The Middlebury register. [volume] (Middlebury, Vt.) 1850-1882, 1871-09-19
Mioolebutg 3egister .
TUESDAY. SEPTEMBER 10. 1871.

TUESDAY. SEPTEMBER 10, 1871.
The Treasure Product of America and
its Influence upon Values in
tho World.
When America was discovered in 1902
the gold and silver supply of Europe did
not exceed $780, 100000, of which $780,
100000 was gold, and $40, 100000 was
silver. According to the estimates of
Humboldt, sixty years elapsed before
this aggregate Of two hundred millions
was doubled by the treasure product of
America. The gold, aud especially the
silver mines Of the Spanish American
states were exceedingly rich aud had been
already worked for hundreds of years.
This accounts for the large accession to
the treasure stock of the world so soon.
Twenty years after, in 1870, the stock of
the precious metals used for purposes of
exchange, in Europe had increased to an
aggregate of six hundred millions, mostly
the product of the American mines This,
according to the estimate of Adam Smith,
had the effect to deprecate the value of
the coin perceptibly, though the vast
amounts of bullion added to the currency
Of the world from the rich fields of the
newly discovered continent were largely
absorbed and the depreciation was so inn
perceptible and gradual that values Of
commodities remained nearly the same
for fifty years longer, when $500, 900, 900
more had been added to the stock Of mon
ey in circulation. In 1920 a great f.
nancial shock passed over Europe, and
silver fell to about one third of its former
value, or in other words, the prices Of
commodities appreciated to about three
three times their former value. Such
was the suddenncss of this financial revo-
luton that experienced financers, prophe.
sled return to former prices, after q
few months of this abnormal condition
But the revolution appears to have been
successful effort of the law of supply
and demand to regulate itself, after being
brought into false position by the influx
of the circulating medium to an extent
which destroyed the equilibrium of values
and representatives. There was, then
as at all other times, the oscillation, which
always attends radical change not only
in finances, but in public sentiment, fash
ion, prevalence of particular ideas, &C.,
from one extreme to another, then back
again, vibrating by less measures, until
the pendulum stops at the dead level of
absolute rest. But after the vibration
was passed, old prices had not been re-
gained.
Several such crises have passed since
that time, one within the memory of us
all, and it is referred to as "war prices"
"ante war prices" &C., in which case the
crisis was fastened by the war and the
change of prices as finally settled upon
since tho war, after the vibrations are
over, is less than it might have been if
the crisis had been deferred a few years
longer.
In the sixteenth century the world re.
oeived and assimilated three fold the
treasure supply of 1892 without material
change of prices until fifty years later an
aggregate amount Of 81 200, 900, 600 had
been applied to commercial uses. Mean.
while, though radical change had not
taken place because of the effort Of the
commercial world to maintain an even
ness of relation, there was general pre-.
paration for the crisis in the abnormal
condition Of financial relations, manifested
in reckless speculation and in unnatural
and unwarranted expenditures and waste
Of property. Then came the crisis. There
was general upheaval and panic. Strong
firms went down with a crash. Prices
went up aud credit went down. After
tho smoke and excitement had passed
away, everything went on again as usual,
but commodities brought three times the
price they had before. Since that period
there have been several such crises but
all Of less Importance, if we estimate re-
suits. The aggregate Of them all will on.
ly amount to about one hundred per cent.
Since the period named the amounts of
bullion annually produced and put into
circulation have increased. In 1S4S it
was S8,500,000,00O and if the same ra-
ito Of increase in product be continued
in 1880 we shall have double that amount.
But the effect of these additions does not
correspond with the supply, for the COM
nercial enterprises of the world are on
grander scale, absorbing the specie pro.
ducts to large extent. Besides nations
not heretofore using it as a medium OF
exchange to any considerable extent, are
coming more and more to employ this
agency, and it will DO long time before
the money supply of China, which is now
only from 81 to SO per capita, will come
TO equal that of France which is s24 per
capita. When We allow for the ABSORB.
ton OF money as above referred to, we
need not be alarmed for its further de-
probation in value, though the history of
the past leaves us to infer that we must
expect it even, though other influences
than such rs were in operation in the six.
teenth century may prevent rapidity of
depreciation which characterized that Pc
Rod.
And most of this influence has flown
from the yield of the precious metals in
America. The other gold fields of the
world have sunk into comparative insig.
ni6cance, by the side of the rich mines
Of America. And it may be safely in.
ferred, that, now the product has become
regular, the effect will be much less upon
the marketable values of commodities,
than when on this sudden discovery of
America and the unexpected throwing of
large quantities Of the circulating mcdi.
um upon the limited gold markets of Eu-
rope and countries using it as medium
Of exchange, the commerce Of the world
had less power of absorption than now.
Hence we need not be solicitous about
the great product Of the precious metals,
and their effect upon commercial values
The effect must be small and unimportant
In any one generation hereafter. if not