the national debt at $315 billion, I am only hopeful that the Administration will see the futility of spending ~selves out of existence and will change

their position on gold. The internationalists are certainly running this country, and a few more years of foreign aid will just about polish us off. As you know, there are' bills in here to do away with gold and silver. All I c~n say in this regard is that there are a few of us here who will fight to the end should they ever press the enactment of these bills. It was my own Senator Key Pitman who dictated the silver purchase paper, and Senator Me-Carran who fought for it for years, and I know that the Nevada delegation will fight bitterly should they press to do away with either gold or silver. They criticize people if they write patriotic letters, but they don't criticize this powerful group of leftists, namely the ADA, which is just as bad for the country on the other side of the ledger. I for one, think that the powerful leftist group is more dangerous because they are in power more than the patriotic groups. There has to be a return of government to those who respect the Constitution. WALTER S. BARING Congressman for Nevada.

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Reading over Walter Baring's letter, Mr. Collins said~i:d~=kIfo-W-­ that Mr. Baring was a Democrat I'd say he'd make a good Republican." ~'There is such a thing as 'a lot of good Democrats getting fed up on the administration and turning toward the Conservative group. The Nevada congressman's letter reads very much as if he would qualify for a Conservative. I'm very much interested in his ideas about the gold bills that have been introduced. He gives those bonus bills, which would be heard by an Interior committee, little chance of passing. HThat idea of getting a raise in the price of gold by way of the Interior Department is old and worn out. It was first originated by Clair Engle when he was chairman of an Interior sub-committee. He called it a
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rency Committee. By this time Clair has seen that his 'new approach' won't work but the Western gold congressmen who followed him still think they can fool their constituents into believing they are still working for them. I am glad Baring is showing them the error of their ways," added Collins. "There should be more in Congress who speak out in Washington and not only in their home districts." "Isn't that a new crime of the New Frontier - bills to do away with both gold and silver in our monetary system?" asked Joe. "That's a new one on me," said John. "The next question I'd want to ask is: If our government does away with its hard money who's going to get it? I know that foreigners are getting our gold; who is in on the silver racket?"

"If you want my idea," answered Joe, "we need a government within our government as a watch dog. We citizens can't do the job. If you will excuse me I have another letter that will need some attention. It is from a New York girl who likes me as a New York newspaper man but is off on me as a California gold miner." "I will excuse you to take time off to see if she has changed her mind," said Mr. Collins. The letter: Dear Joe: You have been in California for months now and 1 haven't heard from you - not even a postcard. You could have been sick and died or been scalped by Indians and I would never have known what happened to you. Evelyn says by now one of those speedy western girls no doubt has you lassoed. Whenever I see Harold on his not-too-frequent trips home he puts me off with "Nothing for publication." You newspaper men are too smart. If you can quit thinking about gold and gold mines for a few minutes please write. I really am interested in what you are doing and what's happening to you, but most of aU when you are going to quit Calif.()rnia and come back to New York. the newspaper srike is over and you can get your job back with a raise. You know, as I told you, I could love you as a big city news man. So let me know when you will be headed back to me and the big city. With love and affection, MILLIE.

Well, thought Joe, how did she ever get the idea that I would be so ready to pull up stakes and head back to the snows of New York. Maybe I did not impress her with the idea it was California or bust. When I get time I will have to see that she is so informed. Mrs. Collins noted letters were getting Joe's attention. She hoped everything was all right in Joe's home town. "I guess they are," answered Joe. "Except when I left New York one young lady didn't believe I had seen enough of the big city to do me a lifetime." "Well, don't be too hard on the girls, especiany those that are interested in you," said Mrs. Collins. "1 don't blame the girl for not losing interest in you."

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«Thanks, Mrs. Collins. It's really New York that I am off on. Twentyfive years of it is all I can stand." «I'm glad you like it here in California, Joe. Your coming has done a lot for John. Before that he was taking less and less interest in life. Your being with him has brought on a change for which I am very thankful.)~

~~I

didn't realize that, Mrs. Collins. I stiU think I'm the one to be thankful. With both my father and mother gone you and John have more than taken their place. I will never forget what you both have done for me." Joe had recov~red completely from his broken leg and moved out to his camp at Mr. Collins' mine. The question now was whether to locate the claims on which the 50-foot shaft was located or consider something else. He could not get away from considering the location in which Harold Ferrin had found the gold ore body 46 feet wide. Being 200 feet underground was the problem. He would have to check on the ownership, in the County Assessor's office. In his report on the ground Ferrin did not make it plain as to whether it was a part of the mine or not. First of all, of course, he'd have to talk it over with Mr. Collins. Collins was thoroughly familiar with all of the Ferrin geophysical reports, especially the one that had arrested Joe's attention. It was too near his own mine to be overlooked. In· discussing it Collins said: «By itself I don't think it would make a mine but in connection with the existing mine it has excellent possibilities. If you like, I will accompany you to the Assessor's office and check on ownerships." Joe agreed, and together they went to the courthouse. The mine property was drawn out in the plat books and apparently did not contain the ground on which Ferrin had located the massive 46 feet of gold are, it being approximately 1,400 feet off and appearing in the Assessor's maps as government land. This startling disclosure caused Collins and Joe to cease their investigation and retire to the Collins home for a discussion. «With all the publicity that piece of ground has had 1 wonder why in thunder it is still vacant," said John. ""I can't understand that."

"I think I can give you an answer," Joe said. "If Ferrin's work was accepted generally by mining people, it would be a different story. But with ilinety:-nine out of a hundred passing it up as just another <doodlebug' contraption you can account for the lack of interest. For years mine owners have been fooled by <doodlebuggers' and they no longer pay attention to their claims. They have been used to doing their mining the hard way and won't consider any other. That's the way 1 would explain it." ""That sounds logical," responded John, "and it puts you in a good spot. You are thoroughly convinced that Ferrin's work is on the level. You have his map he.. made from his geophysical findings, the report showing the ore encountered at depths indicated by his instrument, and the assays of his drill cores. You are a lucky boy. The fact that nobody 113

c--

believes in Ferrin's ability fixes it fine for you. All that you have to do is 'to locate the ground. I suggest you do it right after September 1st. That eliminates your doing assessment work until next year. You can use the Ferrin report as discovery work." "That sounds good; and 1 won't have to bother with that shaft 1 fell into. And what about a Ferrin report as 'discovery' work?" questioned Joe.

'1 don't see how they can refuse to approve it. Remember what you learned about what the Forest Service was driven to do when Ferrin used his instrument on that Sierra County ground? He let them make their own assays on the ore he drilled into at the depths his instrument indicated he would find it. What more do you want?" "Usually what does 'discovery' work consist of?" inquired Joe. ~---

"You should have a copy of the
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filed for patents on all the grant lands, which they were granted on the QT. "In the meantime prospectors not interested in coal or iron had made many discoveries of the other minerals on the railroad lands, especially gold, silver and copper. They were ordered off their claims by the railroad company. Some of the locators were rich enough to fight the railroad in court, one of the cases going as high as the U.S. Supreme Court. And here's where the miners got another crooked deal. That court ruled that the granting of the patents to the railroad company was definite evidence that no mineral except coal and iron occurred on the grant lands. This decision was made in the face of thousands of discoveries. It is one of which 1 believe the highest court in the land is not veqr prou '"_----' "I remember one case down in Tehachapi. Dan McGrew pe'ited/ up a claim on which his gold ore was running $125.00 per ton. He was ordered off the ground by a lime company, leasing from the railroad company. Dan was a special friend of a Colorado senator, who for three years directed Dan's legal steps. The case came to a final decision with all the evidence in Dan's favor. That decision would have upset the ruling of the Supreme Court. It was never made, with the railroad continuing to hold much of the grant lands illegally. So don't file any locations on those lands marked 'RR' unless you have plenty of time and money for lawsuits." <: ~ «Thanks again, John," said Joe, "for addii1gUrterta"my mining edu-- cation. I guess this 'RR' land matter is just a case of 'to him who hath J shall be given'." /"./" ',.,

e ore Joe left Placerville that evening he remembered he had an uncompleted date with Connie. Before quitting time he called at her office to remind her. She was pleased that he remembered. "You have a good memory, Joe," she said. Anybody that will fall 50 feet into a mine shaft and be laid up weeks with a broken leg and still remember a date has a very good memory. I have been so interested in your getting back on your feet that I didn't remember." "Will you keep the date?" inquired Joe. "Of course, silly. Wasn't it lucky we had that date?" So after two months Joe and Connie had their belated dinner. They had much to talk about. Joe was interested in what it takes to get out a country weekly and listened with interest to the happenings of Connie's five-day week. He couldn't help but contrast it with the rush of a New York daily and its numerous editions. "You can be glad you are working on a weekly in Placerville," he told Connie. Evidently Connie had been in touch with Mrs. Collins of later. She had learned something of Joe's personal affairs in the big city. She did not know how to approach the matter but she did want to find out what Joe's feelings were about the girl he had left in New York. Finally she concluded a direct approach was the only way. She knew Joe wouldn't

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advance any information on the subject. «What's the latest from Millie?" she ventured. "What do you know about Millie; who's been talking?" queried Joe. «Perhaps a little bird," answered Connie. "And the little bird is my good friend, Mrs. Collins?" "I'm not saying, but anyway I've heard about you and that New Yorker so you might as well tell me all about her. I'm interested." "I could let you off with 'no comment," but that would give you the idea that I really have a girl in New York. There's nothing to it. My pal's wife thought she had a match made. after having us to dinner several times. We took in a show just before I left for California. I thought r d sound her out. She thought she might like me as aNew Yorker newspaper man but drew the line at a California gold miner. That's as far as I and Millie Manning ever went. There's no story about the girl I left behind me." "So you are whole heart and fancy free," said Connie. «That's it," responded Joe. And so passed an enjoyable evening. Joe couldn't help but think of Connie as a real companion, and he was of the opinion Connie had a like opinion of him. They were just good friends. Joe let Connie know that he was getting close on the trail of a good gold mining property and for a few weeks he would be busy complying with the government regulations that would make it his. "N a publicity of course," said Connie. "But \vhen you do make the big strike I want you to know that my paper gets the scoop." "That's a deal," said Joe. However, unless Washington makes up its mind to do something about the price of gold, the strike may be a long time off. How about that paper of yours throwing some hop into Congressman 'Bizz' Johnson? U.S. gold is going fast into the hands of foreigners. We need to stop the drain and reopen our mines, or else." "The folks around here seem to think Harold Johnson is a pretty good congressman," said Connie. "How about some of your New York congressmen ?" "Oh, they are under banker control. We don't expect anything from them except to take Wall Street orders. But a congressman from this district, containing nineteen gold producing counties, should have different ideas. He should take his orders from closer to home. Oh, well, things are looking better right now. Nearly every day some congressional committee has the administration or Treasury Secretary Dillon, on the carpet asking what can be done to stop the gold drain. It can't go on much longer. And this is for you: if there were no such things as gold mines I would never have met you."

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"

"Well, thanks, Joe. I'm glad you like me and I want to thank you for a delightful evening." Joe felt the same about the evening, and in parting at Connie's home he let her know about it.

.

Before leaving Placerville that evening Joe made a date with Mr. Collins at which he would get his help in locating his claims. He was in the best of spirits driving back to his camp, enjoying the moonlight, the odor of the forest and the thought that he had some wonderful friends in California. He now felt he was getting somewhere in 'quest of a good gold mine and would soon have a real report to mail Harold. He was happier than he'd been for a long time. Joe had borrowed Mr. Collins' copy of the Legal Guide and put in a day reading up on the law, rules and regulations on the location of mining claims. He found that he had three bosses: the Forest Service of the Department of Agriculture, the Bureau of Land Management of the Interior Department, and the State of California. He brought that out the next day when he met Collins. --'1bat's true," said John. «However, stay away from those bureaucrats just as long as you can. If you know the law and all their regulations you won't have to hunt them up. Let them come to see you, and when they do give them as little information as you can get by with. If they carried on their business, observing the real intent of the law you could trust them. Their whole program is to reduce the mining in the West until such time as the prospectors and miners give up in disgust. But when you know the law and stick to it they have no other way to go except ) along with you. We pay them salaries and a lot of expense solely for the encouraging of mining. You will find that the encouragement they give \ / '___. _~-~~l. So watch your step when you start dealing with the bur~aucrats. \ / On September 2, 1963, Joe and Mr. Collins were on the groun~ Harold Ferrin had located and described in his report. It was the ground \ on which he had located the parallel veins with gold bearing placer between. The first vein, 12 feet wide was at. a depth of 200 feet; the second I at 270 feet. In between these was the broken gold bearing quartz, which ) could be termed a placer. However, on the advice of Mr. Collins, Joe ~nded locating the ground ~e claims. ___ --/ . -/-~.-________________ . After several days' work the locating was done. Three claims each measured 600 feet wide and 1,500 feet long. The corners were marked by 4-inch posts or stones at least 18 inches high. In the middle of the end lines, or 300 feet in, posts or rocks were also established. A Notice of Location was posted ~ each c~. __---------------. ,~--- . - . l...--When The notkes were posted Joe inquired as to when the notice had to be recorded with the County Recorder. John brought out that a locator had 90 days in which to record. Some, however, record as soon as the location work was done. This was done, he said, to prevent claim jumping, but if Joe wanted to avoid publicity he could take the full 90 days, at which time he could also record his discovery work. "I don't think there is any hurry as right now gold mining is as dead as a dodo bird," said John. "The miners all think Washington will never give us a 117

raise in the gold price; they have given up hope; they are not interested. You have almost got the entire West to yourself. No doubt as soon as you record your claims and discovery work you will begin to get some attention from the Forest Service. You are in the EI Dorado National Forest and the boys will be caning on you. So I'd advise that you take full 90 days. Joe hadn't thought he would have to name his claims until John inquired, "'What names are you going to give these claims? That's one of the requirements." "That never entered my mind," answered Joe. I didn't know they had to be named, but if so we'll name 'em. What do you suggest, Mr. Col· ?" I Ins. "The Myrtle Creek has had a lot of play and if you are thinking about hooking it on to your three claims how about Myrtle Creek Extension, No.1, 2 and 3?" "Sounds good," said Joe. "'But how did you know I had designs on Myrtle Creek? I thought I figured that out all by myself." "That's the only thing to do if you want a real mining property and I presumed that was your intention. That would be another reason to put off your recording for the 90 days. If you want a lease on tvIyrtle Creek you will have to go at it mighty easy. When the mine owners get an idea somebody wants their property they get mighty cagey. So take it easy." ~
Mr. Collins. I'll give that a lot of planning and if it is not asking too much I will need your help." «You have it," replied John. Joe now figured he was getting some place and would be in the business of mining if conditions were right and finances were available. He would bring Harold up to date with plans. He'd have to do it in detail, so began a long letter. September 3, 1963. Dear Harold: It begins to look as if 1 am getting some place. I am all set to locate three gold claims that have all the marks of being bonanzas. Just think of two veins, each 12 feet wide and assaying $25.00 to the ton in gold. In between these parallel veins is a body of gold bearing broken slate. The ground taken in with the two veins and the placer between extends for a width of 46 feet. Can you imagine that much gold all in one place? The only problem in mining this vast body of gold bearing material is that it is 200 feet underground. That will have to be worked out. This is only half the story. A few hundred feet to the north of my three claims is the famous Myrtle Creek mine which has produced upwards of three million dollars. It is now idle. It is owned by local people whom I can easily contact. I know you will be interested in its history.

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..

It was discovered by lumber people. \Vhile bulldozing a road they cut a high grade gold vein. The lumber company didn't want to mine so leased it to a group of local miners. They had no trouble making money, as none of the are ran less than an ounce ($35.00) to the ton. This group operated the mine for several years but never gave out their total production. The next operator was a North Sacramento man. He took a million dollars from its veins when all of a sudden he ran out of are. He thought the mine was through so sold it to a Reno, Nevada company for $80,000. The head of this group was in 'dutch' with the law. He induced a rich California rice grower to come in with him. Instead of putting the rice man's money into operation of the Myrtle Creek he used it to keep out of jail. It wasn't long before the rice man got on to the deal, got himself a superintendent and took over. But they still hadn't found their ore.

..

About that time Harold Ferrin of the Ferrin Geophysical Exploration Co. entered the picture. He put his instrument on the ground and assured the operator he could again put them in touch with their ore and they could continue mining it through their shaft. This statement needed proving, so Ferrin then drilled to the location indicated by his instrument and picked up the are. So the mine was again in business. After Ferrin demonstrated the wealth of the property with other drill hole3 a Canadian company sent an engineer to check the property. They offered $1,100,000 for it. A French company, with headquarters in New York, was also interested. However, the operators and owners of the ground turned down the offer, fearing an excessive amount of income tax. Shortly after, a fire made the mill and the plant a complete loss and the mine has been shut down since. Now Harold, this is what I'm leading up to: The three claims which I have located are on ground contiguous to the Tnine. Drifts in the mine workings are headed to my claims. As explained to you before, the claims contain a body of gold bearing are 46 feet wide: two 12-foot parallel high grade veins with a body of gold bearing placer in between. Continuing the workings of the mine into this vast body of ore would, I believe, make one of California's richest gold mines. As it now stands, r have the three claims. Quoting our friend, Mr. Collins, gold mining is dead throughout the "Vest. It would be itnpossible for the owners of the mine to interest operators. No one here believes the administration will do anything about gold. This accounts for the lack of interest. If we acted soon, say, within the next six months, I believe we could lease the mine if we can demonstrate our ability to operate. Within the next three months I will have located our three claims, follOWing which we should begin negotiations to get hold of the mine. r can give you a lot more information but I think this will do for a preliminary. In the meantime learn all you can about what's in store for gold with the administration and CO:D.gress. Your boss, the Honorable Benj. Goodwin, should be able to bring you up to the very latest, being a member of the House Banking and Currency Committee. With best wishes to you and Evelyn,

JOE.

Awaiting a reply from Harold, Joe began gathering more information on the mine. In its October, 1956, report the State Division of Mines stated the property contained two main nearly parallel gold bearing veins, 40 feet apart. One is 5 to 6 feet wide, the other 5 to 12 feet. These are exceptionally wide yeins for the East Belt Mother Lode. Being high grade made the property that much more valuable.

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CHAPTER 26

Master Minding The G,old Drain n a short time Joe received an air mail reply from Harold. He must be pretty well interested, thought Joe, who remembered that it was only early that year that Harold tried hard to talk him out of going West.

I

His letter: Dear Joe: Received your long letter which was certainly jnteresting. It begins to look as if you are getting pretty well next to conditions. However, I guess you owe a lot of that to your friend, Mr. Collins. I would enjoy meeting him some time. And don't go falling into any more mine shafts. I don't think I need to give you the same advice about falling in love. You never were much of a hand for the girls. I let the boss, Congressman Ben, read your letter. He's almost as interested as I am. He is going to dig into the gold situation here in Congress and promises to give me the low-down as he picks it up. He did give me this: The U.S. gold reserve is now down to its lowest level since 1939. It doesn't speak well for the master minds now managing our monetary affairs. The gold stock, he says, will continue to decline and even the Administration is looking for an increase of up to $4 billion in the imbalance of payments. This means that in our business with the rest of the world we have run $4 billion in the red just in one year. And the worst part of the situation is that that difference is all payable in gold. When we signed the Bretton Woods Agreement we agreed to convert into gold all dollars held by foreign countries. And listen, there are now over 27 billions in foreign-held dollars awaiting conversion. This, Congressman Ben says, is a very unpleasant prospect, and none of the propaganda artists in Washington or in the Federal Reserve Bank can cope with the truth. What the Administration has done to stop the gold drain Ben calls "childish measurettes" which won't work. He thinks Washington is hoping the general public will have faith in its "measurettes" until the next election. I'll continue digging and keep you infonned. And when the time comes let me know if and on what terms that mine can be leased. Evelyn joins me in best regards to you. No news from Millie. If you are interested, ask. Sincerely, HAROLD.

Both Joe and Mr. Collins read Harold's letter with much interest. «I don't understand why it is that \",hen a congressman has such a grasp of the situation as does your friend Goodwin he doesn't do something about it," remarked Collins. "Ben is from New York, the money capital," answered Joe. "The Federal Reserve lives in New York as do all the rest of the money changers. Ben is one of their representatives. He's got to live with them and be answerable to them. I believe it's the Western congressmen who really are most to blame. For years they have known all about the plight of the gold producing states and now they know how the loss of gold is

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~ endangering our entire economy. They have a double reason f01_' action. What's holding them back?"

f

·'1 guess you have me answered," admitted John. "The urge for a better price for gold should start with the West. I note you hring out a double reason for Western action: the benefit to the Western gold producer and the benefit to our economy at large. It's going to be tough if we lose all our gold, fail to reopen our own mines and have to repurchase our lost gold from the foreign holders. That's when we'll be held up. The foreigners are not going to let us have that gold back for $35.00 per ounce. That's a foregone conclusion."

Taking the advice of Mr. Collins, Joe was delaying the recording of his location notices with the County Recorder at Placerville. He notified Harold and gave him the reason for the delay. Harold was showing increased interest in the gold project and began making an intensive study of the gold and monetary system as far as Washington was concerned. He wanted to get on all sides of it. He dug into the reasons as to why we, the greatest nation on the globe, were running so far behind in our balance of payments. Here's what he learned, which he promptly sent to Joe:

.'."'-'"--..~

<---~

The reason we are not earning enough foreign exchange to compensate for our expenses abroad, and our purchases abroad, is that we are not competing with anything like our full capacity. And I the primary reason for this is that the) wage level has climbed to artifioial highs;" another is because automahBIl is couraged; a third is the high cost of maintaining a government that spends a $100 billion a year; and a fourth is because our capital plant is in too many cases nearly obsolete. The villain in the piece, in the first and second instances, is monopoly labor union power; in the third and fourth, it 's unrestrained, and shortsighted governent. If we could reduce the cost of some

ars:

of our key manufacturing products by as much as 15 or 20 per cent, we might hope to sell a billion or two or three dollars worth of goods abroad, in excess of the present rate. Increased foreign sales would mean increased employment here; increased employment means increased production and, among other things, increased revenue for the government. But as long as there are monopoly labor unions around controlling labor markets, and threatening strikes, local and national, the minute you profess reluctance to pay an electrician $200 for a 20-hour week, or a diesel fireman $150 for doing nothing at all, then we cannot hope to recover our competitive advantages. "-)

•

Everything that Harold filed with Joe was given close consideration by both him and Mr. Collins. "That's very good stuH. I wonder why it doesn't influence Washington thinking," said John. «The administration is hoping that foreign conditions will catch up with ours and that will settle the cat hop. I just wonder how long it will take for Europeans to pay electricians $200 for a 20-hour week and a diesel fireman $150 for sitting in his cab. And did you notice that over in Albuquerque recently

,tI1"::~,dIt:i:~t P~::bt::t

*:: ::0w:::'

we

c~:~g:r

that are going to our minds about bringing up foreign living stan¢lards with ours. Long \ ago we wore out that ;idea, but Washington hasn't found it out yet," re- \ sponded Joe. ~.

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~----------------~--------~------------------------------

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The following week Harold was back with some more stuff hot off the New York press griddle. A New York Journal American writer, Sam Shulsky, opened an article with: «I am sick of the whole gold controversy." The Northern Miner of Toronto, Canada, came back at him with

this: He is not alone in being sick of hearing about gold. The President is sick, and the Treasury Secretary, Mr. Dillon is sicker still. Mr. Dillion had to admit to the Joint Economic Committee of Congress last week that he had changed his position. The V.S. imbalance in foreign payments would, he confessed, require "several years" to correct. He used to be quite optimistic. Correction was just a year or so away was his former advice. But recent progress has been "unsatisfactory." It is quite an admission. Northern Miner readers do not need to be told that it is this everlasting im-

balance in international payments which has decreased the V.S. gold supply to the lowest point in 24 years, has occasioned a loss of $10 billion of gold, and brought the mighty U.S.A. to the point where it must jockey with other and lesser countries in ingenious but demeaning schemes to spin out the remaining gold before two alternatives confront the Administration: (1) Raise the American price and try and attract more gold into the Treasury coffers, or, (2) take the $12 billion of gold now set aside for backing of the monetary structure and throw it into the general pot.

«Isn't that a new idea, John; taking the $12 billion in gold we have to back up our paper and throw it into the general pot?" asked Joe. «No, that idea has been buzzing around Congress for the past two sessions. A new Congressman from New York, Mr. Abe Multer, has twice introduced a bill that would do that stunt. That $12 billion, you know, must be legally kept as a reserve to back up $48 billion worth of deposits the Member Banks have with the Federal Reserve system. It is further reserve for the notes, the paper money the Federal Reserve Bank has issued, the stuff you carry around in your wallet. The first time Mr. Multer introduced his bill the Banking and Currency Committee hurridly called a hearing. It was hoped to put it over before America woke up. There were over five hundred who filed objections and requests to be heard at the hearing. The hearing was cancelled. The Banking and Currency Committee couldn't face the music. '"Before Bretton Woods Agreement and when we had $24 billion in gold in our Treasury, every bit of paper money was backed by 90 cents in gold. After World War II and when we began tu finance the world it dropped to 40 cents. President Roosevelt wanted to scatter more gold around the world, and induced Congress to pass a bill lowering the gold requirement to 25 cents on the dollar. It is at that point now. If Congress ever passes the Multer Bill, the Lord help us. Those Communists and foreigners in Washington will do it if they get an opportunity. It behooves some level heads in Congress to watch that foreign-loving crowd.

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CHAPTER 27

How Does Sen. Barry Goldwater Stand? "Thanks for the new information about our money and the way Washington is trying to handle it," said Joe. "Surely there is somebody in Congress to speak up before all the gold leaves the country. I note in today's paper that Senator Barry Goldwater will support ,Rockefeller if nominated by the Republicans. He gives as his reason, <mainly because u.s. cannot stand another four Democratic years.' Do you think there would be any change in the gold situation if Rocky got into the White House?" "I do not," answered John. The Democrats are carrying out the monetary plans of the Rockefeller family. Rocky's brother is one of New York's leading bankers. No, I do not think we'd help the gold miner or the taxpayer in general one bit by electing Rockefeller. He is for building up the International Monetary Fund with Uncle Sam's gold." «Well, what can we do about it? I wonder if Goldwater really wants to see Rockefeller in the White House," questioned Joe. «It wouldn't hurt to get his idea," answered Collins. "Surely he isn't in favor of the way foreigners take over our gold. Why not write him?" "Do you think I would have any better luck with him than with others we have written to in Washington? So far the only one who has answered is Senator Harry F. Byrd, and he let an assistant in the Treasury write the letter. Trying to get actual representation out of our Congressmen is certainly discouraging. However, I will try Senator Barry. He may be the exception. Joe wrote the following to the Arizona senator: Hon. Barry Goldwater, U.S. Senate, Washington 25, D.C. Dear Senator: We were pleased to hear the radio report of Sen. Russell of Georgia, a leading Democrat, approve your candidacy for the presidency. We believe the South as a whole will approve Sen. Russell's stand. We don't believe in the plan of the Congressional Republicans of California to send an uninstructed delegation to the San Francisco Convention. We would much prefer to let California Republicans select their man with a presidential primary. In the past we have had to take whoever the GOP thrust upon us, thus voiding the primary law. Western Republicans are very anxious this time to (and by that we mean the Conservatives) take a leading part in naming the candidate. We believe the South will join the West in not only getting back to a constitutional government but also in a revival of more attention to the protection of American business and industry. Less attention to foreign development and more to home industries we must have. We hope you will take a lead in this policy. Coming from a Western state you are fully aware of the poor sup-

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port domestic mining has had during the present administration. And at this time we think it's timely to put the question: "Will the Democrats dare face reelection with the balance of payments in its present deplorable state?" Are they willing to continue converting foreign held dollars until the Treasury gold supply is gone? Do they approve of a purely paper money policy? We think you will agree with us that without a quick monetary reform movement that's what now faces us. Can we forsake our national money policy and depend upon continued borrowing from the International Monetary Fund? These are questions that should now be put to the Administration and to its Congressional support. In addition to Civil Rights, on which you have an excellent grasp, the voters must be made aware of our present dangerous lTIOnetary condition. Giving up our gold and refusing to reopen our domestic gold mines should be charged to the present Administration. Sincerely, JOSEPH A. BACON.

