per cent of the total gold production. German interests formerly had extensive holdings in South Africa and Australia, but during the war this control was eliminated.
The United States, the second largest gold-producing country, supplies about 20 per cent of the world's total. Commercially it controls production of another 5 per cent in foreign countries, chiefly in Canada, Mexico, South America, and Korea. About one-fourth of the United States production comes from California. Other producing states in order of importance are Colorado, Alaska, South Dakota, Nevada, Arizona, Montana, and Utah. These eight states supply 95 per cent of the country's output, and most of the remainder is obtained from other western states.
International movements of gold depend chiefly upon its use in the settlement of trade balances, and are not governed by the considerations which control ordinary mineral commodities. Imports and exports vary with changing foreign trade balances. Large amounts of gold normally go to London, because Great Britain requires all gold produced in the colonies to be sent to England; but since England ordinarily has an unfavorable balance of trade, much of this gold is reëxported. The United States up to a few years ago was also a debtor nation, and more gold was exported than was imported. During the war, however, this country became the greatest of the creditor nations and imports of gold, chiefly from Europe, were several times the exports.
The total world's gold production up to 1920 has been upwards of 19 billions of dollars, of which about 10 billions have gone into the arts or been hidden and lost, leaving 9 billions in monetary reserve.
At the present writing the United States government holds an unusually large fraction of the world's gold reserve, about 28 per cent or 2 billion dollars,—an amount equal to two-thirds of the aggregate production of the United States to date. Other large stocks of gold are held, in order, by Great Britain, France, and Russia, these three with the United States holding over a half of the world's total gold reserve. Germany has about 1-½ per cent of the total reserve, and, with its tremendous debt and no sources of new production, is of course in a particularly unfavorable position.
The total amount of gold now (1920) accounted for by governments as money is not more than 10 per cent of the value of the notes and currency issued against this gold. Before the war it was 60 per cent. In the United States the pre-war percentage was 99-½ per cent. Since the war it has been 45 per cent. The ratio of gold to currency is now so small that the gold standard is hardly a physical fact, but is to be regarded rather more as a profession of faith. Notwithstanding the recent falling off in gold production, an increment of approximately 350 million dollars is potentially available each year to be added to the gold reserves. Whether this increment, or a larger increment which may come from new discoveries, is sufficient to maintain a reasonable proportion between gold stocks and the necessary normal increase in paper currency, has been, and doubtless will continue to be, a subject of vigorous discussion and speculation.
During and immediately following the war, the gold production of the world showed rather an alarming progressive decrease. About 1915 the group of three greatest producers—South Africa, United States, and Australia,—reached the acme of its production, and output then fell off. Simultaneously there was a marked decrease of production in many of the less important districts. This general decline was due in considerable part to the fact that during the war the price of gold was fixed and its use restricted to monetary purposes. The price of gold, which is itself the standard of value, could not rise to offset growing mining costs and to maintain profits, as was the case with iron, copper, and the other metals,—with the result that the margin of