The Crime of 1873 : Gold Inflation this time

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.

via The Crime of 1873 : Gold Inflation this time.


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