The Express.
London, England, 1851-09-23 00:00:00

many extravagant anticipations, harmless because
imaginary, most of na foresaw, in the abundance of
gold to be drained from the valley of the Sacra-
mento, a buoyant money market, a revival of enter-
prise, and the bank coffers overflowing to repletion.
As a proof of the troth of the general vatimnation,
Hol'and was supposed to meet the evil in time by
withdrawing her gold currency, and it was gravely
debated in the councils of France whether she
should not follow the same example. At the same
time a sort of gold panic spread rapidly over the
Continent, and while our bank-note commanded a
premium, the sovereign sank to a discount. And
calculations were put forward to show the injury
that would accrue to the Bank of England, by a de-
cline in the price of gold, so plausible and probable,
, that for some time the stock of that great establish-

ment was affected thereby.
So much for the simple theory of supply and
demand. The supply of gold was no doubt over-
stated, but it has been great notwithstanding, and so
far speculative ideas have been realised and con-
firmed; but the demand appears to have kept pace
with the supply, and so far the surmises and calcu-
lations of some economists have proved erroneous,
because the demand has come from sources evidently
not conjectured when the spirit of prophecy was at
its zenith. And we think, therefore, in such cases
prediction is somewhat hazardous, because though
the doctrine of supply and demand in regulating
prices be incontrovertible, and correct even to com-
monplace, still there arc often elements at work to
defeat our most confident calculations. Nature, in
her unseen operations, makes light of our dogmatic
theories. In her laws, especially connected with
this great subject, she is silent, profound and
mysterious. Site does not overturn the principles
we lay down in our closets ; she only neutra-
lises them by other laws or agencies. And when
she appears to act inconsistently with herself, and
thereby refutes our dogmas, we may be sure that she
acts always in strict obedience to her own decrees.
Her deviations resemble the aberrations of the fixed
stars, which philosophers in their ignorance supposed
to indicate some slight imperfections in the economy
of the heavens, but which astronomers, in their
better knowledge, now prove to depend on uniform
and regular causes. Those deviations are often very
various and complex; but they must be studied and
understood before we can comprehend the subject, so
as to enable us to explain those surprising and un-
expected results which embarrass our well-spun ar-
gumentation, and prove us to be but false prophets.
Cause and effect, as in the material world, arc the
agencies which determine the dispersion of the pre-
cious metals; but we know how prone we are to
mistake the one for the other, and thus fall into fal-

lucious reasoning.
In confirmation of these remarks we perceive
what appears to many a strange anomaly, that the
Bank of England has not increased its treasure, not-
withstanding the enormous supply of gold that has
recently been added to the stock of the precious
metals in the world: on the contrary, its stock of
bullion is, we are informed, less by about two',
millions sterling. So that it is manifest that while
it has been receiving through one channel, it has
been drained to a greater extent through another.
We can easily understand why the vast amount of
silver that comes to England goes immediately else-
where, to the continent or to India, where there is a
ready market for it: but the diminution of the gold
bullion is a circumstance not so easily explained. At
all events the explanation, as in the other case, is
not to be discovered on the surface; particularly
when we consider that London is the greatest
market in the world for gold, where at
the Bank an importer may sell any amount, at a fixed
price, and by the facilities offered in such trans-
actions escape the delay, hazard, and inconvenience
of coining his gold. In reality it can scarcely be
said that any advantage is derived from coining
over selling, because the difference between the Mint
and market price can do little more than cover the
interest of money lost in the operation.
The drain on the Bank for gold, indicated by the
diminishing returns, and in face of large supplies tram
different parts of the world, naturally excited some
surprise at first amongst those who narrowly watch
every variation of the bullion market. Merchants
and stockbrokers in such cases usually point to the
exchanges as the immediate cause ; but the exchanges I
could not in this instance afford a satisfactory explana-
tion. Because, while our sovereigns were being sent
to France in large amounts, the sovereign itself, as
indicated by the exchange, was actually at a dis-
count in Paris. And it now appears that while we
were receiving bullion from California, sold to the
Bank, our sovereigns were going abroad, not to
equalise the exchange, but to be coined into French
gold pieces. The high price of silver rendered such
1 a transaction profitable. And it is well known that
fur a considerable period the Mint here was kept in
1 active employment to supply this "exhausting re-
ceiver." By the fall in the price of silver, the cause
has ceased to operate for the present ; bat in all pro-
bability a confirmation of a new supply of gold from
Australia will again excite apprehension in conti-
nental countries, and lead to a renewal of the same
event; and we must be prepared to see a further re-
duction of the Bank stores.
We have mentioned these facts, now well known,
in order to show inferentially how any fresh supply
of gold from California or Australia may be absorbed
in the circulation of continental countncs, either by
a rise in the price of silver, or by displacing paper
money. In those countries possessing a double
standard of gold and silver, as for example the
United States and France, we may, by a deviation of
the relative values of the two metals to a small ex-
tent, anticipate a considerable increase of the gold
currency of these two countries. That such has al-
reedy taken place in some degree is obvious by the
activity of the mints in the United States and
France; and thus we can satisfactorily explain why,
OR the one hand, the greater part of the gold pro-
duced from California has remained in the former
country, and, on the other, why the Bank has
been insensibly drained of its bullion. Had
there not existed an absorbing power in the
United States equivalent to the supply of bullion,
it is manifest that the price of gold would have
fallen to that point which would have rendered its
exportation profitable. The superabundance of it
in relation to the wants of the people, as well as
a restricted market for its sale, would necessarily
have forced it to find a market in England. But
the simple action of supply and demand has been
dearly counteracted by the facilities afforded at the
Mint in the United States to convert the bullion
into coin. And so must that happen as long as the
law is in force with regard to the legal tender. In
truth it is quite rational to suppose that the appre-
ciation of silver, which would affect the value of
the currency in America and France, may by de-
grees force silver out of circulation, its place being
supplied by gold; and silver in the market being
thus rendered more abundant, the relative vales
d the two metals might be maintained. At
adherents it seems by no means improbable that this
imam to the gold currency of such countries as
lam placed restrictions upon it, first by a co-equal
silver standard, and secondly by a premium on gold
coin, may present au effectual bar to any endue seg-
mentation of gold, arising from new supplies. And
if such opinion be verified, we can have no expecta-
tion of any large increase to our stock of bullion.
For as to gold coming from one of our own colonies,
that will no more secure it to us permanently than
if it came from Asia, Africa, or America.
'the tendency of these arguments, if well-founded,
is clearly to banish any immediate prospect of hav-
ing mon. y cheap. The past is an indication of the
future ; and we have seen how all the predio-
tions relative to an increase to our stock el
gold base been falsified by the event. This has
arisen from the causes pointed out; fir in no other
maim r eon we give even a plausible explanation et
a Gust so little expected, as a diminution of bullies
in the face of such apparently, encouraging circum-
stances as the opening up new sources of supply. The
mere state of foreign exchange cannot now, as hem-
tofore, weigh so much with us in determining
prospects of supplies of the precious metal.
are now other more influential causes at work to
demand our most vigilant attention. Not only may
our bullion disappear from the Bank, but our new-
coined sovereigns also, as has been the case for some
time put, causing embarrassment in the money
market, and expense to the country. And we
may add, that, in consequence of recent changes in
the Mint, nearer allied to revolution than reform, we

may find impediments in the way of a rapid supply
of coined money, should the French mint be again
employed in destroying and reconverting our sove-
reigns. Bo that as it may, we fully anticipate some