Читать книгу Blackwood's Edinburgh Magazine, Volume 69, No. 423, January 1851 - Various - Страница 1

Whoever has examined with attention the past annals of mankind, must have become aware that the greatest and most important revolutions that have occurred in human affairs have originated in the variations which from time to time have taken place in the supply of the precious metals which could be obtained for the use of man. As they constitute, by the universal consent of the world, the common medium of exchange and measure of value among nations, their plenty or scarcity has an immediate and powerful influence upon the remuneration of industry and the activity of the working-classes in all countries. According as they are increasing or diminishing, abundant or awanting, is the condition of the people prosperous or calamitous – the national prospects bright or gloomy. No amount of human exertion, no efforts of human patriotism, can sustain the national fortunes for any length of time, or diffuse general and enduring prosperity among the people, if the existing medium of exchange is below what their numbers and transactions require; because, in such a case, prices are constantly declining, credit is liable to periodical and ruinous contractions, and industry, on an average of years, ceases to meet with its due reward. No calamities are insuperable, no dangers insurmountable, when a currency is provided adequate to the wants of men, and capable of extension in proportion to their necessities; because, in such a case, prices are rising or remunerative, and individual effort, stimulated by the prospect of an adequate return, becomes universal, and acts powerfully and decisively upon the general welfare of society and the issue of the national fortunes.

The two greatest revolutions which have taken place in the annals of the species, and which have for ever left their traces on the fortunes of mankind, have arisen from the successive diminution and increase in the supply of the precious metals for the use of the world. There can be no doubt that the decline and fall of the Roman empire – so long and falsely ascribed to its latter extension, plebeian slavery, and patrician corruption – was in reality mainly owing to the failure in the mines of Spain and Greece, from which the precious metals in ancient times were chiefly obtained, joined to the unrestricted importation of grain from Egypt and Libya, which ruined the profit of the harvests and destroyed the agriculture of Italy and Greece, at once paralysing industry, and rendering taxes overwhelming.1 We know now to what the failure of these mines, attended with such portentous results, was owing. It was to the exhaustion of the auriferous veins in Spain and Greece near the surface, from long-continued working, and the extreme hardness of the rock in which they were imbedded farther down, which seems to be a general law of nature all over the world,2 and which rendered working them, to any considerable depth, no longer a source of profit. On the other hand, the prodigious start which Europe took during the sixteenth and seventeenth centuries, and which has implanted the European race for ever in the new hemisphere, is well known to have been mainly owing to the discovery of the mines of Mexico and Peru, and the continual rise of prices during nearly two centuries, which took place all over the world, from the constant and increasing influx of the precious metals drawn out of their rich strata.

The greatest and most momentous contests which have taken place among nations, have been in a great degree determined by the discovery or use, by one of the belligerents, of an expansive currency, to which the other was for a time a stranger. The most memorable strife in antiquity, that between Rome and Carthage, on which depended whether Europe or Africa was to become the mistress of the civilised world, was in reality determined by a great extension of the Italian circulating medium during the second Punic war; and that dreadful contest was less brought to a successful issue by the firmness of the senate or the arms of Scipio, than by the wisdom of a decree which virtually, at the crisis of its fate, doubled the currency of the Roman republic.3 The Transatlantic revolution was brought to a successful issue in the same way; and the independence of the United States is less to be ascribed to the imbecility of British counsels, or the wisdom of American generalship, than to the establishment of a paper currency, which sustained the efforts of the insurgent states when they had no other resources wherewith to maintain the contest. It was the assignats, as all the world knows, that set on foot those prodigious armies which, amidst the destruction of all private fortunes, enabled France, during the Reign of Terror, to repel the assault of all the European powers; and the coalition which at last overturned the empire of Napoleon was sustained by a vast system of paper currency, issued in 1813 in Germany, which, guaranteed by the four Allied powers, passed as gold from the Atlantic Ocean to the wall of China, and arrayed all the armies of Europe in dense and disciplined battalions on the banks of the Rhine. Of what incalculable importance it was may be judged of by the dreadful straits to which Wellington, for five previous years, had been reduced by its want. Great Britain emerged victorious from the strife, chiefly from the powerful influence of the same omnipotent agent. Vain would have been the constancy of Pitt, the genius of Nelson, or the wisdom of Wellington, if the paper currency, established in 1797, had not given her people the sinews of war, and the means of illimitable industry, when the Continent was shut to her commerce, and the whole precious metals were drained away by the necessities of Continental warfare. Nor have the effects of the opposite system, pursued since the peace, been less striking and momentous; for the contraction of British currency to one half of its former dimensions, by the bills of 1819 and 1844, has brought about the dreadful panics of 1825, 1837, and 1847, induced by the decline of prices and the sufferings it occasioned. The English revolution of 1832 transferred power in the British islands exclusively to the inhabitants of towns, and spread such misery through the rural population, that three hundred thousand emigrants now annually leave the British islands for Transatlantic or Australian shores.

As the expansion or contraction of the circulating medium is thus an agent of such prodigious power and irresistible weight, both upon the fortunes of particular states and the general progress of the species, so it will be found upon examination that it is by a withholding or letting loose the fertilising flood, that Providence appears often to act most directly and decisively upon human affairs. When a nation has performed its mission, and is to make room for other actors on the great stage of the world, if its power has rendered conquest by a foreign enemy impossible, a contraction of its domestic currency paralyses its internal strength, and renders dissolution, at no distant period, a matter of certainty. If a great start is prepared for human industry, if new continents are laid open to its energies, and an unusual impulse communicated to its activity by the development of social and democratic passions, a vast addition is suddenly made to its metallic resources, and the increased numbers or enhanced efforts of mankind are amply sustained by the newly opened treasures of the reserves of nature. Rome, impregnable to the assaults of undisciplined barbarians, yielded, at the appointed season, to the contraction of its domestic currency, which rendered the maintenance of armaments adequate to the public defence a matter of impossibility in the later days of the empire; and when the discovery of the compass, of the art of printing, and of the new hemisphere, had at once given a vast impulse to European activity, and provided new and boundless fields for its exertion, the mines of Potosi and Mexico were suddenly thrown open, and nature provided a suitable reward for all this enhanced effort by the continually rising price of its produce.

That a period of equal, perhaps greater activity, than that which followed the discoveries of Columbus, would succeed the outbreak of the social passions that occasioned the French Revolution, has long been familiar to the thinking part of men, and unequivocal proofs of the reality of the change may be seen in every direction around us. But sufficient attention has not hitherto been paid to the extraordinary encouragement which this increased mental energy has received, from the facilities which have been placed at its disposal by the mechanical discoveries of the last half century. Yet are they such as to throw all past discoveries into the shade, and give an impulse to human affairs which has scarcely been exceeded since the first separation of the dwellers in cities and the sojourners in the fields. The steam-engine has wrought these prodigies. Applied to mechanical invention, and the moving of machinery, it has multiplied tenfold the powers of urban industry, elevated the districts possessing the necessary fuel to the clouds, cast down places once the seats of commercial greatness, but destitute of that essential element in modern manufacturing energy, to the dust. Applied to the propelling of vessels, it has more than halved the breadth of the ocean, rendered navigable against the current the greatest rivers, sent the colonists of Europe in countless multitudes up the streams of the New World, and provided an entrance for civilised man into the greatest continents by the very magnitude of the waters which flow down from their inaccessible mountains, or are fed in their marshy plains. Applied to travelling by land, it has diminished distance to a third – brought the capital of every civilised state into close proximity to its most distant provinces; while the simultaneous discovery of the electric telegraph has rendered the communication of intelligence all but instantaneous, and made the circulation of ideas and, it is to be feared, also of passions, as rapid over a mighty empire as heretofore it was in the streets of a crowded capital.

