Part 5: Un-Noble Metal

Gaily bedight, a gallant knight, in sunshine and in shadow, had journeyed long, singing a song, in search of El Dorado. But he grew old - this knight so bold - and o'er his heart a shadow fell as he found no spot of ground that looked like El Dorado. 

And, as his strength failed him at length, he met a pilgrim shadow - "Shadow," said he, "Where can it be - this land of El Dorado?"  "Over the mountains of the moon, down the Valley of the Shadow, ride, boldly ride," The shade replied - "If you seek for El Dorado!"  Edgar Allan Poe 

Duke Mitchum didn’t know it yet, but his life was about to go through a drastic change and not one for the better.  By the end of his first job assignment in Alaska, he had already made quite a reputation for himself so his was a triumphal return to HICO’s Houston corporate office, with a warm personal greeting by Chairman Rainos himself and lunch together in the executive dining room on the twentieth floor.  There was no question in anybody’s mind that this Mr. Mitchum was a mover and shaker, a fast tracker and the sky was the limit for this young man. 

After working on various ad hoc assignments at corporate headquarters for almost a year, it was no surprise to anyone that he was made, not yet thirty years old, Vice President of Asian Operations for a newly acquired HICO company out of Canada specializing in gold mining and ore processing equipment called JAM Enterprises, Ltd. 

The former owner of the company, Jaime A. Moore, was left in place managing the company as its president and given a large number of HICO common stock shares in exchange for 100-percent ownership of his company by the Houston-based conglomerate.  It was a purchase HICO was only too eager to make because of the huge potential gold discovery JAM was involved with in Indonesia – the newly acquired company had exclusive rights to supply all the mine’s equipment needs.

Unbeknownst to HICO, Moore had paid a bribe to the Director of General Mining in Indonesia, who required a foreign company called Brasilex with exclusive mining rights to use only JAM supplied machinery.  The gold ore was deep below ground but nowhere near as deep as South African mines, so the majority of capital investment would be for strip-mining machinery – initial assay estimates from preliminary core samples showed about 60 tons of recoverable gold, a huge find. 

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Big earth-eating hydraulic excavators and hauler trucks would be used in a rainforest strip-operation where several tons of soil and rock were removed to recover, after ore processing, to just one troy ounce of pure gold.

The new gold find in Borneo was the biggest discovery to come along in decades – financial analysts on New York’s Wall Street even said perhaps as big as the Klondike strike of the late nineteenth-century – and each day it seemed new assayer’s reports were coming in claiming more and more potential in the eastern region of the island.  To hit the ground running, Duke was given a deep immersion crash course in mining equipment to get him over to Indonesia as soon as possible. 

Pretty soon Duke was up to his eyeballs in training courses, learning about the likes of agitators, vibrating screens, crucible furnaces, drying ovens, chemical mixing tanks, mixer settler units, leaching tanks, airlift pumps, carbon-in-pulp processing, carbon-cyanide stripping, mercury amalgamation, and mercury recovery systems. 

He also got a refresher course in chemistry and learned about cyanide toxicity and how to manage it when employed in the leaching and metallurgical recovery of gold from raw ore.

Duke learned about the severe hazards of using gold recovery chemicals if exposed or ingested outside recommended safety limits.  A teaspoonful of two-percent solution of cyanide could kill an adult human being, blocking the absorption of oxygen by cells therefore causing the victim to suffocate to death. 

The chemical could cause harm to the brain, lungs, and heart, or lead to coma and death so great care had to be taken by companies who manufactured equipment and by mining companies who actually used the equipment – companies and mine owners ostensibly shared responsibility and legal accountability but with skilled lawyers, haggling could take years, or even decades, so the system protected the big mining companies from lawsuits. 

As an engineer, it was easy for Duke to learn the fundamentals of cyanide leaching, wherein a cyanide solution is used to dissolve gold from host rocks, shook free from the ground using powerful explosives.  After the ore is then excavated, huge hauler trucks bring the ore to a grinding mill, where it is crushed into sand of smaller sized grains, and finally transported to the leaching plant where the ore is mixed with the cyanide solution. 