Marking time before locating his three claims previous to opening negotiations for leaSing the Myrtle Creek, Joe was pleased to again hear from Harold. Harold had started on interviews with individual Congressmen at the suggestion of his boss, Benj. Goodwin. He tackled the Honorable Thomas B. Curtis of Missouri who appeared to be taking quite an interest in the nation's monetary affairs. Curtis agreed to give Harold an answer by letter. Here's what he wrote: ear Mr. Wilson: I have read your letter with interest. As you know I am greatly concerned with the loss of gold that is occurring as a result of our balance of payments deficit, and on July 8th I introduced a resolution in the House of Representatives expressing the sense of Congress that achievement of balance of payments equilibrium should receive highest priority in the formulation of our national economic policy. I do feel, however that the IMF has a real value because of the vital role it plays in stabilizing the world payments mechanism. A breakdown of this system would involve heavy costs for the United States and the entire Free World. In my view, a breakdown of this sort might very well occur if the U.S. were to raise the price of gold at this time. Thank you for your letter expressing your thoughts on this problem. You may be certain that I will continue to give developments in this field my closest attention. With best wishes. Sincerely, THOMAS

B.

CURTIS.

Mr. Collins and Joe read the Curtis letter with much interest, being startled with the congressman's idea of the International Monetary Fund being so helpful to the United States. "Of all things it's America and its gold that's helping to build the IMF," said Collins. "To be able to serve the world's bankers the IMF must have our gold and that's what they are driving for. And unless our Congress takes some immediate action the plot is all set for the foreigners to clean us of every ounce of gold we have. As we learned recently, they hold over $27 billion all subject to conversion. That's the reason the drain of gold is to continue. We can stop it only by raising the price or renig on the Bretton Woods Agreement, which means an embargo on gold.

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"The gentleman from ~1issouri is thinking more of the International ~1onetary Fund than he is of his own United States. Why should we build up a foreign dominated monetary organization at our expense? If we let it all get into foreign hands how much do you think we will have to pay for it to get enough of it back to keep our money worth anything? That's the deal we have got into by agreeing to the deal cooked up at Bretton Woods. What a profit somebody is going to make when the IMF cleans up! Mr. Curtis thinks if we upset the IMF deal by raising our gold price it will cause a breakdown in the IMF, resulting in heavy costs to the U.S. The Missouri congressman would have to talk pretty fast to make me believe that statement. With its tie-in with the Central Banks of Europe the IMF is gathering up our gold at the cheapest price in the world. Fine business for them, but where is it leading us? I just wonder if there are many congressmen laboring under a similar delusion. If this is a condition in Congress it certainly needs an expose. It wouldn't hurt to have your pal Harold check into the situation. And although we don't get many results by writing congressmen perhaps we had better sound out some more." "N ot a bad idea," said Joe. So far we have left 'Bizz' Jahnson alone. Why not try him out? With the Treasury Department having shot do\vn his bonus bill and his measure to set up a gold procurement division under the Interior Department, he now might be in a mood to listen to some horse sense. I'll try him . Here goes: Hon. Harold (Bizz) Johnson. House Office Building, Washington 25, D.C. Dear Mr. Congressman: Now that the Treasury Department and the money changers have shot down your bonus bill and your measure to establish an Interior Procurement Agency, don't you think you should change your tactics and switch to a bill that would stop the gold drain? As you know, the gold drain is the administration's worst headache. You know by this time that the bankers are not going to let any Interior Committee handle any bill dealing with gold. You can't by-pass the Banking & Currency Committee. So now why not a bill to stop the gold drain? It is inevitable that all our gold will leave the country under present conditions. You can stop the drain with a higher gold price and render your administration and the nation in general a much desired service. Our Treasury gold should be set at a high enough price to force the foreign dollar holder to pass up asking for gold and use their dollar to buy our produce. That's the only move left for Congress to take to save the foundation of our monetary system. Would appreciate your comment. Sincerely, JOSEPH

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BACON.

Hon. Barry Goldwater, U.S. Senate, Washington 25, D.C. Dear Senator: We read in today's papers that you will support Rockefeller if nominated mainly because the U.S. can't stand another four years of the present Administration. Have you any reason to believe that, especially as pertains to our monetary and gold policy, Gov. Rockefeller will be any different than under the Democrats? Washington is now carrying out the gold policies of the Rockefeller family. Would Rockefeller make any changes? Our group is for you, but like many other members of the Senate you have remained quiet about the drain of our Treasury gold and what it will lead to. Secretary Dillon has tried a half dozen moves to stop it, all of which failed. He keeps talking about reducing the balance of payments, completely ignoring the more than $27 billion of foreign held dollars that must be converted with gold that we do not have. No one in Congress has given consideration to the idea that if Congress would revalue gold the foreign dollar holders would use their dollars to purchase U.S. goods and products. The question is always asked: "Will the Democrats try to face reelection without taking care of the gold situation?" There has been no answer. That question is headache No.1 of the present administration. This applies also to Mr. Dillon and the Federal Reserve bankers. The Republican Party doesn't appear to have the guts to face this issue or to use it. We would appreciate very much your stand on this situation. Thanking you for an early reply, I am, Sincerely yours, Placerville, California JOSEPH A. BACON.

The next time Joe met ~1r. Collins in Placerville he had a letter from a senator, the Honorable Ernest Gruening of Alaska, who had been taking a leading part in gold legislation, but like everybody else was getting no place. «At least he answered, but his letter is of no help or encouragement to a man who wants to go gold mining." uLet's have a reading of it," said

~1r.

Collins. He read the following:

Dear Mr. Bacon: Thank you for your letter of August 1 and the interesting newspaper article enclosed concerning hearings I conducted recently on legislation to aid the gold mining industry. While I realize that proposals so far considered to increase produc~ tion of gold would not greatly increase the supply necessary to restore the national gold reserve to a healthy condition, I believe we must work for measures that will maximize gold production. Certainly, this is important to domestic gold miners, therefore, to the domestic economy. Further, whatever gold would be added to our national reserve would be a worthwhile contribution. As for measures to halt the alarming drain on our gold reserve caused by the foreign aid program and other policies of foreign rela~ tions, I have been opposing and will continue to oppose legislation which has the effect of further depleting our national gold reserve. With best wishes, I remain Cordially yours, ERNEST GRUENING, U.S.S.

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"You're right, Joe. That letter isn't of much benefit to a gold miner or anyone else for that matter," put in John. "'The gentleman from Alaska doesn't appear to realize where help - immediate help - is needed. Opposing moves of the administration which are increasing foreign held dollars - we would expect that of any congressman, but that isn't the, number one problem right now. It's the 27 billion foreign held dollars that is hurting. Something must be done to stop the forced conversion of those dollars when now we have available only about $3 billion in gold to carryon the conversion." «I agree with you, Mr. Collins, and doesn't it get you down, that damnable Bretton Woods Agreement, by which we tied ourselves up to giving foreigners gold for their paper dollars was pushed over on us by Communists in the employ of our government. A number of years ago I remember of reading about this in The Journal. It was a copyrighted article from the American Mercury telling that the deal was hatched up at a secret meeting on St. Simon's Island off the coast of Georgia. The article gave 70 of the names of the 90 who attended. It was the crummiest and lousiest of Communists, socialists and a few Americans that I have ever seen in print. That's who cooked up that deal and why decent Americans now in Congress would live another minute bound by such a damnable agreement is more than I can figure out. I wonder if 1 could get that over to Senator Gruening." «It won't hurt to try, Joe," responded Mr. Collins. That St. Simon's \ Island appears to be where all the bad deals are cooked up for us Amer- ) icans. Back in 1913 that Federal Reserve Bank was hatched in the same P lace." .

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«I don't know much about the
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«Yes, Joe, I do remember that. But what gets me'i?~thegutting has taken place and nobody appears to be the wiser. It now takes three dollars to do the work of one. In the gutting process nearly $200 billion of purchasing power was lost. And now if Congress does not stop the gold drain and save what gold we can still lay our hands on, there will be more gutting. Congress as a whole must have sold out to those who are promoting a One World Government, the International Monetary Fund and its One-World Bank. . «I wonder if it would be possible to get a check on Congressmen as to whether or not they approve our putting the taxpayers' money and 127

gold into that damnable international pot," questioned Joe. "1 think they should all be put on the spot." "Well, you already have one admitting that the IMF is of real value to us. When we begin buying our gold back from the IMF I wonder what he will think." "Before I forget it," continued Mr. Collins, "I want to review some of Sylvia Porter's writings in the last five issues of the Los Angeles Tinles on devaluing the dollar, which in a simpler statement means raising the price of gold." "OK," answered Joe. '1 never can see much in her financial writing. Of herself I don't think she knows much. She's always quoting some", body else." ~

"You said it. Thaes the way she started her series which has run in the Times during the past five days. Right off the reel she quotes Mr. William McChesney Martin, head of the Federal Reserve Bank. He says to raise the price of gold would be the end of the world. How silly can a big banker get? He admits that the gold drain (we have lost almost $10 billion) is serious and must be stopped. However, in the whole series of five articles there is no plan put forward that will stop it. This leads me to believe that Martin and the Treasury Secretary, Mr. Dillon, do not want it stopped. Ies going just to suit their plans -landing our gold into the coffers of the One-WorId Bank. All that the Administration is doing or promising is smoke screen until all our gold is gone. "Miss Porter tries to tell us that raising the price of gold would be as bad as if Russia took over the nation. How silly can she get? I hope few Americans get scared of such drivel. "The writer goes on about the calamities that would occur in prices of commodities in case we devalue the dollar. Roosevelt devalued the dollar in 1934 by 70 per cent, and it had no eHect on prices, what we would pay for imports or what we would get for exports. I just wonder if business will get scared after reading her stuff. It's too bad the newspapers can't get an intelligent writer to do their devaluation stuff. "When sometime after Roosevelt devalued the dollar England did the same to her pound, dropping it from $4.03 to $2.80, this had no effect on the prices of commodities. The lady admits that other nations are devaluing and she admits the moves to be helpful. But not for the U.S. Why? For the simple reason that the International Monetary gang, now gathering in our gold, as yet hasn't taken it all in at the lowly price of $35.00 per ounce." 128

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CHAPTER 28

Governor Rockefeller and the Gold Miner he next time Joe was in Placerville at the Collins' home he broached the subject of how and when he should attempt to get a lease on the Myrtle Creek. He was holding off recording his three claims until well along in the late fall, thus keeping his plans quiet. He was willing that other people should think that gold mining was a lost industry until he had tied up the property he wanted. In his almost a year of looking over the gold fields of the great Sierra mining region, which included the famous ~fother Lode, he was of the opinion that regardless of what Washington did about the gold price, proper management could make a go of the Myrtle Creek with the addition of his three claims.

T

Joe looked to Mr. Collins to guide him in getting that lease. He realized John was an old-timer with an excellent reputation. He owned his own mine and stood for all that was honest in mining. He was lucky in having been so fortunate as to have made such a connection. He mentioned the subject of the lease to John. Mr. Collins was of the opinion that it was yet early. After Joe located and recorded his three claims he thought would be soon enough. He would sound out the owners, both of whom lived in Placerville, and find out if they had any new plans for the property. He was of the opinion that they, like everybody living on the Mother Lode, were not optimistic about the government doing anything that would aid the gold miners. All the bills that had been introduced to reopen the gold mines had been beaten down by the Administration. There didn't appear to be any immediate hope for a change but anyway it would not hurt to sound out the owners in the near future. Collins explained this to Joe and then drew his attention to a headline on the front page of the Los Angeles Times in which Gov. Nelson A. Rockefeller of New York was quoted in big type as attacking the Kennedy monetary policies. They both read the article with interest, John stating, "It's about time the Republicans were getting on that subject. You'd think they would never let up on the mess the administration had gotten the nation into financially. I wonder if we could give the New York governor the idea of putting the question to the Democrats as follows: WILL YOU ATTEMPT GOING INTO A RE-ELECTION CAMPAIGN WITHOUT HAVING STOPPED THE GOLD DRAIN?" "Boy, that would be a good one," enthused Joe. "It would have a double edge. If they did something which stopped the gold drainand there are but two moves that would do that - it would be helpful to the gold miner. If they didn't and the Republicans continued throughout the 1964 campaign asking that same question, the voters would finally get on to what a substantial gold reserve means to their economy." "That sounds good," said John. «Suppose we cook up a letter to 'Rocky.' Give him a pat on the back for going after the Democrats and

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add a few pointers as to what we think should be done." «Will do," said Joe. «I will get after it right away and forget about the mine lease for the time being." The next day the following letter went to Governor Rockefeller: Hon. Nelson A. Rockefeller, Governor of New York, Albany, N. Y. Dear Governor: We read today in the Los Angeles Times of your attack on the Kennedy monetary policies and commend you for treating this as a Number 1 matter in what's wrong with the Administration. In your recommendations for correction you failed to bring out the principal factor in the whole U.S. monetary system that needs immediate action. It's true the Kennedy spending you point out has brought us to near financial collapse, but what's worrying Washington right now is the $27 billion of our currency held by foreigners AND CONVERTIBLE TO GOLD. If we are to continue abiding by the Bretton Woods Agreement in converting the foreign held dollars, where will we get the gold? At the present time there is but $3 billion in gold in the Treasury to continue the conversion. Will we be forced to sacrifice the $12 billion in gold legally backing Federal Reserve Notes and deposits? You know there is such a bill in Congress right now for that purpose by Congressman Multer of your state. So you see, Governor, the No. 1 move right NOW is to stop the conversion. There are two ways: a gold price raise (sufficient to cause foreigners to use their dollars to purchase our produce) or an embargo on gold. I think you will agree with us that either of these two moves must be taken. And getting down to politics, why don't Republican leaders put forward the question: WILL DEMOCRATS ATTEMPT RE-ELECTION WITHOUT STOPPING THE GOLD DRAIN? When the voter gets On to what the gold reserve means to him he would turn against the Administration. However, we should ask that question every day. Thank you for your comment. Sincerely, JOSEPH A. BACON.

Joe sent a copy of the Rockefeller letter to Harold asking him for a report on anything new on the Washington front. In a few days he received an air-mail reply. "My boss, Congressman Ben, and I have been keeping our ears to the ground. We don't like what we pick up. One of the New York senators, Mr. Javits, was recently quoted in the papers as
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dangerous to our monetary position. He would be one of the first to pull for the Multer bill which would throw the $12 billion in gold backing the Federal Reserve Deposits and notes into the general pot so that we could keep on shifting our gold into foreign hands. What the Administration and the Treasury are doing to stop the flood of gold to foreign countries is only a smoke screen. They are for the build-up of the international banking plans which need our gold - all of it - if they are to be successful. Yes, Rocky and his friend, Javits are dangerous to a U.S. monetary system if we are to have one .

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CHAPTER 29

Prospector Joe Has A Visitor ne Saturday shortly before noon Joe was busy at his camp checking over notes and correspondence when he heard a car door slam and O a "Whoo-hoo" from a female voice. When he saw it was Connie she greeted him with "Surprise! Do I get a welcome when 1 come unannounced?" "You sure do," answered Joe. "You can't imagine how lonesome it gets out here. Furthermore there isn't anybody I'd want to see more than you. Welcome to the mining camp, such as it is." "Hope you don't feel hurt but I brought a ready-made lunch with me and all the makings of a real dinner. And my stomach feels that it's lunch time right now." "If you think that will hurt me you don't know how to hurt a fellow. Let me help you in with the loot. Now, 1 know I'm going to get it. 1 haven't done mv breakfast dishes. We'll have to do 'em or we won't have anything to eat on."

"Well that won't take long," said Connie. But you're just like every other old batch. Before 1 leave here I ,,,ill have to give you a few instructions on the womanly art of keeping house. You sure need it, or is it a wife that's missing?" "I guess one would come handy," remarked Joe. «I never learned housekeeping in a newspaper office. How come you are an expert and still work in a newspaper office?" "Reserve that <expert' idea. I don't know any more about housekeeping than mother made us learn. I guess some mornings that I get up late and have to rush off to the office my apartment wouldn't take any prizes." "Well, let's see what's for lunch," said Joe. "You came at the right time. I didn't have much for breakfast and now I have a real appetite. You're a life saver."

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<TIn glad I'm some good for you," smiled Connie. "We will proceed to see if I brought along the right food. I may fall down at judging men's ideas about eating."

"I'll take a chance," said Joe. "'After nearly a year of batching you will find me, I think, not hard to please. So on with the lunch." Connie didn't have any complaints to make about how Joe greeted her offerings. He thoroughly enjoyed himself. "If this is a sample, regular fare must be out of this world. Thanks for remembering the old batch. When we get the dishes done I'm for declaring a half holiday and showing you around the diggings. The weather is grand and the trees are now putting on their fall dress. After 25 years in New York I never knew there was country like this. I have often heard them talking about God's country. They must have meant EI Dorado County. "If they did they didn't miss it much," answered Connie. "Of course I have seen other parts of California, which you are pleased to call the 'Golden State'. I don't think I'm wrong when I say California has everything."

"I will agree with you if it will show me some gold," said Joe. "'I'm for again demonstrating that it is the 'Golden State'. Mr. Collins tells me he thinks 90 per cent of the state's gold is still in the ground. He points to the fact that in only two places have gold mines gone to any great depth, Jackson, Amador County and Grass Valley, Nevada County. With lunch and the housekeeping disposed of Joe and Connie set out to enjoy the afternoon. They looked over the surface of Mr. Collins' mine and his mill which had been idle ever since the government closed the gold mines during the war, with the Gold Closing Order, L-20B. "A lot of money tied up in that machinery and a lot of are in the ground for it to treat if Washington would give the word," remarked Joe. "Why is it when you say we have very little gold left in our Treasury that the government will not pay enough for gold to allow the mines to reopen?" inquired Connie. "That's what I have been writing to different Congressmen to find out," replied Joe. "I also have my pal Harold and his congressman in Washington both on the job trying to get the answer. They report very few will give them an answer; and I don't think irs because they don't know. <~1um' seems to be the word. Harold's final conclusion is that the majority of Congress is sold on giving all our gold to a foreign money concern and they don't want to raise the gold price until practically all the gold is in the hands of foreigners. After that takes place Harold thinks Congress will be willing to raise the price of gold." «But," interjected Connie, can we operate our money without gold?" «I don't think so," responded Joe. «And that's where the rub comes. We can't operate our finances without gold so we will have to start buying it back from foreigners. Although we have helped them a lot since

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the war they have never been our friends, and what do you think they are going to charge us for gold?» "So that's the racket," said Connie. "And will any of our bankers on this side of the Atlantic be in on the deal?" "That's what we haven't found out yet," replied Joe. "But considering that our monied men are never satisfied I wouldn't be a bit surprised. They surely wouldn't let 243f billion in gold leave the country without having some interest in it. What's wrong is that the United States and its business isn't big enough any more for our money changers; they have to take in the \vhole world. That's the plan of the International Monetary Fund and its One-World Bank, and they need our taxpayers' gold." "Will there be anybody in Congress that will stop this plot before it is too late?" inquired Connie. "That's the $64 question," replied Joe. "And as yet there's no one in Washington brave enough to find out the answer." Leaving Mr. Collins' mine they visited the shaft which was accountable for Joe's broken leg. Joe told Connie that although it had the makings of a good mine he now had something lined up that is so much better, that it was one shaft he would not have to go down again. "That's one time I was lucky. I had a girl friend in Placerville. Mr. and Mrs. Collins never expected me in, and unless I had made that date there would have been nobody else miss me. Somebody was looking out for me."

<'I'm glad that somebody was I," remarked Connie. "When you didn't show up in town I had a hunch something was wrong and that I was needed. You know, Joe, i1's wonderful when you feel that some one near needs you and that in following the urge the need proves to be so real as it did that time. I'll never quit giving thanks that I answered the call for help that night." «You were my guardian angel that time and I'll never stop giving thanks," said Joe. "'How about sealing that idea with a kiss, Joe. You have been neglecting me of late. A girl has got to have a reminder once in a while." "A reminder is good for the gent, too," responded Joe, and with a long blissful embrace he found out just how sweet a girl Connie really was. This was a new experience for him. He had never gone beyond enjoyable companionship with the gentler sex. He wondered if this was love and then began to further wonder why, at his age, he knew so little about girls. He certainly had been missing out on a big part of life, he wanted to conclude. "Now let's go over to the mine adjoining my three claims where I'm going to make my fortune," said Joe.
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That section of the country was beautiful and they enjoyed the walk. The early fall weather was invigorating, the forest odors from the pines and ponderosas were very pleasant and the companionship most enjoyable. But when the mine was reached the blackened remains of the mine buildings presented another picture. Mter taking a quick view of the remains Connie said, "This doesn't look like a fortune to me." "It will after the mine gets going again. I've looked all over the Mother Lode and I don't think there's a gold deposit that will compare with it," answered Joe.

"How do you know there is gold in that dark, rocky ground?" asked Connie. "We have a complete geophysical report on the ground. To verify it we have drilled to the depths indicated by the survey. With the drill"': ing we have found the are. The drill has brought it up in cores which have been assayed. So we know exactly how rich the are and how wide the gold bearing veins are. It's all mapped out for us. I admit those blackened mill buildings and the old concrete foundations don't look promising but they don't indicate what's underground. When we get to going and the are shoots are opened up we will show some rich gold are and your paper can have a real mining story. That's a promise." "I'll be waiting for it and I'm wishing you a lot of luck," said Connie. "Does Mr. Collins have as much faith in the project as you do?" she questioned. "He certainly does. He believes it to be the East Belt's greatest gold mine. All that's lacking now is the proving." Joe and Connie enjoyed another walk back to the Collins camp, and after a brief rest Connie proceeded to think about getting dinner. "J oe, it won't hurt you to have a cooking lesson. I'm not an expert but I can give you a few pointers that will be helpful," offered Connie. "Never too old to learn," replied Joe. Together, both enjoying it, they prepared the dinner. They finished partaking of it with further enjoyment when Joe noticed that it was sundown. "You'd better get over the road to the highway at Pollock Pines before it gets dark," said Joe. "It's not a very good road to drive in the dark. I'll faithfully promise to do the dishes when I come back. I want to go to the highway with you to see that you make it all right and I'll walk back." "It's too bad you have to walk," said Connie. "'I'm putting you to a lot of trouble. And even after your long walk you will hav~ to do the dishes. You will be giving me fits." "I will not," responded J oe. "It's been a long time since I have had such an enjoyable afternoon and evening. And I can't thank you enough for all of it." In a short time they reached U.S. Highway 50 at Pollock Pines. Connie stopped her car for a few last words with Joe. She said, "'I have

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--~------~--------------------------------------------------put off telling you what I have been considering. A Sacramento newspaper wants me to join their force and offers me more money than I'm getting here. I have almost made up my mind to make the move." Connie's news hit Joe rather hard. "After this wonderful day we have had now you want to spoil it with that bad news," he said. "You'd better think more than twice before you leave a nice place like Placerville to go into a big city newspaper. In Placerville you are your own boss. In Sacramento you will have a half dozen bosses. You will have to do twice the work and always be in a rush. I know what working on a big city new spa per is and I never want to do it again. It won't be long before I will be a busy mine executive, and when I want to see you I won't want to go all the way to Sacramento." "Well, said Connie, "if you feel that way about it I will change my mind. It's a good thing I haven't told the boss about giving up my job." "Furthermore," put in Joe, "now that that's settled let's seal it with a kiss. There was no objection, and Connie drove back to Placerville, marking the day as a milestone in her life. Joe, too, enjoyed his walk back to camp and before he went to bed kept his promise to do the dishes. Several days later Joe was in Placerville to see if Mr. Collins had done any investigation regarding the lease and to replenish his food supplies. John was glad to see him. However, he told Joe that it was early yet to make inquiries, holding that the worse conditions looked for gold in Washington the better it would be to get an easy lease on the mine. ~~I don't look for a gold price raise until next year and that only in case the Republicans make it so hot for the President about the loss of our gold to foreigners that he will ask Congress to do the trick," said Collins. "That's one of the best moves for the GOP to make. When there is so much worry about the gold drain they should have sense enough to use it in the election.

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"There's a good one in today's Los Angeles Times and the Chicago Tribune. I just wonder if it will get the attention of the Republicans. It heads off with this: 'EUROPEAN GRIP ON U.S. FISCAL PLANS CHARGED. A Mr. Danielian, president of the International Economic Policy Association, makes the charge. He said Europeans are looking for us to pass the Multer bill which would free $12 billion more of our gold to get into the hands of foreign dollar holders. If that bill were passed our gold would leave this country in billion lots. The tax on foreign securities held by Americans is not so much to stop the loss of gold as it is to reduce American control of business in Europe, the deal being cooked up in the Paris office of the GECD. He comes out flatfooted and says: 'European thought and leadership are in a large measure determining Washington policies as to balance of payments, fiscal and budgetary plans and agriculture plans: I just wonder what the Republicans think of that." "If that doesn't wake e'm up I don't know what will," said Joe.

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The next day John Collins drove out to his mine to see Joe and tell him the bad news about the property on which he had designs. He had to tell him that it had already been leased and the leasers were already setting up a field office. "I'll have to change my mind about the lack of interest in gold mining, the stuff I have been trying to put over on you," said John. "So mark me down as a sort of a dumb ell on the gold situation. I'm sorry you have to give up the idea of getting hold of that property. Anyway is was probably more than you could expect, and the terms would have been more than a small company could handle." "But where does that leave me?" questioned Joe. "You have your three cleams bang up against mine. I would record them immediately. With that solid 46 feet of gold bearing are you have a lot with which to deal. When the new company finds they can enter your vast body of are by way of one of their drifts they will be coming to see you. So come in to Placerville tomorrow and we will record your claims." "Furthermore," continued Collins, «with gold getting hot and a price change near, my mine is going to be a good one. You and your group can have it any time you say. Even with gold at $35.00 it's a good property. And with a few additions of more modern equipment you will be all set up to go." n\Vell, thanks, Mr. Collins. I sure did not make a mistake when I made your acquaintance on the day I arrived in California. As I understand it we have those three claims all monumented and staked. All we have to do now is to make out the location papers, post a copy on the property and record a copy with the County Recorder." «That's correct, but let's get at it," added Mr. Collins .

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CHAPTER 30

The Plot To Give Away All U. S. Gold Placerville to do his recording Joe received the following letter from Thomas B. Curtis, Republican of Missouri: I n Congressman Dear Mr. Bacon: Thank you for your letter and your further comments on our balance of payments problem and the gold outflow and the article entitled "Gold and Money." I think that raising the price of gold, while affording temporary relief from our gold shortage because foreign dollar holdings will be able to buy less gold, will have very adverse eHects in the long run because those people holding gold abroad, never knowing when the next increase in the gold priceo will come. will not want to hold their dollars. There will be even greater pressure to convert these dollars into gold.

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The role of the International Monetary Fund in the future of international trade will be to provide a base of liquidity on which such trade can be based. This liquidity is presently provided by the U.S. balance of payments deficit, and the accumulation of dollars in foreign banks. When we eliminate our deficit, and no dollars are forthcoming from the United States, there will have to be a new source of liquid funds for western expansion. I believe that the organization that can best provide this liquidity base is the International Monetary Fund. It will be independent from the working of national policy, and will thus inspire a confidence in itself that would not be forthcoming if the country's dealing with it were forced to look for the influence of national interest in its decision. I do not mean by this that the United States should do anything against its own self-interest. However, steps that must be taken in our national interest, namely correcting our balance of payments deficit create problems of internationtl liquidity that the western trade network cannot bear too frequently. Therefore, I feel an organization such as the International Monetary Fund should begin to collect the resources to deal with future liquidity problems. With best wishes. Sincerely, September 4, 1963 THOMAS B. CURTIS.

