MICHIGAN ROADS AND FORESTS. 



THE WORLD'S GOLD HARKET. 



If a foreigner were to stop an average Lon- 

 doner, say, in Cheapside, and to ask him the 

 way to "the gold market," he would be answered 

 with a stare of amazement, says W. P. Lawson 

 in The London Financial Times. Even among 

 the city bankers there are few who have actually 

 seen the institution they admire so much. It is 

 as profound a mystery to them as to the ordinary 

 public how gold is handled in London. The gold 

 market is a specialty. It differs from every other 

 in its history, its methods and. in its very select 

 character. It is, perhaps, the oldest market in 

 the United Kingdom. One firm of bullion brok- 

 ers dates back for more than a century, and any 

 firm not over a quarter of a century old is looked 

 down upon as a mere infant. 



Bullion broking, however important, is not the 

 first stage of the gold market. That distinction 

 belongs to the banks and private agents to whom 

 the gold is consigned. There are four different 

 sets of banks engaged in the trade. Transvaal 

 and Rhodesian gold comes, as a rule, through 

 . South African banks. Australian gold conies 

 through the Australian banks. Of late the Indian 

 banks have become large dealers in gold both 

 ways. The big French and German banks, such 

 as the Credit Lyonnais and the Deutsche Bank, 

 act not only for their own countries, but for oth- 

 ers. But the most erratic are the Xew York 

 banks, who seem to delight in surprises. They 

 often buy when they are expected to sell and sell 

 when they are expected to buy. 



The world contains only four great gold min- 

 ing regions, and with one exception they are all 

 British. The first. British South Africa, which 

 furnished last year more than one-half of the 

 total gold imports into the United Kingdom, 

 millions sterling out of 46 millions. Australia 

 held second place with nearly 7 millions sterling. 

 Then came India, with 3'4 millions sterling. 

 Apart from these the United States is the only 

 large gold producer in the world, but nowadays 

 has no surplus for export. Last year the United 

 Kingdom got only 71.119 of gold from tht 

 United States, while it had to find fully 14 mill- 

 ions for Xew York, a rather lop-sided kind of > 

 business. 



The first thing the bullion brokers do on re- 

 ceiving a consignment of bars on a Saturday by 

 steamer from South Africa is to weigh them care- 

 fully and the next is to send them on to the re- ; 

 fillers. The refiner has to bring them up to the , 

 marketable fineness. All this may take three ' 

 or four days, but it causes no delay to the sales. ; 

 By -2 o'clock on Monday afternoon the whole! 

 shipment, however large, is disposed of. 



At a place which, for obvious reasons, cannot 

 be divulged, the bullion brokers meet punctually 

 a: a quarter to two o'clock. Some, or possibly 

 all, of them have certain amounts of the precious | 

 metal to dispose of. Others may have buying or- i 

 ders, and there is nothing to prevent a broker 

 acting for both sellers and buy< 



Bullion brokers have an advantage over all 

 other dealers in the possession of a minimum 

 price. They know beforehand that, however 

 great may be the supply and however small the 

 demand, they are sun Id. for every ounce 



of it. In order to secure that they have only to 

 send the refined bars into the Bank of England 

 and claim notes for it. There is an offset to that 

 advantage in the market having also a virtual 

 maximum, but in practice the maximum is more 

 elastic than the minimum. 



By way of concrete example we may take their 

 meeting of one Monday last month. It was an 

 unusually interesting day, and very significant of 

 the existing situation. 



The demand for gold was keener than ever, 

 and there were a god many small buyers in the 

 market. The action of the Bank of England was 

 uncertain, and still more so was that of the Xew 

 ik banks. Though the price was fixed at 77- 

 -<!.. it was a question whether the Americans 

 might not go a fraction better. The Bank of j 

 England intimated through its broker that it 

 would like to have all the gold available and 

 would give 77s. 9J^d. for it. There is at present 

 a tacit understanding that the bank is to have 

 preference when it is willing to pav the best 



price bid by any other buyer. In one corner of 

 | the city there is thus a faint survival of "noblesse 

 | ablige. The bank exercised its first call on Mon- 

 day's gold. 



