The Sun.
London, England, 1851-11-08 00:00:00

ABUNDANCE OF GOLD.

The question as to the probable effects of an
abundance of gold is again in agitation. California
has thus far realised more than was expected by the
most sanguine, the product at the end of each year
having exceeded the highest estimate at the com-
mencement, and there are now indications of a
similar promise from the new regions in Australia.
A disposition, however, still prevails to believe that
no extraordinary changes in the relations of money
are impending. When the Californian mines were
first discovered it was admitted that if anything
like eight or ten millions sterling should annually
be produced for a series of years, there could be
no doubt strange effects would be witnessed. But
it was contended that instead of this continued
yield there would be a gradual decline after the first
year or two. The idea being now effectually set
aside, a new argument is adopted. The exports of
gold from California for the twelve months ending the
31st December, 1850, were equal, it is supposed, to
12,000,0001., while for the present year, judging
from the first nine months, they may be estimated at
15,000,000/. In the face of this supply there has
been no very observable disturbance in the measure
of value. It is therefore assumed that the aug-
mented quantity has been met by an augmented de-
mand, and that with the increasing traffic of the
world a like annual addition will henceforth easily
be absorbed.

This inference, although it is urged by some able
economical writers, appears altogether unsupported.
The only testa of the result of the increased supply
would be an alteration in the relative value of gold
and silver, or a general and unaccountable rise in the
prices of all articles. But the extensive displacement
of silver which has occurred in France, and which was
plainly foreseen, has prevented the first of these from
being available, except to a very limited extent, while,
with regard to the second, the changes in our com-
mercial system have been such as to produce a rapid
fall in all commodities far more than sufficient to
neutralize any moderate influences of an opposite kind.
Apart from free trade, moreover, there is quite
enough to account for the increased influx having
thus far produced no palpable manifestations. The
Bank of France at this moment holds 8,000,0001.
sterling in excess of what she possessed in 1849 ; the
extent to which hoarding both of gold and silver has
been carried on all over the Continent during the past
three years, and especially in Italy and throughout
the Austrian empire, his perhaps been unprecedented ;
a drain no less remarkable has been caused by the
Irish emigration, which has carried large totals to
western America, where much of it will long remain ;
and finally, there has been the return to India of a
great portion of that specie which was suddenly drawn
to Eoglard after the panic of 1847.
Exceptional circumstances exist, therefore, suffi-
cient to render it unnecessary to assume that an in-
crease i❑ the demand for gold has suddenly sprung up
to an extent such as steadily to absorb fifteen millions
per annum. The tendency of civilization is to render
needless the use of the precious metals for purposes
of barter, and although new colonies and settlements
for a time create fresh demands, there is no reason to
suppose that they more than counteract the econo-
mical influences elsewhere in progress. Even Cali-
fornia herself is not believed to have absorbed, in the
shape of circulation, more than two or three millions,
while on the other hand we have to bear in mind the
effects of extended banking accommodation and the
use of money orders, postage stamps, and other similar
contrivences, which are more or less being imitated in
every part of the world.
Hence we may still infer that previously to the dis-
covery of California the production of gold, increased
as it had been by the large supply from Russia, was
equal most probably to the annual demand ; that its
value is consequently liable to be reduced nearly to the
extent of the exports from California, and that such
reduction will of course be measured by the propor-
tion which the new supply may bear to the existing
stock. What the amount of that stock may be is
wholly unknown, but there can be little ques-
tion that fifteen millions per annum is not rela-
tively an insignificant addition to it. Some in-
vestigators have surmised that 400 millions is
about the total in circulation throughout the world.
If that can be taken as in any degree correct, it will
easily be understood that the Californian supplies
must soon make themselves seriously felt whenever
the condition of Europe shall cause the quantities now
eagerly secreted to return to active purposes.
But it is, after all, not a question of an addition
of fifteen millions per annum. If any reliance can
be placed on ordinary evidence, the production from
California alone is only likely to be limited by the
amount of populatio❑ able to reach the State and
the rapidity of the arrangements for obtaining ma-
chinery.
It is impossible to name any other reason
why the fifteen millions should not be increased to
thirty or sixty. No word of failing supplies has yet
reached us. On the contrary, the miners seem dis-
posed to welcome as many fellow-labourers as may
see fit to join them, and every one asserts that the
whole country is rich, and that as far as the present
generation are concerned it may be pronounced inex-
haustible. The old impression that gold is never
found in large or continuous quantities is wholly dis-
pelled, and scarcely any news could now arrive from
California, Bolivia, Peru, or Australia, that could
take the public greatly by surprise.
In the face of those circumstances it must be in-
jurious to encourage the tendency, always too strong
in the majority of minds, to believe that the old
routine of things is to go on as it has always gone.
It can do no harm to keep the possibilities of the case
constantly in view, so that people may learn gradually
and quietly to adapt their interests to whatever may
occur.

At the same time it may be questioned if the
changes destined to be produced will not be so
balanced in their operation as greatly to diminish
the relative disturbance among the various in-
terests that must be affected by them. On the 22d
February, 1849, the Times gave an outline of the
primary effects to be looked for from any striking
alteration of the relations between the precious
metals and property in general, and the subject has
been dealt with elsewhere and on other occasions
until the public have become familiar with it. But
although the fact is understood that real estate and
all properties the rent or charge for which can
be raised at will are secure from depreciation in
case of an increased currency, while the property of
annuitants, on the contrary, will be exposed to it,
there are a vast number of modifications to be taken
into account by which this course of affairs may be
singularly influenced. The impulse of many, when
they first glance at the question, is to sell annuities
and buy land. Others think justly, that railways,
steam-vessels, houses, machinery, &c., must be equally
or still more desirable. The march of progress, how-
ever, which has brought about the late discoveries
of gold must also bring changes that will affect in
some measure the fixedness even of these possessions.
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tant will be unable to rely upon the perpetuity of his in-
come furnishing him with an exemption from the ne-
nessity of vigilance, labour, or enterprise, the same
tate awaits most of those who are embarked in diffe-
rent investments. The alarm of one class, therefore,