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 http://www.archive.org/details/cu31924030185197 
 
From the Morning Chronicle of 28th July 1853. 
 
 THE 
 
 NEW SUPPLIES OF GOLD 
 
 FACTS, AND STATEMENTS, relative to their ACTUAL 
 
 AMOUNT; AND THEIR PRESENT and PROBABLE 
 
 EFFECTS. 
 
 Revised Edition, with Five Additional Chapters. 
 
 BY 
 
 WILLIAM NEWMARCH. 
 
 LONDON: 
 
 PELHAM RICHARDSON, 23, CORNHILL. 
 
 1853, 
 
 Four Shillings. 
 
6 ' i-'fi 
 
 A» 12. 
 
 7777 
 
 J. CLAYTON, ^PBINTEE, 
 CRANE COURT, FLEET STREET, LONDON. 
 
 
P HEFACE. 
 
 It was no part of the original design, that the 
 following Paper should be re-printed as a pamphlet. 
 A desire, however, expressed in several quarters,^ 
 for its appearance in a separate form, has led to 
 the present Edition. 
 
 The whole Paper has been carefully Revised; and 
 in some places, I hope, improved : a few additions 
 have been made to the text ; and the section on the 
 Influence of the New Gold on the market value 
 of Land and Houses (see page 81), has been wholly 
 rewritten. 
 
 For the materials of the new and interesting Table 
 (pages 91-92) in the first; — and for the Memoranda 
 embodied in the second ; — of the Additional Chapters, 
 I have to express myself greatly indebted to the 
 Governor of the Bank of England (J. G. Hubbard, 
 Esq.): and indebted, not simply for the information 
 and statistics contained in those chapters, but also 
 for several valuable suggestions. 
 
iv PREFACE. 
 
 Having once begun to increase the size of my 
 re-print by further topics and statements, I was led to 
 avail myself of a series of calculations just completed, 
 and relating to the Circulation of Bills of Exchange 
 during the Five Years, 1848 — 52; to introduce the 
 second and third of the Additional Chapters : and the 
 facts and estimates they contain, may be described, as 
 not the least important portion of the book. 
 
 I am unfeignedly sensible, of the very imperfect 
 nature, of the endeavour now made to elucidate a 
 large subject. But I think I may assume that, at 
 least, the Method pursued, is the true one. If we 
 can obtain a sufficient number of Facts, the Theories 
 may safely be left to take care of themselves. 
 
 Globe Insurance, Comhill : 
 
 London: I6th Atigtut, 1853. 
 
CONTENTS. 
 
 PAGE 
 
 INTRODUCTION 1 
 
 I. — Stocks, and Annual Production of Gold and Silver. 
 
 1. Quantity of Gold and Silver previouB to 1848 3 
 
 2. Annual Production of Gold and Silver previous to 1848 . . 6 
 
 3. Production of Gold in California, 1848—1853 7 
 
 4. Production of Gold in Australia, 1848—1862 8 
 
 6. Total Production of Gold in California and Australia, 
 
 1848—63 ; 11 
 
 6. Production of Gold in California and Australia — January 
 
 —May, 1863 12 
 
 II. — Application of the Nkw Supplies of Gold raised 
 from 1848 to 1852. 
 
 1. Mint Legislation of the United Kingdom 13 
 
 2. Mint Legislation of Franco, and the United States 14 
 
 3. Statistics of Coinage of the Hoyal Mint to May 1863 — 
 
 Coin sent to Australia 16 
 
 4. Statistics of the Coinage of France, and United States to 
 
 1862 17 
 
 6. Comparison of tlie Total Becent Coinage, with the Total 
 
 Recent Production, of Gold IS 
 
 III. — Facts connected with the Effects already produced 
 hy the New Supplies of Gold : — and First, as to the 
 Effects produced in the United Kingdom on the Rate 
 of Interest ; and on the Supply of, and Demand for. 
 Capital, 
 
 1. Order of Inquiry 20 
 
 2. Condition of the Reserves and Private Securities of the 
 
 Bank of England— Jan. 1851, to June 1863 20 
 
 3. Questions connected with the Price of Silver in London in 
 
 1861-1862.— Remittances of Silver to India 22 
 
VI CONTENTS. 
 
