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Leader (1850-1860), 19th March 1859, Edition 2 of 2, Page 25

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    • " ¦¦ /¦ ' ¦ ¦ *•* ¦ ¦ ih iqpvqT THE LEADER. 377 No. 4g9> Makch 19, 1859.J__,
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      " ¦¦ /¦ ' ¦ ¦ *•* ¦ ¦ Ih Iqpvqt The Leader. 377 No. 4g9≫ Makch 19, 1859.J__,

      " ¦¦ /¦ ' ¦ ¦ *•* ¦ ¦ ih iqpvqT THE LEADER . 377 No . 4 g 9 > Makch 19 , 1859 . J __ ,

      Oommebgial.

      OOMMEBGIAL .

      The Accumulation And Value Op Gold. Acco...

      THE ACCUMULATION AND VALUE OP GOLD . AccoBDiKG to the Bank returns of last week , there wa ^ hen 19 V 951 , O 22 L of bullion and coin . n its vaults Of this sum only a very smatt portion was Sver coin . The bulk was gold . In the Irish and Scoteh banks , of which the cumulation is very generSlv and vCry considerably above their authorised c & SnXere is about 4 , 950 , 000 ? . . The Bank of France holds , by the latest return , coin and bullion to the amount Of 22 , 284 , 000 ? ^ So that there is at present an accumulation of gold in different places , and a recurrence of the apprehensions that it is destined to fall in value . There is , too , a recurrence of discussions on the subject , and , at present , a orowiu" conviction that Ave are deficient in knowledge of * the quantity of bullion in existence , and of the requirements , of mankind , to enable us to form any reasonable conjectures as to its future value . " We all know that when gold was found in California and in Australia , in such unheard-of- quantities , and obtained at such a comparatively small cost , that the most dismal apprehensions were entertained by the holders of fixed incomes of the depreciation of their property ; that some States , as Holland and Belgium , hastened to demonetize gold ; and that at the end of eight years there is Sot the slightest appearance of that general rise in the price of all commodities which was to bring to poverty ' or starvation all the genteel part of society . On the contrary , the last six weeks average price of wheat , to quote one specimen , hut the most important , is 40 s . lOd . per quarter , which is lower than the average price of any year since 1852 , and lower than the average price of every year since 1842 , except the three years immediately following the final repeal of the corn law , 1850-51-52 . So it is with other commodities , they have fallen , not risen in price ; and where , a rise has taken place , as in cotton and moat , it is clearly the consequence of causes , such as greatly increased consumption , totally different from the the increase in the quantity of gold . Another test of the value of gold generally referred to is silver ; and as these metals are the great media of exchange between different countries , a rise m the price of silver may be considered equivalent to a fall in the price of gold . But the recorded price of silver * 61 § d . per ounce , in 1851 , and 61 jjd . at the present , or even 62 d ., as quoted on Tharsday , is as little favourable to the ratio of a continuous full ' in- the value of gold as the price , of wheat . The time is now come , therefore , when we must look at the elements of value , apart from the statistics of q uantities , and not infer , however certain it be , that all correct opinions and all correct judgments are ultimately formed on the material world , that the estimate of value , which is entirely mental , must necessarily vary throughput society , as a ton or two is added , to the bullion usually obtained . From ft remote period in the history of Europe the different Governments acted on an opinion that they could determine the value of . the precious , metals , when used as coin , and that this was their duty . Our kings were extremely tenacious on this point : and " for . either . subject or stranger , " we are told , " to . interfere with this prerogative by coining was worse than murder or any other felony . " "No foreign coin was allowed to bo used , except to bo exchanged at the king ' s mint , or by the king ' s exchangers ., according to their valuation of the foreign money . " "The sovereign act his own value on his own coin . " To carry out this plan a king ' s exchanger was appointed with unlimited power over the money transactions of the country . " The last royal exchanger was Lord Burloigh" Those preposterous chums nro not yet all at an end ; and though the discovery of America and the extension of trade have made it perfectly clear that the circulation and value of the prcoious metals as the media for carrying on exchange between individuals , and scouring the subsistence of society , are beyond all effcctuijl and beneficial control by any Governments , however powerful , whether utaqpotio or free , they still

