The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1851-01-18

the effect OF those appre tensions upon the bills OF
exchange on England held by continental bankers.
tion may have contributed to the present state OF
the exchanges, and the relative price of the metals.
we think no one can doubt, If their production is to
continue al the same ratio, end IN the same pro-
portion to each other in 1850, that considerable
permanent change must take place., in the per-
msnent relative value Of the two metals and 2,
in the value OF the precious metals together in their
relauon 10 other commodities. The probability
and the consequences OF such results we will con-
slider separately.
Whatever doubt may exist as to whether the re-
in the price OF silver in England expressed
in gold or fall in the price Of gold on the Continent
EXPIRE ssed in silver, and the consequent fall in
the exchanges between England and the Cont
nen, have been caused by the altered proportion Of
silver and gold already produced and brought to
MARKET we think there can be no doubt entertained
that if their production is to continue for any num-
Der of years the same as il has been Ia 1850, when
not only the entire production of the metals was
nearly doubled, but when gold repre- sen,ed IS per
cent Of the whole, very considerable permanent
change must take place in the relative price Of the
two metals. But then, before we come to this con-
clusion, we have two questions TO determine. l.
Will the production OF gold continue at its present
rate Will the production of silver not also great
In the FIRST place, how hong Russia and California
will continue TO supply s1h4uantities gold they
have done in 1850, we wshd not venture to predict,
after all that has happened In the history Of mining
But this are bound to say AFTER carefully CEN
siderng all the evidence which has been furnished
as to the capabilities of California, after the expe-
rience which we have had of Russia for the last
two years, to say nothing of the accounts which
reach often Of other ne W sources for the pro-
duction Of gold, we think there 10 every reason to
expect, at least for some wears to come, supplies
equal least those of 1850. II such, thep, prove
10 be the case, and if the quantity Of silver produced
shall continue as stationary as it has done OF late
years, then there can be little doubt that closer
APPROXIMATION must take place between the two
metals. Admitting these premises, some have
argued against such a result, on the grounds
that larger supply OF gold would lead to more
extensive use of it-hrst, as circulating medium
Of exchange, and for banking purposes; and,
econd, tor the manufacture Of utensils, ornaments,
etc. But SO far, experience is against the sup
posed extension OF the use of gold for banking
purposes. On the contrary, It's being produced in
larp eI quantities, so as to risk the maintenance of
its value, has threatened its entire rejection from
some Of The largest commercial countries in Eu-
rope IL has already thrown upon the market, from
the Bank of Holland alone, the sum OF G4 250. 900,
held gold, Of which they have succeeded in sell
ing Gl, 10000, leaving f2 100000 yet to be dis
posed OF, as favorable opportunities offer. As to
the expecled extension OF the use of gold for ordi-
nary purposes, the only reason for such change
would be Its reduction of value Such an in
creased consumption would no doubt modify and
limit the reduction of price; but that is a condition
which,to some extent must precede The extension
oil its use.
But will the production of silver continue sta
tonay For II is plain that the mere increase of
the production Of gold will not necessarily alter the
relative price of the Two metals, but that such an
increase in The production OF silver may also take
place as will maintain the relative value pretty
much where 1t Is. This we think not altogether
an unlikely result That there will be very
tensive increase in the production OF silver, what
ever pay be the fate OF gold, we have no doubt.
Those who are al ali acquainted with the history
Of Me Xlco and the mining countries OF South Anne
RIGA, are we'll aware OF the great influence which
the price of quicksilver has exercised over the
working of the mnes and the quantity OF sllverpro-
duced from them. California promises 10 furnish an
nllmted supply OF this material, so important IN
mil ing. A letter from Mr. Burnett, the Governor of
California, has recently been published al Washing
ton, In which he SAYS" The quicksilver mine Of
New Almaden, within twelve miles of this place, is
valued at several mioss of dollars. In few days,
Mr. Forbes informs me, they Will have 70 relorts
ope ration and will extract 600 lbs daily, worth
nom $4,000 10 sS,U00-more than 100000 annual
ly This 10 only one of The several mines, but ii is
the largest" The effects OF this new supply OF
quicksilver are already beginning To be felt. We
hea- from The western coast OF South America that
console rattle quantities have already been received
there, that great reduction OF prce is expected,
and that already arrangements are being made,
boil there and in Mexico, 10 re open many mines
which have long been closed only on account OF
the high price OF quicksilver. The great demand
and the high price which have recently been ex-
peresced in Europe for silver, will, no doubt, fur
ther stimulate the production. Should this view
OF the subject prove correct, then, while there may
not be any very important change IN the relative
price of silver ana gold, there will, at least, be a
very large increase in the quanuiy OF both, and
consequently slow but certain reduction in their
Intrinsic value.
From The London Times, Dec 27.l
The Bsnk OF Er gland have announced, TO day.
an increase IN their rate OF discount, from "a 10
per cent. This measure was unexpected, and
markets
The rate has been "a per cent tor about thirteen
months, namely, from the I'D November, loi9;
previously 10 which, II had stood al three per cent
tor about year Judging from the last returns, as
compared with those for November, 1919, when
the rate OF "a per cent was considered expedent,
there were but slight signs 10 lead the public To an
ucIpate any change; but these returns only extend
up 10 the l4,h of December, and it is understood
that since that date a considerable decrease has
taken place In bullion. Then, however, reduc-
lion had been going on for three weeks, amount
ing, In the aggregate TO fi00, 900; and, although
this was not highly important, II was more so thaa
II appeared, because, under ordinary Crcum
stances, at this time there is always large and
steady increase.
In the returns for the week preceding the re-
duciiob 10 Il per cent in November last year the
bullion war 916,037, $50 On the 18th instant il
was only Ell 500 below that amount, the total
beng Els, s20. 100 The notes unemployed III
Nov. mbtr, 1919, were Ell OF 655 and IN the las
return they were slll az nigh "a el0 ,y0sS $50.
ltwIl be seen, therefore, thai the subsequent
duenun In the stock OF bullion duTiog he last few
DAY must nave been the cause OF the alteration
decided upon this morning.
The public will be aware that this reduction has
been ocossioned by the transmission of gold to
PaIIF, consequent upon the question being raised 81
the desirablensss ofaboishing that metal as legal
tender in France. The French merchants and
Others having payments TO receive in England
have called 10 the amount while IL is ia their powf
to get II coined; and the English houses with pay
mems to make in France, have been equally eagei
TO shr gold, to avert the possibility oi being r.
Quifp0 TO silver at premium. which would
be the case II the talked OF alteration should be
decided upon.
This beng the chief cause OF The move menl
which has been going on, il is easy to define it,
limiis In The hrst place, the dram upon Us can
only be- TO the extent OF the claims Of French ira
d,fs or Capitalists On this country, either IN the
shspe OF trade balances, credits, or convertible i'm
vesiments; end, IN the next, 1t can only continue
until the commission now sitting on the currency
question shall have issued their report II the de-
cisiop, about which little doubt is entertained not
~lbetending the panic IN PARIS, should be against
spy alteration then the whole movement will have