Like something from ancient alchemy, the solution magically dissolves the gold from the crushed ore and is then precipitated out of the solution.  One method of precipitation involves adding a metal like mercury to the solution; another method is to add a negatively charged metal cathode, which attracts positively charged gold particles.  Duke learned that cyanide leaching produced many hazardous waste byproducts that must be disposed of properly, like caustic acids and heavy metals, but the most dangerous of all was the cyanide itself. 

Even if disposed of properly, over time cyanide compounds lingered in soil and water and caused animals to become ill – the toxins accumulated in plants fed on by grazing livestock – and if significant amounts were dumped into an ecosystem, the entire system could be destroyed. 

This wasn’t exactly civil engineering – something seemed a little sinister about gold mining with poisonous chemicals – and it wasn’t what he signed on for when he joined HICO, but friends told him that in the corporate world, you took career opportunities when they came along and this was a plum assignment.  Who knew, they joked, Duke Mitchum could one day even take Chairman Rainos’ job.

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           The new gold field was over 100,000 acres in area and located near Samarinda, just west of the Makassar Strait of Borneo.  The Dutch, Canadian, and Brazilian conglomerate, Brasilex, kept the Indonesian government happy by promising a ten-percent royalty on whatever gold was found, payable in dollars outside the country, and also had on its payroll two members of the prime minister’s family who were given huge salaries for “financial consulting services.”  

          Duke arrived with the first shipload of equipment and soon afterwards, drilling and excavation started.  As the conglomerate began requiring more capital to fund further exploration, Jaime Moore convinced HICO to take a minority stake in Brasilex as well, which they did – and a few weeks later, core samples taken from new drilling took the recoverable gold estimate to almost 90 tons.  Ecstatic about the new estimate, HICO approved a huge credit line for Brasilex so they could import millions of dollars worth of equipment from JAM Enterprises, Ltd. – soon the Samarinda site became one of the largest gold exploration and mining operations on the globe, even surpassing Tapajós and Serra Pelada in Brazil.

But over the next two years, political red tape and hostile jungle working conditions, not to mention uncooperative indigenous people unhappy with deforestation of their homelands, produced very little actual gold. 

Still, with new core samples confirming yet another vein running beneath the gold field pushing estimates to over 120 tons, Brasilex and its partners continued to push forward.  A find of this magnitude placed it even bigger than the previous largest find in Indonesian history by Freeport-McMoRan. 

Also by now, HICO’s ownership of 30-percent of Brasilex and the sale on unsecured credit of mining equipment to them meant the Indonesian venture was the largest investment in HICO’s sixty-year history.  But when even more investment and credit was requested by the conglomerate, HICO decided to delay any further investment decisions until an expert outside assaying engineer and a geologist it hired performed an objective analysis and the Houston-based corporation could obtain a second opinion.

The professional two-man team hired by HICO visited the gold site in Indonesia, talked with Brasilex geologists, and toured the assay labs where the ore samples were tested, and surprisingly, were impressed with the quantity and quality of gold deposited within the samples. 

The team did express some concerns that treatment of drill cores, which involved crushing the entire core instead of the usual practice of dividing them to save half for later tests, was not performed, but nonetheless did not object when new estimates for total gold lying beneath the field now hit a whopping 300 tons, putting it on a scale with the entire Alaska and Yukon gold rush yields of the late nineteenth-century.  Once again, HICO put more money into the venture and shipped more machinery to continue exploration and drilling activities.

          Then things started going horribly wrong.  The chief mining engineer for Brasilex, Danilo Pereira Da Silva, for no apparent reason, threw himself out of a helicopter he was riding in with Duke Mitchum and Jaime Moore during an inspection tour, right in front of their faces, and plummeted a thousand feet to his death into the jungles of Borneo. 

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          Indonesian police were immediately notified by the two horrified onlookers and government authorities were also called in, who searched Da Silva’s personal belongings back at the base camp.  The police claimed to have found a suicide note in which Da Silva admitted to having a terminal case of AIDS and couldn’t bear the shame to him and his family. 

          About the same time, the son and daughter of the prime minister complained that their salary was too small and they deserved an increase, as well as a special bonus for the work they’d done so far.  When the financial controller of Brasilex was apprehended at the Jakarta airport trying to leave the country with almost a million dollars in cash stowed in his luggage, the Indonesian Bureau of Investigation called on their own team of scientists and assaying experts to see exactly what was going on in Samarinda. 

