The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1855-12-04 00:00:00

WHAT HAS BECOME OF THE GOLD ?

THE enormous supplies of gold yielded both by
Australia and California are well known ; from time
to time we hear of the arrivals of large remittances,
even as much or more than a million sterling in a

week ; and yet, in the face of these apparent causes of
great abundance, we have complaints of scarcity, and
the rate of discount is high because the stock of bullion
in the coffers of the Bank of England is so low as to
excite apprehensions of the capability of the Bank
Directors to meet their engagements. It is, therefore.
a matter of some interest to ascertain what has become
of the gold which has thus so mysteriously vanished
almost as fast as it has been produced. For a long
series of years the production of gold kept pace with
the requirements for it, and the alternate excess and
deficiency were caused by the ordinary fluctuations of
trade, so that the scarcity at one time was compen-
sated by the abundance at another, and the quantity
of gold in circulation, both for home and foreign trade,
was considered amply sufficient for all ordinary pur-
poses, and no alarm was felt as to any probable want
being unsatisfied. When, however, the startling in-
telligence was received that gold had been discovered
in California, in unheard-of quantities, and from appa-
rently inexhaustible sources, followed a short time
after by still more startling accounts of discoveries of
gold in Australia, which exceeded in richness the
Californian El Dorado, speculation was freely indulged
in as to the effect of such an enormous addition to the
stock of the precious metals. References were made
to the influence which the discovery of the Peruvian
mines had upon prices in Europe many years ago, and
it was confidently predicted that we should shortly
witness still greater changes, so that sovereigns would
be reduced to half their value, and the nominal price
of every other commodity would be proportionately
enhanced. Indeed, a dread was expressed that we
were on the eve of a monetary revolution, by which
creditors and fixed annuitants would be the great suf-
ferers, and that even a necessity might arise, from the
presumed cheapness of gold, of substituting some other
metal as the standard of value. It should be remem-
bered that these predictions were made at a time when
the promises of abundance were as yet unrealised, and
that the subsequent supplies have even exceeded the
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tainly keeping within compass to estimate the additions
to the stock of gold from the discoveries in California
and Australia, at a hundred millions sterling ; and
yet, notwithstanding this enormous addition to the
metallic resources of the commercial world, so far ex-
ceeding that of any previous period, we have had for
months past diminishing reserves in the Bank coffers,
until the margin of surplus became so limited that the
rate of discount was continuously raised upon the plea
that such a step was necessary to stay the perpetual
drain.

Here were two influences of directly opposing
tendency working simultaneously, and all previous
experience seemingly set at defiance. On the one
hand, was the new and abundant supply almost con-
stantly pouring in, every arrival from either gold
country augmenting the stock in circulation ; while,
on the other hand, was an equally constant demand
still greater in extent : so that the excess was more
than absorbed, and we were threatened with the evils
arising from scarcity instead of over-abundance. In
endeavouring to ascertain the probable cause of this
seeming anomaly, much must, of course, be left to
conjecture ; but, at the same time, the subject is
worthy of investigation, as helping to remove some of
the misconceptions which naturally arise in the public
mind. It is well known that the agriculturists, as a
class, will take every opportunity of hoarding gold
coin, not always from want of any information on the
subject of investments and interest, but the majority
of them live far away from banks and banking opera-
tions, and may, at the same time, possess but slender
confidence in paper securities. But, whatever may be
the cause, the fact remains ; and many have been
known to possess large sums in this way. The distress
occasioned by the repeal of the Corn Laws brought
many of these hoards into circulation, and, no doubt,
accounted, in a great measure, for the abundance of
the metallic currency which prevailed for a con-
siderable time. For the last two years, however, there
has been the unwonted combination of high prices and
abundant crops ; and, if the 570,000 farmers have

availed themselves of their opportunities in their usual
way, a very large amount of gold is, no doubt,
reposing in their coffers, and creating that scarcity in

the mercantile Iv orld which has been alarming-the
Directors of the Bank of England.
In France, however, the predilection for hoarding
gold is more prevalent than in England, although the
means of the inhabitants for gratifying this taste may
not be so large. The French agriculturists have also
had many advantages, and it is not at all improbable
that in the two countries there is absorbed, in this
way, more than sufficient to account for the apparent
deficiency. There are many who attribute the scarcity
to the remittances made to the seat of war ; but it
must be remembered that this does not remain, but is
merely in course of circulation, returning rapidly to
the centres of commerce in payment for supplies. A
month's receipts from Australia would replace all that
has so been taken into consumption ; but the deposits
in the hands of small holders have been accumulating,
and will continue to do so until circumstances shall
occur to bring them again into circulation, when we
may again witness a plethora of bullion in the absence
of any large receipts from abroad.
A remedy for this inconvenience will in vain be
sought in any endeavour to persuade the agricultural
portion of the community as to the propriety of
investing their surplus money through any of the
ordinary channels. A better way would, perhaps, be
to afford additional facilities for doing so. In Scot-

land there is not a town, and scarcely a village, where
there is not a branch of a Joint Stock. Bank, and in these
establishments a small farmer or tradesman may receive
for his deposit a receipt bearing interest, and backed by
the security of a responsible body of shareholders; while
the business of the community is carried on by small
notes, enjoying an equal share of public confidence.
In England, on the contrary, Branch Banks are mostly
confined to large towns, far away from the great
mass of the agricultural population ; .and wry few
facilities are afroxcleii for the; ossessors of small capital

to obtain interest on their deposits. The English
Banks shrink from the trouble, and disdain the small
business ; thereby depriving themselves, and the mer-
cantile community, of monetary resources which they

might otherwise possess. It would be worth the at-
tention of some of our Joint Sto-ck Banks whether a
plan of operation, something akin to the Scottish
system,- might not be introduced with mutual benefit

to both parties ; or it may be found, and that at no
distant time, that high prices have enabled the agri-
culturists to absorb all the available gold, and a
recourse to small notes be absolutely indispensable.