The southern press. [volume] (Washington [D.C.]) 1850-1852, 1851-03-18

Cincinnati Chronicle and Atlas, abiding TO a
speculation raised as to the effects likely 70 be
produced by the large increase oil gold from
California, and being, az he informs US, salts
fied that great misapprehens Exists as t 20 the
probable effects Of Califor gold upon tha
monetary transactions of the world. offers few
facts and observations in illustration of the po-
sition he assumes, viz, that there is "no danger
Of gold being materially deprecated as the stand
ard Of value, dc." Believing the subject to be
one OF interest to the readers of the Merchants
Magazine, and that its free and fair discussion
will tend to its calculation, we transfer the re-
marks Of the writer in the Chronicle to our
pages
"Unless ~ yield from the California mines
greatly exceed what appears probable, feel no
hesitation in saying, that there is no danger OF
gold being materially deprecated as the stan
dsrd of value and the idea OF its ceasng ut no
I distant day to be the standard of value, in con-
sequence Of it, reduction in price, is an extrava-
giant and wild Imagination. Upon the most re-
liable data, Mr.. Jacobs, person supposed to be
Of high authority in monetary matters, ertmated
the total coinage Of the world in 1880, at
f3l3OO0,OOO, or 1854 92O,0O0-an amount
less by f60O0O,O0O, or S290,40O,000 than the
supposed coinage of 1908 If we may suppose
that the present coinage of the world is only so
large as that supposed in 1880, to wit, 81 ,5l4,-
100000, it will readily be perceived that it will
require no inconsiderabIe increase of the pre-
cious metals to tell sensibly upon the existing
coinage.
" But it should be borne in mind that the
coinage Of the world does not by any means en-
brace the largest proportion of the total amount
of the precious metals. 1t does not embrace
probably, more than one-third If the coinage
Of the world be y ,514, 100000, we may estimate
the total value of the precious metals at $4544,-
76O. Is it likely that the yield of the California
mines will be large enough to tell materially on
this large amount of precious metals, when we
consider the continual loss to which they are
exposed from abrasion, ship.wreck, and other
casualties? In the connection with this view,
it may be as we'll to mention that few years
ago the Emperor of Russia threw one hundred
millions of dollars in gold, the produce Of his
Ural mines into the money Market and that
neither the currency of the world, nor the price
of gold, has been sensibly affected by it.
"But the misapprehension on this subject
arises chiefly from failure to consider that the
demand for the precious metals increase to a
very great extent, with the increase of their
supply. tis this principle which has kept up
in a great measure, the price Of these metals
notwithstanding their enormous increase conse-
quent upon the discovery Of America. And il
is this principle which will prevent the increase
consequent upon the discovery of the California
mines, from materially depreciating gold, even
although that increase should be much greater
than it is probable that it really will be.
"Mr. Say, in his excellent treatise on political
economy, estimates that while the increase oil
the precious metals consequent upon the discov-
cry of America was ten-fold, the reduction Of
their value was only four-fold. The reason
why the reduction of value was not commensu
rate with the increase of supply was that there
was cotemporaneous increase OF demand
THE costly objects that none but princes could
before aspire to possess, became attainable by
the commercial classes; and the increasing taste
for plate and expensive furniture created great
demand for gold and silver to be employed or
those Objects 1t is true that number of cir
cumstances conspired with the increased supply
of gold and silver to extend the demand fol-
them. The opening of route to the East IN
dies by the Cape of Good Hope, the general al
vance of Europe in civilization, and the discov
ery of the new world itself, exerted a materia
influence in extending the operations Of com
merce, augmenting wealth, and enlarging the
demand for the precious metals. The increase
of gold from California will be attended by cir
cumstances of similar nature. The establish
ment of the European race upon the shores oil
the Pacific, and the direct comm unication there
| by created with China and the Sandwich Islands
will widely extend the operations of commerce
and open new springs of wealth. If the Cali
| fornia mines, therefore, should increase the sup
ply of gold by ten-fold, we need not entertain
any uneasiness on the score of the metals be-
coming too much degraded to answer the pur-
poses of convenient commercial currency We
may safely conclude, from the results of former
experience that in that case it would not be
deprecated more than four-fold. Even with
that reduction of value, it would be much more
precious than silver, which is found to answer
very well the purposes of currency. The value
of gold, as compared with silver, may be stated
to be in Europe, about as l5 l-S to one, al
though according to Baron Humboldt, it is in
China only as IL Il to one, and in Japan only
as eight or nine to one. With the supposed re-
ductlon its value in Europe would still be to sill
yer as 81 to one.
But will the California placers and quartz
rock increase the gold Of the world ten-fold
answer emphatlcally, never. All the mines OF
America only effected such an increase of the
precious metals at a time when their amount
was at least ten times smaller than at present
Mr.. Jacobs estimated the total currency of Eu
rope in the 10th century at E33OOO,O0O, and il
was not probably much more at the period OF
the discovery of America. 1t is much easier
task to increase f33,00000O by ten-fold than
f3l3,O00,000, the present estimated currency OF
the world. 1t is not at all probable that the
California mines will do more than double the
supply of gold, in the next half century If
am right in estimating the total amount of gold
and silver in the world at $4,50O0O0,00O, and
the proportion of gold at one-fourth, or Sl,l25,-
100000, then it will require nearly fifty years
for the California mines to double the existing
supply of gold, even if they should yield the
yearly average Of $25,00o0oO, which is far be
yond what they have yet DONE Such an in
crease would not, probably, diminish the value
of gold more than 40 per cent. (if at all) dimi-
mutton which distributed over the period of hall
century, would amount to less than one per
cent. year, and would not be sensibly felt
"The products of all the mines of America
Europe, and Africa, during the sth century, are
estimated by Mr.. Jacobs at Ea70,00O,O00 or
$4,2l0, 900, andyet the total coinage of the
world at the end of that century, is only sup
posed by him to have been f3s70o0,0oO, or
$l,92l, 100000. What, may. be asked came OF