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Aram Dulyan. Via Wikipedia
Commons
Gold is one of the rarest yet most familiar of metals. That it is found in workable concentrations at all is a result of its tendency to be concentrated in pyrite or quartz veins arising from hydrothermal action near the boundaries of underground magma bodies. Its inertness and great specific weight allows it to be further concentrated in placer deposits. Most likely the richest deposits have undergone this process repeatedly. It is estimated that the entire amount of gold extracted over human history would fit into a cube 67 feet (20.4 meters) on a side. Almost all this gold is still in circulation, since gold is chemically almost as inert as the noble gases, giving it remarkable durability.
Gold is used in dentistry and jewelry, but by far its most important use was and is as money. Its characteristic physical properties, its durability, and its scarceness make it an almost ideal basis for currency. However, most nations have gone off the gold standard, since they desire a more flexible money supply than gold provides. Gold has several industrial uses today in high-tech applications, but it had almost none at the time of the Pacific war.
Gold is mined either from placer deposits, where its heavy specific gravity allows easy separation from the gangue (panning for gold), or increasingly from primary ore bodies as the placer deposits are exhausted. Even the richest gold ores typically contain only a few ounces of gold per ton of gangue rock, so that the gold must be extracted chemically from the crushed ore. Its inertness means that chemical extraction is limited to either the mercury or cyanide processes, both of which involve highly toxic chemicals and the potential for environmental damage.
Gold is found in the central ranges
of New Guinea
and accounted for many of the settlements
and airstrips on that island. It was also mined at Baguio
in the Philippines,
Kolar
in India, Vatukoula on Viti Levu, and in
several locations in western North America. Japan mined about half its gold in Korea. Since gold had
almost no industrial uses in 1941, it was not a limiting resource,
and the amount produced
during the war had little effect on the money supplies of belligerent
nations.
Japan had gold reserves of about $500 million in 1930, but the decision to return the yen to the gold standard just as the Smoot-Hawley tariffs
went into effect proved disastrous, with half of the reserves drained
in a single year in a vain effort to prop up the yen. The remaining
gold reserves were mobilized after the beginning of the China Incident in 1937 and sold in the United States to raise dollars to finance the war. Fully 55% of the reserves, $250 million dollars worth, were disposed in 1937. Strenuous
efforts to increase production were only partially successful,
with total Japanese production peaking at $63 million in 1939.
The Japanese government also encouraged citizens to turn in their gold
jewelry and other treasures ("smashed gold") and eventually collected
$119 million. The U.S. government made no effort to block gold sales,
incorrectly calculating that the gold reserves would soon be exhausted
and Japan would be forced to make peace. Instead, American bank
inspectors discovered in August 1940 that the Japanese had quietly
built up a "war chest" of over $100 million in American financial
institutions that had been concealed through fraudulent financial
reporting. This was a major factor motivating the subsequent freezing
of Japanese assets.
The United States had historically been a major gold producter from the California and Alaska fields, and
by 1941 it held most of the world's gold reserves. With the United
States exporting much of the arms and munitions used by the United Nations,
these reserves were largely untouched at the end of the war, and the
dollar became the premier reserve currency in the postwar world.
References
Neff (2007; accessed 2012-8-2)
Vatukoula Gold Mine Website (accessed 2010-7-24)
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