From the board room the bullion brokers rush- 

 I ed to their offices. There telephones and tele- 

 grams were set in motion to report results to 

 clients in various parts of the world. Cable mes- 

 | sages reached Xew York almost as soon as an 

 i office in Throgmorton St. could be called up. 

 Answering rings were soon heard, most of them 

 inquiries from buyers who had been impatiently 

 waiting the result of the official board. All wen; 

 willing to give a little more than 77s. 9fd., but 

 small hope was held out to them of getting any. 

 ; The invariable answer was, "We will do our best 

 to get some for you, but it will be only five or ten 

 at most" meaning, of course, so many thousand 

 pounds. 



This persistent stream of small buyers is one 

 of the most significant features of the gold mar- 

 ket, h is having more effect on it than any of 

 the big buying movements. The latter, irregular 

 and spasmodic, may upset the market for a week 

 and then not be heard of again for months. 

 Small buying which goes on all the time and is 

 ; little noticed outside has a cumulative effect. It 

 indicates a widespread demand for gold. In so 

 j far as the bullion brokers are unable to meet it, 

 j it must fall ultimately on the Bank of England. 



This brings us to the fourth and most curio'is 

 | stage of the gold market the Threadneadle 

 j Street end of it. The man who must have :>.uou 

 ] or 10.000 of gold to ship by a certain steamer, 

 and who cannot get it in the open market, goes 

 at last to the bank. 



For choice he wants bar gold, as least difficult 

 to handle. But, the bank may be unwilling to 

 > part with bars. The would-be shipper can. of 

 j course, present Bank of England notes and claim 

 | sovereigns in exchange. The bank has a counter 

 privilege which many neutralize that of paying 

 1 out light sovereigns. Between full weight sov- 

 ereigns and those of minimum legal weight there 

 is a difference in value equivalent to 2d. per 

 ounce. Consequently a shipper taking out 5,000 

 or 10.000 of light sovereigns would be paying for 

 the a'ctual gold in them at the rate of 78s. per 

 ounce. Bar gold at 78s. may be as cheap to him 

 as light sovereigns at 77s. 10J/Sd. And it may suit 

 the Bank of England better to furnish bars at 

 78s. than to have light sovereigns continually go 

 ing out and coming in again. 



The feature of the gold market which claims 

 most serious consideration is the gradually dimin 

 ishing surplus of our imports retained at home 

 Last year we saw it fall as low as 3^2 millions. 

 In 1904 there was practically no surplus. In 1901 

 we made a net gain of nearly 7 millions. It is the 

 old story that ''the world's only free gold mar- 

 ket" gets plenty of gold when nobody else wants 

 it, but has to take a back seat when foreigners 

 are in the market. Imagine the Bank of Eng- . 

 land having to say to a group of Wall Street 

 banks, "Please let me have this gold; I need it i 

 badly to strengthen my reser 



DEAD-HEAD LOG INDUSTRY. 



The dead-head log industry in Michigan was 

 inaugurated by Saginaw lumbermen about 12 

 years ago. The methods adopted at that time i 

 for the raising of "dead-heads" was not as 

 comprehensive as those adopted later on by 

 Muskegon and other lumbermen. Lumber 

 was not as valuable 12 years ago as now and j 

 the incentive to recover the sunken logs was 

 not so great. The recent decision of the 

 Michigan courts as regards the ownership of; 

 the logs will probably put an end to the re- 

 clamation of the ''dead-heads" until some 

 agreement is reached with the farmers living 

 along the banks of the old log-driving rivers, i 

 The courts decided that the sunken logs be- i 

 longed to the owners of the river banks and 

 not to the lumbermen who lost the logs years 

 ago. 