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Collins and Joe immediately got into a huddle on the Congressman's letter. UThat one certainly needs an answer," remarked the former. uThe gentleman from Missouri evidently thinks the only use we have for gold is to give it to foreigners. He doesn't seem to know that if we raised the price of gold to $105 we would clean up our gold debt with just one-third the gold. And if the foreigners don't like that price they would begin using dollars to buy our produce. uThe gent seems to be all wrapped up in the International ~1onetary Fund. And I'll bet he's a Rockefeller backer - a Liberal (liberal with OPM). Mr. Curtis writes: "Vhen we eliminate our deficit -->' it being over $27 billion which we have to pay in gold. What a chance when we haven't got the gold! And he's in favor of giving our 'liquidity' to the Fund. And Mr. Curtis believes that the IMF should 'begin to collect the resources to deal with future liquidity problems.' He doesn't need to worry about that; the Fund is gathering our gold - and fast. "So, Joe, that's your next job; write the gentleman a letter. Not that I think it will do any good, especially if Curtis is a Liberal." "O.K., Mr. Collins, but if I'm to do much more letter writing I'd better hire me a secretary." Joe wrote and mailed the following: Dear Mr. Curtis: Thanks for your letter of September 4. I can't understand your allegiance to the International Monetary Fund, which cannot take care of the free world's business unless it gets ALL of our gold. That's their aim now but where does it leave the U.S.? Are you in favor of giving all our gold to the IMF, leaving us nothing but paper money? Have you noted that the administration is now considering the Multer Bill which would eliminate the 25 cents in gold backing the Federal Reserve Deposits and Notes, so that we can continue converting to gold foreign held dollars? And do you know that there are now over 27 billions of those foreign held dollars which must be converted unless you and co-members

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} do something to stop the gold drain. And do you realize that if we stopped the drain with a higher gold price foreigners would use those dollars to buy our produce and thus take care of our foreign trade problem? I note in the news that you are a good Missouri Republican. I was laboring under the impression that due to your following the administration's fiscal policies you were a Democrat. I think you will admit that the biggest Democrat headache is the Gold Drain, yet in pre-election talks and policy making we Republicans are not even whispering about the gold loss. Don't you think bringing before the voting public what that gold loss means would be our best bet to get a change in the White House? I am afraid that with Congress following your ideas we very soon will become a third-rate nation. Sincerely, ---"---JOSEPH A. BACON.

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....-1teading it over with Joe ~1r. Collins remarked, "That's a good one. Wonder if we will get an answer." (Later Joe had to admit the lack of an answer.) "On further thought," said Joe, "1 will send a copy to Harold. He and Congressman Ben should be getting on the firing line. They are right in the midst of the deal by which Uncle Sam is to be relieved of all his gold. It's time we get some helpers in Washington." "And we sure need 'em," added John Collins. «1 was knocked for a loop upon reading my copy of the Los Angeles Times today. Take a good reading of this, a hot one on the Gold Drain by Robert S. Allen and Paul Scott. It appeared in the editorial section. 1 wonder why the Financial editor didn't handle it. Here we have been worrying about that damnable bill of Abe Multer's which would cancel the 25 cents in gold backing Federal Reserve deposits, when, if this article is true, Secretary Dillon of the Treasury Department can kill the 25-cent reserve. That would give him another $12 billion in gold to pass out to foreigners, while he thumbs his nose at Congress. That body passes a law that our money in the Federal Reserve must have gold protection and now along comes the Treasury Secretary saying there's another law which puts the first law out of business. The article brought out that in a meeting of the Joint Economic Committee, Senator Jack Miller, Republican of Iowa, asked what would be done in case the gold res~rve dropped below the required 25 cents on the dollar. There are $48 billion in Federal Reserve deposits and notes that need this backing. Secretary Dillon then said he could resort to a little-known emergency power, suspending the 25-cent law. That was news to the entire Congress and would make the Multer bill unnecessary. "That certainly puts a new light on the gold drain situation," offered Joe. If Secretary Dillon is correct he can shove all our gold out of the country where it will gradually gravitate into the coffers of the International Monetary Fund. That's the communist plan of Alger Hiss and Harry Dexter White when they deluded Congress into approving the

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Bretton Woods Agreement. Communist control of the United States could come with a weakened money system. And I say, divorcing gold from our economy is the surest way to bring on Communism.

"I just received an answer to my letter to Senator Barry Goldwater but it is disappointjng. I'll read it to you. It states: Dear Mr. Bacon: Thank you very much for your recent letter and your remarks concerning the 1964 presidential campaign. Although I am not seeking the presidential nomination and have already announced my intention of seeking re-election to a third term in the U.S. Senate in 1964, I am naturally most appreciative of your interest in this regard. I recognize, of course, that circumstances might develop which could compel me to alter my present course, but until and unless they do, I trust you will agree with me that I should devote my efforts to assuring a continuation of the opportunity to serve my country as a member of the U.S. Senate. Sincerely, September 19, 1964 BARRY COLDWATER.

UBarry doesn't give you much to go on, Joe," said Collins. "If, as the newspapers state, he is today top man for the Republican presidential nomination, and our best chance of getting rid of the Democrats, we got to know where he stands on quite a few important matters." "That's what I thought," responded Joe. "And last night when I was feeling all het up about the Dillon plan to dump all our gold, I cranked one out to the Arizona senator. I want your OK on it before it goes. Here it is:

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Han. Barry Goldwater, U.S. Senate, Washington 25, D.C. Dear Senator: Thanks for yours of the 17th, although disappointing. The matter of whether or not you are to be a contender for the presidential Republican nomination has been news every day for months. What we must have is the answers to a few outstanding leading questions from the considered candidates. So far Rockefeller won't answer on the question of what to do about the gold drain. Being a Western business man, that should be a question close to your heart. Our organization, turned down by the money managers in the consideration of all free gold bills and others pertaining to gold price raises or bonuses, had a last hope that when the drain cut our gold supply down to the legal limit ($12.3 billion) required for backing Federal Reserve Bank's deposits and notes, the Treasury Department would be forced to ask Congress for devaluation. Now we find that the 25-cent law doesn't meau anything, Treasury Secretary Dillon telling your Joint Economic Committee that our money managers are not bound by the Reserve law and can turn loose the $12.3 billion to continut:? converting foreign held dollars. Is Dillon putting one over on us or does one law actually repeal the other? If Dillon has his way about it our dollar is due for collapse. I don't believe you will support a move to take all our gold out of our national monetary system.

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-'--\j'\r----------- - - - It is very evident that the administration will go along with Dillon's plan which will put the rest of our gold in a way to be taken over by the International Monetary Fund, a foreign dominated organization. Our organization is for you. We were deeply impressed when 4,200 persons paid to hear your Los Angeles talk. However, we think every candidate and every Senate and House member should come clear on the gold drain situation. May we hear from you again? Thanks. Sincerely, JOSEPH A. BACON.

After reading the letter aloud Joe admitted it was putting Barry pretty much on the spot, but John was right back at him with: "It's time all our Senators and Representatives were getting back on the spot. With Barry now looking a likely candidate for the White House we should definitely know where he stands on our monetary policies. If a man of his type is going to back up on this most important question, like many of the congressmen are doing, it's going to be just too bad for not only us gold miners, but for every taxpayer in the nation. "Our nation has a gold reserve for just one purpose: to back up our paper money with something of value. Gold was chosen because its value is recognized by the entire world. There's a lot of sense in the statement,
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«Anyone from the gold state of Arizona knows that," responded John. "What we want to know is if Barry will go along with the Democrats, shifting our gold over to foreigners, in obedience to a Communist plot." ''I'm looking for the answer to one question which has eluded me," said Joe. "With a lot of foreigners eligible to take over our gold at a price much lower than in their free markets, why don't they grab it before Uncle Sam changes his mind and repudiates that commie agree-

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ment?" "That's a good question," responded Mr. Collins. "It's one that as yet hasn't been answered by the experts. This is my answer: The foreign dollar holders can't get their gold unless it comes through a Central Bank of Europe. The Central Banks are the biggest part of the International Monetary Fund and its One World bank. That organization has its own plan for Uncle Sam's gold and they will euchre things around until the gold lands in their vault. They don't want to approve the gold call too fast for fear of waking brain-washed America. However, they can depend upon Mr. Dillon who has finally spilled the beans." "Thanks, Mr. Collins for the answer. I was afraid some sharper would hand me that one. Received another letter today, from Senator Alan Bible of Nevada, the silver state. But it's disappointing. He writes: Dear Mr. Bacon: As to gold, I reli!ret to say I cannot hold out much hope for an outright increase in price in the immediate future. Recently our Minerals, Materials and F'uels Sub-committee held hearings on S. 1273, which would have authorized incentive payments of up to $105 an ounce for newly mined domestic gold, but the Treasury Department, as it has in both Republican and Democratic Administrations, was adamant in opposition to what it insisted on calling the «two price system for gold." This is the same position taken by the Eisenhower Administration. Accordingly, some of us concerned with our Amerioan gold mining industry and our country's plight with respec,t to gold have worked out a bill which avoids reference to price. Rather it would authorize payments based on the difference between the cost of production in 1934, when President Roosevelt raised the price of gold from $20.67 an ounce to $35.00 an ounce, and production costs today, I would appreciate your views on this proposal, a copy of which is enc1osed. Thank you for writing me, Cordially, Sept. 18, 1963. ALAN BIBLE.

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Reading Senator Bible's letter Mr. Collins remarked: "We'd better give Bible's bill a good reading. Some day, perhaps, a senator might wake up and introduce a bill that will really hit at what's keeping our gold mines closed. I will study it tonight." The next day John was ready for a report to Joe on the Bible letter and bill. He didn't like it, characterizing it another bureaucratic measure under complete regulation and control of the Secretary of the Interior. It was titled, «To Revitalize the American Gold Mining Industry.n The stated purpose was to restore profitable domestic gold mining. It would direct the Secretary to pay producers a price that would compensate

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them for the difference between operating costs as of Jan. 1, 1940 and the costs of the present, as directed by the Secretary. The producer would have to make application, his eligibility to be determined by the secretary. A Board of Differential Payments Review would be provided by the bill, procedure of such board to be established by the Secretary. Quoting directly from the bill: "The Secretary shall, by regulation, establish a procedure for review by the Board of applications of producers whose claims are denied, disallowed in part or reduced. "You'd better write Senator Bible and tell him the real trouble," recommended ~1r. Collins. "His bill won't stop the gold drain; that's the Number 1 move to make right now. And I note that Senator Kuchel of our state is a co-author. It wouldn't hurt to give him a letter also. Other authors are Senators Gruening, Bartless, both of Alaska, and Metcalf. They should know better. They are fiddling while Rome burns."

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Joe agreed to write Senator Kuchel but observed that he had just been reelected for another six years and could ride along devoting little interest to the predicament of the gold miner. "I did notice that some years ago he came out with a blast about how much gold we would have to give the foreigners, but of late he has been very quiet. No doubt as the Internationalists' plan for the disposition of Uncle Sam's gold becomes more apparent the boys on Capitol Hill are going to talk less and less about gold. They let Mr. Dillon do all the talking, which is all about what he is going to do. Anyway, I'll give Tommy, as you golden staters call him, a round-up. The next day the following went to the senior California senator: Hon. Thomas H. Kuchel, U.S. Senate, Washington 25, D.C. Dear Senator: Senator Bible has written, mailing a copy of S.2125, of which you are a co-author. I have written Senator Bible drawing attention to the fact that all gold bills, the main intention of which was aid to the miner, have been met with defeat, due to Treasury opposition. As long as Congress will take the word of Secretary Dillon and Federal Reserve head, Martin, there is no use presenting this type of bill. What is really worrying Washington and the Administration right now is the gold drain and the fact that over 27 billions of foreign held dollars await conversion to U.S. gold, when we have only $3 billions to do the job as long as we honor the Bretton Woods Agreement, a deal cooked up by Communists Hiss and White. The Republican Party has always prided itself as being the party of «hard» money, meaning currency, backed by gold. How can we live up to this reputation and obey the B. W. Agreement? Now comes the last chapter in the Communist plot to rid U.S. of its gold. At a hearing of your Joint Economic Committee, Secretary Dillon told it he does not have to obey the law which provides a 25-cent-perdollar gold backing of Federal Reserve deposits and notes. He stated to the committee there is another law by which he can tUrn loose the

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$12.3 billion in gold reserved to back our paper. Is this true? How is it that we have never before heard of this law?

The siuation has now gotten down to this: All of the attempts to stop the gold drain and the piling up of the imbalance of payments have failed. Now that they have failed, Secretary Dillon intends to use our last gold to carry out the Hiss-White Communist plot. Our "hard" money Republicans are remaining silent about the situation. If you want to win an election why not use the information this situation has developed? Thanking you for an early reply, I am, Sincerely, Sept. 28, 1963. JOSEPH A. BACON.

As Joe was mailing his effort to Senator Kuchel he received an answer from Governor Rockefeller of New York state. Now, he thought, we should get something that we can really set our teeth in. But it wasn't a letter from "Rocky," but a short note from his secretary, inclosing a statement by Mr. Rockefeller, on "The Balance of Payments - A Growing Crisis," issued to the press Sept. 2, 1963. Joe was again disappointed. He read it over carefully and passed it on to Mr. Collins, asking his opinion. John gave it the once-over. '
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\ Lode. Its fame won't last much longer unless Bizz gets in and does some pitching. I'm afraid Bizz doesn't know what its all about. I don't think he's a real gold man. I remember the first speech he made when he started to run for Congress. It was up in Nevada City, made the white spot of California by gold mining when the big depression hit us. He actually stood up before those miners and told them gold mining was through, and what they needed was the spending of government money in their district. You'd better give Bizz a good one, but take care of 'Rocky' first. Following is the letter to Mr. Rockefeller: Hon. Nelson A. Rockefeller, Governor of New York, Albany, N. Y. Dear Governor: While you were away on your European trip your secretary sent us a copy of your paper, "The Balance of Payments - A Growing Crisis," in answer to my letter to you dated Sept. 3rd, 1963. It shys away entirely from the questions asked in relation to the Gold Drain. If we want to replace Mr. Johnson with a Republican in the White House we can do it by attacking inflation and the gold loss and not with the mild treatment you give it in your paper. If I am not mistaken that paper was written by your brother, David. You write about "coming to grips with the problem," but you don't tell how. You state we should have a "vigorous and effective export drive," when Labor has priced us out of the foreign market. You don't even suggest we quit exporting labor. For instance: The Tide Water Oil Co. is having oil tankers built in Japan. With our present unemployment we need that work here. Japan is shipping steel into California, in competition with the Kaiser plant at Fontana, (this county, San Bernardino) at a price $40.00 per ton cheaper than their home price. This is the way the Democrats want us to do business, the GOP overlooking it. Getting back to the gold drain: the continued imbalance isn't the immediate danger. Foreign held dollars, subject to conversion, now amounting to over $27 billion, is what hurts. You and our Republican friends overlook what can happen if a conversion call comes all of a sudden. Further, you insist that we continue to obey the Bretton Woods Agreement, cooked up by two Communists. And now comes Treas. Secy. Doug Dillon with the statement to the Joint Economic Committee that he doesn't have to obey the law providing 25 cents in ,gold backing Federal Reserve deposits and notes. As we now have less than $3 billions in Treasury gold to continue conversion he wants to send abroad the only thing of value left behind our paper. You don't say a word about all this, neither does the GOP. We don't see how you can promote your candidacy for president and ignore the present monetary mess. As stated above, we can lick the Democrats by letting the public know the real truth. Or don't you favor such a move? Appreciating an early answer, I am, Sincerely, JOSEPH A. BACON.

Before starting his letter to Bizz J ohnson,_ Joe wanted some low-down on the Congressman. "Why do they call him 'Bizz'/' he questioned.

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"'Nell," responded John, "maybe it's part of the word 'business.' But that doesn't ring true as he hasn't been delivering when it comes to the gold miner. He's been getting the 'business' from the money changers. I note he incloses a list of the members of the House Banking and Currency Committee, headed by that Wright Patman of Texas. There are 31 members, three from California, all unfamiliar with gold mining. They didn't even put 'Bizz' on. And that Wright Patman, the chairman, is a total loss as far as gold miners are concerned. He only got to be chairman because he has been a member of the committee longer than anyone else on it. That's poor business, I would say. When his party is worrying itself sick about the gold drain Patman comes out with the statement, 'You can throw all of our gold in the ocean and the nation would get along just as well.' Can you imagine such a character being head of that committee? And further, he has sold out to the Federal Reserve Board. He promised the chairman, Mr. Martin, that he would not take up anything 'controversial' with the board when the entire gold and monetary situation is the most controversial matter in Washington today. When we have such men in the lead in Congress how can we expect to get any place with vital matters? It sure gets me down, but there's no use giving up. So write 'Bizz' a few real facts. Of course he is a Democrat and if they are sold on selling out to the Internationals, what can poor 'Bizz' do? First take a gan at the make-up of the House Banking and Currency Committee which 'Bizz' sent you. At least I will agree with 'Bizz' that that crowd wouldn't do the gold miner any good, but they should· at least listen to some one warning them about selling the American taxpayer out to a bunch of international gold grabbers. This is the line-up: CONGRESS OF THE UNITED STATES - HOUSE, OF REPRESENTATIVES COMMITTEE ON BANKING AND CURRENCY Room 1301, Longworth House Office Building Washington, D.C. Eighty-Eighth Congress WRIGHT PATMAN, Texas, Chairman Albert Rains, Ala. Bernard F. Grabowski, Conn. Abraham J. Multer, N.Y. Charles H. Wilson, Calif. William A. Barrett, Pa. Clarence E. Kilburn, N.Y. Leonor K. Sullivan, Mo. William B. Widnall, N.J. Henry S. Reuss, Wis. Engene Siler, Ky. Thomas L. Ashley, Ohio Paul A. Fino, N.Y. Charles A. Yanik, Ohio Florence P. Dwyer, N.J. William S. Moorhead, Pa. Seymour Halpern, N.Y. Robert G. Stephens, Jr., Ga. James Harvey, Mich. Fernand J. St. Germain, R.I. Oliver P. Bolton, Ohio Henry B. Gonzalez, Tex. W. E. (Bill) Brock, Tenn. Claude Pepper, Fla. Robert Taft, Jr., Ohio Joseph G. Minish, N.J. Joseph M. McDade, Pa. Charles L. Weltner, Ga. Sherman P. Lloyd, Utah Richard T. Hanna, Calif. Burt L. Talcott, Calif. Wm. Summers Johnson, Clerk and Staff Director Dear Mr. Bacon: As I have indicated to you in the past, I do believe that the present course of action in seeking a solution for the gold mining industry is through the Interior and Insular Affairs Committee on the House of Representatives and Senate. However, it is very possible that with

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Wright Patman as Chairman of the House Committee on Banking and Currency there may be in the future some change in attitude toward the gold situation. I would point out to you, however, that looking over the overall membership of the Committee, which is enclosed, a great majority of the members are residents of the area east of the Mississippi River. Few have any orientation towards the mining industry in general or the gold industry in particular. It is possible that the International Monetary Fund Meeting now going on here in Washington will come up with some revisions of the monetary systems which could alleviate this situation. I think it is too early to say now, however. In conclusion. I noted your last comments, "let's introduce some legislation to stop the gold drain." I certainly would be very happy to do anything and consider any proposal to stop the gold drain because this is an overriding problem which this country now faces. If you have any suggestions as to how this can be done or what legislation would be effective in this direction, I would be very happy to consider it. Sincerely yours, Oct. 1, 1963 HAROLD T. (Bizz) JOHNSON. Han. Harold (Bizz) Johnson, 1031 House Office Bldg., Washington 25, D.C. Dear Bizz: Thanks for yours of Oct. 1. We think you will have to give up the idea of getting a better price for gold via the Interior Department and its mining committee. The attempts that have been made, with failures, should convince you of this. . Gold is money, a precious metal, and cannot be treated as a commodity. That's simple. The bankers realize this, and even though the Banking and Currency Committee refuses to consider gold bills, it will never let an Interior committee take over its work. Furthermore, all the bills that have been introduced have been helpful only to the gold miner, while the whole nation suffers from inflation and loss of Treasury gold. You will also have to meet that argument when introducing your type of bill. Why don't you form a Gold Bloc in the House and Senate - a Joint group? We now have less than $3 billion in gold to continue converting foreign held dollars, and Secretary Dillon has told your Joint Economic Committee that he doesn't have to obey the law providing 25 cents in gold backing Federal Reserve notes and deposits. By law that requires a reserve of $12.3 billions in gold. Are you people representing the gold producing states going to let Dillon get by with the conspiracy to give all our gold away? If this happens your Congress will be held responsible. We have kept close tab on the recent meeting of the International Monetary Fund. What they call reform, both from the standpoint of the Fund's ideas and those of the Paris Club. lead only to the international group taking the rest of our gold. In fact. the IMF can't properly finance their over 100 nation members without our gold. Will Congress continue to do nothing and force U.S. to become a beggar nation - begging the IMF to keep it financially afloat? You certainly have a big obligation you are flunking, at the same time fooling your constituents with introducing bills that not only won't pass but if they did would not help the nation at large. Sincerely, JOSEPH A. BACON.

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Joe Bacon was watching his mail closely and came to Placerville nearly every other· day. That was the reason he gave John and Mrs. Collins, but they noted he was a regular caller at the newspaper office in which Connie Morrison was employed. When they showed interest and questioned him his only answer was: HN 0 .comment." "But I do have some comment on an October 15th letter I received from the office of Governor Nelson Rockefeller referring to the long (and I think intelligent) one I wrote him October 7th. It was written by a secretary, Margaret C. Fowler, and is as follows:

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Dear Mr. Bacon: Governor Rockefeller asked me to acknowledge for him your kindness in writing him in detail concerning his paper entitled "The Balance of Payments." He is glad to have your views on this troublesome problem, and I know he read your letter with much interest. With best wishes, Sincerely, MARGARET C. FOWLER. ~
Dear Governor Rockefeller! This letter is an insult to my intelligence. I listed for you a number of national problems but you refused to even comment on them, as if it is none of our business to know what an aspirant to the presidency thinks of these important matters. In reference to U.S. gold losses - with $27 billion subject to foreign call- are we to conclude that you, like the Democrats, are in favor of putting the nation on a paper basis? If so we might as well keep them in office. You are a Liberal -liberal with the taxpayers· gold. Sorry to have to write this. Sincerely, JOSEPH A. BACON.

Before shooting Rocky's letter back to him John Collins looked it over. He agreed with Joe. UBy all means," he said, u we have a voter's and taxpayer's right to know a prospective presidenfs views and policies and what he plans for us. I would have been tempted to write him a stormer. I note he now is out here in California trying to head off the start that Barry Goldwater has on him. I don't think Barry will let him get by . without forcing him to make an expose of his politics. He will have to if he gets anywhere near Barry in the primary race for the Republican nomination. «Rockefeller has no sympathy for the gold miner, nor the American taxpaying public for that matter. We have had a multi-millionaire in the White House; let's have a poorer man next time - one who knows the value of the dollar." Joe no more than got "'Rocky's" letter into the post office when he was knocked over by one from Senator Alan Bible. The senior senator from Nevada, one of the leading mining states of the nation, wrote saying what was practically a tribute to those in Washington who would

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dump the 25 cents in gold backing Federal Reserve notes and deposits in order that we could give foreigners more of the little gold we have left in the Treasury. When Joe gave it to John Collins the latter blew his top. "Of all things," he exclaimed. "How the senior senator of Nevada can put out such stuff is beyond me." He grew more angry as he read it.

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CHAPTER 31

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\ Sen. Bible Approves International Gold Plot

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Dear Mr. Bacon: As the senior Senator from one of the foremost mmmg states, I naturally am most sympathetic with the basic purpose~ of the Western Mining Council to expand and improve Western mining. I am, of course, interested particularly in gold, and I have done my best to bring about an increase in price. However, I cannot concur with the implication in your letter that Secretary Dillon is committing a "treasonable» aot when he advocates repeal of the present law requiring 25 percent gold backing for Federal Reserve notes. A number of people whose patriotism and dedication to America cannot be questioned are of the same opinion. Proponents of repeal of the gold reserve provision argue that one cannot get gold for his notes in any event, and that the only realistic backing for our paper currency is the vast resources and wealth of the United States, and the credit of our American government. It is argued that repeal of the gold provision would make our currency stronger, in that it would establish the fact that the backing for our currency was the over-all wealth of the United States- and not a diminishing and exhaustible gold supply. While proponents of this school of economic thought may be, and in my judgment are mistaken, it most certainly is not "treasonable" for them to hold such ideas. I may say that such charges on the :part of mining men do not do the cause of mining any good, in my judgment. However, I think there is little likelihood of a repeal of the gold provision in the Federal Reserve Act any time in the immediate future. This law is found in Title 12 of the United States Code. Section 41a as amended in 1954. If a bill to repeal the 25 percent reserve provision comes before Congress for approval, you can be certain that I and a number of other Senators will resist. Sincerely yours, ALAN BmLE, U. S. S.

John read it out loud and by the time he finished he was almost frothing. Hyou know, Joe," he said, «that's just what your favorite mining publisher predicted long ago. The world bankers want to get all our gold,24.6 billion dollars' worth, and then load the over $300 billion debt and the results of inflation on us poor property owners. They have already

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reduced the buying power of our meager savings by at least two-thirds, and now they want to load the big debt and the gold loss on the property of the taxpayers. If that isn't a Communist plot I'll eat my hat! "And what do you think of our Nevada friend, Senator Bible, holding that we can't question the ~patriotism' of those who back such a plot against us? And throwing all our gold out to foreigners will <make our currency stronger.' How does he get that way? So - Mr. Bible lets the cat out of the bag. And what a cat! He should hear from you, Joe, at once. Hon. Alan Bible, U. S. Senate, Washington 25, D.C. Dear Senator: As the senior Senator of Nevada, a leading mining state, you should not be blowing about what you have done for gold. You put out hundreds of press releases and hit the press on about every other subject but what your administration is dOing about getting rid of the taxpayers' gold. You are thus serving the Communist gang that framed the Bretton Woods Agreement and the international banking group that see the Communist plan as a way to get control of the $24.6 billion of gold we formerly held. If there is any reason at all that Federal Reserve notes and deposits should have a gold backing then your reverence for those who would repeal the 25-cent law (which was 40 cents until FDR started the fnternational gold shift) is certainly misplaced. And your idea that a repeal of the 25-cent law would strengthen currency is the most crack-pot idea I've heard for some time. It's more of the commie plot to destroy the dollar, and will put an additional load on the taxpayer. While you don't actually advocate the above yourself we don't see ~ you opposing it in the Senate. Backing up paper money with private property rights would be our end as a free nation. I will have to inform you that it will not even take a repeal of the 25-cent law to shift all our gold to foreign dollar holders .. Secretary Dillon has told your Joint Economic Committee that he already has a law that would offset the Reserve provision. Can you get us a copy of that law? Looks like we have been caught asleep at the switch. " Sincerely, JOSEPH A. BACON

«1 am glad you told the gentleman from Nevada that his kind words about the ·patriotism' of those who want foreigners to have all of our gold, are aiding and abetting the Communist plot to reduce our economy to that of the world's lowest nations. Senator Bible doesn't appear to know that the gold give-away was framed by Communists in the employ of our State Department. One of them, Alger Hiss, was sent to jail and the other, Harry Dexter White, committed suicide. The banking fraternity has been hit so often with the statement that they are operating under a system originated by Communists that a Hearst writer, Morrie Ryskind, took up the job of proving Mr. Hiss a saint, 'convicted by perjured testimony and framed evidence.' All you have to do is to note how well Russia is conserving her gold while we are tossing ours out to every foreigner who gets hold of a dollar.