When nature communicated this vast impulse to human activity, and placed these mighty instruments in the hands of men, she was not unmindful of the extended field for industry which their enlarged numbers and increased energies would require. The plain of the Mississippi, the garden of the world, containing a million of square miles, or six times the area of France, was thrown open to their enterprise. Steam power propelled a thousand vessels through the thick network of natural arteries which in every direction penetrate its vast and fertile plains. In 1790, five thousand Anglo-Saxons were settled in this magnificent wilderness; now their numbers exceed eight millions. Australia has opened its vast prairies, New Zealand its fertile vales, to European enterprise. The boundless plains of Central Russia and Southern Siberia, afforded inexhaustible resources to the rapidly increasing Muscovite population; and an empire which already possesses in Europe and Asia sixty-six million inhabitants, can without apprehension contemplate a continuance of its present rate of increase for centuries to come. The Andes even have been passed; the Rocky Mountains surmounted; and on the reverse of their gigantic piles new states, peopled by the Anglo-Saxon race, are arising, and increasing with unheard-of rapidity, in regions rivalling Italy in the variety and riches of their productions, and exceeding it tenfold in the magnitude of their extent. Proportionate to the wants and necessities of mankind, in an age of such intellectual and physical activity, has been the hitherto untrodden fields which the beneficence of nature has laid open to their industry.

These advantages, however, great and unbounded as they are, have been, till very recently, counterbalanced, and perhaps more than counterbalanced, by the serious decrease which, for the greater part of the period that has elapsed since the peace of 1815, has been going on, from the effect of human violence or folly, in the circulating medium of the globe. The South American revolution at once almost destroyed the working of the mines of Mexico and Peru: the annual produce of those mines sank from £10,000,000, to which, according to Humboldt, it had risen prior to 1810, to less than £3,000,000. The diminution in the supply of the precious metals for the use of the globe, from the effects of this most calamitous revolution, which Great Britain did so much to promote, was, during the thirty years which elapsed from 1810 to 1840, certainly not less than £150,000,000 sterling. Contemporaneous with this immense reduction, took place the great contraction of the paper currency of Great Britain, the commercial heart of the globe, which was reduced by the bill of 1819 from £60,000,000, which it had reached in 1814, to little more than £30,000,000, its average since that time. These two great causes of decrease, operating simultaneously during a period of general peace, unbroken industry, great increase in population both in Europe and America, and a vast addition to the transactions and mercantile dealings of men in every part of the world, produced that universal and unlooked-for decline of prices which has been everywhere felt as so discouraging to industry, and nowhere so much so as in the highly taxed and deeply indebted realm of Great Britain. It was the exact converse of the general and long-continued prosperity which the progressive rise of prices consequent on the discovery of the South American mines produced during the sixteenth and seventeenth centuries. It was apparently the commencement of a long and disastrous period of rise in the value of money, and fall in the price of every species of produce, similar to that which, in the first four centuries of the Christian era, crushed the industry and paralysed the strength of the Roman Empire, and at length prostrated the dominion of the legions before the arms of an untutored and barbarous enemy.

It is now ascertained, therefore, by the only sure guide in political science – experience – that if no addition to the circulating medium of the globe had been made at a time when so immense an increment was going forward in the numbers and transactions of the most active part of mankind, consequences the most disastrous to human industry and happiness must have taken place. If – when the United States, with their population of 25,000,000 doubling every twenty-five years, and Russia, with its population of 66,000,000 doubling every forty years, and Great Britain, with its population of 29,000,000 doubling in about the same time, and its exports and imports tripling in thirty years, were in a state of full and undiminished activity – there had been no addition made to the circulating medium of the globe, it is difficult to estimate the amount of embarrassment and distress which must have become all but universal. If the circulating medium of the earth had remained stationary, or gone on receiving only its wonted annual increment, when so prodigious an addition was going forward in the numbers and transactions of men, a universal and progressive fall of prices must have ensued. The remuneration of industry must have been halved – the weight of debts and taxes doubled. The fatal increase in the value and power of riches, so truly felt and loudly complained of in the declining days of the Roman empire, would have been everywhere experienced. A money famine would have been universally felt; and, paradoxical as it may appear, dear-bought experience has now taught us that such a famine is attended with more disastrous, because more widely spread and irremovable, consequences, than even a shortcoming in the supply of food for the use of man. The latter may be removed by increased rural activity and a good harvest in a single year. But the former is susceptible of no such remedy. On the contrary, the augmented activity which it brings on, from the general and pinching suffering with which it is attended, only tends to aggravate the common distress, because it multiplies the transactions in which money as a medium of exchange is indispensable, and consequently makes its scarcity in proportion to the existing demand be more severely felt.

To this must be added another and most important cause, which operated since the peace of 1815 in withdrawing the precious metals from the globe, arising from the very scarcity of these metals themselves. The addition which their enhanced value made to the riches of the affluent was so great, that it led to a rapid and most important increase in the consumption of gold and silver in articles of luxury. Gold and silver plate, jewels, and other ornaments set in gold, became general among the richer classes, and to an extent unprecedented since the fall of the Roman empire. Gilding was employed so much in furniture, the frames of pictures, the roofs of rooms, carriages, and other articles of state or show, as to withdraw a considerable part of that the most precious of the precious metals from the monetary circulation. The scarcer gold and silver became, the more was this direction of a large portion of it increased, because the richer did the fortunate few who possessed amassed capital become from the daily decline in the price of all other articles of merchandise. This effect was most conspicuous in ancient Rome in its latter days, where, while the legions dwindled into cohorts from the impossibility of finding funds to pay them in large numbers, and the fields of Italy became desolate from the impossibility of obtaining a remunerating price for their produce, the gold and silver vases, statues, and ornaments amassed in the hands of the wealthy patricians in Rome, Constantinople, Alexandria, and the other great cities of the empire, so prodigiously increased, that, with the currency, which formed but a small part of its amount, their value is estimated by Gibbon at the almost incredible amount of £350,000,000 sterling of our money.