It is estimated that today there are fully 

 100,000.000 feet of logs lying on the bottom of 

 Saginaw river and its tributaries. For 25 years 

 these streams had carried big drives of logs 

 each spring, and during that period of time 

 more than twelve thousand million feet of 



logs were rafted out of the Cass, Shiawassee,. 

 Flint, Bad rivers, Swan Creek, Tittabawassee, 

 ; Pine, Chippewa, Tobacco, Salt, Sugar, Cedar 

 ' and other streams. 



The recovery, of these sunken logs, which 

 was begun 12 years ago, was not particularly 

 i successful with the methods then in use. and 

 after a couple of seasons the project was aban- 

 doned. 



A year ago some gentlemen from Cadillac 



; formed a company and undertook to clear the 



! Tittabawassee of sunken logs, but as far as 



i known they have not operated as yet to any 



extent. They purposed to erect a saw mill 



j near Midland and calculated to recover 20,- 



000,000 feet of logs. 



Chris. Yockey has been engaged for some 



years in recovering dead-head logs from the 



Au Sable river and has met with fair success. 



At Cheboygan there has been some litigation 



! regarding the ownership of logs taken from 



; the river, which has put a temporary halt on 



operations in the river there. 



It is estimated that there are many millions 

 j of feet of dead-head logs in the Rifle and Au 

 ! Gres rivers and no attempt has been made 

 to recover the same. 



The company operating on the Muskegon 

 rivers was probably the most successful of any 

 who have engaged in the raising of "dead- 

 heads." but here again the courts have taken 

 a hand and stopped operations. 



It is unquestioned that in the bottoms of 

 all of the larger logging streams in both pen- 

 insulas of Michigan are millions of feet of val- 

 uable timber which would many times repay 

 the expense of recovery. 



It has long been the custom in making 

 deals in Canada that the price shall not in- 

 clude logs that have sunk below the surface 

 of the rivers or lakes of that country. The 

 recovery of such logs has long been one of the 

 inalienable privileges of the Indians living 

 along those waters, and the proprietors of the 

 lumber right in the Canadian forests have a 

 fixed price of a dollar apiece for each log that 

 an Indian recovers from beneath the surface of 

 the waters of lakes or rivers. How valuable 

 this sunken timber is may be gathered from a 

 statement made by an American lumberman 

 in talking of this business, when he mentioned 

 that by leaving such a privilege out of a con- 

 tract he entered into with a Canadian 'lumber 

 king" his company lost about $80,000. 



The enhancement of the price of pine lum- 

 ber to the extent of nearly 100 per cent in 

 ten years is an inducement to the lumber own- 

 ers to husband every log. 



WHERE ANTHRACITE COMES FROM. 



Luzerne county, Pa., produced nearly 40 per 

 cent of the total production of anthracite coal in 

 the United States during the year 1906. Its out- 

 put was 26,266,978 tons, as compared to 26,655,315 

 :n 1905, and while there is a decrease of 

 388,337 tons it does not detract from Luzerne's 

 position as the most fertile anthracite field in the 

 country. The decrease can be accounted for 

 principally by reason of the suspension last April 

 and May, when the mines were idle for six weeks 

 while negotiations were going on between the 

 miners and operators, which ended in a continua- 

 tion of the award of the strike commission. The 

 other 60 per cent was mined in the counties of 

 Carbon, Columbia. Dauphin, Lackawanna, Xor- 

 thumberland and Schuvlkill. 



Gov. Magoon has approved a plan for the- 

 expenditure of $4.500,000 for the construction 

 of roads throughout the island of Cuba during 

 the coming year. A formal announcement to 

 this effect will be issued in a few days and 

 will cause general satisfaction, as roads are 

 badly needed. 



The entire scheme, as prepared by Col. 

 Black, superintendent of the department of 

 public works, involves the expenditure of 

 $13.000.000. but it will take several years to 

 carry out the plana. Gov. Magoon will only 

 authorize the expenditure for the first year's. 

 work. 