 PAGE 
 
 4. Rise in the Price of Silver in Paris in 1850.— M. Faucher's 
 
 Explanation 24 
 
 5. Increased Production of Silver since 1848.— FaU in the 
 
 Price of Quicksilver. — M. Paucher's Statistics 30 
 
 6. MetaUic Reserves, &c., of Bank of France, 1848—1852 ... 32 
 
 7. Circulation of Banlc Notes in the United Kingdom, 1848 — 
 
 1853 32 
 
 8. Alterations in the Rate of Discount, 1851 — 53 35 
 
 9. State of the Foreign Exchanges, 1851—1853 41 
 
 IV. — Facts connected with the Effects already produced 
 by the New Disoovbeies on the Prices of Commodities, 
 and the Wages of Labour, in this Countrt. 
 
 1. PricesofThirty-EightCommoditiesinLondon, 1851— 1853 43 
 
 2. Rise in the Wages of Labour — Statistical Evidence 49 
 
 3. Increase in the Export Trade — General Results 50 
 
 V. — Facts connected ■with the Effects, already produced by 
 the New Supplies of Gold, on the Condition and 
 Trade, of the Australian Colonies. 
 
 1. Immigration, and Licenses to Gold Diggers 52 
 
 2. Price of Gold : Rate of Exchange on London ; and Rate 
 
 of Interest at Sydney and Melbourne, 1852-1853 55 
 
 4. Condition of the Banks of New South Wales and Victoria 
 
 1851-1852: — Circulation, Deposits, Advances: — In- 
 fluence of the Low Rate of Interest 56 
 
 5. Imports and Exports of Victoria, 1850—52 59 
 
 6. First Effects of the Gold Discoveries on Prices in Mel- 
 
 bourne 61 
 
 VI. — Inferences from the Facts now brought forward. 
 
 1. Preliminary Observations 64 
 
 2. Impressions generally entertained relative to the Effects 
 
 of the New Gold 65 
 
 3. Extent to which the New Gold has, in this Country, been 
 
 added to the Circulation : — Increased Requirements for 
 
 Coin and Bank Notes 66 
 
 4. The same Inquiry as regards France and the United 
 
 States — General Results 69 
 
 5. Operation of the New Gold on the Rate of Discount 70 
 
CONTENTS. Vil 
 
 PAGE 
 
 6. Effects of a Reduced Eate of Discount : — Increased 
 
 Requirements for Capital 71 
 
 7. Influences which may permanently raise Prices 72 
 
 Vn. — Speculative Questions relating to the Future probable 
 Effects of the New Gold. 
 
 1. Statement of some of these Questions 73 
 
 2. Effect of Increased Demand on Production and Prices ... 75 
 
 3. Influence on Debtor and Creditor Contracts, and on Fixed 
 
 Incomes. — Necessary Qualifications of the Inquiry. ... 77 
 
 4. Effects as regards the Amount of Capital required 80 
 
 5. Effects on the Value of Land and Secxirities — Special 
 
 Circumstances 81 
 
 6. Mitigation of the Effects of a Bad Harvest 85 
 
 VIII.— CONCLUSIONS 87 
 
 ADDITIONAL CHAPTERS. 
 
 (A) — Analysis of the Cikculation of Bank of England 
 
 Notes— June 1849, 1851, 1853 91 
 
 (B) — Additions to the Quantity of Gold Coin in 
 the United Kingdom. — Quantity of English 
 Gold Coin derived from the Melting of 
 American Coin 94 
 
 (C) — Amount of the Funds employed in the London 
 
 Money Market 96 
 
 (D) — Circulation of Bills of Exchange for the 
 Twenty Years 1828-47 — With a Continuation 
 for the Five Years 1848 — 52 107 
 
 (E) — Gold Coin in Circulation in United Kingdom. — 
 
 Coinage 1800 — 50 120 
 
THE 
 
 NEW SUPPLIES OF GOLD. 
 
 Introduction. 
 