Bills of exchange and paper money, which have become known and general only in modern Europe, might have gone far to mitigate these disastrous consequences in particular states, or even, if conducted with prudence and regulated by wisdom, might in some places have altogether prevented them. But as paper currency is a new element of surpassing power and efficacy, but recently introduced into common use among men, the principles on which it should be regulated are far from being generally understood. Even if understood, it requires for its due regulation a combination of wisdom and self-denial that can rarely be looked for among the rulers of mankind. The fundamental principles on which its due regulation must be rested – that of being based on certain and available property of some kind, and of being capable of extension in proportion to the increase in the numbers and transactions of men, and the abstraction of the precious metals forming the medium of international circulation, and yet duly restrained and over-issue prevented – were successively overlooked by the greatest and most enlightened nations of the world. Issued in unbounded profusion in France during the fervour of the Revolution and the terrors of European invasion, with no real basis of available property on which to rest, the assignats produced, simultaneously with the prodigious armaments which saved the country, an unheard-of confusion among the transactions and obligations of men, and destroyed in a few years the whole capital of that great country, the accumulated savings of centuries of industry. Contracted with equal rapidity from the influence of the opposite set of interests in Great Britain after the peace, the paper circulation of the British Empire was rendered the instrument of destruction of property as great, and misery as widespread and universal, among its inhabitants, as the assignats or confiscations of the Convention. Adopted with heedless eagerness, and without any adequate safeguards, at one time in America, and checked at another with precipitate and imprudent severity, four-fifths of the wealth of the United States were in a few years swept away by the fearful oscillation of prices consequent on these violent changes. And although wisdom and prudence could easily have devised a system of paper currency which, entirely based upon available property of some kind, and therefore perfectly secure, was yet capable of expansion in proportion to the increase of the numbers and transactions of men, and the temporary abstraction of the precious metals from a particular country by the mutations of commerce or the necessities of war, yet it was evident that no such wise and patriotic system was to be anticipated, till a vast amount of general suffering had enlightened the majority of men on the subject. Least of all could it be hoped for in Great Britain, where the increase and weight of the moneyed interests, and the consequent determination to enhance the value of money, without any regard to its effects on the remuneration of industry, had become such, that no other interest in the State, nor even all other interests allied, were able to make head against it.

The future destinies of mankind, and of this country in particular, seemed, therefore, to be involved in clouds and darkness; nor did any means appear to be within the bounds of possibility by which the difficulties which beset or awaited industry could be obviated. The greater the efforts made by industry, it was plain the greater would be the distress in which it would be involved; because an increase in the transactions of men required an augmentation in the circulating medium by which they were to be conducted; and an addition to the produce of labour, while the currency was fixed or declining, only rendered its remuneration less. The whole object of statesmen and legislators, both in Great Britain and America, had come to be to cheapen everything, and raise the value of money by contracting its amount – augmenting instead of relieving the general distress arising from the inadequacy of the existing circulating medium for the enlarged wants and numbers of men. The evil seemed to be beyond the reach of human remedy; for in the only country in which a remedy could be effectually applied, the moneyed interests had become so powerful, that Government was set chiefly on measures which, for the sake of private profit, most grievously aggravated it. But Providence is wiser than man: Nature is seldom awanting in the end to those who are suffering from the faults of others. A few bands of American squatters wandered into Texas – a war of aggression on the part of the United States succeeded to make good the settlement – a serious contest took place with Mexico – the Anglo-Saxon race asserted their wonted superiority over the Castilian – California was wrested from them – and by the ultimate effects of that conquest some of the greatest evils inflicted by human selfishness or folly were alleviated, and the destinies of the world were changed!

It is a striking proof how much the fortunes of men are in their own hands, and how vain are the choicest gifts of nature if not seconded by the vigour and industry of those for whom they are intended, that the rich auriferous veins, the discovery of which has been attended with such important effects, and is destined to avert so many evils arising from the absurd legislation or selfish desires of men in recent times, had been for three hundred years in the possession of the Spaniards, but they had never found them out! The gold was there, under their feet, in such quantities that its excavation, as will immediately appear, is adequate to double the annual supply of the precious metals for the use of man over the whole world; but they never took the trouble to turn it up! It was so near the surface, and so accessible, being mixed with the alluvial sand and gravel of the country, that it was first discovered in the cutting a common mill-course through a garden, and has since been obtained almost entirely by common labourers digging holes not deeper than ordinary graves through the level surface of the alluvial deposit of the mountains. They had never attempted agricultural operations, nor thought of an improvement which would have led to its detection. The Spaniards, as all the world knows, and as their history in every age has demonstrated, were passionately desirous of gold; and from the days of Columbus they had been familiar with a tradition or report among the native Indians, that there existed beyond the mountains in the far west a country in which gold was as plentiful as the sand on the seashore, and was to be had simply for the trouble of taking it. It was all true it was there, mixed in large quantities with the alluvial deposit of the mountains; yet during three hundred years that they held the country, they never found it out! A single ditch in any part of the flat region, which is above three hundred miles long and forty or fifty broad, would have revealed the treasure, but they never took the trouble to cut it. Before the Anglo-Saxons had been there three months, they had discovered the riches lying below their feet. Such is the difference of races! It is easy to see to which is destined the sceptre of the globe.

It is impossible as yet to say with positive certainty what is the amount of gold which may be obtained for a long period from this auriferous region; but it is already evident that it will be very great – much greater than was at first anticipated. The following extract, from the great and able Free-Trade organ, the Times, of Nov. 19, 1850, will show what amount has been realised and exported from San Francisco last year, and what may be anticipated in the next: —

"Some estimates have lately been formed of the shipments of gold received in Europe from California to the present time, which, we believe, may be regarded as tolerably accurate, and according to which the amount is about £3,300,000. On the other side, up to the end of September, the receipts at the two mints of the United States had been about 31,000,000 dols., or £6,200,000. Since that time we have had advices of farther arrivals at New York and New Orleans amounting to £500,000. An aggregate is consequently formed of exactly £10,000,000. To this must be added, in order to estimate the total production, not only the amounts which have found their way to China, Manilla, Australia, Oregon, the Sandwich Islands, the States of Spanish America, &c., but also the total which has been retained in California for the purposes of currency. The population in that country now ranges somewhere between 200,000 and 300,000, and although a considerable amount of silver dollars have been imported, the bulk of the circulation is believed still to be in the form of gold-dust or of gold tokens. If the 250,000 persons possess, on an average, £10 a-piece, we have a sum of £2,500,000; and, looking at the expense of a week's maintenance in the country, as well as the large quantities constantly in transit, as well as the reserves, which, as was shown by the last advices, the various deposit-houses are compelled to retain to meet sudden runs, it is probable that this is under the real total. Taking all points into consideration, it may, therefore, be assumed that the whole which has been raised is equal to at least £13,000,000 sterling. Of this production, according to recent official returns from the United States, nearly four-fifths have taken place during the present year. Of 25,966,817 dols. received in the United States Mint at Philadelphia, up to the end of September last, only 44,177 dols. had arrived in 1848, and 5,481,430 dols. in 1849, while the quantity in 1850 had been 20,441,210 dols. The same proportions would probably prevail with regard to the sums distributed to other places; and we are, therefore, led to the supposition that the export this year has already actually reached upwards of £10,000,000, although the results of two additional months have yet to be known. It will be observed, consequently, that the unexpected feature which has hitherto attended the progress of this new region – namely, that almost all the accounts from it, although deemed exaggerations at first, have proved ultimately to have been understatements – is still presented. At the commencement of 1850 the most sanguine expectations that were formed in any direction fixed its probable yield at £10,000,000; and not only has this been exceeded, but each quarter of the year has thus far shown an increase of nearly half upon the amount gathered in the preceding one. Thus the receipts at Philadelphia, for the first three months, were 4,370,714 dols., while they were 6,920,496 dols. for the second, and again 9,250,000 dols. for the third. This rate of augmentation coincides with the influx of population, and, as the emigration to the country is certain to be continued until the remuneration it affords for labour is brought to a level with the advantages offered elsewhere, there is no reason, so long as we are without accounts of an apparent limit to the field of operations, to anticipate anything else than a steady continuance of an improving ratio. So far from a limit having yet been found, each fresh exploration seems to develope new and more favourable localities, and an extended discovery of dry diggings lately alleged to have been made, together with the steps in progress elsewhere to crush the mountain ore by machinery, appears to hold out the prospect that, even with the approach of winter, there will scarcely be a suspension of the prevailing activity." —Times, Nov. 19, 1850.

