------ The Crime of 1873 - animated GIF banner

Macroeconomic Consequences
Political Constituencies
The Cross of Gold Speech
You are reading this slide
The Wonderful Wizard of Oz
Monetary History

Gold Inflation this time

If for centuries gold had got scarcer and scarcer than silver, the world gold stock of gold doubled during the last half of the 19th century. This change is explained by the two waves of Gold Rushes that happened in the world during this period.

The first Gold Rush wave took place in the 1850's with California (1848) and Australia (1850), and led to an increase in annual gold production from 77 tons in 1847 to 280 tons in 1852.

But for our purpose the second gold rush is more significant. By the end of the century most rich ore mines had already been dug, and a lot of low ore mines were left, too expensive to dig. But in 1887 three Scottish chemists invented a process based on potassium cyanide for extracting gold from low-grade ore. By simply soaking the crushed ore in a bath of potassium cyanide the silver and gold contained in it was dissolved. Then miners had just to drain and precipitate the liquid with some other salt. Many mines deemed so far too poor to be dug profitably gave birth to huge amounts of gold almost overnight. This process was applied most successfully in South Africa (1890) and Klondike (1896). South African gold production goes from zero in 1886 to 23 % of total world output in 1896.

Check the SLIDE BELOW !





Miners and mules with a pioneer crowd
The Klondike Gold Rush (1896)


Industrial mining landscape with huge cyanide tanks
Cyanide tanks above a gold mine (National Geographic)


Return to Monetary History
Return to
François Micheloud's Homepage