steady and constant, either superiority or inferiority of price, is the effect of something in the state of the coin, which at that time renders a certain quantity of coin either of more value or of less value than the precise quantity of bullion which it ought to contain. The constancy and steadiness of the effect suppose a proportionable constancy and steadiness in the cause. The money of any particular country is, at any particular time and place, more or less an accurate measure of value, according as the current coin is more or less exactly agreeable to its standard, or contains more or less exactly the precise quantity of pure gold or pure silver which it ought to contain. We now give one more extract from the same great authority in illustration of the important but ill-understood principle, that the true revenue of society consists altogether in the goods possessed, not in the money itself, which he compares to the wheel which circulates them : It is the ambiguity of language only which can make this proposition appear either doubtful or paradoxical. When properly explained and understood, it is almost self-evident. When we talk of any particular sum of money, we sometimes mean nothing but the metal pieces of which it is composed, and sometimes we include in our meaning some obscure reference to the goods which can be had in exchange for it, or to the power of purchasing which the possession of it conveys. Thus, when we say that the circulating money of England has been computed at eighteen millions, we only mean to express the amount of the metal pieces which some writers have computed, or rather have supposed to circulate in that country. But when we say that a man is worth £50 or £100 a year, we mean commonly to express not only the amount of the metal pieces which are annually paid to him, but the value of the goods which he can annually purchase or consume; we mean commonly to ascertain what is or ought to be his way of living, or the quantity and quality of the necessaries and conveniences of life in which he can with propriety indulge himself. When by any particular sum of money we mean not only to express the amount of the metal pieces of which it is composed, but to include in its signification some obscure reference to the goods which can be had in exchange for them; the wealth or revenue which it in this case denotes, is equal only to one of the two values which are thus intimated somewhat ambiguously by the same word, and to the latter more properly than to the former, to the money's worth more properly than to the money. Thus, if a guinea be the weekly pension of a particular person, he can in the course of the week purchase with it a certain quantity of subsistence, conveniences and amusements. In proportion as this quantity is great or small, so are his real riches, his real weekly revenue. His weekly revenue is certainly not equal both to the guinea and to what can be purchased with it, but only to one or other of those two equal values, and to the latter more properly than to the former, to the guinea's worth rather than to the guinca. If the pension of such a person was paid to him, not in gold but in a weekly bill for a guinea, his revenue surely would not so properly consist in the piece of paper as in what he could get for it. A guinea may be considered as a bill for a certain quantity of necessaries and conveniences upon all the tradesmen in the neighborhood. The revenue of the person to whom it is paid does not so properly consist in the piece of gold, as in what he can get for it, or in what he can exchange it for. If it could be exchanged for nothing, it would, like a bill upon a bankrupt, be of no more value than the most useless piece of paper. Money, therefore, the great wheel of circulation, the great instrument of commerce, like all other instruments of trade, though it makes a part, and a very valuable part of the capital, makes no part of the revenue of the society to which it belongs; and though the metal pieces of which it is composed, in the course of their annual circulation, distribute to every man the revenue which properly belongs to him, they make themselves no part of that revenue.-Smith's Wealth of Nations, ante cit. Having thus by a few extracts from the great authority in political economy brought before the reader the true nature of money, both as a source of revenue and a circulating medium, we may proceed to the main object of this chapter, namely, to show the probable influence of a large increase in the stock of gold poured annually into the metal market. There can, of course, be no doubt that the influx, whether sudden or gradual, of so large a quantity of either of the precious metals as to affect manifestly either the prices of goods or the relative value these metals at present bear to each other, would, in the case of England, have a distinct influence on the standards of gold and silver. It becomes, therefore, important to consider, at a very early stage of any possible change of this kind, what increase is likely to take place, and what would be sufficient to produce a really perceptible result. If it appear that the supplies from California threaten any such result, it might be advisable to meet the evil and make arrangements in time-a matter that could probably be done without much difficulty; but if it appear from a fair calculation that no such mischance is likely to happen, we may let events take their course quietly, and watch with interest, but without fear, the development of the resources now suddenly made available. An interesting question that must be