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    O O MME B GIAL

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    THE ACCUMULATION AND VALUE OF GOLD . Accokdikg to the Bank returns of last week , there was then 19 , 951 , 022 * . of bullion and com in its vaults . Of this sum only a very small portion was silver coin . The bulk was gold . In the Irish and Scotch banks , of which the circulation is very generally and very considerably above their ^ authorised circulation , there is about 4 , 950 , 000 ? . The Bank of France holdsby the latest return * coin and bullion

    , to the amount of 22 , 284 , 000 ? . Bo that there is at present an accumulation of gold in different places , and a recurrence of the apprehensions that it is destined to fall in value . There is , too , a recurrence of discussions on the subject , and , at present , a orowiug conviction that Ave are deficient in knowledge of * the quantity of bullion in existence , and of the requirements of mankind , to enable us to form any reasonable conjectures as to its future

    value . We all know that when gold was found in California and in Australia , in such unheard-of quantities , and obtained at such a comparatively small cost , that the most dismal apprehensions ¦ . were entertained by the holders of fixed incomes of the depreciation of their property ; that some States , as Holland and Belgium , hastened 1 to demonitize gold ; and that at the end of eight years there is not the slightest appearance of that general rise in the price of all commodities which was to bring to poverty or starvation all the genteel part of weeks

    society . On the contrary , the last six - ' average price of wheat , to quote one specimen , but the most important , is 40 s . lOd . per quarter , which is lower than the average price of any year . since 1852 , and lower than tine average price of every year since 1842 , except the three years immediately following the final repeal of the corn ; law , 1850-51-52 . So it is with other commodities , they" have fallen , not risen in price ; and -where , a , rise has taken place , as in cotton and meat , it is clearly the consequence of causes , such as greatly increased consumption , totally different from the the increase in the quantity of gold . Another test of the value of gold generally referred to is silver ; and as these metals are the gx * eat media

    of exchange between different countries , a rise m the price of silver may be considered equivalent to a fall in the price of gold . But the recorded pi'ice ofsilverj 61 § d . per ounce , in 1851 , and 61 j | d . at the present , or even 62 d ., as quoted on Thursday , is as little favourable to the ratio of a continuous itill in the value of gold as the price of wheat . The time is now come , therefore , when we must look at the elements of value , apart from the statistics of quantities , and not infer , however certain it be , that all correct opurions and all cox'rect judgments , are ultimately formed on . the material world , that the estimate of value , which is enti rely mental , must necessarily vary tliroughput society , as a ton or two is added , to the bullion usually obtained .

    From a remote period in tho history of Europe the different Governments acted on an opinion that they could determine tho value of the precious , metals , when used as coin , and that this was their duty . Our kings were extremely tenacious on this point : and " for . either . subject or stranger , " we are told , " to . interfere with this prerogative by coining was woi'se than murder or any other felony . " "No foreign coin was allowed to be used , except to bo exchanged at the king ' s mint , or by the king ' s exchangers ,, aocording to their valuation of the foreign money . " "The sovereign

    act his ovm value on his own coin . " To carry oufc this plan a king ' s exchanger was appointed with unlimited power over tho money transactions of the country . " Tho last royal exchanger was Lord Burloigh . ' / Those preposterous chums aro not yet all at an end ; ana though tho discovery of America and the extension of trade have made it perfectly clear that tho circulation and value of tho . precious metals as the media for carrying' on exchange between individuals , and securing the subsistence of society , are beyond all effectuijl and beneficial control by any Governments , however powerful , whether utasDotio or free , they still

    interfere in many ways with metallic money . To the old prejudices of the PlahtagenetsS and the Tudors , even the Lloyds and the Hubbards of our day are still victims , to say nothing of the Liverpools and the Peels , who inherited thend in direct official lineal descent . They acknowledge that over the quantity and the value of gold and silver , Government has no power ; that they are natural or universal money , the more valuable metal being necessarily the money of the richer people ; that both are essential to exchange , which is essential to production ; therefore , that they are natural and necessary parts of social existence ; and yet the heirs of the prejudices of the Edwards and the Henrys still believe that there is some little part of this universal scheme which they can

    advantageously modify . So we have seen the Governments of Holland and Belgium refuse to allow gold to be used as legal money in their countries . Banish it n-om circulation they cannot ; but they will only allow silver to be the measure of value of all other commodities , including gold . Our Government takes a directly opposite course , and will not allow silver to be used here as legal money for a sum greater than 40 s . It will not allow commerce to have and use any other money or measure of value than gold . Thus we are taught at once that we must look to the regulations of Governments , as well < as the quantities of the precious metals , before we can form eorreet opinions of the natural relation of value betwixt them , and betwixt them and other commodities , which is to

    affect the incomes of £ iU classes in society . Now it is at once obvious that the regulations of the two countries mentioned , making in them silver 1 more necessary than gold to cai-ry on business * must have enhanced its value in relation : to . gold and other things . Such a change would go far to account for the slight increase in the value of silver which the recorded prices indicate . But m the same period , that is , since 1850 , there has been a great extension of the trade between India and China and Europe . To go no further back than 1854 , when the computed real value of imports was first givenbetween that and 1857 the imports from