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"Maybe you remember reading in The Journal the story of the meeting of the gang that cooked up the Bretton Woods Agreement. It was first published in the American Mercury magazine. And such a lousy bunch it was, Communists and socialists from all over the world, with a sprinkling of a few of ~1r. Bible's American 'patriots.' Tom Dewey was among them. They met on St. Simon't Island, off the coast of Georgia, and the account of what they did to the American taxpayer never did appear in any American newspaper. Perhaps there were a few more 'patriots' present as twenty refused to sign the list of those present. I suggest you recommend to Senator Bible that he secure and read a copy of Dan Smoot's 'Gold and Treachery: He might change his mind about those 'patriots: I have been reading Dan's other book, 'The Invisible Government: I just want to read you one paragraph from page 106. Listen: 'America was founded, populated and developed by people seeking escape from oppressive governments in Europe. Now our leaders ask us to give up the freedom and independence which our forebears won for us with blood and toil and valorous devotion to high ideals, to become subjects in a governmental system that would inevitably be more tyrannical than any which our forefathers rebelled against or any that presently exist, If the World Government included the despotic and oligarchic and militaristic and feudalistic and primitive systems of Asia, the Middle East, Africa and Latin America, it would necessarily become the bloodiest and most oppressive tyranny the world has ever known', ..

"'That sounds pretty bad, John," said Joe. "I wonder if it could be that bad and if we, the free people of America, would go for a deal like that." "We have already given up much of our freedom by way of laws promoted by the 'Have-Nots' and their organized minorities. To get anything from the Federal government you must give up more than you receive. When balancing time comes you will find a teriffic shortage in your freedom, wealth and property. Every day Congress is passing laws that sink us deeper into what Dan Smoot predicts. The Government shut down my gold mine because a gold miner is the freest man on earth. This was followed by a debt buildup and loss of the dollar's purchasing power that now just about equals the value of my mine. If I were now called to settle up with my government Washington would send out some of those sharpers who would chisel it down to little or nothing and I would still be in debt to Washington. "You paint a picture just about as bad as Dan Smoot's," said Joe. "Well, isn't Senator Bible letting you know whaes in store for us? What more do you want?" "What I'm thinking about right now," responded Joe, "is what are· Barry Goldwater's ideas about all this? Can and will he do anything to stop the foreign avalanche? Ike didn't. Dick Nixon wouldn't have. And further, Ike saw to it that President Kennedy didn't have an opportunity to appoint his own Treasury Secretary. Ike shoved Doug Dillon, a GOP Wall Street banker on him. The Communist money program given us by the Bretton Woods Agreement had to go on, and Mr. Kennedy had

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to take it. That's what gets me down! I firmly believe that a oon as we have lost all our gold to foreigners we will be in a hellofafix. But Mr. Bible thinks this will be just dandy. Who does his thinking? And will Barry Goldwater have to do that kind of thinking? Really, John, when you have time to think about the whole world mess it scares you."

. "Looks like you haven't been reading your favorite mining magazine lately," answered John Collins. The October, 1963 issue, page 3, reads: 'In response to our questioning of Senator Goldwater regarding his policies on llold, he has sent us a letter with the following statement: "As for establishing a higher price for gold, it is my belief that gold should be allowed to find its proper value on the free market place, and that any artificially derived value is not desirable."

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"Well, that's something," asid Joe. And in your opinion, Mr. Collins, just how much good would that do us?" "1 think Senator Goldwater is right," responded John. If we had a free market, really free from banker control, it would not be long before the gold miner would get the world price. Shortages always control ·price. All the experts will agree. with you that there is now a real gold shortage. Even the International Monetary Fund and its One-World Bank is now suffering from a gold shortage. The more than one hundred nations it serves are asking for more loans than it can handle because they don't have enough gold to back up their paper. That's why they are after your Uncle's pile, and as our bankers and Dillon are now OneWorlders they are willing to sacrifice u.s. gold and let the nation's property owners back up the paper money and the vast national debt of $315,000,000,000. "And as to a world gold price - before France had to devalue her franc a few years ago she called on her people to sell their gold to the government. It offered $65.00 per ounce and bought only 25 per cent of the amount needed. The French gold hoarders know what their gold is worth. Since then the world's debts have vastly increased with the real value of gold increasing in like manner. It's only in the United States where our ninnyhammer congressmen think we can get along without gold." "Thanks, Mr. Collins, for that review of the situation. And that means that we will get on the Goldwater bandwagon. The Democrats want to give our gold away and Rocky would travel the same road. I read in the paper yesterday that Rocky is trying to throw a monkey wrench into Goldwater's campaign by insisting Barry is opposed to the World Bank and the IMF. However, the Arizona senator isn't letting him get away with it. He came right back with this statement: '1 have advocated use

of the World Bank and the International Monetary Fund as means of providing loans to those nations which need them.' "1 would agree with Goldwater on that score. We have financed those poorer nations long enough. They should combine their resources and borrow from that combination. But I am opposed to the Bretton Woods gold shift which will end in the World Bank having all Uncle Sam's gold, 151

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leaving him among its <poor relations.' We were all right when our system had a $24.6 gold basis, even though it was accumulated at an advance of $14.33 per ounce. When the price again goes up and we are obliged to buy it from the IMF the taxpayers will be hit again. This is what Rocky is looking forward to, and you can bet the Rockefellers are not going to be caught short when it comes to the clean-up." "Dogonit, John, I think you got something," exclaimed Joe. "That's just what those Wall Street bankers are planning - a clean-up at the expense of American taxpayers. rArthough I don't like Senator Bible's playing footsie with those fello~e calls <patriots,' I think we got to thank him for putting us wise. Now that we have it from governmental sources it's beyond the opinion stage. Those Congressmen who really believe in continuing to live in
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pIe needed playgrounds; tourism was the industry that needed development. The general public and newspaper readers had been well brainwashed to go along. A tough deal, Joe thought. Connie was quick to note that Joe was not in his usual jovial frame of mind. After being seated for dinner she didn't waste any time in trying to find out the trouble. "What's gone wrong, Joe boy?" she inquired. «Has that New York girl gone back on you?" "Long ago," answered Joe. "That's a closed chapter in the life of Joe Bacon." "Well, I'm here. 1 haven't gone back on you. And remember, I did not take that Sacramento job. Open up and let's hear what's bothering you. " Joe gave himself a few moments' thought as to how best to approach the matter. "You know," he said, «1 haven't made many friends here. Outside of Mr. and Mrs. Collins and you I didn't want any more. I was satisfied to have you as close friends, and put most of my time on the object of my coming to California. Limiting my friendship to so few you have become very close to me, in fact, the best friends I have ever had. I would hate to have something come up that would lose for me that friendship. And 1 can use a stronger word than
) very dear to me and if you want to be three-thirds of my friends that's all right with me." nyou are such a sill. Don't you know that I love you? Don't you know that ever since I helped pull you out of that mine shaft I have had my brand on you? When are you going to wake up?" ~'WeII, I'm awake now and knowing that you will be with me will be a lot of help. I will be open to a lot of local criticism; the Forest Service will see to that. I will be painted almost as black as Black Bart. I wanted to warn you. I am very happy that you feel the way you do about the whole matter. And as for my love for you we will have to do something about that as soon as I get :Sfty thousand dollars for my three claims."

"That's a bargain we will have to seal as soon as I can get you alone," happily announced Connie. «I'll see that Main Street jeweler tomorrow. I want to get you wearing my ring before that claims case comes up. The Forest Service and the new owners of the mine will be sure to take me into court."

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CHAPTER 32

IMF Talks "Liquidity" But No Gold Raise few days after Connie and Joe became engaged Joe received a fat letter from Harold. Hal excused himself for not writing sooner, explaining that his new duties in the office of the Congressman had kept him on the jump. He explained that his boss had let him off during the days the International Monetary Fund was having its annual meeting in Washington in late September. Here is his letter:

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Dear Joe: I know you have been waiting to hear from me. After talking with Congressman Ben he gave Ille his. opinion that unless there is some kind of an upset the fate of gold lies in what action was to be taken in this year's meeting of the International Monetary Fund. So he let me off all week and I took it in. What struck me most was the fact that our big United States. which long ago had won its freedom from foreign control, now had to listen to the money managers of one hundred and one forei211 countries to find out what to do with its gold and money. That surely should rile the owner of a Western gold mine. Previous to the opening of the annual meeting of the Fund on September 30th, Robert V. Roosa, under secretary of the Treasury, was out with a statement that monetary reform for the free world was necessary. I know you gold miners of California would agree with that but not the kind of reform that Roosa was urging. From what followed at the convention it was very evident that there was to be no rush for any immediate changes. all foreign nations, both creditor and debtor, remembering that Uncle Sam still has some gold, $15.5 billion, if we are to believe the Treasury's daily report. Roosa had several reform plans to offer, all of which would run up

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against the Fund's lack of gold, with its borrowers suffering from the same malady. He even went so far as to suggest the approach to the old Lord Keynes stuff which would do away with gold, dollars and pounds sterling. This is what Yale "theorists" have been promoting for the past five years. It's a WBOG (without benefit of gold) theory. Leading foreign representatives in the Fund showed a tendency to go along with this idea, but I gathered that they would be willing to forget the policy as soon as your Uncle Sam had been relieved of all his gold. And you'd be surprised how little the word "gold" was mentioned during the whole convention. "Liquidity" appeared to be the word used most by the delegates, but none of them reached the conclusion that it would take much more gold than there is in the world today to get that liquidity, at the present low gold price, or a faster How of international business. One U.S. official suggested an enlargement of bilateral borrowing. Under suoh a system Mr. Roosa reported he had defended the stability of the dollar. What he meant whenever there was a foreign call for converting dollars he borrowed foreign convertible currency with which to satisfy our foreign creditor. He didn't say, but this is one of the tricks with which of late he has been able to show no decline in Treasury gold. But he will have to repay in dollars, all of which must be covered with gold. This is just one of his temporary juggling transactions to keep the Treasury gold balance looking good - at least until the 1964 election. There was just one man in the whole wide world gathering who did talk about gold,- Dr. T. E. Donges, Minister of Finance for South Africa, the world's leader in gold production. Her output runs better than $750,000,000 per year. As I stated above, until the final session gold had been pointedly ignored or rudely brushed aside by representatives of all major powers. I did not see how they could get by with it when it's the lack of gold that is now giving the finance officials of all free nations their biggest headache. However, Dr. Donges did not let them forget that, regardless of their jockeying around without gold, the yellow metal will be the final master. He gave notice that his nation considered a study of gold fundamental to any examination of the problem of international liquidity and announced that it proposed to put its views forward when the Fund undertakes its liquidity study. A revaluation of currencies in terms of gold is not, as has been said, a "radical" proposal, Dr. Donges pointed out. On the contrary, he s~id, it is essentially a conservative proposal, specifically envisaged by the Fund's Articles of Agreement and, it is designed to give greater weight to the traditional role of gold in international payments rather than to experiment with new, untried and perhaps over-ambitious mechanisms. There are three main forms in which international liquidity may be increased. The first is through an increase, actual or potential, in the supply of foreign exchange, i.e., dollars, sterling, and perhaps certain other convertible currencies. The second is the creation of a new international currency, i.e., claims against some international monetary organization or "world central bank." The third is an increase in gold reserves through an upward revaluation of gold in terms of all currencies. Only by revaluing gold, the South African minister maintained, can we be really sure that the delicate structure of international financial confidence will not be impaired. The governors were reminded that the Fund's Articles of Agreement make specific provision for a unifonn change in par values. Dr. Donges recalled that at the formation of the Fund at Bretton Woods 20 years ago the South African delegate made a comprehensive 'statement on this section, pointing out that this approach was "the only one which offered a hope for an orderly change of the relationship between gold and currencies in the future:' There was no disagreement with this state-

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ment at that time although the U.S. representatives did say that such a change should not be lightly made. This, Dr. Donges contends, shows that the Bretton Woods conference did contemplate a change at the appropriate time. No doubt, Joe, you and Mr. Collins and many more Western gold miners are very much interested in just when is that "appropriate time." I was greatly put out that not one of the world monetary leaders present supported Dr. Donges' statement although I considered it the conclave's outstanding conclusion. All the rest of the nations' finance ministers kept harking back to the question of "liquidity," or how to make their money work without gold. Our goldless hero, Mr. Douglas Dillon. will head one grou1?, known as the "Paris Club" to make a study of "running the world s finances sans gold. Dillon will lead the Club which, in its bargaining sessions, will rule out as a solution any change in the price of gold or the fixed rates at which currencies now exchange. The Fund will have an additional study group to come up with plans as to how best to operate without a gold price change. No time was set for reports but I would hold it would be some time after more of our gold is shifted to foreign nations. Also attention must be given the election. What gave me the most thought is why Secretary Dillon is forsak .. ing the Fund and joining in with the Paris Club, even being its leader. It is composed of only ten of the Fund's membership of 101 nations. Of course France will be a leader in the Club. Dillon is continually talking against devaluation when it is only a short time ago that France devalued her franc - and howl Also. not over a year ago when De Gaulle was stepping out, President Kennedy put out the idea that in case France and Russia combined their dollar holdings they could clean up on our gold available for foreign conversion. All in all I'm at a complete loss to understand why U.S. is so bent on getting rid of her gold. I hope this gives you a picture of what happened at the 1963 meeting of the International Monetary Fund. I see no conclusion other than the world's monetary centers need a little more time to grab the rest of Uncle Sam's gold. Let me know what's going on with you and Mr. Collins. Best regards. Sincerely, HAROLD.

A few days after Joe had cleaned up on his letter writing in his endeavor to get the answer to Harold's question as to why the United States did not think it best to conserve her gold, he dropped in to see the Collins. "You just missed him," greeted John. «He just left." «Just missed whom?" puzzled Joe. "Haven't you been expecting a visitor from the local office of the Forest Service? The chief of the EI Dorado National Forest paid you a call. I don't know why he came here but I guess his rangers have picked up a report that we are 'partners in crime.' I had to tell him you were making my camp your headquarters, so before long you will be having a caller." "Well, if that's the next step we had better get together on my defense if it's all right with you." . <'Nothing will please me better," responded John. HI know you have

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a clear case; that is if your location notices were recorded before the Forest Service made any deal with the land. Their only reason, as you found out, for requesting a former locator to abandon his right was to allow the Service to put a road across the claims. \Vhen the first locator abandoned his claims that reopened them for mining entry. Up to the time you located the government had given no notice of any type of withdrawal. I am very much of the opinion that you are in the clear. "What do you think will be their procedure?" asked Joe. "They will treat you nice at first," said Jobn. Be "glad to know you" and all that, and ask you plenty questions. When they can't get what they consider satisfactory answers then they will pull abandonment papers on you. 1'd give out as little information as possible. The main guy will have a witness and shorthander to take down every word you say that will be used in case you have to go to court. I suggest you stay here today so that we can frame up our defense." "Will do," said Joe, "but first I want to drop down town for a chat with Connie. If they knew you and I were associated no doubt they have picked up the information that I know that newspaper gal. Also, if I know how they use local newspapers they will be spreading plenty on the
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shouldn't put you to

C'What do you mean, ctrouble'? When was being with you ctrouble'? I'm surprised at you. I know you and Mr. Collins have been busy but 1 just don't see enough of you. So no more such talk." "All right, Connie girl, I'll be good. That will be easy. You know I would like to be with you all the time. You haven't any corner on that idea, although perhaps I do get wound up in this mining business. When I first thought about coming to California 1 didn't know it would take hold of me as it has." "'I'm glad it's only mining," laughingly exclaimed Connie ....If it was some of these good looking EI Dorado girls, I'd be worrying. Let's go home."

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While Connie was preparing the lunch she told Joe that she, too, had a visitor from the Forest Service office. I don't know why he'd pick on me but I guess a little bird has been talking. Placerville isn't a big city, and things get around. If they didn't I wouldn't be able to dig up usual quota of small news. Any way, the gentleman was certainly looking for information - and, he didn't get it; not from me any way." "As far as you could tell, just what does he already know about me'?" inquired Joe. «He does know you have located and recorded three claims, and when I asked him what's wrong with that, he clammed up. He wanted information on every thing I knew but wasn't open for an interview. I asked some more leading questions but did not get very far with the man. I even pretended I was interested from a news standpoint for the paper but all he would say was, "It will come out: From that I would judge the Forest Service is planning quite a case. Those three claims of yours must be good." <eI'll say they are," responded Joe. «I can't talk as an expert but from the little I do know, I'd have to go a long way in the Golden State to find a deposit as wide and as rich. Its story has been in The Journal, and I guess the Forest Service and the new leasers know full well about it, although neither would have a good word to say about the method by which it was discovered. Maybe they will know more about it before this case is over. I guess they are going to give me the works. John Collins is waiting for me now. As we are planning my defense I'd better get back. That extra hour is up too. Time goes too fast when I'm with vou. Thanks for the nice lunch and for the information about the G-man. Joe demonstrated his thanks with a caress that Connie had been missing for several days.

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CHAPTER 33

Joe Prepares.For Battle With Bureaucracy ack at the Collins home Joe reported what he had learned from Connie. Both he and John concluded that the claims were important enough in the eyes of the Government that it would make a real fight to prove the locations invalid.

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"Let's get our heads together," said John, "and before seeing an attorney, plot out a defense. 1 have followed many of these cases in my time and of late I have watched the growth of bureaucracy which now threatens every claimholder in the West. In the field and in Washington they are working overtime to put the claimholder out of business. The claimholder is in their way of building the Bureau of Land Management as one of the gover~ent's biggest businesses. And you know what I think of the Government in business. I was certainly glad to see Barry 158

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Goldwater come out for the sale of that big monstrous electric concern, the TV A, to a private company. Our Government now runs seven hundred types of businesses, when I don't think they could make a profit on a peanut stand. They don't have to make profit when they can charge their losses to the taxpayer. "'You'd better throw up a red light, Joe. When I get started on that subject there's no stopping me. We've got a job on our hands so we'd better get at it."

nOK, John, I will start with a few questions for which I need answers. 'What do you think will be the nrst move of the G-men?'" ''I'll bet a dollar to a doughnut that he will be out to your camp this afternoon. That's all they have to do and he will stay on the job until he catches up with you. He will be armed with a paper for you to sign which would dispossess you of the claims. He won't find you there today but you can look for him tomorrow. rel="nofollow">7 "1 won't run away from him so will be looking for him tomorrow," said Joe. "So - what reason is he going to give me that would make me think I should give up the claims," asked Joe. "That's a good starter," answered John. "You know the bureaucrats work that word, 'discovery' to death. The first thing the gent will tell you is that you haven't made a 'discovery.' In his dictionary a discovery means that there must be sufficient gold in your claims to cause a prudent man to drop everything and put his time and money in on making a mine of your claims. Did you ever think of just what would constitute a 'prudent' man?" "Yes, I think I know just the kind of an individual a 'prudent' man would be," responded Joe. "He'd be one who had a job at some work, financed by others. He'd be one that would look forward to receiving his pay check days before it was due; and when he'd get it he would turn it over to the wife who would have every cent of it budgeted. When you really consider the bureaucrat's requirement for a 'discovery' it makes you laugh, and heartily. Imagine, how much of that man's pay check would the wife have budgeted for gold mining. And you mean to tell me, John, that the Forest Service and the Bureau of Land Management gets by with that interpretation of what constitutes a 'discovery'?

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"And what's more," answered John, "the Washington bureaucrats have our congressmen sold on that kind of stuff. It's true some Western congressmen have promised reform 'measures, especially in defining what constitutes a 'discovery.' Even if they did, the law would not control the actions of field men who interpret the law to accomplish whatever they want. They have a habit of dealing singly with claimholders, and when they get 'em scared they put over any deal they want. This preponder~ ance of power vested in the government's land bureaucracy is what's causing the trouble. The intent of the laws passed by Congress may be O.K., but they don't control the intent of the bureaucrats. There's no getting around it, the Bureau of Land Management is bent on building

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up the most powerful land outfit in the world. It's worse than govern~ ment ownerships of businesses. It's just what you, Joe, have to face if the Forest Service takes you into court. And they will do it. They will proceed with the idea they have a perfect case against you. So when that gent from the FS catches up with you, watch your step. Tell him nothing, but find out, if you can, what their procedure in court would be. Do you think you are ready to meet him?" Receiving assurance that Joe felt able to hold his own with any Forest Service man John warned him to watch his step and to return with a good report as soon as he had his session with the bureaucrat. Two days later Joe was again at the Collins home, brim full of how Bureauracy works. However, he told John Collins the Forest Service man had given him a liberal education on what the FS intends to do with mining on public lands. The G-man, he said, even indicated that later even those claims that had been patented would, "upon proper examination" be turned back to the government. Following this statement Joe launched into a full scale account of his brush with the Forester. "He wanted to know all about me, where I came from, where I was now living, what I had done before coming to California, and on ,vhose authority I presumed to locate a mining claim. «I'm a citizen," I said. Then he admitted that would make me eligible. But why locate those certain three claims, he wanted to know especially when no discovery has been made: 'How do you know a discovery hasn't been made/ I questioned. He then wanted me to admit that on the surface there was not even an indication of a gold mine. Here I told him that perhaps he hadn't made a good examination, stating that government engineers had been known to pass on claims without even going on them. That drew his ire and he characterized my statement as 'hog-wash: I went right back at him with the statement that just with an advertisement in a newspaper that would never be read by the claimholders, entire blocks of hundreds of claims are wiped out, the government never having an en~ gineer on any of them, yet they were declared 'non-mineral in character with no discovery of valuable minerals being made.' Well, he hadn't seen any of those advertisements. Then I pulled that one on him about the Joshua Tree National Monument. You remember the law that was passed eliminating 289,000 acres had a provision which called for a mineral examination to determine if the remaining 500,000 acres could be classified as mineral. In complying with that section of the law two engineers spent two days on foot examining the half million acres, turning it down flat. They wrote their report from talks with the Park Service boys at their Twenty-nine Palms headquarters. That's something more he didn't know. I told him he should read up on these matters. He didn't like that, saying he had plenty of reliable and authentic reading matter at his command, especially 'right from Washington: "You can see, John, he wasn't getting any real information from me, so then he begin to threaten to 'take me into court'. He thought I would scare. We can now note just what the Forest Service's contention will be. eNo discovery of valuable mineral: They don't know we have the com-

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plete geophysical report of the ground, made by Harold Ferrin of the Ferrin Geophysical Exploration Co., which was followed by drilling." Here Mr. Collins broke into the conversation. ~'The Forest Service is going to object strenuously to geophysics being accepted as reliable evidence of existing mineral." "But," answered Joe, "Ferrin proves his geophysical report with drilling. His drill brought up the gold ore from the depth indicated by his report. The 'proof of the pudding' should convince the court and lick the Forest Service." "You are right there," responded Collins. "The law recognized geophysical reports as evidence of assessment work for at least two succeeding assessment years, that is if done by an 'expert: That leaves the gate open for the FS. Only they are ~experts.' "When it comes to this 'expert' business," said Joe, "I believe any court would judge by results rather than an assumed professional classification; don't you?" "I'll go· along with you on that," agreed Collins, "but now let's get on with what arrangements we will have to make for a trial. r sure the Forest Service will go the limit with you. We've got to come to conclusions as to whether or not we want a jury trial. They cost money and might be dangerous. Since gold has slipped as a local industry, due to Communists having too much say in Washington, a lot of local residents think gold miners are just in the way. The Forest Service has seen to it that that idea has gained ground. That high-powered Sierra Club from its headquarters in San Francisco has promoted the same idea, advocating the Wilderness Bill. No doubt you have noted that a majority of our residents have been brainwashed with the same idea. You might get a bunch of pensioners on a jury whose gold is their monthly Treasury check. And believe me, the FS attorney would see that no friends of gold mining were on that jury. So, 1 would advise you to forget about a jury trial. We have a Superior Judge in this county who would give you a fair decision." Joe accepted Mr. Collins' suggestion with: ~'All that we have to do now will be to wait until the Big Hawk lights. No doubt he will be out to the camp soon with his papers." "Well, keep me in touch," said John. "As soon as he makes his next move, come in and report." Joe was getting off a late report to Harold when his expected caller showed up. He came with a demand that Joe cancel his location notices. It was all prepared in an official-looking document. All that Joe had to do was to sign. "What will happen if I don't sign it?" asked Joe. "That will be for you to find out," angrily replied the FS man. "You can't peddle that paper here," responded Joe. well be on your way." 161

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The next day at the Collins home Joe reported. "What do you think will happen next?" he inquired. "Several things," answered Collins. "They might file a trespassing charge against you or bring you into a Bureau of Land Management hearing and make you show cause why you shouldn't give up the claims. In that case the big brass will be up from Sacramento but that shouldn't scare you. "But I've got a hunch, Joe. I think we should go out to the claims for a check-up. I am suspicious."

"0£ what," queried Joe. "Well, a gent who used to be in charge of a National Forest was accused of having claim boundaries destroyed. The accusation was made by the boys he hired to do the job. They ",'ere to tear down the location notices and kick over the monuments and boundary marks. So I think it would be a good idea to do a little checking. The next day John and Joe visited the claims. The former's suspicions proved to be correct. All evidences of the locations had been destroyed. "Got to get busy and do all the location work again," said John. "You will need three more notices, properly made out, for posting on the ground and your corners re-established with monuments. If you don't mind I'll help you tomorrow. I'll bring out the new notices. I'm not going to let those guys beat you with such a low-livered trick." And so the three claims were again made legal. Several days later Joe received a registered mail notice to appear at the local office of the Forest Service and answer to a charge of. illegally holding U.S. government land. The hearing was set for one week after the date of the summons. This called for another get-together of the "partners in crime:' Joe and his best friend, John Collins. Their plan of action was pretty well agreed upon. Collins decided to sit in with Joe at the hearing and Joe called at Connie's office to see if the newspaper had any news on the event. There was none, both Joe and John concluding that the lack of advance news might be an indication that the bureaucrats weren't so sure of winning their case. Anyway they bolstered their confidence with that idea .