 IT is now Five Years since the first discovery of Gold in California, 
 and Two since its discovery in our own colony of New South Wales ; 
 and a period has arrived when there is reason to believe that some of 
 the permanent, as distinguished from the merely temporary, conse- 
 quences of those great events have begun to manifest themselves : — 
 In this counti-y we have seen the Reserves of Bullion in the Bank of 
 England accumulate rapidly beyond all former precedent, and then 
 diminish; and although the diminution has been by no means 
 unexampled, it has taken place in a manner, and to an extent, which . 
 are certainly remarkable, when the surrounding circumstances are 
 considered. We have seen, also, a curious and important change in 
 the Rate of Discount. A year ago, the extreme depression of the 
 rate of discount ; and, to some extent, of the rate of interest also ; 
 was a topic of general remark : and with those whose profits or in- 
 comes are derived from the employment of money capital, it was a 
 subject of no small anxiety as regarded the future. Six months 
 afterwards, a change occurred in the direction of advance: and that 
 change has become more confirmed with the lapse of every month. 
 At a very recent period, the country was disposed to think that one 
 of its greatest inconveniences was its large and rapid accumulation 
 of capital : — an accumulation supposed to be in process of swift, 
 excessive, and indefinite increase, owing to the produce of its gold 
 colonies. That opinion, however, is now much modified, and does 
 not meet with so ready an acceptance. During the present year, 
 we have begun to trace a palpable rise in the Wages of Labour ; and 
 
 B 
 
2 Iniroduction. 
 
 we have witnessed a rise ; or a tendency to rise ; in tne market 
 value of classes of commodities which are important either from the 
 magnitude, or the multiplicity, of the articles which compose them. 
 We seem to have already reached that stage in the process of 
 distributing the produce of the gold-fields both of Australia and 
 California; at which this country — and, practically speaking, the 
 Bank of England, as, in these operations, representing this country 
 — has ceased to be the central and, more or less, fixed place of 
 deposit of the new gold in its progress from the regions of its 
 production, to those commercial countries, in which it wiU most 
 readily, and with most advantage, command other objects of wealth. 
 At present this country is rather a channel of transit, than a place of 
 lodgment, for the new gold. 
 
 These are a few of the reasons which appear to authorise the sup- 
 position that what may be called the purely transient consequences 
 of the Gold Discoveries: — that is to say, the early and incidental 
 disturbances, moral and material, arising from the first shock which 
 they occasioned : — have in a great measure passed away : and have 
 been replaced by a commencement of those greater, and more funda- 
 mental changes, by means of which the New Gold will, more or less 
 rapidly, modify the commercial and social relations of the world. 
 It is extremely desirable, however, that we should not generalise 
 too hastily on a subject where facts are so few, and sources of 
 error so plentiful; and it is especially important that we should 
 not permit the magnitude, or the interest, of the events under dis- 
 cussion, to confuse and obscure our reasonings on those points and 
 details of the case, respectilig which we happen to possess adequate 
 evidence. > 
 
 Entertaining theSe views, we shall endeavour to trace vdth some 
 degree of care, first of all, the Facts of the question ; and having 
 satisfied ourselves as far as possible with reference to the data 
 which admit of being stated with a degree of certainty : we shall 
 then endeavour to ascertain the present aspect of those Reasonings 
 and Theories respecting the Future, to indulge in which there is so 
 6ti-ong and natural a tendency. 
 
 In the first place, then, as to the Facts : — 
 
Quanflties previous to 1848. 3 
 
 I. — Stocks, and Annual Pkoduction of Gold and Silver. 
 
 (1) atTANTITY OF GOLD AND SILVEK PKEVIOUS TO 1848. 
 
 It will be readily understood that, in all reasonings and specula- 
 tions on the actual, or future, effects of the new gold discoveries ; it 
 must be a primary object to form a proximately correct opinion, 
 as to the Quantities of Gold and Silver existing in various forms, in 
 the commercial parts of the world, immediately before the dis- 
 covery of the Califoniian supplies. If we know, with some degree 
 of exactness, the quantities of the precious metals to which the 
 additions have been, and are being, made ; we may, perhaps, 
 discover means of estimating the effect of those additions on the 
 value of the pre-existing quantities ; and, in the absence of such 
 knowledge, our speculations can be little more than efforts of 
 imagination. 
 