      interfere in many ways with metallic money . To the old prejudices of the PlahtagenetS and the 1 udors , even the Lloyds and the Hubbards of our day are still victims , to say nothing of the Liverpool . the Peels , who inherited them in direct official lineal descent . They acknowledge that over the quantity and the value of gold and silver , G overnment has no power ; that they are natural or universal money , the more valuable metal being necessarily the money of the richer people ; that , both are essential to exchange , which is essential to production ; therefore , that they are natural and necessary parts of social existence ; and yet the heirs of the prejudices of the Edwards and the Henrys still believe that there is some little part of this universal scheme which they can ^ advantageously modify . So we have seen the Governments of Holland and Belgium refuse to allow gold to be used as legal money in then : countries . Banish it from circulation they cannot ; but they will only allow silver to be the measure of value of all other commodities , including gold . Uur Government takes a directly opposite course , and will not allow silver to be used here as legal money for a sum greater than 40 s , It will not allow commerce to have and use any other money or measure of value than gold . Thus we are taught at once that we must look to the regulations of Governments , as well . as the quantities of the precious metals , before we can form eorreet opinions of the natural relation of value bfetwixt them , and betwixt them and other commodities ,: which is to affect the ineomes of all classes in society . Now it is at once obvious that the regulations of the two countries mentioned , making in them silver more necessary than gold to cai-ry on business ^ must have enhanced its value in relation to gold and other things . Such a change would go far to accoimt for the slight increase m the value , of silver which the recorded prices indicate . ± Jut in the same period , that is , since 1850 , there hasbeen a m-eat extension of the trade between India and China and Europe . To go no further back than 1854 when the computed real value of imports was first given , between that and 1857 the imports from China increased from 9 , 125 , 040 * . to 11 , 448 , 639 ^ , and from British India , exclusive of Singapore and Ceylon , from 10 , 672 , 862 * . to 18 , 650 223 * . These two « reat countries , already crowded with an industrious ' population , have been accustomed , like other civilised people , for ages , to use silver as money , and there is no reason , therefore , to be surprised when such large quantities of goldfioAved into Europe that large quantities of silver flowed from Europe into Asia . In the seven years , 1851-1857 , according to a paper laid before the Committee of the House of Commons to mqiure into the Bank Acts , silver , to the amount of 56 , 676 , 000 ^ . was exported from Western Europe to China and Hindostan . Whatever may bo the case in Chinathough , as the Chinese are eager seekers after gold in California and Australia , there is no reason to suppose they would not willingly receive it in their own country in exchange for silk and tea—Australian gold has continually found a market in India , and heon sent thither . But in China old regulations , and in India modern regulations , make silver the only legal money ; and for the same reason that its value is artificially enhanced in Eiirope by the action of the Governments of Belgium and Holland , it is enhanced in Asia by the action of the Governments of China and Hindostan . To those who habitually see nothing but wisdom dictating the conduct of statesmen , it may appear strange , hut to us who have dogged their steps , it is only amusing to find them foolishly decreeing in England that only gold , and in India , that only silver shall be legal money . Xot they actually adopt these two adverse courses , one or other of which , or both , must bo erroneous , and they prohibit the use of gold in India as money , and of silver in England . They therefore disturb the natural relative value of the two metals in both countries—raise that of silver in Hindostan , and raise that of gold in Europe—and strengthen , if they do not originate the causes , which make silver continually flow in suoh large quantities from the

      latter to the former . As commerce in both - countries naturally does , and naturally would on all occasions , use the metal which is relatively cheaper for paying debts , and as this use is a natural part of society , like division of labour , the Government by its regulations actually thwarts the dispensation of Providence , and causes all the loss and waste which arise from bringing hither the gold , which , could it be freely used , would , in the natural course of trade , flow from Australia to Hindostan , and sending silver in its stead to the Havin" thus slightly indicated some of the causes , which alter the relative value of the precious metals to one another , independently of the quantities produced , we must add that similar causes — namely , regulations , especially those which impede exchange and production , as many of them do to an almost inconceivable extent , affect in like manner the value of all commodities in relation to the precious metals . The stimulus which the modern discovery of large quantities ol gold has given to exchange and production ^ all over the world would be quite sufficient , t h ere can be no doubt , because these are all parts of the Sciine natural system , to require and absorb all the additional gold and silver lately added to the general supply . It would operate in two directions . It would increase the quantity of commodities to be exchanged , making more money everywhere required : and it would increase the opulence of individuals and of nations , everywhere increasing the demand for the precious metals m the arts and for ornaments . Unless we could estimate the future increase of population on the globe under free intercourse , and the future cravinor for ornament of all that population , which will tend to enhance the value of the precious m etals , it is perfectly idle to speculate on the effects of the new quantities over the iuture estimate of value . We know , from experience , that the great tendency in the price of all commodities , as measured by the precious metals , since the first effects of the discovery of America passed away—has been downwards . All things have become cheaper . They are- obtained by less labour , and a less quantity of gold has to be given for them . On this general fact we are inclined to believe that there never wilf be that augmentation of prices which some alarmists expect , from finding large quantities of gold in California and Australia .. We must rem ind the reader , in confirmation _ this view , that the amount of gold recently discovered and brought into use as money , is very much less in quantity than the substitutes for it which have been gradually , and in some cases hastily introdticed into use without perceptibly affecting the value of the j > recious metals . All over Europe paper has been substituted for the the precious metals as money . In the beginning of the American war only paper was to be found m the countries that arc wow the United States . At the per iod of th © French Revolution , linlllions of assignats banished gold from France . For many years a forced paper currency was almost the only money in use in England , Russia , Austria , Prussia , Sweden , Denmark , and in many of the small states of Germany . Now , if the immense addition to the money of the world made by this forced paper currency , had no perceptible eflect on the estimated value of the precious metals , how can we oredit the alarmists who tell us , that adding a few additional millions of gold to the circulation , will decrease its value ? Value is . an estimate of the mind . For gold , the craving is so great , that the supply must always be below the desire for it and tie consequence is , that the value , however Tuch it may sii , never can ihll below the average Sate in past years , ns ^ . Wf « by those who look merely at the additional quantity . Un this accoiT throughout the whole convulsive period we have alluded to , when heaps of paper money were forced into use , gold and silver retained their . y duo nQM'ly unftlterod , w was continually proved bv a depreciation of the paper money in proportion * tofte quantity . Through all thole storms the valuo of the metals remained a fixed and certain light , wooing and even cpmmandmg Governments

  • Citation
    • Leader (1850-1860), March 19, 1859, page 25, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/l/issues/cld_19031859/page/25/