          They obtained samples of the drilled cores and sliced off samples to study beneath an electron microscope, making a startling discovery; what they found was placer gold, the kind that originated from rivers, rather than flakes that would have originated from an underground volcanic deposit.  Government experts determined, therefore, that the core samples used by Brasilex had been salted with gold flakes more than likely purchased from local Indian tribes. 

Shockwaves of this massive fraud reverberated as far away as Houston in a matter of hours, and Indonesian authorities announced that it was suspending immediately mining operations at the gold field and ordered the arrest of high-level foreign management still at the site. 

Moore, sensing the jig was up, had the previous day telexed to HICO his letter of resignation as president of JAM Enterprises, Ltd. and left the country (a week earlier he had sold off all his shares in HICO), but Duke was arrested, as was the Director General of Mining of Indonesia.  No mention was made of the prime minister’s offspring and they were never made part of any legal proceedings or part of the multi-million dollar international lawsuit against HICO and Brasilex for fraud, bribery, and money laundering. 

         The partners of Brasilex declared bankruptcy and disappeared somewhere in the Amazon jungle, but HICO had major problems as its stock price plummeted on Wall Street.  Besides the $400 million in direct losses associated with its investment in Brasilex and inability to ever get paid on JAM equipment it shipped to Indonesia, the embarrassment and loss of credibility caused further problems throughout the family of HICO businesses and subsidiaries.

          When the U.S. Justice Department and the Securities and Exchange Commission announced that it too planned to investigate HICO’s business activities in the United States, its chairman had no choice but to resign to save face for the beleaguered conglomerate. 

         He walked away from the scandal with a severance package worth $50 million and moved to his spacious, bougainvillea-covered mansion in the Cayman Islands, and after a few years, as all the legal proceedings were finally settled and fines paid, the sad affair was forgotten and HICO once again regained its sterling reputation.

So, as they say, shit rolled down hill, and ultimately it was Duke Mitchum, All American, who bore the brunt of HICO’s ire and became the company’s scapegoat.  The thirty days he spent in the local hoosegow was the longest month of his life, when finally lawyers from Jakarta hired by Houston and minimum effort by U.S. Embassy staff combined to finally put enough pressure on Indonesian authorities to win his release from that hellhole. 

Upon returning to Houston, Duke learned that his employment with HICO had been terminated, but he would receive one-year’s severance pay, outplacement assistance to help him in preparation of his job resume, and assistance in seeking new employment elsewhere.

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 Of course, no one wanted to hire Mr. Mitchell after what happened – he was a corporate pariah – so weeks, then months passed as his parents saw their wonderful young son, whose career had once looked so promising, spend his days reading and watching television, pretty much friendless at this point – Duke had moved back home to live with his parents.

           But even Duke’s parents had underestimated him.  True, he had taken a big one on the chin that had knocked him down, but not unconscious – as far as he was concerned, there had been no ten count. 

           He was no loser goddamnit!  Duke intended to get up off the mat and move forward with his life, just as soon as things settled down and the dust cleared a bit.  Although he was still relatively young, he now felt much older and wiser, and he had learned a thing or two about how the big boys played the game – he wouldn’t be so stupid and trusting the next time around.  Time, that was it, that was the secret; it was just a question of time.

Duke then began reading, and reading, and reading.  He spent hours on end in Houston’s public library, and if that wasn’t enough, he drove to College Station and researched at Texas A&M’s library.  His appearance began to change – his hair grew long as did a new beard, and he wore mainly blue jeans, sweatshirts, and black Converse low-cut sneakers. 

His parents even suspected he may be smoking pot and were sure he was drinking too much beer, judging from all the emptied Lone Star cans in the trash bin.  On the other hand, they were glad their son had snapped out of his funk and was at least doing something, had shown an interest in something, apparently with the passion of a crusader, although they had absolutely no clue what he was up to. 