 Now, although there is no accurate statistical statement to be 
 obtained of the quantities of gold and silver existing in the com- 
 mercial parts of the world — that is to say, in Europe and America — 
 at the commencement of the year 1848 : certain results have never- 
 theless been arrived at by the researches and discussions of compe- 
 tent authorities : and those results are entitled to considerable 
 attention. They are undoubtedly no more than approximate state- ' 
 ments : but they are statements which, under all the circumstances, 
 we may safely adopt as the basis of our subsequent reasonings. 
 
 As regards the quantity of gold and silver produced in North and 
 South America from the time of the discovery of Columbus to the 
 year 1 848, the evidence and statistics connected with that interesting 
 question have been investigated by Mr. Danson, in a Paper which 
 forms one of the most valuable contributions to be found in the 
 series of the Statistical Journal (see vol. xiv. 1861). The results 
 of Mr. Uanson's researches are entitled to great confidence ; and, 
 for practical purposes, we may regard the conclusions at which he 
 Jias arrived respecting the American supplies as those which in the 
 present inquiry ought to be accepted. 
 
 ' In the foUoyifing Statement, we have endeavoured to compile, from 
 various portions of Mr. Danson's Paper, such figures as will readily 
 convey an idea of the quantities of gold and silver obtainsd 
 
 B 2 
 
4 
 
 Production, 1492—1848. 
 
 in America down to two periods— viz., 1 803, and 1 848. The periods 
 taken, therefore, will he from 1492 to 1803 (or 311 years) ; and 
 from 1492 to 1848 (or 356 years). It will he seen also that, from 
 the total quantities obtained, certain deductions are made ; so as to 
 show the quantities of gold and silver, the produce of America, 
 existing in various forms in Europe and America in 1 803, and also 
 in 1848. 
 
 The Statement is as follows : — 
 
 RESULTS COMPILED 
 
 PEOM 
 
 MR. DANSON S 
 
 PAPER. 
 
 
 
 Total Quantity obtained in J 
 North and South. America J 
 from the year 1492 ) 
 
 Silver. 
 
 Gold. 
 
 Totals. 
 
 1803. 
 
 Mill. 
 £ 
 831 
 
 1848. 
 
 1803. 
 
 1848. 
 
 1803. 
 
 1848. 
 
 Mill. 
 £ 
 1080 
 
 Mill. 
 £ 
 291 
 
 Mill. 
 
 £ 
 433 
 
 Mill. 
 
 £ 
 1122 
 
 Mill. 
 
 £ 
 1513 
 
 Deduct for wear and tear, and" 
 casualties, on stock of gold 
 and silver in use in North 
 
 , and, South America, say J,)- 
 per cent, per annum, 1492 
 
 - ■ — 1803 : and f per cent, per 
 annum, 1803—1848 _ 
 
 Deduct for Quantities sent J 
 from America, elsewhere > 
 than to Europe, since 1492 . ) 
 
 Leaving, as existing in various* 
 forms in Europe and North 
 and South America, of Gold \ 
 and Silver, the produce of ' 
 North and South America 
 the following quantities. .._ 
 
 7 
 
 19.2 
 
 1 
 
 2.4 
 
 8 
 
 21.6 
 
 824 
 24 
 
 1060.8 
 40 
 
 290 
 2.6 
 
 430.6 
 4.5 
 
 1114 
 26.6 
 
 1491.4 
 44.5 
 
 800 
 
 1020.8 
 
 287.4 
 
 426.1 
 
 1087.4 
 
 1446.9 
 
 Note. — ^In this table piastres and dollars are converted into sterling at an 
 approximate exchange of 5 per £. 
 
 From other sources, and by the researches of other inquirers, 
 results similar to those obtained by Mr. Danson, with respect to 
 America, have been obtained as regards other parts of the world j 
 and, collecting all the data together, we are able to construct the 
 following statistical estimate ; and although the figures which it 
 contains are few, they have been arrived at by no means easily : 
 
Stocks of Gold and Silver, 1848. 5 
 
 Table I. — Estimate of the value of the Total Quantity of Gold and Silver 
 existing in various forms in Europe and America at the commence- 
 ment of the Year 1848, subject to certain deductions hereafter pointed 
 out : — 
 
 Silver. Gold. 
 
