South of Ottawa, in the sleepy little Canadian town of Arden, Ont., with a population of 255, there was last week a great hullabaloo. Eleven miles beyond Arden two prospectors named Newton and Alexander had staked gold claims. Ore from these diggings, assayed by the Canadian Mines Department, was reported to contain $200 to $600 of gold per ton. Hollinger Consolidated Gold Mines, Ltd., had bought the claims and was about to start drilling while dozens of mining engineers, hundreds of prospectors were stalking Arden's once placid streets. Again Depression, which steeps most men in gloom and poverty, was demonstrating its power of bringing hope and sometimes wealth to those who tie their fortunes to gold.
The demonstration was not, however, the most striking evidence of the peculiar power of gold over Depression. The Philippines has not only a gold boom but also a mining stock boom, and last week its fine frenzy was augmented because it had virtually been given an official blessing by no less a person than strutty little Manuel Quezon, President of the Commonwealth.
It was the second boom of its kind in three years. The first one struck the Philippines in 1933 when the dollar was cut loose from gold. In that year 14,658 Philippine gold claims were staked. The Philippine gold mining business, which had only been coming into its own about the time Depression hit, went zooming. A boom in gold stocks swept like a typhoon through Manila. Then the stock boom collapsed, as such booms do, but not the mining business.
Newly discovered mines came into production. The price of gold was now $35 an oz. instead of $20.67. The value of the islands' annual gold output jumped from $5,700,000 in 1933 to $11,600,000 in 1934, to $15,600,000 in 1935 and this year is well on the way to over $20,000,000. As such only two of the islands' exports, sugar (valued at $35,000,000 in 1935) and coconuts (valued at $35,000,000 in 1935) will be more important.
This growing business was temptingly profitable. Its tales of wealth, sudden and not so sudden, are fabulous and some of them are real. Dean of the gold mining business is old Judge John W. Haussermann, who went to the Philippines 38 years ago as a second lieutenant of the 20th Kansas regiment and returned last July as Republican National Committeeman to hear Alf Landon accept his Presidential nomination. The tale concerning him is that anyone who put $100 into his Benguet Consolidated Mining 25 years ago would be worth $500,000 today. Even so, although he nursed his company along since 1909 it did not get into the big money until after 1926 when new ore deposits were discovered. Not until 1933 did its earnings exceed $2,800,000 a year; last year it earned $3,600,000.
In 1927 the Balatoc mine was a $500,000 hole in the ground, which borrowed $250,000 more, paid it back from earnings in less than two years and by 1934 was paying $2,000,000 a year in dividends. Several other mines have had smaller but equally brilliant records, accompanied by tales of Tom-Dick-&-Harry made rich overnight.