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CHAPTER 34

Joe Faces the Bureaucrats and Wins he day of the hearing came, opening at 10 a. m. Judging from the array of government boys Joe didn't have a chance. However, numbers didn't scare him; he felt confident. Judging from the brass in attendance, Collins silently came to his conclusion that the government had

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much at stake in the case. There was the chief of the Sacramento office and two legal aides, also two officials from the San Francisco office. The El Dorado chief opened the hearing, stating the charge. He first determined that Joseph A. Bacon, charged with illegally occupying U.S. Government land, was present, which Joe admitted. Upon questioning, he further admitted locating and recording the three legally described claims in question. Here a forest man cut in with: "Do you know how to locate a claim?" "I think 1 do," quietly responded Joe. "I followed the law very carefully, beside I had expert advice from an experienced miner." The FS man came back with: "Your kind of locating doesn't show that. You omitted entirely to post your notice on each claim; neither did you put up your monuments to outline the boundaries of the. claims." Then addressing the government men present he said: "I find the claims invalid due to the fact that they were not marked or properly posted." "I beg to differ with you," responded Joe. "The claims are properly staked and posted. And before this group declares them invalid on the grounds you propose, I demand they be inspected by your officials." Joe's apparent assurance threw the Foresters off their well-oiled track. Following a conference among themselves it was announced that it was now so close to lunch time that the session adjourn, to reassemble on the claims at 3:00 p.m. Joe agreed. As Joe and Collins were leaving the FS office the latter remarked, "Well so far you~re doing all right, but I'm still suspicious. It's yet an hour before lunch. We could have got to the claims in less than an hour and if they had to have lunch we could have made it at Pollock Pines. In the next four hours those claims could be again ~undressed·. Let's forget about lunch and get out to the ground immediately." "John, you ARE suspicious," said Joe. We pay those boys good salaries and they should perform their work honestly. I could never get used to that kind of business." "You still have something to learn about the government land grabbers," responded Collins. "They never will let up until they have all our land, and they don't care how they get it. Their chiefs in Washington put out press releases about what wonderful jobs their departments are doing 'for the people: and at the same time close their eyes to methods used by their field men. So let's guard those claims until three 0' clockl. We can get there before any of their claim destroyers make it." "O.K., I'm with you," said Joe. "Let's go. We'd better warn Mrs. Collins though. They did, and the good lady hurriedly packed a lunch. They arrived at the claims by noon and after lunch inspected the posting and monuments which were found in good order. About 1 o'clock, a man carrying a gun, showed up. He could have been a hunter. However, Joe and John engaged him in conversation and stayed .with him until he decided that if he was going to get a deer before nightfall

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he'd better be on his way. He was carefully watched until he passed the claims and disappeared. "We are now ready for the next act of the show," laughed Joe. Promptly at 3 o'clock the government party showed up. The claims were thoroughly inspected and found "not wanting." "Something is wrong," said the El Dorado Chief. "One of our best rangers just a week ago was on the ground and brought in the report that the claims were not marked or posted. This hearing will be resumed at the Forest Service office at 10 a.m. tomorrow." The government party returned to Placerville, trying to figure out why their plans went awry. However, they were not ready to give up. After a "closed-door" session at the FS office they spent the night at the city's best hotel and went into the hearing the next day with what they thought was an iron-clad program. The hearing officer opened with: "We request the clerk to enter on the minutes this statement: 'The three claims in question are properly posted'." He then introduced one of the legal lights who took over. He opened with: "Mr. Bacon, the government finds that you have nothing to support your claim of a ~discovery'. You should be fully aware that it takes a 'discovery' in order to make a claim valid. Do you know what it takes to constitute a lawful 'discovery'? '1 think I do," answered Joe. "Perhaps you can further enlighten me."

And that's what the attorney proceeded to do, launching into a lengthy discourse of the 'Prudent Man' court decision. "I am fully aware of the improper use of that decision by your organization," countered Joe. "It isn't law, only being a political decision to accomplish an illegal take-over of land orginally intended for private development. The U.S. Bureau of Mines is yearly granted a big appropriation to be spent in urging private operation of mines, with your organization hampering their work with your 'prudent man' policy. Do you realize how much private mine operation there would be if done only by 'prudent' men?"· "Weare not here to listen to your opinion of Forest Service operation," angrily stated the hearing officer. "You haven't made a legal discovery on those three claims and the government is herewith demanding that you relinquish any right you think you have to them. We can't have you clouding the title." "Does the location of mining claims on public land cloud the title?" question Joe. The answer: "It does when the government has other use for the land." "And, if I may ask, just what use do you have for these highly mineralized claims? What notice did the Forest Service give in the Federal Register of any withdrawal of the land constituting my three claims?">'1:;

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Joe's questions stopped the conduct of the hearing for a few minutes while the hearing officer and his legal aides got together. The officer concluded the conference with the announcement that the hearing would be continued at 2:00 p.m. that afternoon. "Looks like you're going great guns, Joe," said Mr. Collins as they proceeded to John's home for a round-up. "You should have been a public lands attorney. If I'm not mistaken you have those bureaucrats stymied and as yet you haven't really opened up on them. I don't see anything they can do about it till two o'clock except eat their lunch. I'm really enjoying the hearing. I'm quite proud of you." At two o'clock the hearing was reopened. The hearing officer introduced one of the attorneys who announced that the hearing would have to be concluded that afternnon. He then made the charge that Joe had located the three claims properly but had failed to make a legal discovery. He pointed to the fact that at no place on the surface was there the least bit of evidence of the occurrence of mineral. He ended his talk with: "I see no other stand for the duly qualified officers in this hearing to take other than to <declare the claims in question as non-mineral and therefore invalid'." Here Joe concluded it was time to play his "hole card." Digging into his brief case he came out with a Ferrin geophysical report on the three claims, backed by drill holes. The assayed cores taken from the hole showed the land to be some of the Mother Lode's richest in gold. The drill hole cut the gold bearing area on a slant at a depth of 200 feet. Here the vein was 8 feet wide, an over-all average running $21.90 per ton. The center 5 feet was much richer. Then the hole cut through 20 feet of black slate, all of which was broken and containing gold. At this point the drill entered a parallel quartz vein, 10 feet wide, that assayed $34.80. Joining this was a 7 foot vein of silicified schist, assaying $8.40. "If this doesn't constitute a
ration Co., the same firm that did the work on my claims. There was no outcrop on the Shannon claims. Ferrin's instrument located a heavy showing of gold are under 45 feet of overburden. The drill was sent down to get the samples which were turned over to an engineer of your Sacramento office. He made his own assays that ran to $266.00 per ton in gold. On that showing you approved the granting of a patent. I have a deposit of gold ore 46 feet wide assaying from $8.40 to $34.80. That's enough are for ten mines; you can't turn down those claims. If you did you would be the laughing stock of the mineral world." That last statement of Joe's appeared to take all the wind out of the sails of the bureaucrats. None of the officials were ready to carry proceedings any further, the examiner quietly announcing the close of the hearing. As Joe and Mr. Collins left the Forest Service building the former appeared puzzled. "Why," he said, «the outfit never rendered any decision." "They didn't have to," responded John. "When they couldn't prove the claims 'invalid' they were through - all washed up. They were so taken aback that they did not feel like telling you the claims were yours. Anyway, they didn't have to; they didn't meet for that purpose. They had other fish to fry. I'm glad that fish didn't prove to be you." "But what I'm thinking about now is the presence of two men who in no way were connected with the hearing. If I don't miss my guess they are mining men. I smell a rat. I'll make you a bet they are with the company that has the mine. They want and need your claims. They have come to the same conclusion you reached last spring. Your claims, tied to the mine, will make the Mother Lode's richest property. In a few days you will have some callers. They will be seeing you about a deal, so name your price.

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CHAPTER 35

Prospector Joe Makes A Real Deal hat evening Mr. and Mrs. Collins and Joe and Connie celebrated with a dinner at the Blue Bell Cafe. John assured Joe that he had won his case against heavy odds, mainly because most claim holders didn't know their rights. Ninety-nine out of a hundred were not brave enough to face the bureaucrats. They always backed down when faced by a government man parading a lot of authOrity. And if they didn't know mining law they were licked before they got started. "This condition," added Collins, "has made the G-boys overbearing. They forget they are working for us, the taxpayers. However, Joe, you were well prepared and you took the enemy into camp. I must congratulate you."

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"You are the one to be congratulated," said Joe. "In less than a year you surely have taught me a lot about mining and mining law, and don't

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think I don't appreciate -it. If I had gone to college instead of learning to peddle news I might now have become a mining lawyer, and saved the bacon of a lot of claim holders who have had to surrender their properties.,. "You're doing all right, Joe," responded John. "Just watch your step when tllOge two mining men come to see you. They know what your three claims are worth." "I'll need some more lessons from you, John. Will drop around tomorrow and learn how to deal with big shot mining men."

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"Will be looking for you," assured Mr. Collins. "And don't let us spoil your evening. Take us old folks home and then you and Connie can have the whole evening to yourselves. And don't waste it all talking about newspapers." Joe and Connie got a real kick out of Mr. Collins. "He's a real nice man and we'll take his advice about not talking newspaper," said Connie. "If I'm not mistaken we have much nicer matters to talk about. What are your plans when you get that fifty thousand?" "You mean 'our' plans, don't you?" quickly responded Joe. "We are full-Hedged partners, you know. But I still have one more battle. The only firm who can use my claims is out to get them. As John says, they will be around to see me soon. So wish me luck. While I'm going to ask $50,000 I can't expect mqre than 10 per cent down." "That's a nice piece of money," said Connie. "Can we get started on that?" . "We can if you are willing," answered Joe. "It isn't a great deal to launch out into married life, but I'm sure we can make it." "I'm sure of it, too," said Connie. "Anyway I'd marry you if you didn't have a cent. Love would find a way, you know." And so Joe and Connie were ready for their next adventure. Two days later the mining company representatives hunted up Joe. To his inquiry they told Joe the Forest Service had told them where he could be located. "We had hoped," they admitted, "to make a deal with the Service but you beat them to it. They had made no withdrawal of the claims so that they would have been in a position to make a deal with our company. Although they did not tell you following the hearings your claims are good, with no assessment work due on them until September, 1964. So we are not going to fool around with you. We are ready to make a deal with you right now. What's your price?" Joe didn't expect such rapid action. He was taken by surprise. He wanted to do some more talking. "I wonder if you h~ve any estimate on the amount of ore in those claims?" questioned Joe. "We don't know any more about it than you do," answered the spokesman. "But a block of gold are 46 feet wide is practically unheard of. Tie it up with our mine and I think we'll have a real property that will

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do well even if Washington doesn't get off the spot and raise the price of gold. If you will deal with us we plan to get Ferrin back here with his instrument to check the whole property. We have watched all his work here and in Arizona, Nevada and Oregon. We are satisfied he knows what he is doing. So let's get going. What's the best price you

can make us on your three claims?" ~1 didn't expect to get a deal this soon on the ground,77 admitted Joe. "I just haven't got used to feeling that they are mine as yet. I wanted to study the matter of a deal; inquire around some." "We think you realize it would be too costly for you to operate it yourself and that our mine and plant is so located that it would be worth more to us than to any other company." "Yes, I have a rough underground map of your property which shows that all you would have to do would be to continue one of your drifts to enter my 46 feet of are:' replied Joe. "Since I noted you were at the Forest Service hearing I presumed you had plans for the claims and I have been giving the matter of the value of the ground considerable thought. How would $50,000 strike you?" "'Well, that's a lot of money, even in these days of inflation, but we don't think you are too far out of line. If you wouldn't ask too much down I think we can do business. Would you go for $10,000 down?" Joe was surprised but he did his best not to show it. It was his first mine deal. Without too much ado he agreed to go on with the deal and arranged to be in the mining office the next day at 10 o'clock. He then drove to Placerville to tell John and Connie the good news. Connie sent him back to camp early that evening so he'd be at his best to complete the deal. The deal went over smoothly, Joe assuring the manager that his company was an excellent one to do business with. Of course the conversation drifted to the price of gold. The manager told of the work the company secretary had been carrying on with different Congressmen thought to be friendly with domestic gold mining. Joe told of his efforts along the same line, stating that, judging from results, the American gold miner doesn't have many friends in Washington. He then proceeded to tell of his experience to date in trying to interest the administration in not only preserving a prime domestic industry but also adding gold to the nation's fast diminishing reserve. He said: "From the President down and from the newest Congressman up, all are apparently tied to the movement of our gold into foreign hands, with the International Monetary Fund and its One-World Bank in the offing handling U nele Sam's gold as it arrives in Europe converting foreign held dollars. The Administration, Treasury Secretary Dillon and the Federal Reserve Board chairman, Mr. Martin, keep insisting that a raise in the price of Treasury gold would be bad for our economy. They refuse to note the improvement in Canadian finances when their dollar was devalued from $1.06 to 92 cents. They won't admit when it now takes three

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dollars here in the U.S.A. to do the work of one that \ve already have our devaluation. «When that bird from Texas, Wright Patman, became chairman of the House Banking & Currency Committee we thought we'd have a friend. He used to stand on the Roor of the House and tear the Federal Reserve Bank apart. He even accused it of distributing $15,000,000,000 of our bonds (that could have been cancelled) to its 14,000 member banks. He introduced a bill in the House to head off the distribution but received only 60 votes out of 437 in favor of passage. You would think he, of all Congressmen, would be aware of what the 'money changers' are doing to us. But he won't make a move to preserve the foundation of the U.S. dollar. He even promised Reserve Board Chairman Martin he would not bring up any controversial matters affecting the Board's program - when everything now being done with our gold and money is highly controversial. He's a complete washout. «Then I had the notion that Senator Harry F. Byrd, chairman of the Senate Finance Committee, for years designated the 'watchdog of the Treasury' might do us some good. I wrote him mainly on the drain of our gold supply. He wrote me a friendly letter of thanks and then stuffed his envelope with a printed and lengthy blast of the Federal Reserve Board's plans in regard to gold. As far as the Board is concerned we have nothing to expect from them but a complete compliance with the Bretton Woods Agreement until our last gold dollar is gone. «Next I noted that Sen. Mike Mansfield of Montana, Democrat Senate leader, and close friend of the President, made a speech out in Arizona, urging $65 to $70 for gold. I wrote him asking why not that speech on the floor of the Senate. There was no answer to that letter. No doubt the play was to wean the votes of Arizona away from Barry Goldwater. You can mark the senator from Montana as far from being a friend of the American gold miner. «I also noted the activity of Rep. Thomas B. Curtis, Republican of in regard to our national finances. 1 wrote him. He proved to be against the proper stability of OUf dollar, and all for the administration plan of shifting our gold to foreign shores. I was about to give up when I thought of Sen. Alan Bible of that fine mining state of Nevada. Here 1 thought I'd get some help. But he, too, is sold on a complete drain of all our gold, writing it would be better to base our monster national debt and the ravages of politically induced inflation on our property and sav ings. If that isn't the plan of our Supreme Court protected Communists, I'll eat my hat! Boy, was I mad when I received that letter! It made me ask: 'Where are we headed?"7 Missouri~

«1 can tell you where we are headed," said the mine manager. HAnd I certainly want to compliment you on the wonderful job you have done stirring up those foreign loving officials in Washington. Their only excuse is that they are doing it to stop world Communism which, to my notion is the best aid the commies have. In fact, it is THE Communist plot to weaken our nation and drag us down to the level of the lowest. I didn't

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know that there was anybody out here in the Western gold field that had such clear ideas of just what was going on in Washington, D.C. "I have another deal for you. Our secretary, with his other numerous duties has been trying to carryon the same thing you have so successfully done with Washington. We must now completely equip the mine. It will be a full time job for our secretary. How would you like to come into the company as assistant secretary? I understand you have been a newspaper man in New York. We will have need for such an employee on our staff. At first we can't go too heavy on salary, but how would $125 per week do?" This was another complete surprise for Joe. It was so unexpected. He lost no time in accepting but then caught himself up sharply. "It sounds fine but I will have to accept with some reservation." He told them that his original intention in coming to Californa was to do some mining of his own. He'd like to accept the job with that understanding. Further, he was planning on getting married. He and the girl hadn't set the date as yet but he'd like to get at least two weeks off when the event occurs. "I think we can take care of your ~reservations' ," said the manager. "And I want to be the first to offer congratulations. As far as going into mining yourself, underground mining costs a lot of money. Right now unless you know just what you are doing, all about the potential of your property, also your ability to handle the labor situation, most operators would be out of luck. Anyway, I think you will want to watch the development of your three claims and being in our office would be your best opportunity. Then as we get into operation I'm sure we can offer you a better salary. We are a new company with three of the best gold mines in California and there will always be room at the top in our organization." The entire deal sounded good to Joe and he accepted without any further ado. Going back to Placerville with a new job and a $10,000 check in his pocket he felt he had plenty of good news to divulge to Connie and Mr. and Nlrs. Collins. He felt it was the happiest day of his life, now being able to tell Connie they could go ahead with their plans to be married. He also felt that forever he could forget a feeling that his leaving New York and his newspaper job had been a mistake. He could not wait till closing time. He rushed into Connie's office and put down his big check with the statement, "I want to pay my subscription:' Although startled, Connie looked at the check saying, "That will pay you up for 2,500 years. Do you want to make it that long?"

"rn make it forever if you go with it," said Joe. "Can you make it off for the rest of the day?" And so preparations for their life together began. Connie agreed that she could be ready in another month, although Joe said he only needed a day. Where would they live? Joe was due to work for the mining company at once. In the month's time both could get off for a two weeks' honeymoon. Upon their return, Connie could stay on her job temporarily while Joe commuted to the mine office daily.

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Connie's apartment would he nice for the love birds for a short time till a larger home was available. If Connie could get away from her job at that time that would suit Joe. "However," he said, "if you can't quit then or want to stay on a while it will be all right with me. We have our whole lifetime to plan and I don't know of anybody I'd rather do that with than you." That night Joe though he could stand a telephone call to Washington. He called Harold and gave him the good news. Almost thunder-struck Harold exclaimed: "Boy you are a fast worker. You haven't been in California a year yet; you have made a $50,000 mine deal; have a good job and are getting married. I hardly realize it's all possible." "Well, it is, and I want you and Evelyn to be at the wedding," answered Joe. It will be in about a month from now. We'll know the exact date soon and I will let you know. Anyway, I want you to look over the deal here. You might be interested yourself. When you make your arrangements with Congressman Ben give the old hound my best. How about it?" "We will do our best and will let you know soon," answered Harold. "You're a lucky dog. If I thought I could do half as well I'd stay in California myself. How come you have been so shy about letting us know about the girl. Evelyn wants to know all about her in your next letter, and right away." "Will write full particulars in the morning," promised Joe. On the following morning Joe went to work after a delightful weekend with his bride-to-be; And they did not forget their best friends, Mr. and ~1rs. Collins. As assistant secretary of the mining company his first move was to get an idea from his immediate boss, the secretary, in regard to what was expected of him, especially in the line of public relations. He wanted to know just what the company's poltical policies were and how far the secretary had gone in contacting Washington in reference to gold. After an hour's talk the secretary concluded with: "You and I hit right down the same alley. I would approve everything you have done in your research. I think our government is entirely on the wrong track in not taking definite steps to really stop the flow of gold from this country. More than ever the United States needs that gold. I can see a dismal future for the taxpayer if he is to be forced to put up his property and savings to guarantee the high-handed spending that has characterized several of the past administrations and especially the present one. "I don't see any national future for America with our gold in the hands of an international group of bankers. I hold with your idea that forCing us to give up our gold will eventually put us on the level of the poorer nations. And I recognize this as just what it started out to bea Communist plot. Why our leaders in Congress fail to recognize this fact has been a mystery to me for many moons. I agree with you one hundred percent. Carryon."

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Joe was happy that he and his boss clicked. He wanted to sound him out on just one more thing. "Who, in your opinion should we back in the 1964 presidential race?"

'1 don't think we will disagree on that point either. We don't look to President Johnson for any help. The late JFK gummed up the administration when he had to accept the Wall Street banker, Mr. Dillon, for his Treasury Secretary. He could have kept control of the whole monetary and economic situation by naming his own Treasury Secretary. You remember it was Ike who urged the appointment of Dillon. Under Ike the imbalance of payments were hitting us just as hard as they were under Kennedy. During Ike's last two years it ran over $7 billion. There wasn't a word said about this until Kennedy was elected. And then both Ike and Nixon started talking about the gold drain. If we want to do something for gold mining I'd quit listening to anything Ike has to say and I'd eliminate 'He's My Boy, Nixon' as a presidential possibility. We know his record on gold. «And l\1r. Rockefeller is a strong supporter of the policy of tieing us up to the International Monetary Fund and its One-World bank. I don't mind paying taxes to my own government but I draw the line at supporting a foreign dominated international government. They can call me an 'isolationist' if they want to but I would say I'm a 'Nationalist.' 'Foreign entanglements' are far more dangerous now than they were when Washington left the White House. However, it's going to take some time yet before a lot of Americans realize it. We have a real campaign of education on our hands. We even must run the gauntlet of being called 'extremists' to do the job." «I'm certainly glad to hear you talk that way," said Joe. "Will you go along with me in supporting Sen. Barry Coldwater for the presidency?" «I sure will. He's the only man in the Senate who has come out with a real gold cure - a world free market. If, when we start producing gold, we can sell it any place in the world we will be on the right track. Just think of the value our government has sacrificed in letting our treasury gold go to foreigners for the lowly price of $35.00." With that leading question settled Joe went happily to work at his new job.

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CHAPTER 36

U. S. Igolo,res It's Gold Wealth ach morning before starting to work the mine secretary and his assistant Joe, conferred on matters concerning gold and the nation's monetary matters. One morning Joe touched on a recent report of the 1962 gold production of South Africa, which ran to 25,506,144 ounces, worth

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$889,000,000. "That's getting close to a billion dollars," remarked Joe. "Just think how much that would mean to us in business, new wealth, employment and development. Give that amount of gold the real world price and Washington could quit worrying about the gold drain."

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"And an ounce of gold," said the secretary, "isn't like a basket of peaches. The peaches are consumed, representing value for a short time only. The gold is indestructible and if not hoarded enters into and remains in business channels. I just can't understand the attitude of our government servants, from the President down, ignoring gold and the wealth and power it can represent if used properly. I would say that present treatment isn't far from treason. Bring that out in the letters you send out today." "Will do," responded Joe. "Thanks for the tip." Another morning the conversation got on the subject of what would happen to living costs and our savings if Washington finally made up its mind to give Treasury gold its real present value. "A lot of folks have been misled on that subject," said the secretary. "Those who want to corner our taxpayers' gold have brainwashed the public into believing that in case the price of gold would be doubled the value of their dollars in the bank would be cut in half and their cost of living would be doubled. I just checked a back issue of the Northern Miner, Toronto, Canada. It covers that subject in answering a question from a BuHalo, N. Y. subscriber. It handles the matter in a way that any school boy could understand. Here it is: Some reader of this item may think we are biased because of our mining c{)nnection. It would be better if we repeated what a highly reputable American publication, Business Week, has said: "A man with money - in the bank or in cash - would still have the same number of dollars. Remember that the change would be only in terms of gold. Debts would not be altered. Payments on a house would be no larger. A savings bond would be worth the same number of dollars as before. "Insurance policies would continue to carry the same face amount. «There would be no automatic effect on the value of your house or other property. Of course, the question of inflation would arise. If devaluation were to set off widespread fears of inflation, causing people to run from the dollar and into goods or property, then there could be some rise in prices. That, however, is not something that would happen overnight . . "So far as stock prices are concerned, the initial reaction could be deflationnot a price rise, but a decline. Devaluation might be taken as a signal of dollar

weakness, causing a jolt in the market. «Foreign owners of dollars might run from dollars into gold, and take their gold~ back home. Abroad, 'some of this gold could go into private hoarding. That is not prevented everywhere as it is in the United States. The result could be actually to cut down on the base for U.S. credit and money supply. "Thus there could be a sharp initial decline in stock prices. Later, if inflation were to take hold, there would be a rise in the market, but whether this came about would depend on many factors besides devaluation. "Nobody could know in advance what would happen to the cost of living or the general price level. "The devaluation of 1934 had little effect on prices then or for some years afterward. At that time, the White House announced almost daily changes in the price of gold. The idea was that prices of farm products and other things would rise along with gold pricef'. Nothing of the sort happened, much to the surprise of President Roosevelt and the authors of the devaluation program."

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"In other words," said Joe, "our dollar will be the same old dollar when devaluation comes. John Collins takes the Northern Miner. I wonder if he missed that," "'By the way," questioned the secretary, "what's Collins planning on doing with his mine?" "'I have the promise of a lease on it when conditions are right," answered Joe. The secretary took that in rather knowingly and from that time Joe's status with the management was on the rise. A few days later the secretary approached Joe on the advisability of extending encouragement to Sen. Barry Goldwater with a special letter thanking him for an outstanding talk at Pittsburgh, Pa., especially aimed at the administration for its lack of encouragement to domestic industry. He handed Joe a dispatch, the contents of which marked the Arizona senator as the national leader now needed in the White House. It read: PITTSBURGH - Sen. Barry Goldwater (R-Ariz.) said the monstrosity of government spending and taxing is sapping U.S. economic vitality and costing millions of jobs. The Arizonan called for a long-range federal spending blueprint, coupled with "evidence that those shaping our policies have some understanding of the dynamics of economic welfare and progress in this free society." "A free economy cannot flourish under the shadow of a sword clasped by a heavy-handed government, ready to slice off incentives to work, to invest and to earn," Goldwater said in a speech to the Harvard Business School Association. Lost in Limbo

The conservative lawmaker, a top prospect for next year's Republican Presidential nomination, said the U.S. economy should be creating at least 1.25 million new jobs every year to keep a growing labor force at work. Goldwater said «millions of new jobs are, simply and sadly, lost in the limbo of investments not made, risks not taken, enterprise not dared - because of the lack of confidence that becomes a reflex as an ecenomy is regimented and regulated." Goldwater said economic trouble will continue "so long as political leaders remain fearful of plain talk about what this fiscal and tax monstrosity is dOing to the vitality of our economy." He said the federal government «must have clearly stated effective procedures for developing and adhering to a longer range expenditure policy."

No Perception "We cannot continue on a shortsighted course of having the budget preempt a rapidly growing proportion of our national income," Goldwater said. "That is, however. precisely what will happen so long as we wobble from one budget to another with no clear perception of where we ought to be going." He said the tax structure is acting like a ball and chain, and the President's proposals for tax reduction and revision - now before the Senate Finance Committee - «do pathetically little to correct this." Goldwater said he views the key principles of the U.S. economic system this way: «First, every man should be free to make his contribution to the production stream where his talents fit best. What he receives should be determined by his performance, measured impersonally in the market place. . . . "Second, every person ought to be free to try out any idea for a new product or new method. , . , He should reap the reward if the idea survives the impersonal test of the market place, and he should take the losses if the new idea cannot survive this test. «Third, these rewards tend to be temporary because of competition. . . . Thus the fruits of new ideas have been transmitted widely and quickly throughout the economy," Goldwater said when the system goes awry, its troubles are only "miscarriages of a system with a powerful capacity to

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generate economic progress." But he said there has been «an insist-

step in. He said no part of the government has any right to force its policies upon unwilling persons, businesses or industries except . . . when Congress passes legislation to that effect."

ent attempt . . . in recent decades to turn our national philosophy around by 180 degrees" by having the government

~'I agree with you," said Joe. Barry has wrapped up a lot of our troubles in that talk. If the American people can't see where the New Frontierites are taking them it's just too bad." ~'Yes, but a lot of those people have their feet 'in the trough.' Don't forget that those big businessmen who compose Dan Smoot's 'Invisible Government' are reaping most of the benefits of Foreign Aid. They want a tax cut but don't want to help pay part of the tax cut by having the budget reduced. The game must go on. They are the ones who will be behind the scenes at the San Francisco convention plugging for -some candidate other than our friend, Barry. Boy! have we got a job on our hands I What Al Smith said long ago still goes: 'Who wants to kill Santa Claus.?' "

The next day Joe hit the office with another dispatch, this one from Washington, D.C. And he was angry. «Just think, only about two months ago I tried to sound out Sen. Harry F. Byrd on our gold loss when all he would send me was a printed report from Treasury Secretary Dillon's office on what steps had been taken to keep foreigners from getting our gold. Now the senator, who prides himself on being called the 'watchdog of the treasury,' comes out with the statement he is getting lots of mail on our 'fiscal situation and especially our loss of gold'." "Well, what are you mad about? I'd say you are getting results. Let me see the dispatch. It read: BYRD SEES U. S. DEBT AS ELECTION YEAR ISSUE Adamant Senate Finance Chairman Won't Hurry Tax Cut Warns of Deficit Budget, Cites Gold Loss WASHINGTON - The people are worried about national solvency and may register their opposition to the Administration's spending in next year's election, Sen. Harry F. Byrd (D-Va.) predicts.

Gold Loss Cited

Byrd Heads Finance

Bryd, who heads the Senate Finance Committee, said in an interview there is more concern about the mounting national debt than he has encountered at any time in his 30 years in the Senate. His committee takes up next week a House-passed bill to extend the $315 billion debt limit. "I think the people generally are awakening to the fact that after having deficits for most of 30 years we've gone about as far as we could go in adding to the debt," Byrd said.

«Judging by the mail I get and other evidences, there's more concern about our fiscal situation, especially our loss of our gold, than in any other period that I've seen in the Senate. "We've lost two-thirds of our free gold because of our unfavorable balance of international payments. If we lost all of the free gold because other countries elect to take gold instead of dollars, the dollar would plunk down like you throw a rock off a precipice." The finance committee chairman challenged Mr. Kennedy's Thursday news conference statement that "'the economy will suffer", unless the Senate acts quicklyon the tax bill. Brydmade it clear the measure won't be ready for Senate consideration until next year.