 £ £ 
 
 The Prodlice of Millions. Millions. 
 
 America 1,021 426 
 
 Europe 80 25 
 
 Russia 13 44 
 
 Africa and other places — 100 
 
 1,114 595 
 
 As existing a.d. 1500 28 12 
 
 1,142 607 
 
 Total Millions £1,749 
 
 From this total sum of 1,749 Millions Sterling, it is clear that a 
 very large deduction must be made : — (I) for exportations to Asia; 
 
 (2) for the vyear and tear of coin, gilding, ornaments, &c. ; and 
 
 (3) for losses by fire, shipwreck, and other casualties. There are 
 no means of forming more than very vague conjectures as to the 
 proper amount of these deductions. As far, hovyever,- as such con- 
 jectures have been formed, they point to the following results : — 
 
 Silver. 
 
 £ 
 Millions. 
 
 Gold. 
 
 £ 
 Millions. 
 
 Total. 
 
 £ 
 MilUons. 
 
 350 .. 
 
 50 . . 
 
 .. 400 
 
 Deductions referred- to above 
 
 Leaving 792 557 1,349 
 
 as the respective amounts of Gold and Silver existing in various 
 forms in Europe and America at the commencement of the year 
 1848: — or immediately prior to the influx of the Califomian 
 supplies. 
 
 There can be no question of the existence of large accumulations 
 of the precious metals in various parts of Asia ; — in India, in China, 
 and in Central Asia, for example ; but as far as immediate com- 
 mercial effects are concerned, these accumulations may be almost 
 disregEirded. They constitute large inert masses, which will be 
 impervious for many years to come to the influences which already 
 agitate profoundly, both Europe and America. 
 
 It is not necessary to refer at any length to the figures of the last 
 
6 Annual Produce, 1800 and 1848. 
 
 Table ; and it may be sufficient to point out the comparatively ^mall 
 amount of gold and silver existing in Europe in the year 1500— or 
 at the discovery of America. 
 
 (2.) ANNUAL PRODUCTION OP GOLD AND SILTEE PREVIOUS TO 1848. 
 
 With a numerical statement before us of the quantities of gold 
 and silver in Europe and America in the early part of 1 848 ; the next 
 step is to ascertain vphat were the annual supplies at that time. 
 Knowing the total stock, we next want to know the annual supply 
 required to maintain its value at something like an uniform level; 
 and this inquiry is answered, as far as it can be at present, by the 
 following Table (ii.) — the result, like the preceding one, of the 
 labours of many inquirers : — 
 
 Table II. — Estimated Value of the Annual Quantities of Gold and Silver 
 placed in the Markets of the World in the Year 1800 : and in the early- 
 part of the Year 1848: — in Millions, and Decimals of millions sterling. 
 
 The Produce of 
 
 Silver. 
 
 Gold. J 
 
 1800. 
 
 1848. 
 
 1848. 
 
 1800. 
 
 1848. 
 
 1848. 1 
 
 Less. 
 
 More. 
 
 Less. 
 
 More. 
 
 Amprip.f^ . , 
 
 MiU. 
 7 
 
 .56 
 
 .20 
 
 MiU. 
 6.20 
 
 1.32 
 
 .21 
 
 1 .90 
 
 MiU. 
 .80 
 
 MiU. 
 
 .76 
 .01 
 
 .82 
 
 MiU. 
 1.92 
 
 .14 
 
 .09 
 .28 
 .66 
 .18 
 
 MUl. 
 2.10 
 
 .36 
 
 4.10 
 .55 
 
 } 2.80 
 
 MUX. 
 
 MiU. 
 .18 
 
 .22 
 
 4.01 
 .27 
 
 1.97 
 
 Europe, excluding ) 
 Russia, but includ- ! 
 ing Turkey ) 
 
 Russia 
 
 Afrif'a 
 
 .08 
 
 Archipelago of Asia . . 
 Various other Sources. 
 
 Totals 
 
 1848 over 1800, More . . 
 
