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,