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Byrd has scheduled hearings to run through Dec. 15. At Friday's session, Sen. Vance Hartke (D. Ind.) moved to wind them up at once, but lost 12 to 1. Byrd termed Hartke's motion "a publicity stunt." Tax Reduction on Borrowed Money "When the President started this idea of a tax reduction on borrowed money, He predicted a recession if his bill wasn't enacted quickly," Byrd said in the interview. "It hasn't occurred." Byrd, who maintained silence in the 1960 election when fonner Vice President Richard M. Nixson carried Virginia, said he is reserving judgment on the next Presidential contest. Gambling With National Security But he said President Kennedy is taking a "very serious gamble" with national solvency by proposing to cut taxes and increase spending at the same time. He said he will vote against the House-

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passed bill to cut taxes $11 billion unless expenditures are reduced. Planned Deficit

"Never before in the history of our country has any President advocated a planned deficit in order to reduce taxes," Byrd said. "I feel that it is very untime~ ly because we've already got a deficit this year of $9 billion. A tax cut of $11 billion will be added to the public debt and within two and a half years the administration itself admits that the debt will be $334 billion." In elaboration his opposition to the President's tax cut plan, Byrd said, "Today we're enjoying unusual prosperity. The profits of the corporations are higher than they ever have been. The gross national product is high and the depression or the recession did not occur." Besides, Byrd said, he doesn't believe a tax reduction will have the impact that Mr. Kennedy claims.

After reading that blast Joe still thought he might be able to get some leading questions answered by the Senate's Finance chairman, so he wrote· Senator Byrd the following: Hon. Harry F. Byrd, U.S. Senate, Washington 25, D.C. Dear Senator: A few months ago when I wrote you concerning the Gold Reserve situation, asking some very pertinent questions, all that you mailed me was a printed explanation of the Treasury's swapping for foreign convertible currencies so as to keep from reporting losses of gold in the Treasury Daily Report. I wanted to know if when the Treasury uses the swapped convertibles it eventually would have to supply convertible dollars in payment. There was no answer. I wanted to get across to you that our continued imbalance of payments isn't as important as the fact that we now have over $27 billion, all convertible, held by foreigners. And that eliminating the $12.3 billion in gold needed to cover Federal Reserve Notes and deposits, there remained only $3 billion to convert the $27 billion. On this there was no comment. Since then, Treasury Secy. Dillon has told your Joint Economic Committee that he doesn't have to obey the 25-cent law; that he can use the $12.3 billion to continue converting foreign held dollars. He states he has another law to back up his statement and can use this gold "in case of an emergency." And of course he can always find an emergency. On November 5 a Federal Judge in Los Angeles, backed by the Treasury, held we are still in a "war emergency," and therefore ti is illegal to hold gold bullion. I have clipped from the Los Angeles Times a two-column article (AP Washington dispatch) quoting you strongly on this whole financial mess. Taking Dillon's word, he does not intend to stop the gold How to foreign dollar ohlders. This should call for action. Can't your Finance Committee'urge Banking and Currency to either put an embargo on gold or put a price on Treasury Cold that will cause foreigners to

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use their dollars to 1?urchase our produce or manufactured articles? If such an action isn t taken our currency will be stripped of all its gold backing. Lees quit worrying about the Negroes and get after something that really is important. Let's find out how it is that the Treasury can go along for months showing no loss of gold when we are willing to let it go at the world's lowest price. Best wishes. Sincerely, JOSEPH A. BACON

Joe later had to report that there was no answer to this letter, and went home talking "liquidity' knowing full well that the only way they could get that liquidity is by grabbing on to our gold. "You remember Senator Bible wrote us of the plan, stating that those who favored it felt it would be better to back our vast debt, the ravages of inflation and the Administration's spending programs on the taxpayers' property and savings rather than on gold. In that way we are tied up stronger than ever to the 'pink' monetary management now in vogue in Washington." "Well, Congress is our only help. We can only appeal to its members. Have you sounded out Sen. Gruening on the gold drain?" "He is going down the same road as all the rest. He doesn't appear to be interested in stopping the drain by which the IMF is getting control of the gold we have left. However, his bill S.2125, aimed at only aiding the gold miner, is the only one that has made any headway. It has sub-committee approval and assurance of 'no opposition' from Secretary Udall. But who knows how long Udall will stay on the job under President Johnson. He is one Kennedy appointee who has stirred up plenty of trouble for Washington .

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CHAPTER 37

Liberals Would Scrap All U. S. Gold or Joe the days by. He liked working with the mine secretary. His evenings he spent in Placerville with Connie. They did not F neglect Mr. and !virs. Collins, who appeared to be just as happy as if Hew

Joe and Connie were near relatives. While most of the conversation had to do with the wedding and the future plans of the happy couple, Mr. Collins could not refrain from introducing some recent gold news, knowing of Joe's intense interest. He had just received his December issue of Pay Dirt, the official organ of the Arizona Small Mine Operators J run by Charles F. Willis, owner and publisher, and R. G. Moore, editor, at Phoenix. He called attention to an article about the proposal to repeal the Gold Reserve law which provides for 25 cents in gold to back Federal Reserve deposits and notes.

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"This whole thing sounds fishy to me," said Collins after Joe had read it. "Secretary Dillon has already told us he can use the $12.3 billion in gold to continue paying off foreigners. Says he has another law giving him that power. If this is true why are they talking about the repeal of the 25-cent law? I'm afraid Congressmen are letting the Treasury's gold jugglers get by with a lot that will not stand the light of day." "It sounds like that to me," put in Joe, "and note the article states ~sales of gold' to foreigners. I don't call that a ~sale' when we have to dig up the gold to foreigners to cover the dollars they hold. Somebody's using the wrong word. And do you note that phrase, 'Support of the International Dollar?' We give the dollar gold support when it gets into the hands of the Internationalists. This further supports our conclusion of many moons ago that the communist plot is working, supported by the present Washington administration. It is impossible to come to any other conclusion. The International Monetary Fund must have all of your Uncle Sam's gold. I must bring this to the attention of the boss tomorrw." "This all getting too serious:' said Mrs. Collins who was always a very good listener. "I want to know more about the plans for the wedding. What is the date? And Connie, can I be of any help to you? John tells me you are still working on the newspaper." "Thank you, Mrs. Collins," responded Connie, "I'm getting along fine. My dressmaker helps me a lot, and Joe comes to town every evening to keep me in good humor. And he doesn't even talk about gold mining. The wedding is to be two weeks from today, at the little church around the corner; wedding luncheon at the Blue Bell. Honeymoon? 'No comment: as Joe would report. Further, you and Mr. Collins are to stand up with us. You are our closest friends. The next day Joe wrote the following letter: Hon. Ernest Gruening, U.S. Senate, Washington 25, D.C. Dear Senator: We want to congratulate you on getting subcommittee approval of your S. 2125. Personally we have been more for something that would stop the gold drain, especially when we have over $27 billion in the hands of foreigners subject to convertibility. However, if we can't do anything about that we would settle for anything that will reopen the gold mines. With the President now calling for jobs for an additional five million men, could you sell him the idea that your bill would be quite an assist in digging up those jobs? No doubt during your time in the Senate you have had opportunity to get well aoquainted with him. Why not try him? He appears to be a good mixer. When he was out for the nomination for the presidency three years ago he was my selec· tion. I hope he hasn't lost his natural conservation. Sincerely, JOSEPH

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CHAPTER 38

The Assassination of President Kennedy t was Friday, November 22nd. Joe was at the mine office early and ready for a big day's work, into which he had already launched. The company had taken on two new mines, doubling the secretary's work, part of which he assigned to Joe who still had a lot of correspondence with congressmen to clean up. It appeared very hard to get the boys in Washington to commit themselves on gold.

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Joe had word from Harold and Evelyn that they would be in Placerville several days before the wedding. Harold wanted some time to look over what Joe had been doing before he and Connie would be off on their honeymoon. He was surprised at what his pal, Joe, a rank tenderfoot, had accomplished in less than one short year. He just couldn't realize it. His and Evelyn's attendance at the wedding was only part of their reason for making the trip to California. Joe was well into the day's work when the awful news of President Kennedy's assassination came over the radio. Operations came to a dead stop. For four days America hung on to its radios and televisions, taking in every word and action of the broadcasters. For that four days there wasn't a commercial, which usually represented millions of dollars. Nobody appeared to know who paid the bill, or if there was one. As the news came out from Dallas, Washington, New York and other centers it hung like a pall over the entire nation. Never before had the nation received such a shock. But in less than an hour a new president was sworn into office and Lyndon B. Johnson of Texas took over. Politics, business, governmental agencies and foreign nations were alerted. What would be the policies of the man from Texas? When the days of mourning were over the mine management and some of the leading investors met. All wanted to know how the events of the past several days would affect gold mining. The company had a large sum of money invested and plans called for larger expenditures in equipment, engineering and operation. With actual operation hundreds of miners would be employed. Wages would be practically trebled what they were when Roosevelt shut the gold mines down. A great deal was involved in the new enterprise. Management had to, as much as possible, arrive at what were Washington's plans. Both the secretary and Joe brought the directors up to date on their efforts to get a line on the possibilities. A close tab was kept on all Washington reports. Among ot~er statements President Johnson announced he would "preserve the stability of, the dollar." That sounded very much like the statements coming from the Eisenhower and Kennedy administrations over the past several years. After his ""stability" statement the first bill the new president signed was to extend the limit of the National Debt to the enormous sum of $315,000,000,000. Can we have stability without gold? That was the question that

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bothered the gold mining company leaders. All attending the gathering took a hand in the discussion, Joe, as assistant secretary, making notes of the discussion, to be later supplied to directors and stockholders. Joe was well received by company heads. The next day Joe had an early morning session with the Secretary, letting him read the Pay Dirt's comment on what would or would not happen to the $12.3 billion in gold, the only safeguard our paper money now has. He gave the secretary John Collins' thoughts on the matter. Their discussion centered around the question as to just how much of the Kennedy policies would be followed by the new president, Lyndon B. Johnson. "I believe Johnson is a good business man," remarked the secretary. «He's had years of experience as a law maker. He's a successful agriculturalist. He was not born with a silver spoon in his mouth, nor with millions at his command, as was Kennedy." "Yes," added Joe, "I noted in a California paper, the San Bernardino Sun, that he had a very lowly start. While a young fellow he ran an elevator in San Bernardino, and while there was no elevator to operate he slung hash. There was no Harvard or Boston for him. So if coming from the ranks means anything LBJ is off for a good start." "O.K., but let's get down to brass (I mean gold) tacks," remarked the boss. That's our meat. In today's papers you will read Johnson's policies on everything but gold. He shys away from it very religiously. We must find out if there is anyone in Congress brave enough to adopt a domestic gold policy and stick with it." "
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government his representatives in Washington should exercise the guiding hand." "'I'm with you there~'" said Joe, «but so far there is no one in either the House or the Senate that will take a hand in the situation. That Wright Patman of Texas who used to use the press to berate the Federal Reserve and Wall Street bankers, has turned out to be a complete Hop. We had an idea that when he became chairman of the House Banking and Currency Committee we'd get somewhere with gold and monetary reform. But somebody stuck a pin in Wright and he just phizzed outa complete loss. I have written him twice - no answer. I tried Tom Kuchel, California's senior senator, who should be a real leader for the Golden State,- no answer. «Bizz" Johnson, who represents the great gold mining area of California - nineteen counties from Inyo to the Oregon border - persists in shying away from gold as money. He and a· number of others in Congress think, when it comes to gold, they can by-pass the Banking and Currency committees. A number of years ago when in the House, Clair Engle called it the 'New Approach: The boys who really run the gold show let them play around with their bills that would only help the gold miners. There were no bills that would stop the gold drain and protect the American taxpayer from the situation so highly recommended by Senator Bible." "And who else in Washington have you been writing to?" questioned the secretary. «Surely there must be some few members in either house on whom we can depend. How about Sen. Ernest Gruening of Alaska, where there are billions in gold still in the ground awaiting an opportunity to add liquidity to the U.S. dollar? You probably noted among the world money managers that word 'liquidity' is a favorite. But they don't want to realize that liquidity comes with the amount of gold at d" our cornman. "'That's what struck me when at this year's meeting of the International Monetary Fund," remarked Joe. «They accomplished nothing, shut up shop and went home talking 'liquidity,' when the only way they can get that liquidity is by cabbaging on to all our gold. The Treasury says it still has $15,582,000,000 in gold to give away. And Senator Bible recommends we continue the giveaway. It would strengthen our paper money, he says. When you have men of that type in the highest branch of our law making body what is there to do?" "Congress is our only source of information and help. You will have to keep at them. How about Senator Greuning?" «He's just like a lot of others," answered Joe. He is not interested in stopping the gold drain, which of course would interfere with the IMF cleaning up on what gold we have left. However, his bill, S. 2125, is the only one that has made any headway. It has been approved by a subcommittee of which Greuning is chairman. G~euning says he has received assurance of a 'no-opposition' report from Interior Secretary Udall. But who knows how long Mr. Udall will stay on the job under President Johnson. He is one Kennedy appointee who has stirred up plenty of 181

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trouble for Washington. One of the best reports I've seen on Greuning's bill appeared in Charles Willis' Pay Dirt. I think we should give it a good reading. Perhaps if we agree to let the IMF fatten up the liquidity of its paper with our gold the One-Worlders might let our gold mines reopen. Joe handed over the Pay Dirt clipping, given him by John Collins. It read: SUBCOl\fMITTEE APPROVES GOLD BILL New Measure Would Provide Compensation Payments to U.S. Gold ~,fines Amount Would Be Determined By Cost-ai-Production Factors Hearings on a new gold bill, the Gold Mine Revitalization Act of 1963, were held October 23 and 24, by the Subcommittee on Minerals, r>.laterials and Fuels of the Senate Interior and Insular Affairs Committee, Senator Ernest Gruening, chairman. The measure - S. 2125 - had been introduced on September 9 by Senator Gruening with Senators Bartlett, Bible, Kuchel and Metcalf as cosponsors. Early in November the minerals subcommittee voted to approve the bill, with minor amendments, and the measure is now before the full Interior Committee for consideration.

cause of the great expenses involved in

opening closed mines.

S. 2125 would authorize the government, through the Secretary of the Interior, to make "compensation payments" to gold miners, the payment being the amount by which the cost of producing gold today exceeds the cost of equivalent operations in 1940, the peak production year in the United States. Provisions of the bill are the direct result of previous hearing'S on proposals to aid the domestic gold mining industry, particularly the July hearings on S. 100 and S. 1273. As those bills met strenuOus opposition from the Executive Branch of the government, Senator Gruening decided a totally different approach was needed. In introducing the bill, he called attention to government actions which had, to all intents and purposes, destroyed the domestic gold mining industry. The fixed price of gold, established at $35 an ounce in 1934, was cited as the first reason gold miners are unable to operate profitably; the second, the Senator pointed out, was the War Production Board's Order L-208 issued in October 1942, which closed all domestic gold mines. As a result, he said, even mining operators that might be able to make a profit at $35 an ounce have been unable to begin operations be-

At the hearings, Gruening recalled that "any attempt . . . to ameliorate the condition of the American gold miner by increasing the price the American government would pay to him" has been met with arguments by the Treasury Department that this would "upset the international financial applecart; that is, if the American Treasury were to pay an American gold miner a subsidy of $70 an ounce for his American gold, in addition to its price of $35, bankers in Switzerland, England, and elsewhere would become upset and might demand payment in gold for the dollars they hold." He also noted that an American cannot get gold for his dollars, but a Swiss banker, or an English banker can and does get gold for his dollars. Senator Gruening explained that while the Treasury's argument was not accepted as valid, the threat of a recommended veto made it useless to pursue the earlier proposals for aiding the gold mining industry, and a new approach was necessary. He emphasized the point that S. 2125 does not, in any way, change the price paid by the Treasury for gold, or mention the cost of gold. The bill was drafted, he said, so that it does not have any effect whatever on gold as a monetary unit. Therefore, it would simply be a means of assisting the gold mining industry regain prosperity, and, by avoiding reference to gold prices, escape obstruction by the Executive Branch of the government which has been based on the premise that aid to the gold miner would damage international financial stability. In his testimony supporting S. 2125, Senator Bartlett of Alaska called attention to the drastic drop in U.S. gold production - 4,870,000 ounces of new gold

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in 1940 vs. only 1,526,757 ounces in ulations and excessive red tape to the 1960. «Last year America's domestic point that all of its provisions are so gold production was not even sufficient weakened as to make it ineffective or so to supply the needs of America's domes- complex that the small operator cannot tic industrial gold market," he continued. afford to take advantage of the same." "American new gold supplied but half of Dr. Elgin Groseclose, a financial and the industrial gold demand. The rest, investment consultant, directed his tesirnports." He insisted that government timony prinoipally to need to stimulate policies have subsidized commercial pur- domestic gold production because of the chasers of gold, and that this continued shortage of international liquidity. While support of one sector of the economy at admitting that the present proposal would the expense of another is not justified. not expand U.S. gold production suffiAlso testifying in support of the bill ciently to meet the world problem created were Representatives Chenoweth of Colo- by reason of our monetary excesses, Groseclose does see the bill as preparing the rado and Johnson of California. way for a more fundamental solution of Merril E. Shoup, president, and Max the gold question. \V. Bowen, executive vice-president, of A statement submitted by Dr. Donald the Golden Cycle Corporation of Colorado Springs, told the hearing that pass- H. McLaughlin, hoard chairman, Homeage of S. 2125 would mean the resump- stake Mining Company, repeated his tion of profitable mining operations in views expressed in earlier testimony and many of the gold mining camps of the emphasized his contention that "if special West and Alaska, reduce unemployment, aid in some form is not provided soon, lessen welfare loads, and at the same all mines in the U.S. that are dependent time increase the production of gold on gold alone will be forced to close bewhich is becoming increasingly short sup- f ore many years pass. " ply in this country. Senator Gruening reported briefly on Cost and production data were pre- recent correspondence he had with Secsented to show the benefits which would retary of the Interior, Stewart L. Udall, be derived from the provision of S. 2125. then stated: "I am happy to report that For the Cresson mine of Cresson Con- possibly in consequence of this corressolidated Gold Mining and Milling Com- pondence, I have had several long telepany current costs were estimated at phone conversations with Secretary Udall $88.90 an ounce of gold against a cost and the result is that there will not toof $34.43 in 1940, a difference of $54.47. day be an adverse report from the InHowever, the assistance limitation im- terior Department. There will be for the posed by applying the Cost of Living time being no report whatever and it is Index would reduce the "compensation agreed that the matter will be studied, the new aspects fully considered and an payment" to $41.31 per ounce. effort made to see whether approval canFor the Ajax mine, a smaller tonnage, ~ot ~~ worked out along these or similar higher grade ore mine, current costs lmes. , were estimated at $74.57 an ounce, comThroughout the hearings two points pared to $35.02 in 1940, indicating compensation payments of $30.55 per ounce. were stressed: first, that the Federal Government itself is directly responsible for In their brief, Shoup and Bowen ex- the present distressed state of the gold pressed the hope that S. 2125, "a simple, mining industry; and second, that S. 2125 straightforward solution to the gold min- would in no way change the. pricc paid ing problem, will not be emasculated by the Treasury for gold, and would have through amendments, administrative reg- no effect on gold as a monetary unit.

"Well, that's something," remarked the secretary. A very good report of the hearing on the Gruening bill. Getting Udall's agreement to layoff on any adverse report will be helpful. However, paying $80 to $100 to the domestic miner with the Treasury continuing to convert foreign held dollars at $35 just wouldn't make horse sense. The real truth is that we are letting our treasury gold go at one-third its value. It's criminal." "That's what gets me down," said Joe. <~And about that bird Udall, 183

who knows how long he \vill stay on the job? His handling of public lands, especially mining claims, has made him extremely unpopular. And now that he wants to shift Northern California water into Arizona, the entire Golden State is up iIi arms against him-even his friend, Governor Brown. I don't think President Johnson is going to take a chance on losing that big California vote." «Anyway it should help to give Senator Gruening a commendatory letter. He's worked hard on his bill," said the secretary. "And give me another quick rundown on your letters and answers from those congressmen and others whom you supposed were the most likely to take an interest in the gold miners' cause:' "Will do," said Joe .

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CHAPTER 39

Prospector Joe's Congressional Rep,ort <·On the whole, very few in Washington are interested in doing anything about gold mining or stopping the flight of gold to foreign countries," reported Joe. "Rockefeller and his banking family are all for the International Monetary Fund. I wrote him twice. All I could get from his office in Albany was two short notes from a girl secretary and a printed press release. I noted the name of Rep. Thomas B. Curtis, Republican of Missouri in the news. He is for the IMF and talked about more liquidity to aid world trade. And if you take it from me the only way the IMF can get that liquidity is by getting all of Uncle Sam's gold. I have had several letters from "Bizz" Johnson, who represents this California district. I tried to sell him on the idea that the gold drain was America's No.1 headache which should be cured. He then challenged me to propose a bill that would stop the drain. He no doubt remembered the Iowa congressman who introduced a bill to put an embargo on gold. The bankers made quick work of him. In the following election he wasn't even nominated. The money changers come first with congressmen. ·'Rep. William E. Martin, chairman of the National Republican Committee was in Los Angeles early in 1963 talking about the gold drain. Here, I thought was an opportunity to get to rich ground and make a clean-up. I wrote him a nice letter, getting NO answer. Then I thought Sen. Harry F. Byrd, supposed to be the 'watchdog of the Treasury,' might give me some help. He was 'glad to get my views' but sent a printed explanation of Treasury swapping dollars for foreign convertible currencies, with which it met the foreign calls for our gold. In this way calls direct on the Treasury were evaded, but no doubt the swapped dollars would have to be met with gold at some time later. There was no comment by the gentleman from Virginia, but about two months later he hit the press with a loud blast about what was happening to our monetary condition.

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"Then I noted that Sen. Mike Mansfield, the man closest to the administration, was in his home town, Butte, Montana, mending his political fenses. He made the statement that the U.S. Treasury should be now payng $65 to $70 for gold. I couldn't let this get by so wrote asking him why not make this statement on the floor of the Senate and in the White House. NO answer. I wrote Sen. Thomas Kuchel, California's senior senator; NO answer. Following that I went after Sen. Alan Bible of Nevada, whose hills are lined with unmined gold. You already know the result. According to Mr. Bible we should let the IMF have all our gold. He wrote that this would strengthen our paper money, as the debts of the nation and the results of years of inflation could then be saddled on our property and our small savings after income tax. If that isn't a Communist idea then I will eat my hat. It sounds exactly like the advice that Harvard man, Galbraith, gave the late president. "So with such results the cause for gold in Washington looks mighty weak. As you suggest I'll write Senator Gruening and perhaps President Johnson would be interested in hearing from a California gold bug." "No doubt Senator Gruening is interested in getting support for his gold bill; also his co-authors," stated Joe's boss. «As for President Johnson, he's just too interested in a thousand other matters to start anything with the Treasury and Federal Reserve, both of whom are dead set against the gold miner. What I can't understand is why Western congressmen and those business men who want a sound dollar don't get together. Or is the 'sound dollar' talk just so much baloney? As matters now stand the dollar is sound only for the foreigner. Joe, do you think we can work on that idea? What has become of the real Americans in Washington? Take it from me: America is suffering right now, morally, m~ntally and financially obsessed with the idea of what we owe foreigners. They can call me an isolationist if they want to but if there ever was a time when some isolation would do us some good it is right now. I just wonder if President Johnson ever gets that idea." "I have been watching Washington reports pretty close," said Joe, "but so far the new president hasn't mentioned gold or that 27 billions of foreign held dollars awaiting conversion to Treasury gold. His ideas and plans about nearly everything else have been given wide publicity. Furthermore Treasury Secretary Dillon has been very quiet. Under the late President Kennedy he was forever assuring us that the dollar would be stabilized, but I don't know what with; at least not with gold which is heavily mortgaged to our foreign friends.

..

"By the way, yesterday I had a note from the publishers of my favorite mining publication, Newell H. Leppert. He called attention to a gold plan written for him by a Los Angeles man, Robert Gains. The publisher doesn't think much of the plan; neither do I, so last night I whacked out the following and put it in the mail this morning: I have your note asking an opinion on Robert Gaines' gold plan, appearing on page 17 of the December, 1963 issue, California Mining Journal. I agree with your comment that it would take too much time to ac-

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cumulate a reserve of $10 billion in gold, paying only $50.00 per ounce. Mr. Gaines objects to taxes that would be necessary to pay a gold production bonus, when his plan could not be carried out except with additional taxes unless the Treasury put a price of $50 on the gold produced under the Gaines' plan. Fifty dollars per ounce would open too few mines in the United States considering present costs of operation. There is no plan that would increase the U.S. gold reserve sufficiently to aid the general economy. All the plans submitted so far are for the benefit of the gold miner only. None of them can get the approval of the Treasury Department and the Federal Reserve Board, unless the constitutional duty of coining money and fixing its value is returned to Congress where it belongs. Under present conditions the Executive department of government is usurping a power and duty that does not belong to it. Dr. Franz Pick Has the Answer

Now turn back to your page 16 article, same issue, in which you quote Dr. Frank Pick, taken from the Northern Miner, Toronto, Canada. Doesn't it appear to you that he has the answer? For the benefit of your readers I am reproducing a portion of the article as follows: A few weeks ago, the Republic of Liberia announced through the highly respectable banking firm of Leu & Co. in Zurich, the sale of L$ (equal to the U.S. unit by the grace of whioh it exists) 20 gold coins, containing a net of 16.8 grams of fine gold. About 10,000 coins, bearing the effigy of President Tubman, were minted in Switzerland. Worth $18.90, the coins are being sold at $34.00 each. The gold to make them came from Fort Knox. The currency in Liberia is the U.S. paper dollar, the effective central bank is the First National City Bank of New York. Another issue of gold coins, also minted from American gold, will be featured by the Bank of the Netherlands Antilles. About 1,500 sets of four, or a total of 6,000 coins, will be sold at $190 each, with a gold value of $95. These coins are only forerunners of more to come. Other Countries Profiting On U. S. Gold

The "Black Republics" of Central and West Mrica, "bought" between $700,000 and $1,900,000 each of gold from the U.S. Treasury, according to official statistics. Rumors are that they too want to have their national gold coins - naturally, sold at a 100 per cent profit for their rulers - and we can easily visualize Senegal ordering such coins with her newly acquired $1,700,000 of U.S. metal from anyone of the commercial mints of Europe. Unfortunately, such events remain unknown by the general public, as the American press does not consider them fit to print. There you have the answer. And Congress has the answer. The answer from the highest monetary authority in the United States, backed by U.S. official records. If. with this going on, the Banking and Currency commitees are not interested, then there isn't much of a chance of Western gold miners reopening their properties. However. no Western mining organization should stand by and let this crime go unnoticed by their Representatives in Washington. Heretofore the only information we had to work with was that handed out by the gold swindlers themselves. Now we have information from a very authentic source. backed by official government figures. It is not only definite information that gold in foreign countries is worth twice the U.S. Treasury figure but also that in Washington there now exists some agency -making a huge profit off the taxpayers' gold. The whole mess calls for an immediate and searching investigation. All Western Mining organizations should make such a demand on their congressmen. They should ask the American Mining Congress to lead the demand.

