The Sun.
London, England, 1863-10-20 00:00:00

RECENT GOLD DISCOVERIES.

The following is the interesting paper on the above sub-
ject, read last Thursday by Mr. Thomas M'Comble, before
the Trade and International Law Department of the Social
Science Association :

A wide-spread uneasiness has been recently visible, par-
ticularly amongst annuitants, persons having fixed in-
comes, and even other persons whose interest is at stake,
as to the danger of gold becoming deteriorated in value.
The same was exhibited about 12 years since, at the time
the great discoveries of gold were made. I then expressed
whiche lett,
everyis
r m
my belief that they were, to a great extent, fallacious. I
still remain of the same opinion, and I have no doubt that
the alarm is
other uncalledcourse,commodity
af
nor
a.
rt i
eleGold,
s of
valued
a althoughuedocommerce,r t h standardeanmeasured
d i
tsvalue
ea
every-
where, buyy;
wh
must depend in a great degree upon the labour and expense
necessary to produce it. I think I can prove that, upon an
average, gold takes more to produce than it is worth at the
Bank of England, viz., £3 17s. 6d.-22 carats fine. Gold
has certainly been increased, and is daily being increased as
an article of commerce ; and it has thus added to the cir-
culation of the world without depreciating its value ; nor
can its value be very well lessened while it requires its full
equivalent in labour and capital to create it. It forms, in
fact, an accumulated national capital, which is a kind of
property to be laid by in good times for emergencies
which may occur in bad times, Being a universal cur-
rency over the world it is fit for this purpose ; and will
continue so as long as it requires the full value of labour
and capital to obtain the gold. I know from personal obser-
vation that gold digging is not remunerative. To commence
with alluvial digging, even in the richest spots at the best
times, the great majority were unsuccessful. I have been
upon the richest of the fields, and know that the vast maj°-
rity did not succeed, and that the aggregate of the gold ob-
tained, if equally divided amongst those working for it,
would scarcely amount to anything like the ordinary wages
of labour. The gold procured by alluvial washing is soon
exhausted on any field ; and it is to the source from which
those deposits have originally come that we look for a per-
manent supply. The oldest stratified rocks are seldom auri-
ferous, even in the gold countries, but those next in succes-
sion, such as the silurian, devonian, and carboniferous Pe'
nods, contain large quantities of the precious metal. By
capital and machinery the gold is extracted by the process
of amalgamation. But in no country has this, upon an ave-
rage of years, been very remunerative. It is proved by the
statistics of gold digging that it is a profession unremuno-
rative, and that, while its ranks are recruited by young vo-
taries led away by the romance of the thing, they soon tire
quit it. This is why more gold is not being produced, as
the auriferous rocks are almost inexhaustible in the gold
countries. It is produced in limited quantities, because
it does not remunerate those who get it for their labour.
I think this is indirectly shown by the wanner
in which it impoverishes those countries in which it is
largely produced. I take Victoria, which, if not the largest
field of gold production, is certainly as large as any, being
about equal to California, some years exporting
more and
some years less. Before gold was discovered, the exports of
that colony were at least equal to the imports upon an ave-
rage of years, but after the discovery of gold they usually
fell very far short, one year as much as six millions. The
last year, 1860, of which I have the figures, shows the im-
ports at £15,622,891, and the exports (including the gold
produced) at £13,867,860, or nearly a deficiency of two mil-
lions against the colony. I admit that many of our colonies
exhibit a disposition to import more than they export, but
not in anything like this degree. Canada may be ci, ed as a
similar case, but it could be proved to be situated very dif-
ferently, its population being almost entirely agricultural.
We have the returns for 1860 given in the Exchange Maga-
zinc, vol. i., page 21, which we assume to be correct (but we
do not vouch for it officially), value of imports,
£6,888,324 ;
of exports, £6,926,360. So that even Canada is now export-
ing as much or more than she is importing. Gold neither
remunerates the country who produces it, nor the country
where it is produced. Most other branches of industry en-
rich the land where they are carried on—the timber trade of
Canada may be said even to do this, it is clearing the land
preparatory to cultivation, but the digging for gold tear up
the bowels of the earth ; they take not an annual return,
but the capital itself, and impoverishes rather than enriches.
The persons engaged in gold digging in
any of the gold
countries do not obtain fair remuneration for their actual
labour. In Victoria, in 1861, there were 233,501 persons
engaged in gold digging ; and at this date the number is
226,987. The amount of gold produced in 1861 was
2,072,359 ounces of gold, which is not more than about £35
a-head, not to give interest for the capital £1,511,012 in-
vested. The numbers who embark in the production of
gold are decreasing. It does not remunerate them. They
obtain more in other pursuits. So long
as gold is only
procured by paying full value for it, its production must
be but limited. There was a panic at the period
when gold was discovered in California and Australia; and
it was contended that gold would become cheaper, and those
who had fixed incomes, and money to receive at distant
dates, would be serious sufferers. Of course, the value of an
article is in proportion to its abundance, and even the cur-
