one sovereign at the commencement of the period—and yet in a large class of manufactured goods no advance in price would be apparent, the reduction in the cost of production being in more than an equal proportion. In ordinary times, agricultural operations escape in a great degree the influence of industrial progress; but within the last ten years-that is to say, since the repeal of the Corn Laws, which nearly synchronized with the gold discoveries-the spirit of improvement has been as busy in agriculture as in any other department of industry, and, in conjunction with importations from foreign countries, has acted, and must for some time at least continue to act, powerfully upon the price of raw products in this country.

The depreciation of gold, therefore, may be realized either in a corresponding advance of prices, or in the neutralization of a fall which in the absence of depreciation would have occurred; but in whatever form it may come to us, our gain or loss as a nation will be the same, and will depend upon the condition I have stated the more or less rapid depreciation of our currency as compared with the currencies (convertible, like ours, into gold) of other countries. Whether, the conditions of production remaining unaltered, the depreciation be indicated by a corresponding advance of prices, or, those conditions undergoing improvement, the fall in the value of gold merely operates in neutralizing, as regards price, the effects of the cheapened cost of commodities-in either case the gold price of the products of English labour and abstinence will rise. A given exertion of English industry will reap a larger gold reward than before; and foreign commodities not

*

rising in price in the same degree, the larger gold reward will indicate, over so much of our expenditure as is directed to foreign productions, a real augmentation of well-being. As regards that portion of our expenditure which falls upon the products of our own industry, individuals and classes will, according to circumstances, be benefited or injured by the change; but as a nation, we shall neither gain nor lose, since here the increased cheapness of gold will be exactly neutralized either by a corresponding advance in price, or by the prevention in the same degree of a fall which would otherwise have taken place. It is in this way—by the increased command which she obtains over foreign markets by her cheap gold-and not, as is commonly supposed, by finding an outlet for her wares in California and Australia, that England will benefit by the gold discoveries. That outlet for her productions-were the movement to stop here-however it might benefit individuals, would for the country at large be an injury and not a boon; it would deprive her of that which might conduce to her comfort and happiness, and would give her "a breed of barren metal" in exchange. But the movement does not stop here. The money which she obtains from the gold countries, instead of absorbing, like India or China, she employs in purchasing the goods of other nations. It is in the enlarged command which she acquires over such goods that her gain consists, and it is thus that she indemnifies herself, though at the expense of the nations who ultimately retain the new gold, for the loss-the indubitable loss -which she is called on in the first instance to sustain.

* On this point see post, p. 147 et seq.

IV.

ESSAY TOWARDS A SOLUTION OF THE GOLD QUESTION.

SUMMARY OF THE MOVEMENT. M. CHEVALIER'S VIEWS.*

It is now rather more than three centuries since the conquest of Mexico and Peru by the Spaniards, and the discovery of rich mines of the precious metals in those regions, excited the cupidity of Europe and opened a new epoch in human affairs. Of the numerous occurrences which conspired about that time to break the spell of old ideas, and to carry the world rapidly over the border line of mediævalism into the full movement of modern civilization, this was certainly not the least powerful. The subsequent depreciation of gold and silver, and the revolutions in private property, though the most conspicuous, were by no means the sole, nor even the most important, consequences of that event. The rage for gain - the auri sacra fames-awakened by the golden visions of the new Eldorado, hurried across the Atlantic those numerous and daring adventurers who laid the foundation of the Transatlantic states. The vast sums of gold and silver liberated

*The Edinburgh Review, July 1860.

by their exertions supplied, and rendered possible, the remarkable expansion of Oriental trade which forms the most striking commercial fact of the age that followed. Less directly, but still intimately, connected with the same event, were the sudden growth and temporary splendour of the Spanish monarchy, as well as its rapid decline; the establishment of the Poor Laws in England; the financial embarrassments of Charles I., which resulted in the Long Parliament and the Revolution; and the rise and progress of British maritime power.

Once more after the lapse of three centuries, the world has witnessed another great discovery of the precious metals. The auriferous sands and rocks of California and Australia are as much superior, in richness and abundance, to those which rewarded the industry of the Spanish adventurers, as these latter were superior to all which had been previously known; and gold has now for eight years been pouring into Europe in an exuberant tide of wealth beyond all former experience. What, then, will be the result of these Californian and Australian discoveries? and how far will they resemble in their scope and influence their prototypes of the sixteenth century? These are questions which, in the presence of such facts, cannot but force themselves upon every thoughtful mind.

But since the epoch of which we have spokensince the day when the sparkling veins on the sides of Potosi attracted the eye of the Indian shepherd-a mighty change has come upon the world. Society in all its constituents has been profoundly modified. Commerce has grown to dimensions of which the

merchants of the sixteenth century could have formed no conception. The entire foreign trade of the greatest commercial nation then in existence probably did not much exceed that which is now carried on in a single English or American port. The total tonnage of the united galleons which constituted the Spanish mercantile marine only amounted a century later, as we are informed by Robertson, to 27,500 tons-little more than the tonnage of the Great Eastern steam-ship. Some of the most populous and wealthy communities of the present day had not yet begun to exist; and the whole quantity of the precious metals then in use was probably less than that which now circulates in some second-rate European kingdoms. The conditions under which the experiment of the sixteenth century was tried are no longer those with which we have now to deal, and the precedents of that period may therefore be thought to have little application to the present time.

But, on the other hand, if we examine the details of this change, we shall find that the facts of which it consists are of a nature, in relation to the influence of the gold discoveries, in a great degree to counteract and neutralize each other; some of them tending not less powerfully to enhance, and give increased efficacy to that influence, than others tend to impair it. The stability of trade has increased with the increase of its mass; but, on the other hand, the agencies at our disposal for acting upon trade have increased in a still greater proportion. The quantity of the precious metals now in existence may be twenty or thirty times greater than when Columbus made his memorable