So obsessed was Duke’s re-awakened passion for learning that he even traveled to Washington, D.C. so he could visit the Georgetown University Library and the Library of Congress to take advantage of their vast collection of knowledge.  He read again the works of the Carthaginian Camus, whose homeland he shared in common with St. Augustine during a different era, who wrote of man’s Sisyphean conflict about what he wanted and what we had – either he discovered life’s meaning through a leap of faith and placed hope in God, or he died concluding everything had been meaningless. 

It was about raison d’être, something that each person came to grips with on their deathbed, assuming they were lucky enough to die in bed and could see it coming.  Life had to be more than just a mustard burp – momentarily tangy than lost instantly into thin air.

Duke learned everything he could about that un-noble metal that had cost him his job and future – gold.  Why did it have such a strong allure for mankind, and how did religion dovetail with the acquisition of wealth and power, always it seemed, by an elite few?  He wanted to know what we were as human beings, where did we come from, and why were there so many similarities in cultures and societies around the planet, which sprang up almost simultaneously and according to experts, in isolation of each other.  

He wanted to return to Alaska and explore those mounds he saw on Kenai Peninsula, and find out what that metal bar, that bowtie shaped ingot he found had really been used for.  It was in a site of scattered stones that looked they had once been a structure of some kind.  Duke wanted to know why in the kitchen do they come and go, speaking of Michelangelo, and why was a different road not taken westward and when look, the land was bright.  Sophocles heard it long ago on the Aegean and had miles to go before he slept. 

Why did people insist on killing each other every few years during periods of warfare, and how to explain the words of peace from so-called biblical prophets twisted by mere mortal men into words of hate and violence?  How did the spread of civilization evolve?  Had his own country become a Potemkin village of a once great culture that no longer existed, one that once espoused virtue and the inalienable rights of average citizens?  If you rescued a drowning man not out of pity in a noble, selfless act, but instead to receive adulation, reward, and praise for being a hero, did it make any difference in the end?

 He felt a patriotic duty to his country to explore her history and learn more about how America evolved into the country and society she was today.  And he wanted to know what compelled men to seek divine and Earthly immortality above all else.  So Duke Mitchum set out on his quest for truth, and in so doing became a modern-day prophet of sorts himself, and he hoped in the future to become a sage and impart the wisdom of all that he learned unto others.
           The old and noble profession of teaching became the young wise man’s ultimate objective.  And where better to start than with the creature of his own undoing.  It was at this juncture that Duke’s research unveiled some interesting facts which he would carry forward in explaining an amazing saga, one for the ages that no one but he had uncovered until now.

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Gold is the so-called noble metal because no other metal comes close to it in beauty and desirability.  The very word “gold” conjures up visions of adventure, glory, power, wealth, and greed.  People and civilizations have gone to all imaginable lengths to own this substance.  The cry of “Gold!” has the universal power to drive men half-mad and send them rushing across a continent or around the world with gold fever, leaving behind job, home, family, and friends.

They will abandon minimal creature comforts, endure incredible hardships, face death dozens of times each day, and still continue to hope for success in the face of all evidence to the contrary.  And it has also, not infrequently, turned normally decent folk into cheats, thieves, scoundrels, and even murderers. 

But exactly what is gold and what makes it so special?  Gold has been the source of both eternal beauty and contemptible greed, and empires for millennia have been ravished, nations have gone to war, pirates have plundered sea-going vessels, and men have abandoned homes and families, lured away by dreams of boundless riches.

Evidence gathered from archaeological diggings revealed that gold was prized and worshipped from the earliest days of mankind’s history and the ancient quest continued to this day.  Gold has some pretty amazing qualities as a metal.  A cubic foot of water weighs a little over 62 pounds, granite 168 pounds per cubic foot, but a cubic foot of gold weighs over 1,200 pounds.  A mere cubic inch weighs almost three-quarters of a pound!

Gold is inert and will not combine with other metals so therefore will never tarnish; that’s why it’s sometimes found in an almost pure state, be it very large nuggets, small flakes, dust, or embedded in quartz – one of its favorite host ores.  Of all its qualities, perhaps the most amazing thing about gold is the fact that is virtually indestructible.