rency of a country, which is the standard by which the
I value of every other article is measured,
is noexception;
but there are circumstances which must be taken into
con-
sideration, and in the case of geld it seems never to be ob-
tained in too great profusion, as the demand is apparently
always in advance of the supply. Before the increased
supply was obtained commerce languished, and social
progress was obstructed, in consequence of the
diminished quantity of the precious metals. The dis-
coveries in America and Australia came at a very
opportune period, when the railroad and telegraph
Systems, colonisation and the penny postage, called for an
enormous influx of the auriferous metal to aid this expan-
sion. To use a very vulgar expression, gold was the manure
which brought the great yield of prosperity. The supply was
increased, but the demand still kept in advance of the sup-
ply. It has aided the capitalist and the labourer's wages
alike—the profit to both is very great, not in England or
Europe, but over the world. In India, wages have risen (of
ordinary labourers) from 2,1 to is a day. There is a natural
affinity between the wages of labour and gold which has
not been pointed out. Wages have been advanced by the
increased supply of gold; and yet that very advance tends
to check the over-production of the precious metal ; for,
while wages rule the value of all other articles, it does that
of gold iu an especial degree, because the main element in
its production is labour only, with the exception of a very
small amount as the interest upon capital in those cases
where skilled machinery is used, and the land-tax or rent,
usually trifling, charged in the shape of a royalty. I think
that it does not follow that, because the gold has increased
in quantity, it must necessarily have decreased in value.
Gold is a non-perishable article, produced in extremely small
quantities, and is very different from any other article of a
perishable or ordinary character. It becomes, therefore, as I
have already said, a great accumulation of capital to be
stored up by men and nations for future emergencies. There
are ecoaomists who argue that because we have within the
last ten years added 100 millions to our stock of gold, that
it must have depreciated in value. But I contend in this
paper that it has not done so, and that it is not likely to do
so while the checks we have pointed out remain. Trade
and population both increase with the increased comforts
and facilities the gold has offered, and thus provide an out-
let for all the extra quantity which has been produced.
There are many who contend that an alteration in the value
of gold has already taken place, but I cannot see that such
is the case. I cannot see that between 1852 to 1862 they
have much increased in amount. Wheat is the leading article
or staff of life, and quote the highest and the lowest prices,
as given in the tables in the Estate Sales Gazette. I find in
the years between 1850 and 1851 the price ranged between
39s to 635; in 1856 it rose, and from that year to 1858 it
averaged frem 44s to 755, and from that date to 1862 it re-
mained almost stationary at 53s to 555. I may also state
the same principle applies to the other great articles of pro-
duction, such as tea, sugar, coffee, rice, wool, metals, &c. ;
of course cotton being
an exception. The prices, therefore,
of most articles do not indicate any alteration iu the value
of articles of consumption. The highest amount of bul-
lion held by the bank in the last ten years, ending with
1862, was on the 10th July 1852, when it was £22,232,138,
and the lowest was on the 18th November, 1857, when it
was £6,484,096. The gold does not appear to accumulate
there. It is not got for nothing. It has to be paid for. It
has gone to expand and foster commerce in every part of the
globe. It is true it has had to replace the silver currency
of France, which again has gone to India ; but this is, after
all, only a limited portion of it. In all parts of the world,
in England as well as in America, in India and China, and
indeed everywhere, more currency wao necessary. A vile
and vitiated paper had in many parts usurped the place of
gold, and commerce was liable to sudden fluctuations in
consequence. All this has been checked ; there is now a
currency something like commensurate with the require-
ments of commerce, and we now hoar of fewer violent
crises, which were formerly so common. Thus I find that
notwitla tending the increase of trade and the greater num-
ber of joint-stock banks, their issue was larger in 1854 than
in 1862; while that of the Bank of England was nearly
the same. If the increase in gold had not opportunely ar-
rived, I should have had to record many severe crises
calved by the use of debased currency. I have been led by
had toe
a careful consideration of the subject to arrive at the
opinion that credit has a very great influence upon
isl
our Comprlaasesre
prices. This is not to be much wondered at, when we take
tonftelif consideration how seldom in the actual business
cheques, draughts
gold payments are actually made, if specie
merc'talec.notainectoryunlitks:i
in every transaction, how limited would
transactions
ee
whi
which
. ar e Theo a
rvastriea amount enn
il to
upon
of
bills,th e
real transactions
The great benefit which the is
canF.,n
ghlaarnddl
creditberip p
irse ce i:etreyd-.
In a good com 'Op
that it has taken the
where visible—its influ
prices more equal. Before placeeoifncrease of gold has effected is,
greater than even gold itself.
a vitiated currency, and ren-
deredt
prices
ehthe increase of the precious
metals in 1848 and 1849
more
a tendency to fluctuate ;
yas.
Torheestationary aspect than
but since then they have had
thaw
ys ohfavwehbeaetenhafvoer
they have ever had previous]
been more stationary since 1858