By the last accounts there was no less than a million sterling exported from California in six days. This amount of gold, great as it is, however, is by no means the whole of the supply which has been obtained. It is the regular measured amount only – what entered the custom-house books, and was exported in the entered traders. But who can estimate the amount which in those vast and desolate regions has been amassed by individuals, and made its way out of the country in their private possession, or secretly in shipments of which no account was kept? It is incalculable: like the plunder amassed during the sack of a capital or province, it may be guessed at, but cannot be ascertained with anything approaching to accuracy. Probably the amount thus acquired, but not entering any public records, may equal all that is ascertained from the custom-house books. But call it only a half, or fifty per cent, it will follow that last year the amount raised was upwards of £15,000,000, and this year (1851) may be expected to reach £17,000,000 or £18,000,000! If so, it will nearly double the annual supply of the precious metals for the use of the globe, which at present, from all sources, is between £16,000,000 and £17,000,000. It may with confidence be anticipated, that how secretly soever great part of this treasure may be smuggled or conveyed out of California, none, or at least very little of it, will be lost. It will all be carefully preserved, and sooner or later find its way into the circulation of the world, or be manufactured into the gold ornaments and vessels which minister to its luxury or magnificence. Nothing more is required to show the prodigious influence of this great change; beyond all question it will, in its ultimate effects, alter the face of the globe.

Mr M'Culloch observes in his Commercial Dictionary– "Should eight or ten millions yearly, in addition to the present supply, be obtained from any other source, it will produce a gradual alteration of prices, similar to that which took place three centuries ago on the discovery of the mines of Mexico and Peru." No one can doubt that this observation is well founded; but if the effect of eight or ten millions annually added to the treasures of the world would be so considerable, what must the effect of the addition of sixteen or eighteen millions? Yet this addition is just now going on. In the month of August last, the gold shipped at San Francisco alone was 2,984,000 dollars, or about £800,000; and supposing a half more was raised, of which no account is kept, this is £1,200,000 in a single month! In five weeks from September 1, the quantity shipped was 5,000,000 dollars, or above £1,200,000; which implies at least £1,800,000 altogether obtained. This is from the labour of 40,000 or 50,000 persons only, who are at present engaged in the diggings; but it is known that from 80,000 to 90,000 will be engaged in them next year, so that the supply raised may be expected to be nearly doubled. There is great inequality in the amount obtained by individual persons employed in that laborious occupation; but taking the average, it is about four and a half dollars a day. Call it four only, and suppose they work 250 days in the year, each person at this rate will raise 1000 dollars' worth of gold, or nearly £250. At that rate, 50,000 persons would raise £12,500,000 in a year; and 75,000, £18,750,000; – which coincides very nearly with the result derived as above from other sources of information.

The bullionists, struck with terror at so prodigious an addition annually to their darling gold, and consequent diminution in its exchangeable value, are beginning to exert themselves to decry it. They say that there is a "Currency Restriction Act of Nature;" that the supply of gold from the alluvial washings will soon be exhausted; and that when the excavation comes to be made from the rocks and mountains in which the veins are embedded, it will cease to be profitable, from the hardness of the strata of rock in which the veins are found.4 The plea in abatement of the supply of gold thus likely to be obtained is very remarkable. The fact of its appearing in the highly respectable journal where it first was ushered to the world, and from the pen of the eminent geologist from whom it is said to have proceeded, are alike ominous. It shows at once how marvellously strong has been the hold which the mania for raising the value of gold and cheapening that of everything else prevailing during the last thirty years, from the influence of the holders of realised wealth, has got of the most influential classes in this country; and how deep is their alarm at the prospect of all their measures being at once blown into the air by the augmented supply of this very gold from the shores of California! A "Currency Restriction Act of Nature!" What a commentary on the measures of Sir R. Peel, so vehemently lauded and strenuously supported by all the capitalists whose fortunes, from the Currency Restriction Act of the right hon. baronet, were every day increasing in value! They would fain enlist Nature in the same crusade against labour and in favour of riches; but they may save themselves the trouble. There is no Currency Restriction Act of Nature: her beneficence, unlike that of man, is equally distributed over all her children. The Currency Extension Act of Nature will only stand forth in brighter relief from having been immediately preceded by the Currency Restriction Act of Man.

To show how chimerical are the hopes of a Currency Restriction Act of Nature, which is to limit and interrupt the blessings with which an increased supply of the precious metals for the general service of the world cannot fail to be attended, it is sufficient to observe that the auriferous region where the gold is found in alluvial deposit, is said to be a tract of country between three and four hundred miles long and from thirty to forty miles broad. It is therefore as long as from London to Berwick, and as broad as the average breadth of the plains of Yorkshire. What is the scraping or excavations of sixty or eighty thousand men on so immense a surface? Conceive every one of these persons daily digging his own grave in this auriferous region: how long will it take them to go over the whole surface and exhaust its treasures? Only apply to it the test of the rudest calculation. A square mile contains above 3,000,000 square yards. Supposing each digging occupies two square yards, there will be 1,500,000 diggings in a square mile; and if each person excavates a digging a-day, which is probably as much as can be calculated upon at an average, as the operation is so much impeded by water, 100,000 persons will take fifteen days to turn up and exhaust one square mile. In the gold region, however, there are at least 9000 square miles. Supposing that the 100,000 persons work 300 days in the year, which is more than can be calculated upon, they will only turn over and thoroughly search twenty square miles in a year. At this rate, it would take above four hundred years for even that large army of labourers to exhaust the alluvial gold region. We are aware the diggings do not go on regularly as is now supposed; that one man tries his fortune here, and another there; and that the earth is perforated at the same time in a great variety of places, many of them at a considerable distance from each other. We know, too, that the real extent of the gold region is hitherto the object of speculation and hope, rather than actual survey or knowledge. It is quite probable, too, that our calculation, which is a mere rough guess, may be above the mark in some particulars, and below it in others. Still, enough, making allowance for all such errors, remains to show that, in the alluvial gold region alone, if the accounts of its extent and riches are at all to be relied on, there is ample room for a vast annual addition to the treasures of the earth for a great many generations to come. The circumstance which makes it all but certain that the gold region must be very extensive, is its being found in the alluvial deposits of the mountain rivers, such as the Sacramento, along their whole course. If you find granite or mica slate particles in the beds of rivers and the level fields they overflow near the sea, you are sure of finding the same deposits up to the mountain regions from which they are brought down.

