In September of 1965, Joe Barr, a Treasury Department official with a long history in government, agreed to meet with a group of members of Congress from Western states. He knew what to expect. Earlier that year, he had met with the same group, and endured its ire over the Treasury’s reluctance to help the American gold industry.
After the Second World War, world leaders had met at Bretton Woods, in New Hampshire, and, as part of an agreement on an international monetary system, had fixed the price of gold at thirty-five dollars an ounce. This had, predictably, depressed the U.S. mining industry, even as the demand for private gold shot up. The more easily obtained sources of gold had been depleted over the years, while harder-to-reach sources became more difficult to mine profitably, given the static price.
Foreign competition—chiefly from Canada and South Africa, where mines were less depleted and labor costs were lower—was far more intense by 1960 than it had been after the war, when the price of gold was set. The United States was a distant third in gold production. Rather than attempt to compete, many mines simply shut down.