discussed here is the probable total annual supply of gold and silver throughout the world, as well now and within the last fifty years, as for the 300 years that have elapsed between the discovery of America and the commencement of the present century. It is true that very rough estimates must suffice for many of these points, and possibly information exists that would give much more accurate results than any that will be here offered; but such information is not at the moment attainable by the author, and the general conclusion, would not, he believes, be affected by it. The supplies of the precious metals received from the various parts of the world, described in former pages, vary exceedingly in amount in different years, so that it is difficult to obtain any average without taking into account a large number of years. It appears from calculations made at the beginning of this century by Humboldt, that the quantity actually extracted from the South American mines, from the discovery of the New World to the year 1803, a period of nearly three centuries, was 9,915,000 marcs Castile weight of gold, and 512,700,000 marcs of silver; or estimating the marc of Castile at 4,800 grains, 6,798,771 lbs. avoirdupois of gold, and 351,565,7144 lbs. of silver; and the value of the metals estimated roughly, may be stated as three hundred and seventy-five millions sterling in gold, and twelve hundred and eighty millions in silver, the proportion between the two metals in quantity being as one to fifty-one, but in value as one to three and a half. From this value, however, must be deducted about oneeighteenth part, either retained in America, or exported to Asia direct, leaving a total of fifteen hundred and sixty millions sterling imported into the Old World. It is possible that this calculation may be too high, and the translator of Humboldt's work gives the total amount as some thing less than twelve hundred millions sterling instead of fifteen hundred and sixty. The value of the marc of Castile is however considered to be as stated in the text, and gold and silver are taken according to present values, allowing for one-twelfth alloy. It was also calculated by Humboldt that the quantity of gold obtained by the Spaniards on the first discovery of America, and brought to Europe, did not in all probability exceed in value five millions sterling, and it may therefore be neglected in any calculation affecting the whole amount. There must have been a very large quantity of gold and silver in use and circulation in the civilized countries of the Old World, before the discovery of America, and this quantity has been estimated by Mr. Jacob to have amounted to £34,000,000 in coin alone. The total amount in value, including all that was employed in plate and hoarded, was probably not less than £150,000,000, of which we may consider perhaps that twenty millions was gold; but this is only conjecture. The proportion between the quantity and value of gold and silver has always been very different, owing possibly to the many more purposes for which silver is used. It might be supposed at first sight that the value and the quantity would bear the same proportion, as those metals in our own country are made to bear an invariable ratio to each other, but this is by no means the case. This is illustrated by Adam Smith in the case of different kinds of food. He says, The price of an ox is about three-score times the price of a lamb. It would be absurd, however, to infer from thence that there are commonly in the market threescore lambs for one ox, and it would be just as absurd to infer, because an ounce of gold will commonly purchase from fourteen to fifteen ounces of silver, that there are commonly in the market only fourteen or fifteen ounces of silver for one ounce of gold. 80-727201614540 113-201 113001 It appears from good historical evidence that the value of fine gold to fine silver, before the discovery of America, varied between one to ten and one to twelve; that is, one ounce of gold was worth from ten to twelve ounces of silver. About the middle of the last century the ounce of gold became worth fourteen to fifteen ounces of silver, and is now fixed at 14 ounces nearly, or about equal to that which obtained in ancient Greece. [More accurately 14-2878; the shilling being fixed at 80-727 grains fine silver, and the sovereign at 113-001 fine gold. We have therefore the ratio= 14-2878.] The discovery of America, therefore, and the influx of the precious metals to the extent of upwards of fifteen hundred millions sterling, in addition to the regular sources of supply and the accumulations in Europe to that period (the quantity of the two metals being in the proportion of fifty-one ounces of silver for each ounce of gold, and the value, as we have said, from ten to fifteen ounces of silver for one of gold,) trebled the money value of labor and corn; but in spite of the enormously larger proportion of silver introduced, it has increased the value of gold by only one-fifth part, owing no doubt to the far larger use of silver in the arts, partly consequent upon its greater abundance. In a work published in 1807, it was estimated that the value of the gold and silver together brought into circulation, was then about £10,000,000, and of this quantity about three-quarters of a million was probably gold and the rest silver. This agrees with the estimate made by other authors, that about one-fourth part of the whole supply affects the circulation. It may therefore be some guide in future calculations. The differences above referred to, have as yet induced no