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After writing the Journal editor he also got letters out to the Treasury Department and also to the New York bank that handles the gold deals on this side of the Atlantic. Both he and the mining company secretary were anxious to see what the official explanations would be. After Joe got his letter off to the Mining Journal publisher he wrote the following to Senator Gruening: Hon. Ernest Gruening, U.S. Senate, Washington 25, D.C. Dear Senator: Here is definite information, backed by an official source, that U.S. Treasury gold is being shipped to foreign countries, where it is coined, after which it doubles in value. If you and co-members let this pass without immediate action we might as well give up the fight to get our gold mines reopened. We just can't let these gold profiteers get by with their swindle at the expense of the American taxpayers. We expect action. Sincerely, JOSEPH A. BACON

"With that going on," remarked the secretary, "I wonder what else our congressmen, or for that matter, Treasury Secretary Dillon, need to give consideration to some gold legislation. The U.S. Monetary system surely needs that extra gold value now going to foreigners. And many of our gold mines could reopen with that $70 price. We could give President Johnson a part of that additional five million jobs he needs. Perhaps the Studebaker move to Canada might give Washington a jolt. Instead of doing something to protect jobs and make new ones most everything that Washington does eliminates them or shifts them to other countries. Taxes and excessive labor costs will be our downfall." "I noted something else in that Studebaker move announcement by their president, Byers A. Burlingame, that could be a lesson to our money managers. In addition to lower wages and fair government treatment the Studebaker company's dollar will buy 14 per cent more in Canada than in United States. That's due to Canada lowering its paper dollar value, now 92 cents, formerly $1.06. It also brings them more for their gold. We, in this country, appear to be too dumb to realize that. Before sending that article to the publisher I will have to let John Collins read it. 1 will go to see him this evening, and if you hear a blast down that way it will be John blowing off. And before I forget it, some day soon 1 want to read what you have on John's mine. He gives it a very good record." The next evening, after work, Joe hit for Placerville, expecting two lectures, both for neglect. He hadn't seen Connie for two days and the Collins for a whole week. He'd have to frame up some good excuses. Work had doubled in the mining office, and when hit by the Kennedy assassination the activity came to a complete stop. He hoped that would get him by. And it did. Connie was lovely. "I knew you were more than busy, Joe:' she said. "And now the boss who had just bought a paper in

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Jackson, the next county seat south of here, wants us to postpone our wedding trip. But I told him ~nothing doing'; and that our arrangements were made long before he bought that paper. I have been shuttling back and forth to Jackson, helping out there as well as keeping up here. The trips are nice along Highway 49 but I've been keeping late hours." Together Connie and Joe called on the Collins. "Where have you folks been keeping yourselves?" inquired John. "Don't you know you both are now our children. We want to see you once in a while. We know you have been busy but that doesn't make any difference. First thing you know you will be eloping and we'll miss attending a wedding." "That's one event you won't miss," responded Joe. "But that isn't what is bothering me just now." "I'll bet I know what it is. I've read the December Journal and all about our Treasury gold being shipped to foreigners who have it coined after which it doubles in value." "Yes, .T ohn has been storming around the house for a whole week waiting for you to drop in for a council of war," added Mrs. Collins. "Well, what are we going to do about it?" stormed John. "That's just more than I can stomach. I want to know what our congressmen are dOing, allowing some shysters to make a $35 an ounce profit on 0 DR gold - the gold the taxpayers have paid for. The colored folks and their sympathizers are marching on Washington for a whole lot less than that. Do you think we could stir up the gold miners for a march on Washington? We've got to do something right now or else we are lost. If Washington can get by with that highway robbery we might as well kiss our gold mines goodbye." John was really angry but he calmed down as Joe handed him the article he had prepared for the mining publisher. He read it with a great deal of interest. "That's a good one," he said, "but what can we do about it?" "Do you remember the day I met you," questioned Joe. "Sure you do. lt was Gold Discovery Day at Coloma. The Clampers were all soused

and making whoopee while the politicians and the Beach and Park boys were trying to make speeches. There wasn't one word said about gold. That day, like Andy, you were 'regusted.' You wanted to talk to somebody about gold and the bad deal the gold miners are getting from Washington. And I wanted to meet somebody who knew a lot about gold mining. It was a lucky day for me. Don't you remember, John?" "That gives me an idea," said John. "There's another Gold Discovery day coming up next month. January 24th is the day Marshall discovered the gold in Sutter's mill race at Coloma. January 24, 25 and 26 is a weekend on which all of California could get together and insist that Washington use our taxpayers' gold so that we get its full value, and so that any congressman win be convinced that to keep our gold mines closed is utter foolishness. This could very easily be tied in with Senator Gold-

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water's monetary policy of having a free market for gold. We might even be able to get the Senator to come to Placerville and be the main speaker for the gold mining part of the day's observance. In fact, the entire West should join in such a movement. I am at a complete loss as to why business, both large and small doesn't appear to realize what the loss of our gold means to them." "The fact is, they are not told the truth," responded Joe. "And they are too busy digging up enough business to pay taxes and keep going. Day after day the Treasury Department puts out reports showing that there is no gold leaving the country. For months it has published the same old Rgure as being the amount of gold On hand - $15,528,000,000. Does it want us to believe that when our gold is worth $70.00 per ounce in other countries foreigners are not taking it; especially when they can get it for $35.00? Then Joe announced that he had received a wire from Sen. Ernest Gruening of Alaska in regard to his gold bonus bill, S. 2125, dated Dec. 13, 1963. It read: S. 2125 WAS REPORTED UNANIMOUSLY BY THE INTERIOR AND INSULAR AFFAIRS COMMITTEE TODAY. COMMITTEE ACTION WAS TAKEN IN FULL REALIZATION ADMINISTRATION OPPOSITION WILL PRESENT GREAT DIFFICULTY FOR PASSAGE BY THE SENATE. THANK YOU FOR YOUR HELP IN THIS MATTER. REC'D. 4;OOP PST ERNEST GRUENING, USS

"How much good is that going to do us if the gentleman from Alaska hasn't sold his co-members in the Senate, and if there is so much administration opposition?" questioned ~1r. Collins. "I have already given Senator Gruening the information about our Treasury gold bringing $70.00 an ounce in foreign countries," responded Joe. I wonder what he needs to convince his friends in the Senate that our taxpayers are losing plenty every time an ounce of gold goes to a foreign country." "Give him another letter on the same subject and ask him what it takes to convince the Senate of what the Treasury is doing to us," urged Collins. "Will do," responded Joe. The next morning the following letter was dispatched: Hon. Ernest Gruening, U.S. Senate, Washington 25, D.C. Dear Senator: Thanks for your wire announcing the approval of S. 2125, unanimously by the full Interior and Insular Affairs Committee. You make no comment on the proof furnished you that our Treasury gold, coined, is bringing $70.00 per ounce in foreign countries. Is there anything preventing you from getting this information on the floor of the Senate with a demand for an investigation by the appropriate committee? Would this be by Harry Byrd's Finance Committee or by

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Banking and Currency? Our efforts for a better price for gold are useless unless you use this information. Would it be possible to summon Dr. Franz Pick of Chicago before the Senate. I know he charges $150.00 per hour to talk to him, but the taxpayers are losing far more in letting our gold get into the hands of foreigners at $35 per ounce. Best wishes for the Holiday Season. Sincerely, Dec. 14, '63 JOSEPH A. BACON.

Before there could be any more talk about gold mining or congressional bills concerning the same, Mrs. Collins broke in with: "What I want to know is when there is to be a wedding? Let's talk about that for a while. I'm fed up on this gold business." "Now mother, what \ve are talking about is important," said John. "So is getting married," answered lady Collins. «So let's hear about it."

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CHAPTER 40

The Happy Event ere Joe and John woke up to the fact that they were utterly neglecting the lady members of the house. Joe hurriedly offered apology, asking Connie to tell their plans for the happy event.

H

"It's all settled," she said. «Joe has promised to make me a happy woman, with the help of the clergy, at noon this Saturday. Mr. and Mrs. John Collins are going to be our main witnesses. There will be a few more, with luncheon at the Blue Bell. Joe won't let me tell where we spend the honeymoon, but we both have two weeks off and won't be back until next year. So if you want to wish us a Merry Christmas and a Happy New Year you better be doing it now. I am the happiest girl in the whole of what Joe calls the Golden West. Now he and Mr. Collins can go back to talking gold mining." Which they proceeded to do. "I don't understand why Senator Gruening or any other Western member, supposed to understand the gold situation, refuses to confront Congress with the information· on the price of our gold in foreign countries, provided by Dr. Pick. That refutes the continued reports by the Treasury and IMF that there's no difference in the price throughout the world. It demonstrates that our taxpayers are losing $35.00 per ounce on every bit of gold that leaves the Treasury. Further, we should know who is getting the profit. Does it go to the foreigners, or is there somebody in our government in on the swindle?" "You are asking some sixty-four-dollar questions," answered John. "However, ever since Woodrow Wilson was president, the ~money chang-

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ers' and not Congress have run our monetary matters, despite the fact that the Constitution says it is a power and duty of our lawmakers. Every once in a while Wright Patman of Texas, now head of the House Banking and Currency Committee, used to break out against the way the Federal Reserve Bank is running our money business, but since he has reached the top place in that committee evidently the Board has twisted his tail as he is now a very gentle animal. He takes no part whatsoever , in a great many matters that are our business in which he should be concerned. But we should not put all the blame on the gentleman from Texas. There isn't a member in either house of congress that will properly represent the people when it comes to the management of our money. "Take another reading of that wire from Senator Gruening. After getting full committee approval of his bill he is ready to give up when he brings up the 'administrative opposition: He wants us to believe he has done his part and let it go at that. He, like all the rest of his comembers, are afraid to force the Treasury to admit that our gold, with government approval, is bringing $70.00 in those foreign countries. Is President Tubman of the Republic of Liberia and the ruler of the Black Republic of Africa, making that $35 profit, or is the National City Bank of New York in on the deal? We, the taxpayers, who have paid for that gold, have a right to know. But apparently there is no one in Congress who will see that we get our rights. Our Congressmen would rather spend their time and our money in seeing that a colored gentleman gets a right to go to college or eat with the white folks. Like Andy, I too, is 'regusted' ."

.

"1 don't blame you," put in Joe. "For the past 30 years you have been battling this deal. Under right conditions you have a gold mine ready to prod1:lce a million dollars. Under the same right conditions the gold fields of the West are worth billions - billions that are badly needed by our government and its people today. With the President talking about the nation right now needing five million new jobs I wonder if he ever gives any thought to what putting the right price on gold would do to help. Or will he go along with the rest of our presidents, taking orders from the 'money changers'? You remember FDR said he would drive the <money changers out of the temple,' but he let 'em in stronger than ever. And worst of all, Co'ngress refuses to battle this condition which means that it will take a terrible depression before the money managers will give an inch. And remember, it's in times of depression when those who have the gold, O'UR GOLD, our $24.5 billion worth, will make the cleaning. Just recall what that Atlanta, Georgia, banker, Malcolm Bryan said:
"1 don't want to interrupt," here interposed Connie, «but, Mister Joe, are you forgetting very soon you have to head for the Sacramento airport to pick up your pal, Harold and wife, Evelyn?" "That's right, I guess I was forgetting," responded Joe, explaining to the Collins that Harold planned to do some looking around Placerville and the mines before he and Connie deserted them to start their honeymoon. «Bring them around; we'll see if we can make a gold miner out of your friend," said Mr. Collins. "Take them out to the camp. That mine could be working with very little encouragement from Washington. I sure would like to see it operating again. The missus and I don't need to make any more money so we'd be glad to let you have the property without royalty; just take over and go to work any time a paying operation is possible."

..

"'Well, John, that sounds good," Joe said, almost with tears in his eyes. "Nobody has ever been as good to me as you and Mrs. Collins. And if I can speak for Connie, too, we both will always remember you." With an approving smile Connie wished the Collins a Merry Christmas and then again reminded Joe that it was time for them to leave for the Sacra~ menta airport. Approaching Sacramento on U.S. Highway 50 Joe remarked that he was glad the Sacramento Valley fog had disappeared. He wanted Harold and Evelyn to land in the sunshine and the usual flowers and winter greenery. "Maybe we can make them forget the cold and snows of New York and Washington," he said. Mter crossing the snow-capped Sierra, Hal and Evelyn had a perfect landing and were more than happy in again seeing Joe and meeting his bride-to-be. Joe and Harold had much to talk about, and Connie and Evelyn were soon happily discussing the coming happy event. Evelyn was especially interested in Joe's prospects. "Harold and I can't make out how in less than a year he has been so successful, when we both had the idea that long before the end of the year Joe would be back in New York looking for his old job with the newspaper. His success is really remarkable." "You are right. 'Remarkable' is the word and Joe is a remarkable boy," offered Connie. «And I'm not saying that because he is to be my husband. Of course he owes a lot to Mr. Collins. Those two, regardless of one being young and the other over 70 get along splendidly. It may be that when Joe came here he realized that he knew nothing about mining, except what he had read, and was ready to learn from a man with 50 years' experience." «But in New York we never thought Joe was anything like the success that he turned out to be," said Evelyn. «He did his work and kept his job on the same paper that Hal worked on, but he was never outstanding. He never seemed to get enthused about anything. He just didn't seem to fit in."

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"Well, he fits in here; and how," responded Connie. "But I still, as he would too, give Mr. Collins a lot of credit. I want you to meet both Mr. and Mrs. Collins. They are real folks. Just today Mr. Collins told Joe when things are right for gold he can have the Collins mine. It has all its machinery ready to go. And Mr. Collins wouldn't ask a penny from Joe for his part - royalty, they call it. Just think of that. In addition to being a remarkable boy, I guess Joe is also lucky.

.. I.

'1'11 say he is," added Evelyn. "But what does Joe intend to do with Mr. Collins' mine?" "Whenever you folks in New York and Washington decide that gold is worth more than it is now bringing no doubt Joe will be interested in operating it; or leasing it to an operator. I do think, however, that he wants to do some mining on his own. He always says that's what he came to California for, but I think he came here to marry me." Both girls got a good laugh out of that, Evelyn assuring Connie that was at l~ast part of what was to happen. That night before retiring, Harold and Evelyn compared notes. They were charmed with Connie. "The lucky dog," said Harold. "Coming to California has been the making of that boy. We are both to meet his old friends, the Collins, tomorrow, and go out to the mine where Joe has been living." "Is that the mine Mr. Collins is going to give Joe?" questioned Evelyn. "What do you know about that?" asked Harold. "Oh, Connie told me all about it. That girl is pretty smart herself. Joe is lucky in more ways than one. What's he plan to do with the mine?" "We'll find out tomorrow. Joe wants me to meet the men at the ing office where he works."

min~

The next day the mine officials were glad to meet a man, secretary to a congressman. Here's an opportunity they thought to get some first~ hand information right from Capitol Hill. Harold explained, however, that getting information on the gold situation in Washington was diffi~ cult. "The Treasury has its cut and dried policies, all of which amount to its determination that there will be no changes in the gold price"too upsetting for foreign exchange." They do say something about 'liquidity' which they think they can obtain without keeping our gold, and encouraging legislation that would reopen our gold mines. They don't appear to think that gold is the best means to liquidity." "Congressmen don't want to talk about gold," reported Harold. Even those who are the direct representatives of those of you who could now be producing gold remain silent. When my boss gave me some time off to talk to your Western Congressmen they were always too busy doing something else. They worry about foreign aid, civil rights, unemployment, their party's political future, but shy away from gold and what the lack of it is doing to our economic situation. As I reported to Joe on this year's meeting of the International Monetary Fund, the main topic 193

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tember 30th. Summing up the whole several days' discussions, they amounted to but one idea, expressed in one word, 'liquidity.' And although the monetary experts present from 101 different nations did not say it, they could not but arrive at the conclusion that it is going to take more gold, and more gold value, to give the nations who are members of the Fund the liquidity necessary to carryon their international business. They would not admit that the lack of gold is now the cause of monetary difficulties all over the free world. But before long I believe they will be forced to this inevitable conclusion, that there isn't enough gold value in the free world to aid the transaction of business. After a great deal of study and observation I believe this is what we can look forward to. As you probably read in the papers, the convention split into two groups at the closing, both to give the matter of liquidity additional study. Our Mr. Dillon, Treasury Secretary, is a leader of what is known as the Paris Club. The other group's study will be under the jurisdiction of the Fund. I was unable to learn why the split or why Dillon allied himself with the Paris group. At the close of the convention Dillon gave out that by early summer of 1964 his group might know what was in store for us. Personally, I believe time is being marked until more of the U.S. gold is scattered, making it more accessible for inclusion in the gold of the Fund. Joe tells me he has letters from Congressmen approving this idea. «As for President Johnson, he has called in every line of endeavor for suggestions, even colored integration leaders, but no gold producers. This would force me to believe he will play along with the policy of the late Mr. Kennedy. You probably will remember that Dillon was Eisenhower's choice and recommendation. There might have been a difference if Mr. Kennedy had .made his own choice. There still may be something yet to come in the Treasury situation. President Johnson has brought into his office Robert Anderson, one of his Texas associates and former Treasury head under Ike. There may be a change in the Treasury personnel but not in the policy until the Fund comes to a conclusion as to the amount of gold it needs. "With our Western congressmen going international and no help among the Easterners for the gold producer, what do you suggest we do?" asked the mine secretary. "You can't lie down," answered Harold. "You have too much at stake. Joe tells me you have definite information that our Treasury gold is selling in Liberia and Africa for $70.00. I would not let Washington forget that. I would put that to every member of both houses of Congress. I would take it up with President Johnson and demand an immediate investigation - not by the Treasury but by the Joint Economic Committee. You have information that is of more value to you than the help of a dozen congressmen. Use it - and use it quickly. You have an election coming up. It's time to act." The group thanked Harold for his ideas after which he, Joe and Mr. Collins went to the Collins mine camp. Both complimented Harold on his grasp of the world gold situation. "You have come a long way in that 195

line," said Joe. "How did you do it?" "Give all the credit to Congressman Ben, my boss. He gave me time off and many contacts, but there's a lot more to learn. Gold and money is the people's business but there is nobody in Washington brave enough to open up the subject and let the people know what's going to happen. The 'money changers' are in control. They hold it's up to the taxpayers to put up the gold and let them handle it. When the gold gives out the taxpayers can then put up their savings and property to keep the Internationalists in business."

"If President Johnson can't see his way out of this mess," questioned Joe, «what have we to look forward to?" "You wrote me that you already have the answer in that Senator Barry Goldwater, now leading in the race for the Republican nomination, is for a free gold market. Under strict control, U.S. gold coined in foreign countries has a value of $70.00 per ounce. If Barry gets us a free market that market is open to gold producers. Seventy dollar gold would put most of our mines back on production. And before conditions are finally settled it now looks as if the yellow metal will have to have a price around a hundred dollars." "With Goldwater the only prospective candidate offering any way out for the gold producer, and the man who wants a sound dollar, we got to get behind him," said Mr. Collins. "And not too far behind. As for a conservative administration, there never has been a time in our history when we needed one more than now. All that our U.S. government amounts to now is spending tax money to get votes. There is no longer such a thing as economy in government. LBJ is now making a big play on cutting down expenses. That sounds good to our tax ridden citizens, but the gang President Johnson has to work with is not that kind. They learned their stuff under FDR and have been on the spend ever since. I used to think LBJ was at least half-way conservative, being a farmer and one who had a rough start in life, but I've changed my mind. I don't think he knows the difference between politics and economy. On the radio this morning in commenting on big foreign aid spending he said:
,

astically, "from ball mill and rock crusher to the smelter that turns out the bullion. Not a thing to buy, all in nne shape and ready to go to work as soon as you hook up the motors to the power line. All we need is a favorable administration in Washington." That evening while Connie and Evelyn were putting in the final touches on the wedding dress and the bride's trousseau, Joe and Harold were deeply involved in talking over what could be done with the Collins mine. Both realized that with only a slight raise in the gold price it would be a bonanza. The equipment was in excellent shape; there was paying are in sight and underground conditions were right. Mr. Collins and Joe recently had hooked up the hoist to power and had checked the timbering. It was in good condition with no caves. In a day's time it could be running full blast, handling 50 tons of ore every shift. Mr. Collins loved that property almost as much as he did his wife. He insisted on frequent inspections to keep it in operating order. All of this was of exceptional interest to Harold. If Joe had done so well in California why couldn't he? If Joe had plans for operation he'd need help, in finances as well as operation. He'd give it a lot of thought and in the meantime he would have another talk with Congressman Ben about what the new administration might do about gold. He talked it over with Evelyn. She, too, was of the opinion they might become residents of the golden state. If Joe had done so well there was no reason why Harold couldn't also. Evelyn had already considered Harold brighter and a better worker than Joe. The wedding day for Connie and Joe dawned. The little church in which miners worshipped back in the 1850's was the scene, with Evelyn and Harold the chief witnesses. Mr. and Mrs. Collins were also happily in attendance as well as a few close friends of Connie's who worked on the paper. Joe unconsciously held up the party on the way to the church by announcing he had an air mail letter from Sen. Ernest Gruening of Alaska in which he fin:J.lly acknowledged taking cognizance of news that U. S. Treasury gold, coined in foreign countries, took on a value of $70.00 per ounce. Joe was quite put out with the senator's comment that the $70 statement ~'is very interesting and would require careful study before using." He turned the letter over to Harold with instructions for him to make an early call on the gentleman from Alaska as soon as possible. "I don't understand why Congress wouldn't be right up on its ear with that information," he said.

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"Say, Mr. Bacon, don't you know you have a wedding on your hands and a honeymoon coming up," urged Connie. ~'If I hear any more about gold mining during the next two weeks you are liable to be threatened with a divorce." "What, before we are married? Come along, my beautiful bride-to-be, before you change your mind. Hal, take this letter and do your stuff. We will want a report."

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And so Connie and Joe were married and irnlnediately left for Santa Cruz on their honeymoon. When Joe let Connie know where they were going she said: "1 know what you want to do. You want to bother that California Mining Journal editor who has his office in Santa Cruz. Remember what I said about a divorce." The Senator Gruening letter, given to Harold, read as follows: Dear Mr. Bacon: Thank you for your letter of December 14 concerning the gold legislation. All of us who are concerned with enactment of a law to aid the gold mining industry must be aware that, although the Senate Interior and Insular Affairs Committee has reported S. 2125, it will still be extremely difficult to bring this legislation to the floor of the Senate. This is, of course, because of the opposition expressed by the Executive Branch - a circumstance which presents a very substantial obstacle to getting S. 2125 scheduled for Senate consideration. Despite the difficulties we face, I believe the action of the Senate Interior Committee demonstrates the existence of strong pressure for assistance to the gold mining industry which will be recognized by the Executive Branch. Your information concerning a $70 per ounce price for United States gold abroad, is very interesting. This, of course, requires the most careful study before using it as an argument in behalf of gold assistance Ie gisla tion. As for your suggestion of expert testimony on the subject by Dr. Franz Pick, there is no money available for payment of his fees. I will however, keep your suggestion in mind. Thank you again for writing to me as you have. With best wishes, I remain Cordially yours, Dec. 17, 1963 ERNEST GRUENING, U. S. S.

Joe and Connie had the bridal suite at the Dream Inn in Santa Cruz, the city's newest hotel, located on the bay just where scenic West Cliff Drive begins. They both wanted to be by the ocean, at least that was Connie's first thought. The next day she decided Joe had additional thoughts when he announced he wanted to get in touch with that Mining Journal editor. «Remember what I told you about a divorce," Connie reminded. "Well, there won't be any more gold mining until we get back to Placerville," promised Joe. "I want to get something off my mind before we get to taking in the city and surrounding area." HI have been reading up on Santa Cruz, and there is a lot I want to see and do here," Connie informed her husband. "I want to do the stores and I haven't been to a show for six months. I want to visit the Begonia Carden and see 'The Last Supper.' I want to go out West Cliff Drive and drive up San Lorenzo Valley on Highway 9, which my tourist book says is one of the state's most scenic roads. I got to look over the new University grounds. (We may send our children to it.) Then we want to go to Monterey, Carmel and Pacific Grove and the 17-Mile Drive." "Wait a minute," broke in Joe.

"Where have you been getting all

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the information? You are jjust a sweet little lady from Placerville, and you talk like a Santa Cruzan. Anyway I just want to have one talk with the Journal editor. After that the honeymoon two weeks will be all yours. " "All right; that's a promise, and if you don't keep it please relnember my threat." Joe had his visit. He wanted to inform President Johnson of what he had learned by reading in The Journal of our Treasury gold bringing $70.00 per ounce even in darkest Africa. Both he and the editor agreed that it was queer that the Africans had a better idea of what gold was worth than our U.S. money managers. They agreed that President John~ son should be sent the following letter: Dear Mr. President: The day's radio news told of your discussing unemployment with your Labor Secretary. Considering a great many conditions under which domestio industry must operate today, employment conditions are not going to get any better, unless we undo many government moves of the past decades. Steps must be taken more foverable to our own industries. I would like to call your attention to a domestic industry that has been closed for a number of years due to poor monetary management. You, as a long-time member in the legislative branch, know all about this. Perhaps you will agree with me that an appeal to Congress would be useless as that body during the big depression, fearful of conditions, gave up its power and duty of managing money to the Treasury and Federal Reserve Board. Both those agencies have plans now to use our gold in the build-up of the International Monetary Fund. Secretary Dillon is now leading the Paris Club in a "liquidity" study, overlooking the fact that at present there isn't enough gold value in the world, at the low U.S. price of $35.00 per ounce, to finance the Free World, the aim of the Fund. At the same time, U.S. Treasury gold is being shipped to foreign countries and coined, after which it is sold at an advance of 100 percent above our legal price. This has been disclosed by Dr. Franz Pick, the noted Chicago monetary expert. He brings out that the National City Bank of New York is concerned, that one lot of 10,000 coins went to Liberia after being minted in Switzerland, the deal there being handled by the banking firm of Leu & Co. in Zurich. These coins, rated at our price, had $18.90 worth of gold. In Liberia they brought $34.00. The Bank of Netherlands Antilles handled similar deals for African Republics, a $95 gold coin selling for $190. «These African nations have 'bought' between $700,000 and $1,900,000 each of gold from the U.S. Treasury, according to official statistics," quoting Dr. Pick. No one objects to our government making a profit, but today there are 27 billion foreign held dollars which must be converted at $35, as long as we comply with the Bretton Woods Agreement. When our gold is worth twice that figure why does your administration persist in the conversion at the low price? And why does your administration persist in keeping our own gold mines closed by refusing to give them the advantages of the foreign gold market? We note that Robert Anderson, former Treasury Secretary, has joined your office. He no doubt knows all about this. Refusing to offset inflation with a proper gold price is hurting every taxpayer. RefUSing to reopen our own gold mines is adding to unemployment and keeping a large portion of the Western States in a ghost town category, at the same time practically rendering valueless gold properties that in 1930 to 1940 were worth millions. It certainly does appear that we are over-

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looking a vast field of national improvement. Mr. President, this letter is intended for your personal consideration. Please do not turn it over to any monetary agency. If you don't have time to give it a thoughful answer, I won't expect to hear from you. Wishing you success in the world's toughest job, I am, Sincerely yours, JOSEPH A. BACON. Placerville, California.

During Joe's and Connie's absence on their honeymoon, John Collins saw to it that Joe's mail was not neglected. Joe had told him to open and read it upon receipt and hold it for his return. John was cocked and primed to light in on President Johnson's office for the shoddy little letter that came in response to the long one he had written the President on January 2nd. Here is a copy of it: Dear Mr. Baron: The President has asked me to thank you for your letter. It is helpful to him as he assumes his new responsibilities to have the thinking of our citizens on matters of interest and concern to the Nation, and he appreciates your taking the time to write. Sincerely, RALPH A. DUNGAN; Special Assistant to the President.