But what is the alluvial gold region to the mountain region from which the precious metals with which it abounds have been torn down by the storms and wintry torrents of thousands of years! If you find a detritus of a certain description in the mixed sand and gravel of a plain, you may predicate with perfect certainty the existence of mountains and rocks of the same formation in the higher regions from which it has been brought down. Granite or mica-slate debris in the beds of rivers or the level fields which they occasionally overflow, imply granite or mica-slate in the hilly region from which they take their rise. Whence has all the gold come which in the alluvial plains of California is producing such treasures, and changing prices over the whole world? It has come down from the mountains. And what must be the metallic riches with which they are charged, when the washed-down gravel at their feet is so prolific of mineral wealth! The bullionists, influenced by dread of a general rise of prices, and depreciation of the exchangeable value of their realised fortunes from this rise, say there is a "Currency Restriction Act of Nature;" that gold at any depth is unworkable at a profit; that Providence is niggardly of its bounty; and they in secret indulge the hope that it will continue permanently that contraction of the currency which they have contrived to force upon mankind, and which, while it lasted, has proved so eminently profitable to themselves. But a little consideration must show that their hopes in this respect are entirely fallacious. Granting that the veins of gold, when they go deep, are embedded in very hard rock, what is to be said to the cropping out of the veins over the vast extent of the auriferous Rocky Mountains? If the wasting away of wintry storms on the tops and sides of these mountains brings down such quantities of gold with the streams which furrow their sides, must not the laborious hand of industry prove equally efficacious in removing it? If the expansive force of a rapid thaw, following severe frost, can rend the rocks in which the gold is embedded, is not the power of gunpowder or steam equally great? Already a company, composed of English capitalists, has been formed to explore the mountain treasures; and without supposing that they are to find an El Dorado in every hill, and admitting that there may be several failures before the right one is hit on, it is morally certain that in the end the mountain reserves of treasure must be discovered.

The additions to the currency of the earth, hitherto considered, have been those coming from these auriferous regions of North America, now for the first time brought into view only; but this is by no means the whole of the provision made by nature for the extended wants of mankind in this age of transition, vehement excitement, extended transactions, and rapidly-increasing numbers. The Ural and Altai Mountains have brought forth their treasures at the same time, and provided as amply for the wants of the Sclavonic race in the Old, as the Californian hills have done for the growth of the Anglo-Saxon in the New World. Gradually, for twenty years past, the Russian treasures have been brought to light; and their progressive increase has done more to alleviate the distress and sustain the industry of western Europe than all the wisdom of man in her aged monarchies has been to effect. Grievous as have been the calamities which the contraction of the currency of the world by the reduction of paper in Great Britain, simultaneously with the ruin of the South American mines by the revolutions of its vast regions, which we laboured so assiduously to promote, have produced, they would have been doubly severe if the Ural and Altai Mountains had not provided treasures at the very time when the other supplies were failing, which in part at least supplied their place. Their influence was long felt in Europe before their amount was suspected, and even now the wisdom or terrors of the Russian Government have prevented it from being accurately known; but it is generally understood to have now reached five or six millions sterling annually; and, like the Californian gold, it is susceptible of an indefinite increase, in the event of the influx of that metal from America not lowering its value so as to render it unworkable in Asia at a profit.

Assuming it, then, as certain that for a very long period, and for many successive generations, a vast addition is to be made to the annual supply of the metallic treasures of the earth, it becomes of the highest importance to the interests of industry in all its branches, agricultural, commercial, and manufacturing, to consider what the effects of the change thus induced must be – what benefits it will confer upon mankind – what dangers, if any, it will remove, especially in the great commercial community in which we are placed. And a little consideration must be sufficient to demonstrate to every impartial and disinterested mind what these effects will be – and to prevent, on the one hand, chimerical or unfounded hopes being formed, and, on the other, undue or unmanly depression from the effects of recent calamities being felt. Fortunately we are not driven to theory or speculation to ascertain what these effects will be – experience, the only sure guide in political science, points to them with unerring certainty: the great monetary revolution of the sixteenth century is the precursor and the monitor of that of the nineteenth.

The first effect of a great addition being made to the annual supply of a particular metal in general use and high estimation all over the world, is that the exchangeable value of that metal, in comparison with other metals or articles of consumption, will undergo an immediate alteration, which will prove lasting and considerable if the increased supply turns out to be great and permanent. This is no more than takes place every day with all the articles of commerce. According as the crop of wheat, or oats, or barley, or cotton proves abundant, so surely does the price of these articles rise or fall in the market. If gold is produced in much greater quantities than heretofore, its price, as compared with everything else, and in particular with the precious metal in common use, next to it in value, silver, must ere long change. If the increased supply proves very great, it may in time come to reduce the price of gold, as compared with silver, fifty, eighty, or even a hundred per cent. Gold is more valuable than silver, only because it is more scarce: if it becomes equally plentiful, its value will gradually sink; and if the quantity afloat in the earth should ever come to be as great as that of silver, it would come to be of no greater value. This effect may appear either in the fall of the value of gold as compared with silver, or notes exchangeable into gold, or in the rise in the value of silver as compared with that of gold, or notes exchangeable into that metal. This effect has already taken place. Silver is 3 per cent dearer as compared with gold than it was a year ago: and this change will doubtless continue. This is the first and obvious effect of a great addition to the gold treasures of the earth; and even this is a considerable benefit; because, as it has been produced by the augmentation of the amount of the circulating medium of mankind, it must facilitate the acquisition of it for the purposes of commerce, or for sustaining the undertakings of industry.

But though this is the first, it is by no means either the only or the most important effect of a great addition to the gold treasures of the earth. By far the most important and beneficial effect is to be found in the gradual but certain rise of prices, whether measured in gold, silver, or paper, which inevitably results from any considerable addition to the circulating medium of mankind. This effect is precisely analogous to the great rise of prices which took place during the war, in consequence of the extended issue of paper which was made after 1797 to sustain its expenses. It is well known that it more than doubled the cost of every article of consumption: it raised the price of wheat, in fifteen years, from 55s. to 110s.5 This effect resulted from the extension of the issues of the Bank of England from twelve to twenty-eight millions a-year. A result precisely the same must take place over the whole world from a lasting and considerable addition to the metallic treasures by which its exchanges are conducted. If the gold in circulation, or which may be put into circulation, is greatly augmented, the price of everything must rise, whether it is paid in gold or silver, just as the price of everything rose during the war, whether paid in specie or in paper. Gold then bore such a monopoly price, from its being so much in request for the necessities of war, that the guinea at last came to be worth twenty-eight shillings. That was the enhanced price of gold, as compared with silver; it had risen thirty per cent in consequence of the absorption of gold specie in the Peninsular, German, and Russian campaigns. But the change of prices resulting from the extended issue of paper was much more considerable; it had increased not thirty, but a hundred per cent, and that equally, whether the price was paid in gold, silver, paper, or copper.