Other metals like iron and steel may rust and dissolve over time into dust, but this doesn’t happen to gold; it never rusts – archaeologists who today dig up gold artifacts 5,000 years old will find they are still in brand new condition.  New discoveries of sunken treasure ships, which sailed the high seas during the days of the conquistadores, still yield gold coins in mint condition, despite the fact that anchors and timbers have long since been rotted by corrosive seawater.  NASA uses gold foil to protect vulnerable components because it’s resistant to heat and radiation like no other material.

Because of its indestructibility, gold can’t be permanently lost but only well hidden; once discovered it can be used over and over again.  The gold fillings in your mouth may well have been gold that once decorated King Solomon’s Temple, or used for making the death mask of some ancient Egyptian pharaoh, or brought back from the New World by conquistadores.  

Long after you’re dead and your coffin and bones turned to dust, your gold fillings will still be buried in the ground, in perfect condition, and perhaps will be dug up by treasure hunters a thousand years from now.

The yellow metal can be found almost anywhere; in the most common rocks in your backyard and even in seawater, which has minute traces of gold.  But in such small traces, there is no cost-benefit in extracting it given the large amount of investment needed to obtain enough gold to pay for the mining overhead – a situation that changes if the price of a troy ounce of gold raises on world markets making the mining profitable enough.

Mining operations need concentrations of at least 2.5 grams of gold per metric ton of ore in deep-shaft mining to at least one gram of gold in open-pit strip mining to be cost effective.  Nature likes gold more than any other metal and provides it in finished form without the need for mining it at all in some places, which is called placer gold.

Because it’s so resistant to wear and tear, over millions of years rocks that contained gold have worn away through erosion, but have left behind a residue of pure gold in the form of flakes and nuggets.  These types of discoveries have been the source of many a gold rush as the metal lies glistening in the sun in plain sight.  Its touch is very appealing, almost like velvet, and its luster possesses a hypnotic effect like no other substance.

In reflecting light, gold seems to absorb it as well as reflect it, and no matter how you turn it under illumination, its warm glow remains constant and uniform.  In pre-historic times, cavemen probably had very little use for gold in the practical day-to-day world.

A knife or spearhead made of pure gold would very soon lose its edge, and a hoe made to till the soil would bend out of shape the first time it hit against a rock because of its softness as a metal and its malleability.  Its softness makes gold very easy to hammer into different shapes while still at a cold temperature, unlike the high heat you would need for making a steel horseshoe.

It can be hammered in sheets so thin that a gold nugget the size of a walnut can be stretched to cover a football field in thin gold leaf.  If the thin sheet happened to split at some point, repair is simple because it can be cold-welded by friction from rubbing.  Another unusual property of gold is that it’s ductile, meaning that it can be drawn out into a long, thin thread so fine that the same walnut-size nugget could be made into a thread 50 miles long. 

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Gold didn’t always have a monetary value and scholars cannot agree when the transition took place from gold being an ornamental metal for making statues and jewelry to becoming a monetary metal.  Goldsmithing has existed since recorded history, as seen in the exquisite works of art taken from the tombs of Egyptian pharaohs – the noble metal was perceived by the Egyptians as representing the Sun and the god Ra, and thus became associated with the immortality of the demigod pharaohs. 

The Egyptians were amongst the first to use the method of gold-leaf hammering and plating, wherein sheets of gold were pressed through ever finer rollers and cut into squares, so thin that light could pass through them yet they would not break.  The leaf they produced from this technique was so thin that 370,000 of them stacked one on top the other could make a pile only one inch high. 

In Europe, the height of gold crafting was reached during the Middle Ages when alchemy was gaining immense popularity, and gold was associated with the magical Elixir of Life that granted near immortality.  The Philosopher’s Stone was said to be the secret ingredient of the Elixir.

Fortune hunters seeing church steeples covered in gold, cathedral domes, reclining Buddhas, temple ornaments, religious artifacts, or any number and types of objects worldwide coated with gold-leaf often concluded erroneously that these things were made of solid gold, so legends of golden cities and long lost treasures became part of collective folklore.  Ergo, mountains of gold must have been mined since ancient times and much more still waits to be found deep in ruins since buried by earth and rock. 

