SCOUTING YESTERDAY | South Dakota wants feds to let U.S. mines back into global gold market

This week in South Dakota history: Jan. 10-16

Homestake Mine, ca. 1940

Following World War II, the gold mining industry in the United States was struggling. And 75 years ago, the South Dakota Legislature was trying to do something about it.

According to the Rapid City Journal, the Legislature in 1949 sent a letter to the U.S. Congress requesting an amendment to the Gold Reserve Act of 1934, which had allowed the president to set a fixed price for gold and restricted any sales of gold on the market by entities other than the United States Treasury.

President Franklin D. Roosevelt had set that price at $35 per ounce. The letter requested that U.S. citizens be allowed to buy, hold and sell gold in both domestic and foreign markets. At the time, the precious metal was receiving up to $65 per ounce on international markets.

In addition to opening up markets, the Legislature also wanted mines companies and owners be compensated for their losses during WWII.

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The War Production Board (WPB) had halted all gold mining in the United States, according to The Weekly Pioneer-Times. Stopping gold operations would allow resources to be used for the mining of more critical war time materials. Among those were minerals like copper, which was used in a variety of applications ranging from communications equipment to shell casings.

At the time, Homestake Mine manager Guy Bjorge and Rep. Francis Case had already met with WPB officials to discuss the shifting of operations to war time goods. Lumber from the mine’s mill was already being used in military installations and converting the mine’s machine shop would allow Homestake to stay open. The mine, under an exemption, was allowed to continue processing ore until June 8, 1943.

The WPB agreed to converting the mine’s facilities for wartime production. In a letter to former employees enlisted in the war, Bjorge described the mine and the city of Lead’s current conditions.