This change will be universal. It is a mistake to suppose that it will be limited to the countries, such as England, in which gold is the established standard of value. It will affect equally, certainly, though perhaps somewhat more indirectly, the nations, such as France, where silver is the standard and great medium of exchange. The reason is, that by adding considerably to the general circulating medium of the globe, it brings a larger quantity to be balanced against every article which forms the subject of commerce, and consequently raises its price when measured by any part of that circulating medium. This effect may be seen every day in ordinary life. A plentiful crop of wheat, especially if it continues for several years in succession, lowers the price not only of wheat, but of every other grain crop in the country, and consequently raises the price of every article of commerce when measured by the amount given for it in any of these grain crops. And the same effect took place on a great scale, over the whole world, for centuries together, when the mines of Mexico and Peru were discovered, which, although chiefly productive of silver only, yet, by the large quantity of that metal which they yielded, raised prices to a very great degree universally, and that equally whether those prices were paid in gold, silver, or copper.

The effects hitherto considered are those on the value of the precious metals themselves from a considerable and continued increase in their supply in any part of the world. But in a commercial and opulent community such as Great Britain, where the greater part of its undertakings are carried on by means of money advanced by banks in their own notes or those of the Bank of England, on the security of bills or other obligations, the effect of a considerable increase in the supply of gold or silver is far more extensive. Such an increase diminishes the great weakness of a paper circulation, that of being dependent on the supply of the precious metals, and liable to be contracted when they are withdrawn. An inconvertible paper, issued in reasonable and not excessive quantities, and adequately guaranteed, would answer the purpose just as well in a particular country, and effectually secure it against the terrible disasters consequent on the alternate expansion and contraction of the currency; the former inducing the commencement of undertakings of which the latter disabled the performance. But the world is not wise enough yet to perceive how easy and effectual a remedy this simple expedient would provide against the greatest and most extensive calamities which now afflict humanity; and so great is the power of vested capital which such calamities benefit, that it is probable several generations must descend to their graves, or become insolvent, before it is generally adopted. But the extension of the metallic currency of the globe, though it cannot altogether remove, materially lessens this dreadful danger. It inspires confidence among moneyed men. It diminishes the terror of the withdrawal of the precious metals, which, when it once seizes them, is productive of such unbounded calamities; and thus renders the granting of accommodation on their part both more abundant and more regular. Paper becomes more plentiful, because gold, on which it is based, has flowed into the coffers of the banks in larger quantities, and thus at once augmented their own treasures, and diminished the risk of their being drained away by the necessities of other men. The effect of this change in a commercial and manufacturing community is incalculable. We can form a clear idea from woeful experience, of what it is. It is precisely the converse of Sir R. Peel's measure.

It is impossible to give a better picture of what this great Currency Extension Act of Nature will do for industry in all countries, and especially the commercial, than by saying that it will as nearly as possible reverse the effects which Mr Cobden, the great advocate for the cheapening system, said, in his evidence before the Committee on Bank Issues in 1840, he had experienced in the preceding years in his own business from the contraction of the currency consequent on the great importation of grain in 1838 and 1839: —

"I could adduce a fact derived from my own experience that would illustrate the heavy losses to which manufacturers were exposed in their operations, by those fluctuations (in 1837) in the value of money. I am a calico printer. I purchase the cloth, which is my raw material, in the market; and have usually in warehouse three or four months' supply of material. I must necessarily proceed in my operations, whatever change there may be – whether a rise or a fall in the market. I employ six hundred hands; and those hands must be employed. I have fixed machinery and capital which must also be kept going; and, therefore, whatever the prospects of a rise or fall in price may be, I am constantly obliged to be purchasing the material, and contracting for the material on which I operate. In 1837 I lost by my stock in hand L.20,000, as compared with the stock-taking in 1835, 1836, and 1838; the average of those three years, when compared with 1837, shows that I lost L.20,000 by my business in 1837; and what I wish to add is, that the whole of this loss arose from the depreciation in the value of my stock.

"My business was as prosperous; we stood as high as printers as we did previously; our business since that has been as good, and there was no other cause for the losses I then sustained, but the depreciation of the value of the articles in warehouse in my hands. What I wish particularly to show, is the defenceless condition in which we manufacturers are placed, and how completely we are at the mercy of these unnatural fluctuations. Although I was aware that the losses were coming, it was impossible I could do otherwise than proceed onward – with the certainty of suffering a loss on the stock; to stop the work of six hundred hands, and to fail to supply our customers, would have been altogether ruinous; that is a fact drawn from my own experience. I wish to point to another example of a most striking kind, showing the effect of these fluctuations on merchants. I hold in my hand a list of thirty-six articles which were imported in 1837, by the house of Butterworth and Brookes of Manchester, a house very well known; Mr Brookes is now borough-reeve of Manchester. Here is a list of thirty-six articles imported in the year 1837, in the regular way of business, and opposite to each article there is the rate of loss upon it as it arrived, and as it was sold. The average loss is 37½ per cent on those thirty-six articles, and they were imported from Canton, Trieste, Bombay, Bahia, Alexandria, Lima, and, in fact, all the intermediate places almost. This, I presume, is a fair guide to show the losses which other merchants incurred on similar articles."

It was these disastrous losses which made Mr Cobden a Free-trader. He wished to cheapen everything as his own produce had been cheapened. The contraction of the currency, and its being made dependent on the retention of gold, was the origin and root of the whole evil and all the disasters the nation has since undergone.

Such a change, however, the reverse of all this, like all those produced by nature, is so gradual as to the vast majority of men to be imperceptible. Like the gradual extension of the day in spring, or the change of temperature, the change is so slight from day to day that it eludes even the closest observation. From one month to another, however, the alteration is great and striking. The addition, first, of six or eight millions of gold, annually raised, rising by degrees to sixteen or eighteen millions – which doubles the annual supply of the precious metals for the use of the globe – being diffused over an immense surface, and finding its way more or less into the coffers of all nations, may not produce a great or even visible start of prices at any one time. But the change will be incessant; and before many years have elapsed, the result, if the increased supply continues, will be great and apparent. In the first instance, the effect will appear in arresting the fall of prices which has so long been going on, and which our legislative measures have all been calculated to increase. But after arresting the fall, it will speedily induce a rise; and this rise will for a long period be so steady and considerable as to produce a very great increase in the remuneration of the labouring classes, and immensely to benefit them. There is no speculation in this: it is only supposing that the increase of gold is to produce the same effect as the increase of silver, from the discovery of the South American mines, did three centuries ago.