The use of gold has always been associated with organized religions and pagan worship, dating back to primitive cultures in which gold itself was sometimes worshipped as a god.  But no religious denomination controlled or hoarded more gold, nor used more gold in its religious rites, than the Roman Catholic Church – much of which came from South American sources, mined by the native Indians and “confiscated” by the Catholic conquistadores under their motto: God, Gold, and Country. 

As far back as the early 1900s, compounds prepared from gold dust and sulfur made people suffering from severe rheumatoid arthritis feel better when applied to sore areas, and repeated treatments actually cured some patients.  Medical professionals speculate that healing properties from gold may come from the way gold interacts with a substance called peroxynitrite within infected cells.  Gold-based therapy, called chrysotherapy, has also gained renewed interest over the past few years to help cure cancer patients, particularly prostate cancer.

Experiments with fluorescent light-emission-properties of gold during the past few years have shown that it can have a wide range of applications in medicine, genetics, and chemistry.  Compounds produced from gold emit fluorescence because its atoms form linear chains and interact with each other.  The light emission of gold can be used to detect diseases when gold compounds attach themselves to nucleic acids in the cells, and in some cases, even repair damaged cells. 

Research continues with gold compounds which one day may result in medicines that actually extend life spans significantly.  The explanation of how gold became money, and how money works is not simple; expert economists are capable of writing pretty complicated books on the subject.  Involved was the evolution from primitive means of bartering for goods to more advanced capitalism, and the need for a more practical monetary system. 

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Somewhere along the line, through universal acclaim it was agreed the noble metal possessed all the qualities needed for a monetary standard: it had an intrinsic value, meaning that in of itself it had many unusual features and uses; it was virtually indestructible, called the immortal metal; it was universally desirable; people and nations risked life and went to war to own it; and it was amazingly scarce.  

All the gold that the Earth has given up to mankind since the beginning of time, everything from the globe over, pressed into one massive metal block would create a small cube of only sixty feet on all sides – it can fit neatly inside a little-league baseball diamond! 

The first minting of gold coins took place around 550 B.C., when the incredibly rich King Croesus of Lydia, a country in Asia Minor bordering on the Aegean Sea, had his image stamped onto small golden pellets.  But centuries before that date, merchants who traveled the Silk Road between Europe and Asia already discovered the acceptability of gold as a medium of exchange – had it been necessary to trade spices from the East for cattle in the West, the animals would have died long before reaching the Orient.  

It was far more logical to carry on the journey the commodities’ worth measured in gold specie and avoid the need to herd animals along the trail.

The downsides in transporting gold by caravan were the highwaymen and cutthroats along the way, who preferred to get rich the old fashioned way.  So it was only logical to develop a new level of sophistication whereby merchants did not actually carry large quantities of gold with them, but rather left if at home for safekeeping.  Instead, they exchanged written receipts guaranteeing delivery of the gold upon re-presentation of the receipts, so there slowly evolved letters of credit and a rudimentary banking system, which the Dutch later honed to perfection.

The medium of paper money, like the bills issued centuries later by the government of the United States, known as greenbacks, promised the bearer of the note that the United States government would refund upon presentation of the greenback the amount of gold stated on the paper.  The goldsmiths who issued gold receipts might be thought of as the world’s first bankers, who early on got themselves into trouble by diluting coins with non-precious metals or loaning out money with interest charges – something the early Catholic Church frowned on. 

By charging interest for loans, goldsmiths could make a handsome profit so were able to create wealth simply by issuing receipts for gold that didn’t actually exist, and the only way to get caught would be to have everybody show up at the same time to redeem their receipts, a highly unlikely event.

In the early stages of its history, the United States elected the policy of minting gold coins and any paper money issued could be redeemed or exchanged for its value in gold – in economic terms, referred to as the gold standard.  The theory behind the gold standard was simple: the federal government could not increase the amount of money in circulation unless its supply of gold grew in proportion to its spending commitments. 

In business dealings with foreign nations and corporations, the national goal was to maintain a balance of payments, achieved by selling as much of our goods to them as we purchased from them.  America’s founding fathers were frugal men of strong Protestant work ethic who believed you should not spend more money than you made, so a single gold standard stabilized world currency, since other nations could demand gold instead of currency to settle debts in the event currency of any nation became inflated.  Gold would then flow out of a country and banks, and governments seeing their gold reserves decline, would want to protect themselves by reducing the amount of money in circulation.

