Re-opening of the Central Eureka gold mine in Sutter Creek has been postponed indefinitely, due to fears of hazardous substances. At the price of gold today, production from this mine would be worth nearly $2 billion. Photo by: Jerry Budrick

As economic conditions around the world worsen, the origin of modern day currency has experienced a revival in its worth.

The price of gold hit $1,000 an ounce Friday. In a highly publicized report, CitiGroup's chief technical strategist, Tom Fitzpatrick, predicted that the price of gold could climb as high as $2,000 an ounce by year's end.

Fitzpatrick points to the massive bailouts occurring in numerous countries. "They are throwing the kitchen sink at this," he said. "The world is not going back to normal after the magnitude of what they have done. When the dust settles, this will either work, and the money they have pushed into the system will feed though into an inflation shock. Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration."

Comparisons are being made to the Great Depression, which began with the stock market crash in 1929 and ended only with the stimulus of World War II. Through the years of depression, gold mining insulated the local economies of the areas where it was produced.

One such area was California's Mother Lode, the center of which is Amador County. The subterranean vein of gold runs north and south for 120 miles and only a small part of it was tapped by the gold miners, who worked for nearly 100 years, from 1848 until 1942.

Review of mining records reveals that the production from California's gold mines settled into an annual increase from the 1920s until the U.S. government decided to close them down in 1942, by Order L-208 from the War Production Board. The reason for the closure lay in the need for manpower in industries considered essential to the nation's second world war effort.

In that last, war-shortened year of production, the gold mines of Amador produced more than 49,000 ounces, which had a value at that time of $35 per ounce. Such production today would be worth $49 million.

The few years until the war ended saw the mines fill with groundwater, which loosened and weakened the timber framing that provided protection for the miners deep beneath the surface of the earth. After the war, the expense of pumping and re-timbering the old mines proved to be a deterrent to resuming operations. Added to that was the heightened awareness of the dangers posed to mineworkers, risks that the union leadership was unwilling to allow.

Famous mines in Amador County include the Kennedy and Argonaut in Jackson, the Keystone in Amador City and the Central Eureka in Sutter Creek. Dozens more existed up and down the corridor that roughly follows Highway 49. The mines and the highway exist because of the underlying vein of gold.

The city of Sutter Creek has been working on re-opening the Central Eureka mine property to the public, though not as a producing gold mine. One of the foremost advocates of the plan is Sutter Creek Councilman Bill Hepworth, a 20-year member of the board of directors of the Kennedy Mine Foundation.

The re-opening had been scheduled for last July 4, but was postponed by state regulatory agency fears of hazardous materials in the soil on the mine site. "As soon as the state comes back and tells us what we need to do, we'll get back on the project," Hepworth said.

Asked about opening mines for production, Hepworth was less than enthusiastic. "Everyone I've ever talked to about gold mining and the refining felt that it really wasn't a tourist attraction type of business," he recalled. Hepworth also told of stories he had heard from former mine workers at the Kennedy and Argonaut. "High-grading (surreptitiously removing valuable ore from the mines) was part of how the miners made enough money to pay for their families," he said.

The state has long recognized its Mother Lode as an important resource, worthy of preservation.

The California Department of Conservation Office of Mine Reclamation created the Surface Mining and Reclamation Act of 1975. This act dictated that all counties in California will designate areas in their general plans that have important minerals to be protected.

Amador County's general plan contains numerous areas designated as containing important minerals, one of which is along the same line as the vein of gold. The official designation of this zone is MRZ-2, defined as an area "where adequate information indicates significant mineral deposits are present."

The county's general plan is in the midst of an update, which foresees inclusion of an expanded designation on mineral extraction or processing.

The existing general plan goes on to limit parcel size in MRZ-2 to a 40-acre minimum. It also states that "land uses proposed on mineral lands will be reviewed as to their impact on the eventual extraction of the identified mineral resource. Uses which would permanently preclude or seriously hamper a mineral extraction shall be found inconsistent with the General Plan."

The federal General Mining Act of 1872 first solidified the rights of miners and many of the act's provisions remain in effect today. Simply stated, the act makes it clear that mining is subject to regulation, not prohibition.

Federal, state and county laws, at first glance, appear to promote and encourage mining. But the regulatory and environmental clearances required to mine gold in the Mother Lode can drive costs beyond the means of small operators. Local opposition groups, fearful of noise, dust, truck traffic, arsenic or cyanide pollution, can stretch the permitting process into years of contentious public hearings.

Modern gold miners no longer use ear-splitting, ground-shaking stamp mills, opting for roller mills that are quieter. Mercury-free processes for extraction of the gold have been discovered, foremost of which is called "flotation." Miner safety has been improved.