The effect of the same change, by diminishing the weight of debt and taxes, will be still more signal and beneficial. Among the many and appalling evils of which a rise in the value of the circulating medium, and consequent fall in that of everything else, is productive, there is perhaps none so widespread and calamitous in its effects, as the adding to the weight of debts and taxes, and thus weighing down the energies of the productive classes, upon whose efforts the whole prosperity of society depends. It is that which has been the great cause of the long-continued depression and agony, interrupted only by fleeting gleams of prosperity, of the last thirty years, as the sudden expansion and contraction of the currency consequent on its being made dependent on the presence or absence of the precious metals, has been of its frightful oscillations. The taxes now paid by the nation, as measured by the price of wheat – the true measure – are, after, five-and-thirty years of peace, twice as heavy as they were in 1815, after twenty years of a costly war. This is what renders it so difficult for any government to maintain armaments, either at sea or land, at all commensurate to the public necessities; which has weakened our national influence, and degraded our national character, and exposed us to the deplorable state of weakness against foreign aggression, to the dangers of which, the Duke of Wellington has said he has found it impossible to awaken any Administration for thirty years. The Government see the public dangers, but they are disabled from guarding against them, because Parliament, stimulated by suffering constituencies whom the fall of prices has involved in constant difficulties, will not vote the necessary supplies. It is the same with the weight of mortgages, jointures, family provisions, bonds, bills, and debts of every description. They have all been doubled in weight since the bill of 1819 contracted the currency; and hence the inextricable embarrassments into which nearly all classes of the community have been precipitated, except the moneyed, whose fortunes have every day been increasing in real amount, from the same cause which has spread ruin so generally around them.

When it is said that the effect of Californian gold will be to reverse all this – to reduce gradually, and probably before twenty years have elapsed, half the weight of debt and taxes now felt as so grievous a burden by the community – it is affirmed that it will confer, perhaps, the greatest blessing which a beneficent Providence could confer on a suffering world. In England it will gradually and to a certain extent, so far as average prices are concerned, undo all that the Bullionists and Free-traders have been doing for the last thirty years. It will remove a large part of the frightful evils consequent on the monetary measures of Sir Robert Peel; and if seconded by a revision of our import duties, and a moderate tax for fiscal purposes on all foreign articles brought into the country, it would go far to repair the devastation produced by the selfish legislation of the last thirty years. In France it will arrest that dreadful fall of wages which, ever since the peace, has been felt to be increasing, from the constant reduction of prices arising from the destruction of the South American mines, and the simultaneous measures adopted for the contraction of the currency in Great Britain. The unjust monopoly of realised capital will be arrested, at least for a long period. The unjust depression of industry, by the continued fall of prices, will be gradually terminated. But so gradual will be the change, and so unseen the operation of the vivifying element thus let into society, that even the classes most benefited by it will, for the most part, be ignorant of the cause to which their improved circumstances have been owing. They will be blessed by the hand of Nature, they know not how or by whom, as, under the former system, they were cursed by the hand of man, they knew not how or by whom.

Already the beneficial effects of Californian gold have been felt over the whole world, and nowhere more strongly than in this country. It is well known that prices of all articles of commerce, except corn and sugar, have risen twenty or thirty per cent within the last year; and the Free-traders consider that as being entirely owing to their measures. If so, it is singular how corn and sugar, on which the inundation of Free Trade has been chiefly let in since 1846, should be the only exceptions to the general rise. It is singular what contradictory effects they ascribe to their system: at one time it is lauded to the skies, because it tends to lower prices, and cheapen every article of consumption; at another, because it is said to raise prices, and encourage every branch of industry. Both effects cannot be owing to the same system: to ascribe them both to it is to say that a certain combination of gases produces alternately fire and water. At all events, if Free Trade brings about a rise of prices, what comes of all the arguments which went to recommend it on the score of reducing them? The truth is, however, Free Trade has nothing whatever to do with the recent rise of prices of manufactured articles, nor with the extension of the national exports which has taken place. These happy results, the passing gleam of sunshine, have been entirely owing to other causes, among which Californian gold bears a prominent place. Free Trade has tended only to continue and perpetuate the misery and depression which attended its first introduction.

This argument of the increase of our exports last year (1850) having been owing to Free Trade, has been so admirably disposed of by that able and intrepid man to whom the nation is under such obligations for the light he has thrown on these subjects, and the courageous way in which he has everywhere asserted them, in a late public meeting at Rugby, that we cannot do better than quote his words: —

"The Free-traders had boasted much of their system as having increased the amount of our exports; and he (Mr Young) had been continually trying for a long period to get from them the names of the countries to which those increased imports went. At length he had the fact; and the result would be most startling as applied to the arguments and predictions of that party before the corn law was repealed. The countries he would take were Russia, Sweden, Norway, Denmark, Prussia, Germany, Holland, Belgium, and France; and he found that in the year 1845 the quantity of corn imported from all these countries, comprising, as they did, the whole of northern and central Europe, amounted to 1,741,730 quarters, whilst the declared value of British and Irish manufactures exported to those countries was L.17,504,417. But last year the corn imported from those countries had increased in quantity to 6,857,530 quarters, whilst our exports to them had decreased to L.15,274,639. These figures showed that from the whole of northern and central Europe we took last year no less than 5,115,800 quarters of corn more than in 1845, and that there was a decrease in the value of our exports of L.2,229,778. Again, last year the declared value of our gross exports amounted to L.63,596,025, but in 1845 it reached the sum of L.60,111,082; so that in the course of these four years the increase was only L.3,484,943. He found also that our exports in 1830 were L.35,842,623, and in 1835, L.47,372,270, being an increase on the five years of L.11,529,647, or 32 2-10ths per cent. That was an increase under the operation of protection. In 1840 the exports amounted to L.51,406,430, or an increase upon 1835 of L.4,634,160, or 8 5-10ths per cent. In 1845 they were L.60,111,082 – an increase on 1840 of L.8,704,652, or 16 9-10ths per cent. In 1849, L.63,596,025, an increase on 1845 of L.3,484,943; and in the present year, supposing the increase continued in the same ratio, he calculated that that increase would on the year 1845 be about L.4,350,000, or 7 2-10ths per cent. Would Free-traders boast of their exports after that? They talked upon this question as if the country had, under the system of protection, been in a perfectly dead and stagnant condition, and that the agriculturists were like the clods of the earth, and less capable of improvement. Why, it was under protection that our ships were employed to go to the island of Ichaboe, from which guano was first imported into this country; and it was under protection that that island had disappeared from the face of the ocean, and every cwt. of its guano had been brought here and spread upon the soil. He rejoiced and exulted in the march of science as much as any man; but it was an arrogant and an unfounded assumption on the part of the Free-traders to monopolise to themselves, as the result of their system, those improvements in agriculture which were going on under protection with railroad speed, and to which, in truth, their measures had only given a check, and not an impetus. But then he was asked, what have you to say to the United States? He would tell them. He found that the exports to the United States amounted to L.11,971,028 in 1849; but in 1836 they were not less than L.12,425,605; so that the exports in the former exceeded those in the latter year by L.454,577. Surely facts like these would dispose of a few of the Free-trade fallacies, and we should not hear them again repeated, at all events." —Morning Herald, Nov. 28, 1850.