The relationship between gold and currency would therefore once again be brought into balance.  This was economic mantra until the Great Depression in the United States; adjustments of this type were what stabilized world economies up until then – even today some economists and die-hard goldbugs look back on the early years of the twentieth-century as the true Golden Age of prosperity in America.

Between 1873 and 1893, consumer prices fell because there was a decrease in gold production in America and during the subsequent twenty years up until 1913, gold production increased dramatically as prices soared, thanks to a new processing technique called potassium cyanide leaching used in addition to mercury.  It was the use of deadly mercury, even in ancient times, which poisoned the environment and to this day still poses a threat to human life. 

The Industrial Revolution brought about a tremendous increase in world output of goods and trade, but new gold fields emerged so gold supplies kept pace with production – and America’s gold standard remained adequate for its national economy.  The role of government in banking affairs was something fiercely debated since the country’s founding.

In earlier times, Andrew Jackson had not liked a strong central bank, unlike had been the case with Alexander Hamilton, so Jackson vetoed the extension of the charter of the Second Bank of the United States in 1836.  But a strong central bank came back.  The Fed was born in 1913 with the Federal Reserve Act signed by President Wilson and the U.S. once again had a central bank albeit a flawed one.

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In a lucky coincidence for America, J.P. Morgan, the country’s de facto central banker during much of the post-Civil War era had been born in 1837, a year after the charter of the Second Bank expired – and he died the same year the new central bank, the Fed, was born.  It was J.P. Morgan who governments turned to for financing of a variety of domestic and foreign projects and military interventions.  It was J.P. Morgan who single-handedly saved the gold standard in 1895.

Economic stability deteriorated rapidly when in 1914 Europe became embroiled in World War I and afterwards major world currencies lost value, so European countries suspended the gold standard – thinking it would be a temporary measure just as the United States did during the Civil War.

The cost for producing advanced instruments of war beginning in the early twentieth-century was tremendous, and every nation involved with advanced warfare was forced into weapons production far in excess of what it could afford i.e. its gold reserves – so nations had no choice but to print money not backed by gold.  In some cases, hyperinflation ensued.  Economists learned the bitter truth that lowering the price of gold when the price of goods had risen sharply didn’t mean the goods would come down in price.

The final blow to the hope for prosperity in the world after the Great War came with the economic period in America known as the Great Depression – when the machinery of an international gold standard finally broke down.  During the 1930s, industrial production in the United States almost came to a complete halt.

Working people learned the true meaning of unemployment and hunger and as more citizens lost their jobs, fewer goods were bought producing still further cuts in production; it was a cycle that seemed unstoppable.  Gold was the furthest thing from the mind of most struggling American families, who were being kept busy just trying to scrape together ordinary copper pennies for food.

Friedrich Engels, friend and collaborator of Karl Marx, once remarked that a day would come when gold would be used for making toilet seats.  This prediction, along with Marxism and Communism, found their way to the trash heap of history, while gold has not lost one iota of its mystical appeal.  The human race has had a very special relationship with gold for many thousands of years. 

History, tradition, and legend have given gold an emotional, magical significance that far transcends whatever practical value it possessed as a useful metal.  In ancient times gold was associated with divinity, immortality, and royal blood – and only in more recent times did it become the unparalleled symbol of financial stability.

What’s intriguing about gold is that despite our modern, highly sophisticated, highly complex economy, millions of people still react with primordial emotions when economic troubles threaten them – as if we have retained coded somewhere in our DNA a subliminal attraction to the noble metal – and begin hoarding gold whether it’s part of the monetary system or not.  There is simply no other material that matches the ancient and universal awe and respect in which gold is held.  Habits that are many thousands of years old are hard to break.  But where and how did this subliminal attraction originate?  Here is where the saga that Duke investigated and researched really begins.

(This is a work of fiction. Although some real-world names, organizations, historical settings, and situations are used to enhance the authenticity of the story, any similarities to actual persons, organizations, or situations are coincidental and all portrayals are purely the product of the author’s imagination. This is the second edition abridged version 2019. First edition Copyright © 2006. All rights reserved)