    , China increased from 9 , 125 , 040 * . to 11 * , 63 ?/; , and from British India , exclusive of Singapore and Ceylon , from 10 , 672 , 862 * . to 18 , 650 , 223 * . These two great countries , already crowded with an industrious population , have been accustomed , like other civilised people , for ages , to use silver as money , and there is no reason , therefore , to be surprised when such large quantities of goldfkrvved into Europe that large quantities of silver flowed from Europe into Asia . In the seven years ; 1851-1857 , according to a paper laid before the Committee of the House of Commons to inquire into the Bank Actssilver , to the amount of 56 , 676 , 000 *

    , was exported from Western Europe to China and Hindostan . Whatever may bo the case in Chinathough , as the Chinese arc eager seekers after gold in California and Australia , there is no reason to suppose they would not willingly receive it in their own country in exelmngq for silk and tea—Australian gold has continually found a market in India , and beon sent thither . But in China old regulations , and in India modern regulations , make silver the only legal money ; and for tho same reason that its value is artificially enhanced in Europe by the action of the

    Governments of Belgium and Holland , it is enhanced in Asia by the action of tho Governments of China and Hindostan . To those who habitually see nothing but wisdom dictating tho conduct of statesmen , it may appear strange , hut to us who have dogged their steps , it is only amusing to find them foolfshly decreeing in England that only gold , and in India , that only silver shall be legal money . Tot they actually adopt these two adverse courses , one or other of which , or both , must bo erroneous , and they prohibit tho use of gold in India as money , and of silver in England . They therefore disturb tho natural relative value of the two metals in both oountries—vaiso that of silver in Hindostan , and

    raise that of gold in Europe—and strengthen , if they do not originate the causes , which make silver continually flow in suoh large quantities from the

    latter to the former . As commerce m both countries naturally does , and naturally would on all occasions , use the metal which . is relatively cheaper for paying debts , and as this use is a natural part of society , like division of labour , the Government by its regulations actually thwarts the dispensation of Providence , and causes all the loss and waste which arise from bringing hither the gold , which , could it be freely used , would , in the natural course of trade , flow from Australia tc Hindostan , and sending silver in its stead to the latter .

    Having thus slightly indicated some of the causes , which alter the relative value of the precious metals to one another , independently of the quantities produced , we must add that shnilai causes— - niamely , regulations , especially those which impede exchange and production , as manj of them do to an almost inconceivable extent , affect in like manner the value of all commodities in relation to the precious metals . The stimulus which the modern discovery of large quantities ol gold has given to exchange and production all over the world would be quite sufficient , there can be no doubt , because these are all parts of the same natural system * to require . ;¦ and absorb all the additional gold and silver lately added to the general supply . It would operate in two directions . It would increase the quantity of

    commodities to be exchanged , making more money every where required .: ¦ ¦¦ and it would increase the opulence of individuals and of nations , everywhere increasing the demand for the jirecious metals in the arts and for ornjaments . Unless we could estimate the future increase of population on the globe under free intercourse , and the future cravinof fox * ornament of all that population , which will tend to enhance the value of the precious metals , it is perfectly idle to speculate on . effects of the new quantities over the future estimate of value . We know , from experience , that the great tendency in the price of all commodities ^ ecious metalssincthe first

    as measured by the pr , e effects of the discovery ofAmerica passed away—has been downwards . All things have become cheaper . They are obtained by less labour , and a less quantity of gold has to be given for them . On this general fact we are inclined to believe that there never wilf be that augmentation of prices which some alarmists expect , from finding large quantities of gold in California and Australia .. We must rem ind the reader , in confirmation _ this view , that the aniount of gold recently discovered and brought into use as money , is very much less in quantity than the substitutes for it which have been gradually , and in some cases without

    hastily introdticed into use perceptibly affecting the value of the jwecious metals . All over Europe paper has been substituted for the the precious metals as money . In the beginning of the American war only paper was to be found in the countries that arc wow the United States . At the period of tho . French llevolution , milllions of assignats banished gold from France . For many years a forced paper currency was almost the only money in use Jin England , Russia , Austria , Prussia , Sweden , Denmark , and in many of the small states of Germany . Now , if the immense addition to the money of tho world made by this forced nanor currenov , had no perceptible effect

    on tho estimated value of the precious metals , how can we oredit the alarmists who tell us , that adding a few additional millions of gold to the circulation will decrease its value ? Value is an estimate of tho mind . For gold , tho craving is so great , that tho supply must always be below tho desire for it , and the consequence is , that the vuluo , however much it may sink , never can full below the avorage estimate in past years , as is opprohondod by thoso wh < 3 look merely at tho additional quantity . On this account , throughout the whole convulsive period wo have alluded to , whon heaps of paper money

    were foroed into use , gold and silver retained tneir value newly unaltered , as was continually proved by a depreciation of the paper money in proportion to its quantity . Through all those storms the valuo of tho metals remained a fixed and certain light , wooing and oven commanding Governments

    O O Mme B Gial

    O O MME B G I A L .

    Untitled Article

    No . 469 , Makch 19 , T 859- ! WE LEA DEB , 377

• Citation
  • Leader (1850-1860), March 19, 1859, page 377, in the Nineteenth-Century Serials Edition (2008; 2018) ncse2.kdl.kcl.ac.uk/periodicals/l/issues/vm2-ncseproduct2286/page/25/