The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1852-07-13
THE GREAT AUSTRALIAN MOVEMENT
IN GREAT BRITAIN.
Effects Of the California ard Australian Gold
Discoveries on the Commerce Of the World.
The Emigration Mania in England,
Scotland, and Ireland,
Sc &c. Sc

TIE EFFECT OF THE CALIFORNIA AND AUSTRALIA
GOLD DISCOVERIES ON THE CURRENCY AND VALUE
or PROPERTY.
IRON the London Times June rs
The considerations which, three years ago, were
almost derded as to the probable effects Of the i'm
creased supply Of gold, are new assuming prepon-
derance over all other subjects. The anxious pause
Of curiosity is latent but it is nevertheless felt by
every one and it is easy TO understand why it has
not hitherto been more decidedly expressed. The
land owners do not care to the full extent of
their hopes, and to stimulate cry from the annui
tant class for preventive meddling. That class
on the other hand, together with the much larger
body who dislike everything that upsets routine
and necesstates thought, endeaver to pursuade
Themselves into indifference. Their original dis
belief having been forcibly overcome, they seek
refuge in the conclusion that fresh uses for the
precious metals will prevent any alteration Of value
The remaining class. consisting Of ordinary men of
business, who are not affected by the bias of either
the landlords or the anuuitants, hesitate to discuss
a subject which they have no time to work out and
which nevertheless, they expected to be per-
fectly clear. Under these circumstances, although
il may involve repetition Of former statements it
viii be useful to review the general bear
iDgs of the whole question.
To arrive at an exact solution it would be neces-
sary to ascertain the amount Of gold and silver in
the world, and the present annual consumption for
coinage and the arts This is impossible and con-
jccturalquantites must consequently be taken The
total OF coin has been guessed at G400 900 000 or
this ESQ 600 600 may be assumed to be gold, and
ESQ, OOO.0O0 silver. The annual consumption of
gold is believed to be under CT, 000, 900.
Starting with these figures, If the demand for
gold were likely to continue limited to its ordinary
amount, estimate of the effect of the supplies
now pouring upon us could easily be formed. Those
supplies within the few years since the discovery
of California have probably in the aggregate Left
us excess Of upwards Of ESQ goo 900 over what
has hAherto been found sufficient for current wants,
and to maintain an equilibrium in the general re-
lations Of property The increase, therefore, has
been equal to twenty per cent the whole sum in
existence; in other words, the measure of value
would appear to have been extended one-ffth Gust
as twenty-five inch measure were extended to
thirty inches and hence the effect to be looked for
is obvious Where gold is the standard, the price
OF every article adjusts itself to the relation it bears
to that metal. If soyereigns were twice as nume-
rous, man would demand two where he now takes
one An increase of twenty per cent in the supply
should, therefore, have been followed by proper
tonate advance in the nominal value of all things.
But signs are wanting of any such general adj
vance ii is necessary therefore. to inqlire-frst,
whether any absolute test is available by which
the change can be shown to have taken place in
some one instance, although it may have been coun-
teracted in Others and next, if this be impossible
whether the apparent anomaly can be explained on
different grounds.
The most direct test would be sought in the price
of silver, that article next gold having hitherto
been the least liable to variation. But il was long
ago pointed out that in those countries where gold
and silver constituted equally legal tender, one
metal, as it became moro abundant, would displace
the other, and that the surplus of gold would thus
be reduced, and large amount of disengaged silver
be thrown upon the bullion market in its stead
Previous to the Californian discoveries silver was
the circulating medium, both in France and the
United States. because since the periods when the
double standard fixed in those countries it had
increased rather rapidly than gold and all per-
sons having payments to make selected it, therefore,
the best medium. Its relative cheapness in
France, however, as compared with gold, was less
than per cent, while in America it was merely
ha, he Ca1;r Ia.
forward, the difference disappeared and silver
would have become relatively much the dearest but
for the displacement which then, ofcouse occurred
When 100 francs in gold instead of being worth l02
francs in silver, fell in value to fraction below 100
francs in the latter metal it became forth with more
profitable to make payments in gold, and to sell sill
yer at the market price for expectation. In this
way large infusion of gold took place in France,
while in the United States it absolutely became the
most common circulating medium. Thus, the effect
of the supplies Of gold has not been limited to
that metal, but has been difused over gold and sill
yer, and hence, instead of being equal to 20 per
cent, which would have been the case if the ESQ.,
000 900 Of gold had alone been in question it has
been only Il per cent from being spread over the
entire E400, COO 600 of gold and silver.
By recognition of this fact, all surprise at the
absence of any very striking disturbances up to the
present time is removed. There is quite enough to
warrant the assumption that influence operating
on one side to the extent of q per cent has been
partially rendered impercepibe by the force of cir
place there have been the effects of increased pro-
duction from free trade and free navigation, the
latter OF which, combinedwith railroads, have
ed large amount of goods that would otherwise
have been in store or in rapStu to find its way to
market. Next, it is impossible to estimate what
may have been the extent Of boarding in Germany
and Italy; and, lastly, there remains to be taken
into account the uniform tendency to fall in prices
consequent upon the march OF invention and the
simplifcation of labor
We have now, however, to consider the future.
So long there is any silver, to be supplanted in
countries where, owing to the existince of double
standard it is optional for the debtor to pay either
in gold in silver, the effects of the increased pro-
duction will continue to be extended to both metals
and consequently, if the surplus of gold this year
should be, as has been estimated, EDS 900 000 its
influence on prices could be but seven per cent.
But the period must rapidly approach when the dis
placement of silver will have ended, and when the
changes brought about will be upon gold alone In
France the existing amount of silver is still doubt
less very large but this is not the in the United
States and the proposed law by which the coins be-
low a dollar to be deterorated 6.9l per cent will
prevent for the present any action upon that portion
of the stock. In Germany the debased state Of the
silver coinage will likewise for long time preserve
IL from displacement. In Holland silver has been
already established as the standard, and cannot
therefore be driven out. With regard to Eastern
nations il is difficult to form any estimate. On the
WHOLE however we may infer the possibility of he
displacement process still occupying three four
years, and that during that time, therefore, the eff
fects to be produced will be spread, as they have
thus far been, over both metals.
At the end of that period the consequences will
be felt by gold alone and the relations of property
measured by gold Standard will proportionably
exhibit a more rapid disturbance. At the time
it must not be overlooked that the increase of
gold each year will have meanwhile diminished the
per centage OF alteration which would otherwise
take place. For instance, the total amount Of gold
in the world, which is assumed at ESQ 900 900,
would then possibly be G250, O00, 900, and pro-
duction which, operating upon the first sum, would
rise in prices Of ten per cent would, under
those circumstances, cause only additional rise
Of six per cent This is feature Of great import
ance in the whole question, because it will con-
tsntly tend TO counterfeit that increasing ratio Of
disturbance which might be anticipated if the
supply Of each succeeding year should prove larger
and larger 1t is likewise to be borne in mind that,
with diminution in the purchasing power of gold,
there will be proportionate diminution in the in
ducement to seek it. If the quantity of gold were