corresponding change in the standard, nor has such a change been rendered necessary in the smallest degree. The precious metals still flow into and from our country, according to the course of exchange and the general value of gold as affected by local and temporary causes; so that, although the quantity of gold has been so vastly increased by recent importations from Siberia, some outlet must have been found to prevent the change from being seen or felt. It is considered by those who have made careful calculations on this subject, that the average annual supply of gold for some years past must have exceeded five millions sterling, that of silver amounting to eight millions or thereabouts; and that while the supply of silver has been for some years increasing with some degree of regularity, that of gold has also increased, but chiefly within a few years. The latter supposition, there can be no doubt, is true, as the evidence already given with regard to the supply from the Ural and Siberia abundantly proves; and it has indeed at present amounted to this, that each ounce of gold has latterly been balanced by only thirty ounces of silver, instead of fifty, as had been the case for some years previously; the value of the whole of the silver introduced being thus double that of the gold, though formerly it was treble. Are there, however, it may be asked, no necessary bounds set to this absorption of a material, which, like gold, is of limited use in the arts? Perhaps the best answer will be given by comparing the following table, carefully made by Humboldt, with the relative values of gold and silver in the world within the period of the last three centuries. Periods. Proportionate Supply of Gold and Silver from America. Average an- 1492--1500, 1750-1803, 7,589,500 REMARKS. Till 1525 gold chiefly produced, after that silver almost exclusively. Silver very largely predominating. Potosi mines exhausted after the middle of the century. Brazilian gold mines wrought and very large quantities of gold introduced. Brazilian gold mines alone estimated to produce gold to the annual value of one and three-quarters million sterling. No materials seem to exist for determining the quantity of gold which at different periods has flowed from one continent to the other; but it is certain, that while the principal metal till 1525 was gold, the silver afterwards preponderated in the proportion of 60 or 65 to 1, until the commencement of the eighteenth century, when the Brazilian alluvial washings coming into work, the proportion was enormously changed; for while the silver mines yielded about the same as before, the gold in creased so as to alter the mean annual average supply of the precious metal from three and a half to more than seven and a half millions. Towards the close of the eighteenth century the gold supplies began to fail, and those of silver to increase, the general result seeming to show that the proportion was reduced from 60 to 1 to 22 to 1, although it afterwards rose to nearly 40 to 1, and again sunk to 30 to 1. These very considerable fluctuations seem to have produced a comparatively trifling result, so far as the use of the precious metals in coinage gives evidence of such result; but the real amount of change,-if estimated in the proportion of the difference to the total amount of specie,-and the mean annual supply, will be seen to be very large. We ought not, however, to be astonished, as Humboldt well observes, [Political Essay, ante cit. book iv. chapter xi.] that :— The proportion between the respective values of gold and silver has not always varied in a very sensible manner, according as one of these may have preponderated in the mass of metal imported from America into Europe. The accumulation of silver appears to have produced its whole effect anterior to the year 1650, when the proportion of gold and silver was as 1 to 15. Since that period the population and commercial relations of Europe have experienced such a considerable increase, that the variations in the value of the precious metals have depended on a great number of combined causes, and especially on the exportation of silver to the East Indies and China and its consumption in plate. If also Europe, at the commencement of the present century, produced, according to Monsieur de Villefosse, forty ounces of silver for one of gold, it appears on the other hand that in the 15th and 16th centuries, the proportion was more in favor of the silver, since during that period the silver mines were much more productive than the gold washings, so that probably the value of gold must have risen in Europe, even without the discovery of America." Within the last quarter of a century the supply of gold has greatly exceeded the supply on record for any former period, at length reaching to the value of more than six millions per annum; while the value of silver, although slowly increasing, has probably not exceeded eight millions. But we must consider somewhat more in detail the statistics of the precious metals within the last fifty years, and the increase made to the stock of the precious metals within that period, so as to determine, as far as possible, the present amount of capital stock. It is only thus that we can estimate the influence of any sudden and considerable increase in the supply. The following account (Table I.) will give the probable annual supply at present, without including California, but making an ample allowance for the quantity which, there seems no reason to doubt, may be expected from Siberia. TABLE I. Showing the present supply of gold and the sources of the |