When John read that letter he was fit to be tied. He was really angry and Mrs. Collins had to listen to his tirade. «Joe wrote that Texan a fine letter and it's an insult to get such an inane reply. It was when President Johnson was all het up about needing five million new jobs and just about the same time that Studebaker decided to move their factory to Canada. Joe wrote an excellent letter about how reopening the gold mines could supply a lot of those new jobs. "J oe reviewed the whole gold situation, especially about our continuing to payoff our foreign debts in gold at $35 per ounce, while a New York bank was shipping our gold to Switzerland, where it was coined and sold to Mrican countries for $70 per ounce. When the president won't listen to facts of that type conditions must be getting pretty bad in Washington. The Bobby Baker stuff doesn't begin to compare with the gold scandal, if you ask me." "Joe and Connie will be home tomorrow," cut in Mrs. Collins. "They have had such a nice time that you'd better not show Joe that letter for a few days, at least until after Joe has swung into his job at the office." "OK," said Jahn, «but I know Joe will want to get a size-up of how President Johnson views the gold situation as soon as he can." "As you state he won't get it from that letter," responded Mrs. Collins . . "He just wasted his time and effort. It's too bad there isn't somebody in Washington who will consider the situation as very serious. I don't know much about it, but from hearing you and Joe talk there must be something decidedly wrong."

"Anyway, we still hav~ Barry Goldwater to depend upon," said John. "If he can convince the voters that President Johnson and Rockefeller 200

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are both out to give all our gold to the Internationalists we may have a chance to put Barry in the White House and really go back to putting this nation on a conservative basis. LBJ and Rocky are so darned liberal with our taxes that if either of them get back in for another four years you can expect a depression that will rock the very foundation of the nation. Barry Goldwater is our only salvation." Upon their return from their honeymoon in Santa Cruz, Joe and Connie lost no time in calling on Mr. and Mrs. Collins. Mrs. Collins was right. They were so happy that it would have been too bad to drag them immediately into the Washington political mess as far as it concerned gold mining. It would not hurt to let them have a few days to get settled in Connie's cozy apartment. They certainly were two happy kids and the Collins were just as happy as the newlyweds. As Joe got back to work at the mining office, however, he spent some time in catching up on his correspondence. As John predicted, he blew his top when reading the scanty and completely useless reply from President Johnson's office. That wipes up Mr. Johnson as ever taking a hand in correcting the gold mining situation, concluded Joe. Like Ike and Kennedy, the man from Texas is under complete control of the International Monetary Fund, he further concluded: «It appears that Washington is bent on giving our gold to the IMF and mortgaging the property of our taxpayers to mop up inflation results and our vast national debt," he said to Collins when he got back into the swing of his work. "We \vill just have to depend upon someone else in Washington," agreed John. "President Johnson has proven to be a complete washout." A few days later, dated January 30, 1964, Joe received a press release on a new gold bill from the office of Representative Walter S. Baring of Nevada. It was very similar to the Greuning bill which received Interior subcommittee approval but could get no further due to Senate opposition. Joe couldn't get any encouragement from the Baring bill, HR 9756, and lost no time in writing the following to the Nevada congressman: Dear Congressman:

...

•

Received your press release on your HR 9756. Isn't it very similar to Senator Greuning's S. 2125? We have a letter from the A~askan senator, written following his getting a unanimous vote of the subcommittee, in which he practically gave up, with the statement that it will be impossible to get the Senate to go for the bill. Considering this fact, why another similar bill in the House? \Vhy haven't members of both houses become interested in the fact that U.S. Treasury gold is now being shipped to Switzerland, coined, and then sold for $70.00 per ounce in Africa. It appears to us that this is right for an attack and an immediate investigation. This has been exposed by Dr. Franz Pick of Chicago, the nation's leading expert on gold and monetary affairs. If I were you I would forget about any more bills, form a gold oommittee, with members from both houses, and press the Treasury for a full investigation. Telling the truth, the Treasury could no longer hold

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to the statement that $35 is the world price. Sincerely, JOSEPH

A.

BACON.

When Joe talked over the Nevada congressman's move and his letter on it to his boss and Mr. Collins he admitted that he had just about reached the end of his rope. "If Walter Baring won't call for an immediate investigation I will be ready to give up," he said. "I still have another idea which may prove helpful," said Collins. "Let's have it," responded Joe. "But it's got to be good. Washington doesn't seem to listen to anything for the benefit of domestic gold mining. Shoot!" "For years I have been watching Clair Engle, first in the House as our representative in our District II, and now in the Senate. He certainly did a lot for us while in the House, but after getting in the Senate somebody appears to have put a buckstrap on him. He's forgotten all about the gold miner he did so much for while he was representing our Mother Lode in the House. As you know he has been sick since last August but now is on the improve. He got back in the Senate for a few days just at the end of the first half of the present session. "Regardless of the fact that he was on the improve a number of Democrats with ambitions to grab his seat in the Senate, led by Governor Brown, started a move to get Clair to resign. The governor had several cronies willing to take over Clair's $22,500 job. When that didn't work they made all sorts of moves to get Clair to say he would not be a candidate for re-election in this year's election. Governor Brown made several trips hack to Washington to work on Clair and Mrs. Engle, hut each time came back empty handed. About that time Clair announced he would again be a candidate, a number of the Democrat hopefuls, with ambitions to take his seat, letting it be known that unless Clair could produce a medical statement that he was fully able to make a vigorous campaign they would be out against him. "That old Governor's antics made me mad. Many times I have met and talked with Clair, and I could not forget all he had tried to do for us gold miners. I'm not much of a letter writer hut I spent several days writing Clair. I haven't mailed the letter as yet. I wanted you to read it. Here it is. I hope you approve. This is what John wrote: Dear Clair: I hope you will pardon the use of your first name, but I have met you and talked to you a number of times and never overlooked all your efforts to do something for the Western gold miner. That appeared to be your main work in the House, but since you went into the Senate it looks as if you have forgotten us. As you probably remember, I am the owner of an EI Dorado County gold mine, worth a million dollars back in the '30's but not worth a tinker's dam since the Closing Order L-20B. I well remember when you first went into the Legislature from Red Bluff, Tehama County. You did not waste any time trying to get that body interested in trying to get our gold mines reopened. You were one of the first to join Western Mining Council, Inc.

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The late State Senator Thomas McCormick, then president of the Natomas Gold Dredging Company, gave the mining organization a dinner at the Sutter Club in Sacramento. You and Senator McCormick were the only legislators present. Somebody wanted you to get a good grasp on mining so sat you next to Bob Dahlberg of Auburn, Placer County, who learned his mining in Colorado. From that time on you did your best for mining, continuing when you were elected to the House of Representatives for District II, the 19 counties of which are gold producers - when Washington will let them. Just as soon as you reached Washington you met the late Senator McCarran of Nevada, a mining leader. You and the senator were the first to come out for a world free market for gold. You both brought out the idea that the "liberal" spenders had dethroned gold as the basis of our money because it acted as a police on holding down government spending. I remember during Eisenhower's administration you asked the Western Mining Council to get you a gold nugget to present to Ike. You had an idea that if he had one for a pocket piece he might be more favorable to the gold miner. Little Jane Osmeyer of the Plumas County Chapter provided the nugget from her private collection. When you presented it to Ike do you remember what he said? I was mad for a week when I read his reply. It was, «I am pleased to have a memento of a past industry." He should have been made to eat those words, but you were too polite to tell him so. This did not discourage you, however. Some of the Counoil leaders got the idea that the Treasury Department had led us astray about the provisions of the Gold Reserve Act. We did not believe that placer gold was the same as gold bullion and was under the jurisdiction of the Treasury. We took up the matter with you and you boned the Treasury about it. It took you fully three months to get an answer. The Treasury had to admit that placer gold, or as the law puts it, "gold in its native state" is free of government control. You can hold it or sell it for any price that you can get. That decision was very helpful. Since then I know of placer gold that has brought prices from $100 to $140 per ounce. When you got into the Senate no doubt you humped into a lot of opposition to your plans for gold. Senator McCarran had passed away, and all the Senators appeared to be for shoveling our gold out to foreigners in converting the dollars the administration so lavishly spent in foreign countries. They thought more of obeying the Bretton Woods Agreement than they did of keeping a solid base of gold behind our $35 billion worth of paper. And that's the situation as of today. It now looks as if you will not only have the opposition of the leaders of your own party in the coming election but will have to face a strong oontender from the Republican ranks. The mess your Democrat friends have stirred up will no doubt be helpful to any Republican candidate. At this time I cannot help but be reminded of the steward in the gospel who was about to lose his job and was called upon to render accounts to his master. The steward was old, too proud to beg and too old to get another job. When preparing his accounts he called in his master's debtors and excused each of them parts of what they owed. When the master observed what he had done he commended the steward for his prudence in planning for his future when he no longer would be steward. Now Clair, with the greater part of your last year in the Senate before you, you still have a wonderful opportunity to do something for the gold miner. Sen. Ernest Gruening needs help for his gold bill which has received unanimous approval of an Interior committee. You and your friends could supply that help. You could revive the move for a world free market. There is not enough gold in the whole free

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world to carryon its commerce. A higher price is necessary. The U.S. Treasury and the Federal Reserve Board can no longer get behind the argument that $35 is the world price as it has been exposed that our Treasury, with the help of the National City Bank of New York, is shipping gold to Switzerland, where it is coined and sold in Africa for $70. per ounce. With this proven fact you can break the banker's hold on the future of gold, and forever win a place in the economic history of the nation. I am inclosing a page out of the December, 1963 issue of the California Mining Journal, quoting Dr. Franz Pick of Chicago, who has revealed the $70 gold deal now being participated in by the U.S. Treasury. With best wishes for a continued improvement in your health, I am, Sincerely,

-.

JOHN COLLINS,

Placerville, California.

('Why, John, that is a Jim-dandy," enthused Joe. HIt's a historic and political masterpiece. Knowing Clair Engle as you do I hope it will have some influence on the California Senator, and that we get a good response from him. With Engle and Gruening in the Senate and Baring in the House perhaps we still have a chance to get a complete investigation of our Treasury gold bringing $70: per ounce in Africa. Why don't we write the Treasury Department? It would be interesting to hear its explanation." "A good idea," said John. "The three boys we are depending upon might be backward in boning the Treasury. That department has run our monetary affairs so long that most congressmen approach them with fear and trembling. But we don't look upon them that way. Sec. Dillon is just another government worker living off our tax money. I say, give him a letter." And so Joe wrote the Treasury the following: Information Department, U.S. Treasury, Washington 25, D.C. Dear Sirs: Your attention is called to a page olipped from the December, 1963, issue of California Mining Journal, which reports that U.S. Treasury gold is being shipped to Switzerland, coined, and then sold in Africa for $70. per ounce. This Was first printed in the Northern Miner, Toronto, Canada, which gave Dr. Franz Pick of Chicago as the authority of the report. With Dr. Pick's knowledge of world finances we believe there is nothing wrong with his report. We would like the Treasury's statement on this highly important revelation. How can your department hold that $35 is still the world price of gold when transactions like this are now being carried on? We would appreciate an early reply. Thanking you we are, Sincerely yours, JOSEPH A. BACON.

Placerville, California.

«And that Alaska boy, Senator Gruening, hasn't given us an answer concerning the $70. gold in Africa," said John. ~
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ting his gold bill through the Senate, so all the work he and his Interior Committee did is a complete loss. Long ago they should have learned that the Treasury, the Federal Reserve Board and the International Monetary Fund are not going to submit to a gold bill being handled by the Interior Department. Handling our money and gold is a special job, handed them by Congress, and they will not let any other department horn in. "And as long as it is impossible to get approval of any bill that -will improve the position of domestic gold mines there is but one way left for us. That is to press for a complete investigation of the Treasury's sale of our $35 gold in Mrica for $70. That should be as plain as the nose on your face. We must keep after our Western gold members in Congress until they make the necessary move. If I'm not mistaken this has been going on for years. 1 remember when Senator Knowland of California and Senator Ferguson of Michigan brought this up on the floor of the Senate. They both agreed at that time that our government was allowing foreigners from $70 to $77 per ounce for their gold. The Senate, most of whom are under the thumbs of the International Bankers, now gaining control of our gold, were not impressed by the assertion of their two leaders. No doubt it will take a bomb to get the age-encrusted Senate to realize that a Communist plot is ruining our monetary system." "I agree with you, John," said Joe. "Let's dig into Dr. Pick's revelation and use it for everything it's worth. The Treasury will have to have some kind of an answer. I'll put them on my letter list. In the meantime I will give Senator Gruening another letter in a try to make him see that an expose of the $70. gold deal is practically the only move we have left. I will sell my boss on this idea and suggest that I keep at it until we get some action." "That's all there is left for us to do," answered John. Our years of effort have brought us to no other conclusion."

. ...

Hon. Ernest Gruening, Senate Office Building, Washington 25, D.C. Dear Senator: Considering your belief that there is no chance of getting the Senate to approve your S. 2125, why don't you accept our suggestion that you demand of the Treasury a full explanation of our Treasury gold bringing $70. per ounce in Mrica? We have written Clair Engle. who knows the gold situation from A to Z and also Walter Barin~ of Nevada who has introduced a bill similar to your S. 2125. There s no doubt of his bill meeting the same fate as yours. Thanking you for keeping us informed as to your efforts for gold, and awaiting your reply, we are, Sincerely yours, JOSEPH A. BACON. Placerville, California.

Consulting with John about the letters they had out awaiting answers, Joe suggested writing that bank in New York that Dr. Pick re205

ported as being involved in the transactions that brought the value of $35 Treasury gold up to double that value. "A good idea," stated John. "That bank is the first to handle the gold as it leaves the Treasury. 1 note in today's paper that bank is quoted as stating the $3.6 billion loss in the balance of payments of 1962 has been cut to $3 billion for 1963. However, it does not mention the over 27 billion of foreign held dollars awaiting Bretton Woods Agreement treatment. I wonder why."

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JDe wrote the bank: First Nation City Bank of New York, New York, N.Y. Dear Sirs: We are looking for information. In today's Los Angeles Times it quotes your bank as stating that the Balance of Payment situation of 1963 has improved over that of 1962 - $3 billion as compared with $3.6 billion. While this is a slight improvement you omit the fact that there are now over $27 billion of foreign held dollars awaiting conversion to Treasury gold, when there remains only about $3 billion to do the conversion. Why do you omit this most important detail? Another matter: we note that Dr. Franz Pick, the noted Chicago monetary expert, has connected your bank with some U.S. gold transactions that do not look good to us. It is stated that you have access to Treasury gold which you ship to Leu & Co., Zurich, Switzerland. There it is coined and sent to African republics who pay $70. for it. We would like to know how you get away with this when the Treasury Department continues to hold that the free world price of gold is $35. Also we would like to know who is making the $35 profit. Thanking you for an early reply, we are, Sincerely yours, JOSEPH A. BACON. Placerville, California.

With the letter on its way to New York, John Collins thought it was time to begin to sum up his and Joe's efforts to determine what else could be done. "No doubt your boss at the office is awaiting a report so we might as well be hatching it up," said John. "While we have put in a lot of plugs in important places," remarked Joe, we have practically drawn a blank as far as results for the gold miners are concerned. Congress as a whole is going along with the Communist plan of Alger Hiss and Harry Dexter White to take all the gold out of the U.S. monetary system. In the whole of Congress there hasn't been a voice raised against the Bretton Woods Agreement, the Hiss-White frame-up, by which we not only lose all our gold but end up owing foreign countries billions. And if I know what I am talking about, the International Monetary Fund will be glad to take over that debt as long as we are suckers enough to pay all the taxes Congress votes on us." "I think that's about the size of it," said Collins. "But let's make a check and determine who in our government is responsible for this monetary mess." 206

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"Let's start in with Senator Alan Bible of Nevada, a man who should lead the move for keeping the dollar sound for American taxpayers. He was the first to tip us off that the Administration plan is to give all our gold away and make our property back the national debt and all the adverse effects of inRation. Bible objected strenuously to my designating the Washington leaders traitors who approve the Hiss-White deal. If those two Commies can be called traitors why not those now carrying out the Hiss-White plan? Coming closer to home and reviewing the record of our own Mother Lode congressman, Bizz Johnson, I still haven't found out why the 'Bizz.' He has kept insisting on treating gold as an ordinary commodity instead of money so that his bills would not have to be submitted to the Banking & Currency committee. And every time he got anywhere near a hearing it was always Banking & Currency boys who licked his bill. He did not realize that any bill pertaining to gold would have to go the banking route. Senator Gruening's bill, S. 2125, was the same type. After he received full approval of his Interior committee he was still up against the senators who take bankers' orders. He was through." "However," cut in John, "you will have to admit that Gruening has been the only one who took notice of that deal by which our Treasury gold, coined in Switzerland, is bringing $70. per ounce in Africa." "You are right," answered Joe. "That's the only ray of light that has shown up in all our endeavors. I am now trying to get Senator Gruening to start an investigation of that Treasury deal. But we are getting ahead of the parade of congressmen and others responsible for the bad deal now being handed to domestic gold miners. After checking on all those we have contacted I intended to bring out that Senator Gruening was on to the $70. deal. However, if you remember, I wrote him three times before he took notice of the African deals. We must check some more with him and the $70. gold sales. "We have determined that Gov. Nelson Rockefeller, who has designs on the White House, is a complete flop. He refused to answer the simplest questions put to him on gold. He has sold out, lock, stock and barrel, to the Internationalists. Ditto for Sen. Thomas Kuchel, your own California senator, especially -since he has taken on the job of heading Rocky's campaign in the Golden State. (John, I wonder if we will have to quit designating it as such.) •

"When it comes to doing something for domestic gold, President Johnson is no different than the late Mr. Kennedy. The Internationalists have him roped and tied, hand and foot. He's in the same class as Rocky; not one iota of difference. «For a while I thought that good Republican, Thomas B. Curtis of Missouri, might be of some help to us but he, too, proved to be sold out to the Internationalists. The Hiss-White deal is working both Democrats and Republicans. A good American gold miner hasn't a look-in with any of them. Congress is a complete washout. An investigation of the Treas207

ury's $70. racket is about our only opportunity to get something started but I doubt if there is anyone in Washington who would go after it.') «Right you are," agreed Mr. Collins. "1 can't help but think of those 'patriots' Senator Bible wrote you about. However, when you get down to bedrock a congressman would need a lot of guts to really go after the money changers who have wrecked our gold mining. I remember back in 1934, when the monetary mess wasn't nearly as bad as it is now, a member of the House, Louis T. McFadden, let off a blast on the floor about what a corrupt institution the Federal Reserve had turned out to be. And he didn't let up with one speech. He accused Sen. Nelson W. Aldrich, who introduced the bill which founded the 'Fed' as 'the tool of European bankers, who for nearly twent), years had been scheming to set up a central bank in this country and who had spent vast sums to accomplish their purpose.' Well, to make a long story short, Congressman McFadden did not live long after those speeches in the House. Two known attempts were made on his life. He was poisoned at a government banquet but was saved with a stomach pump. Next, some one took two shots at him but missed. But a short time later he died a mysterious and unexplained death. So it would really take guts to go after those who are keeping our gold mines closed." "Good God! Mr. Collins, can that be so?" exploded Joe. "You don't have to trust to my memory, although rn put it up against a lot of folks my age," responded John. "The whole mess has been published in a pamphlet by Forum Publishing Co., 324 Newbury St., Boston 15, Mass., which you can buy for 50 cents." "Well, no wonder our duly elected Representatives and Senators shy away from taking up matters at the fountain head," said Joe. "Maybe I will be a marked man with those letters I have written the Treasury and the New York Bank which shipped that $70. gold. We should be hearing from them soon. As soon as I get the answers I will be bothering you . " agaIn. "No bother," said Mr. Collins,
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Mr. Leland Howard, Director, Office of Domestic Gold and Silver Operations, Treasury Department, Washington 25, D.C. Dear Mr. Howard: Your statement about our Treasury gold, coined and sold for $70. per ounce in Africa doesn't appear to stand up to facts as revealed by Dr. Franz Piok of Chicago. The first lot of 10,000 coins that went to Liberia might have been commemorative coins selling for a premium, but there was no event to commemorate another 6,000 coins of a gold value of $95 each that sold for $190. each. And what about the $700,000 to $1,900,000 that went to other Black republics? And what about Dr. Pick's statement: «These coins are forerunners of more to come." It looks as if there are more explanations coming. Sincerely yours, JOSEPH A. BACON.

Joe had written Mr. Howard further, especially in reference to the commemorative idea. It was evident however, that the Treasury official did not want to be questioned further. He cut Joe off with the following snappy letter: Dear Mr. Bacon: This is in further reference to our recent correspondence concerning the sale of gold. There is nothin~ more that I can add to my letter of March 9, 1964, inasmuch as the infonnation I gave you in that letter explains the cOnditions as they happened. Very truly yours, April 9, 1964 LELAND HOWARD.

The next evening Joe and Connie called on the Collins. John lost no time in latching on to Joe while the ladies took to another room, knowing they would not have an opportunity to get into the conversation when the men got together. "Did you see the Los Angeles Times today?" questioned John. ~~Not

yet:' answered Joe. "The office has kept me on the hump today."

~~W ell,

the big hawk has lit. Mr. Dillon has convinced the Joint Economic Committee that the 14,000 member banks which have over $48 billion invested in the Federal Reserve Bank don't need the gold backing these deposits have with the Federal. Nine of the 16 members of that committee are in favor of scrapping the law which requires 25 cents in gold per dollar backing those deposits. This can be done by passing the Abraham Multer bill which has been kept on ice through the last two sessions of Congress. Joe was all ears. ~~This:~ he said, ~~is what Senator Bible of Nevada brought out in his last letter. You remember he wrote that it was held that ditching all our gold would strengthen our paper money, as then all our debts and our $30 billion imbalance of payments to foreigners would be levied against our people's property and savings. That's where the squanderings of present and past administrations are taking us. How do

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you like it?" "I don't like it," responded John. "The gold miner has had the rottenest deal of any industry in the nation, and now we will have to put everything we have in hock to pay for the acts of a government steered by Communists in the State Department."

"'It does get you down," Joe said, "but just remember, even though our communized government turns against gold in favor of paper promises it is still very much desired by the International Monetary Fund and the bankers of the rest of the world - even Russia. A lot of nuts in U.S. say gold is worthless because you can't eat it. Mr. Khrushchev knows better than that. He used his gold so that his people might have bread."

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"'No doubt you remember, Joe, that this Joint Economic Committee was told by Mr. Dillon that he did not require the repeal of the 25-cent law, as he had at his command another law which would offset it. If this be true why is the Committee pushing for the Abe Multer bill? I'd like the answer. Has Mr. Dillon been kidding us? Maybe we can take heart in the fact that the committee has some Americans on it who oppose the move. There are five - all Republicans - Senators Jack Miller of Iowa, and Len B. Jordan of Idaho; Representatives Thomas B. Curtis of Missouri, Clarence E. Kilburn of Kentucky and William B. Widnall of New Jersey. We can also believe that Barry Goldwater will go along with these and make it one of his campaign issues. He has already declared for a free gold market, which, if adopted, would put the Bretton Woods Agreement out of business as well as make the move of the Joint Economic Committee useless." Joe had another letter, this one from Sen. Kuchel of California. He explained that it was in answer to one he wrote in 1963. "'In my book," he said to John Collins, ""Tommy gets the prize for the longest delayed letter. So much happened since I wrote the senator that I thought I'd better give him a history lesson. Here's his letter and my reply:" Dear Mr. Bacon: My efforts to improve the domestic gold mining situation have not been and are not half-hearted. The fact of the matter is that I am one of 100 Senators; there are also 435 Members of the House of Representatives. All these Members of Congress have a voice in the matter. I cannot do the job alone, nor can Senator Gruening, nor can all of us who have co-sponsored S. 2125. Little or nothing will come to pass on this legislation until the Administration removes its threat of Presidential veto. Heretofore the Administration had not had an opportunity to say it disapproved of the compensatory payment approach of S.2125. That is why we sponsors of that bill thought it might have a chance. We wanted to put the Administration to a test on the matter. Unfortunately, the reactioh was the same as it has been to all other proposals for helping your industry. I hope that you do not think that because of this ultimate reaction of the Administration that I was wrong in exploring the possibilities. I am sure that the other members of the gold mining industry in the United States would not wish me to withdraw from working on their behalf merely because the President of the Western Mining Council, Inc., undertakes to criticize me whenever the Administration frustrates

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my efforts. That is why I will continue to work for the benefit of those in your industry, even though you do not appreciate that work. Sincerely yours, April 14, 1964 THOMAS H. KUCHEL.

United States Senator

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Han. Thomas H. Kuehel, U.S. Senate, Washington 25, D. C. Dear Senator: Thanks for your long-awaited answer. Much has happened in re~ gard to gold since I wrote you, all of which you and co-members should be aware. Dr. Franz Pick of Chicago has brought out that the Treasury is over $4 billion off in its Daily Reports, in its failure to take into con~ sideration gold loans from the IMF, dollars swapped for convertible foreign currencies, and other transactions to keep the reports looking good to us, the brain-washed public. Dr. Pick has also brought out that Treasury gold is being shipped to Switzerland, coined, and sold to the new Mrican republics for $70. per ounce. The Treasury is trying to get by with the statement that these gold coins were for commemorative purposes, but this was only in the case of Liberia. Eleven Democrats on your Joint Economic Committee have voted to scrap the reserve law which calls for $12.3 billion backing Federal Reserve Notes and deposits. You took no part in backing up the five Republicans on that committe who filed a minority report. I really don't think you are a Republican any more. We can't have a sound dollar if we scrap our gold reserve. Your support to Senator Gruening's S. 2125 is useless, as the Interior Department has no jurisdiction over money; and gold is money. Your Banking and Currency Committee will never let an Interior committee handle its business. It's a backdoor approach to the situation that won't work. Senator Barry Goldwater is the only one in the Senate who has come out with the proper gold reform - a Free Gold Market. But tied up as you are with Governor Rockefeller you can't do anything about this. He is a liberal internationalist willing that all our gold gets into foreign hands. I am certainly sorry you have tUrned against California and its efforts to get back to producing gold, a monetary commodity now needed by the entire world. Sincerely yours, JOSEPH

Placerville~

A. BACON. California.

~
«What do you think the price will be to us softheads?" questioned Joe.

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"Using the proper ratio between money and commodity and service 'Costs it can't be less than $105. per ounce/' answered John. "'Then," quickly responded Joe, «with that additional value of gold we could meet the cost of President Johnson's 'war on poverti and it wouldn't cost the taxpayers a penny.» "The Money Changers didn't ~plan it that way' Joe. It is intended that we boob taxpayers put up the costs of LBI's spending so that the IMF can hold the gold until profit time comes." "And how about that $15 billion worth of cancellable bonds that the Federal distributed to their 14,000 member banks?" asked Joe. "You told me about that steal last year, if you remember.» "1 sure do. That was the time Hon. Wright Patman of Texas introduced a bill in the House to stop the distribution. It received only 60 House votes out of a total of 437. That $15 billion would practically win LBJ's poverty war. But he, like other presidents, is now taking orders from the Money Changers. The cost of the poverty war must be charged to us, the taxpayers. The Honorable Mr. Patman is now chairman of the House Banking & Currency Committee, a position in which he could really do something about the situation now. But he looks the other way. "Well, then what's the answer?" "There's only one answer, Joe - Barry Goldwater's World Free Market policy. It would put the Bretton Woods Agreement out of business, stop the drain of our Treasury gold to foreigners and reopen the West's gold mines. Furthermore, those foreign dollar holders who would not want to pay the new price for gold would use their dollars to buy our produce and manufactured articles." "That would be a real program for the whole nation to adopt," enthusiastically added Joe. «I move that Sen. Barry Goldwater of Arizona be our standard bearer in the 1964 presidential election." "I second the nomination and urge that it be spread on the minutes of every mining organization in America," responded John Collins. And so ended an evening, the discussion of which lined up more work for Joe. As he and Connie made their way home he offered his excuse for taking the entire evening talking gold with Mr. Collins. «Mrs. Collins and I did not mind," replied Connie. "We had an enjoyable evening. And if it were not for gold and mining my name wouldn't be Mrs. Joe Bacon."

THE END

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