The restoration of peace on the Continent was the principal cause which again raised the amount of our exports to the Old World. This appears decisively in the returns: the exports of Great Britain to Germany alone, which, in 1848, had sunk to less than £4,000,000, rose, in 1850, to £6,078,355. The cessation of purchases to the Continent, during the two preceding years, in consequence of the alarm consequent on the French and German revolutions, only made the rush for English manufactures greater when the restoration of tranquillity reopened the Continent to our industry. In America the change was equally great, and equally irrespective of Free Trade: our exports to the United States, in 1850, exceeded £12,000,000. This extension arose from the general rise of prices, and extension of credit, from the opening of the treasures of California. It not only created a new market for exports on the reverse of the Rocky Mountains, but so vivified and animated every part of the Union, as rendered them capable of purchasing a much larger quantity of the manufactured articles of this country than they had done for a great number of years.6

But by far the most important and beneficial effect of Californian gold hitherto experienced has been in the extension of credit and increase of accommodation at home. This effect is obvious and important. The notes of the Bank of England in circulation, have risen in the last year to L.20,000,000 or L.21,000,000 from L.16,500,000, which they had fallen to during the panic. The circulation of every other bank has, as a matter of course, been proportionably augmented. What produced this great increase in the circulating medium? The influx of bullion into the country, which augmented the treasure in the Bank of England to above L.16,000,000. There is the secret of the whole thing; of the activity in the manufacturing districts, and the general extension of credit and rise of prices through the districts. It is Californian gold which has done the whole; for it has at once filled to overflowing the vaults of the Bank of England, and relieved its officers, and those of all similar establishments, from all dread of a drain of specie setting in. Gold was abundant; the banks no longer feared a collapse: therefore notes were abundant also; the terrors of the holders of them were abated. Prices rose, and credit was extended. We are far from thinking that it is a wise and judicious system to make credit of every kind entirely dependent on the amount of metallic treasure in the vaults of the Bank of England: we only say, having done this by Sir R. Peel's monetary system, we have to thank California for having put at least a temporary stop to the evils with which it was pregnant. It is not surprising that the addition of even so small a sum to the metallic circulation of the commercial world should produce, in a single year, so great a result. The discovery of two millions of bank-notes, in an old chest of the Bank of England, stopped the panic of December 1825; the mere issuing of Lord J. Russell's letter, announcing the temporary repeal of the Bank Charter Act, put a period to the far severer crash of 1847. The addition of five millions to the metallic treasure of this country is quite sufficient to vivify every branch of industry, for it will probably put fifty millions, in bank-notes and private bills, into circulation.

As the influx of Californian gold, however, is an element of such immense importance thus let into the social world, it is material to observe what evils it is adequate to remedy, and to what social diseases it can be regarded as a panacea. This is the more necessary, because, while it tends by its beneficent influence to conceal for a time the pernicious effects of other measures, it is by no means a remedy for them; nor has it a tendency even, in the long run, to lessen their danger. It induces immediate prosperity, by the extension of credit and rise of prices with which it is attended; but it has no tendency to diminish the dreadful evils of Free-Trade and a currency mainly dependent on the retention of the precious metals at all times in the country.

On the contrary, it may, under many circumstances, materially aggravate them.

As the effect produced by a great addition of the metallic treasures of the earth is universal, it must affect prices equally in every part of the world. The largest part of the bullion, indeed, will be brought to the richest country, which is best able to buy it, and has most need of it to form the basis of its transactions. But still, some part will find its way into every country; prices will be everywhere raised, and the relative proportion between them in different countries will remain the same, or even be rendered more unfavourable to the richer state. That is the material circumstance; for it shows that it must leave the greatest and most lasting evils of Free Trade untouched. Supposing gold to become so plentiful that the sovereign is only worth ten shillings, and the effect on general prices to be such that the average price of the quarter of wheat is raised from forty to sixty shillings – which, in a course of years, is by no means improbable – still the relative position of the British with the Polish and American cultivator will remain the same. The price of the wheat may be raised from 15s. to 25s. a-quarter, on the banks of the Vistula or the Mississippi; but still the ability of their cultivators to undersell our farmers will remain the same, or rather be augmented. Prices will still be so much higher in the old rich and heavily-taxed country, which absorbs the largest part of the metallic circulation of the earth, than in the young poor and untaxed one, that in the production of the fruits of the earth, to which machinery can never be made applicable, the inability to carry on the competition will only be rendered the more apparent by the increasing, or at all events, permanent difference of the prices.

In the next place, how cheap soever gold, from its augmented plenty, may become, there will be no cessation, as long as our paper circulation remains on its present footing, of those dreadful monetary crises which now, at stated periods recurring every five or six years, spread such unheard-of ruin through the industrious classes. Let gold, from its greater plenty, become of only half its value, or a sovereign be only worth ten shillings, and prices, in consequence, rise to double their present amount, the danger of a monetary crisis, as long as our currency is based on its present footing, will remain the same. Still, any considerable drain of the metallic treasure of the country, such as it is – either from the necessities of foreign war, the adverse state of foreign exchanges, or a great importation, occasioned by a deficient home harvest – will send the specie headlong out, and, by suddenly contracting the currency, ruin half of the persons engaged in business undertakings. It is the inconceivable folly of making the paper circulation dependent on the retention of the metallic; the enormous error of enacting, that, for every five sovereigns that are drawn out of the country, a five-pound note shall be drawn in by the bankers; the infatuated self-immolation arising from the gratuitous negation of the greatest blessing of a paper circulation – that of supplying, during the temporary absence of the metallic currency, its want, and obviating all the evils thence arising – which is the real source of the evils under which we have suffered so severely since the disastrous epoch of 1819, when the system was introduced. The increased supply of gold, so far from tending to obviate this danger, has a directly opposite effect; for, by augmenting the metallic treasures of the country, and thus raising credit during periods of prosperity, it engages the nation in a vast variety of undertakings, the completion of which is rendered impossible when the wind of adversity blows, by the sudden contraction of its currency and credit. And to this danger the mercantile classes are exposed beyond any other; for as their undertakings are always far beyond their realised capital, and supported entirely by credit, every periodical contraction of the currency, recurring every five or six years, exposes one-half of them to inevitable ruin.

Let not the Free-traders, therefore, lay the flattering unction to their souls, that California is to get them out of all their difficulties, and that after having, by their ruinous measures, brought the nation to the very brink of ruin, and destroyed one-half of its wealth engaged in commerce, they are to escape the deserved execration of ages, by the effects of an accidental discovery of metallic treasures on the shores of the Pacific. Californian gold, a gift of Providence to a suffering world, will arrest the general and calamitous fall of prices which the Free-traders have laboured so assiduously to introduce, and thus diminish in a most material degree the weight of debts and taxes. So far it will undoubtedly tend to relieve the industrious classes, especially in the rural districts, from much of the misery induced on them by their oppressors; but it cannot work impossibilities. It will leave industry in all classes, and in none more than the manufacturing, exposed to the ruinous competition of foreigners, working, whatever the value of money may be, at a cheaper rate than we can ever do, because in poorer and comparatively untaxed countries. It will leave the commercial classes permanently exposed to the periodical recurrence of monetary storms, arising out of the very plenty of the currency when credit is high, and its sudden withdrawal from the effect of adverse exchanges, or the drain consequent on vast importations of food. It will leave the British navy, and with it the British colonial empire and our national independence, gradually sinking from the competition, in shipping, of poorer states. Nature will do much to counteract the disasters induced by human folly; but the punishment of guilty selfishness is as much a part of her system as the relief of innocent suffering; and to the end of the world those who seek to enrich themselves by the ruin of their neighbours will work out, in the very success of their measures, their own deserved and memorable punishment.