 Per Centage on total \ 
 stock existing in / 
 Europe & America ( 
 lnl848 ; 
 
 7.84 
 
 8.63 
 
 1.80 
 
 1 
 
 1.59 
 
 1 
 
 3.26 
 
 9.91 
 
 t 
 
 6.65 
 1 
 
 p. et. 
 1. 
 
 p. ot. 
 1.09 
 
 £79 
 
 ),000 
 
 p. ct. 
 0.6 
 
 p. ct. 
 1.78 
 
 £6,6S 
 
 0,000 
 
 We have, in these figures, the state of the annual supply not 
 merely in 1848, but half a century previously, or in the year 1800 ; 
 and it is important that the facts with respect to each of these two 
 periods should' be carefully examined. The leading points of the 
 comparison are:— that while the annual supphes of silver had in- 
 creased only 10 per cent.: the annual supplies of gold had increased 
 
Calif ornian Gold, 1848 — 52. 7 
 
 more than 200 per cent. It may be admitted that, during the in- 
 terval, some change had taken place in the value of gold as com- 
 pared with silver ; but the constancy of the relative value of gold 
 and commodities justifies us in concluding, that an increase in the 
 annual supply of that metal, from 3^ millions sterling in 1800 to 
 10 millions sterling in 1848 ; had not been greater than was required 
 by the wants of the expanding commerce, and growing population, of 
 the world. 
 
 In 1848, the annual supply of New Gold was at the rate of less 
 than 2 per cent, on the total stock of that metal then existing in 
 Europe and America ; and the annual supply of New Silver was at 
 the rate of more than 1 per cent, on the corresponding total stock 
 of silver. 
 
 (3). PHODUOTION OF GOLD IN CALIPOKNIA, 1848— 185S. 
 
 In 1848 began the Californian supplies ; and in May, 1851, gold 
 was first found at Bathurst (New South Wales), and in October of 
 the same year at Mount Alexander (Victoria). We have to ascer- 
 tain, therefore, the extent of the changes which have been produced 
 by these events in the annual supphes of the metal since 1848. 
 
 As regards the produce of the Galifornian mines down to the end 
 of 1852, we possess tolerably accurate means of framing a return; 
 and in the following Table we have availed ourselves of such official 
 papers from the United States as were necessary for presenting the 
 general conclusion in the shortest and simplest form : — 
 
 Table III. — Statement from Official Sources of the Deposits of Gold-Dust 
 and Bullion, the produce of United States Territory, at the Four Mints 
 of the United States (New Orleans, Philadelphia, Charlotte, and Dah- 
 lonega), during the Five Years ended Dec. 31, 1852 : converting dollars 
 into sterling at iive dollars per £. 
 
 Years ended 31st Deo. £ 
 
 1848 - 8,800 
 
 1849 1,229,500 
 
 1860 7,213,000 
 
 1851 11,187,600 
 
 1862 10,806,700 
 
 £30,445,600 
 
 Note. — ^There seems to be good reason to believe that the total produce of 
 gold in CaUfornia during the five years ended December 31, 1852, was about 
 
8 
 
 Produce of Australia, 1851-52. 
 
 £10,000,000 more than the preceding amornit : or was equal to about forty 
 •mUKons sterling. Messrs. Hussey, Bond, and Co., of San Francisco, in an 
 intelligent circular, dated July, 1852, furnish estimates -which appear to 
 lend great support to the substantial accuracy of this general result. ^ The 
 deposits at the United States Mints are ascertained facts ; but, in addition to 
 the gold-dust and bullion deposited at those mints, there were :— (1) the 
 quantities exported direct to Europe, South America, ajid other places ; 
 (2) the amounts carried &om California by passengers to foreign countries ; 
 and (3) the amounts retained for circulation, and as hoards in California 
 itself and the immediately surrounding region. 
 
 (4). PRODUCTION OP GOLD IN AUSTKAIIA, 1848 — 1852. 
 
 The preceding figures answer our inquiry as regards California, 
 As regards Australia, we have resorted to the Blue Books of 
 Colonial Correspondence already published by Parliament ; and, after 
 comparing and collating with some care the statistics to be found 
 in various parts of those voluminous collections, we have arrived 
 at the following conclusion : — 
 
 Table IV. — Statement compiled &om the Blue Book of February, 1863, of 
 the Quantities of Gold-Dust and Bullion exported by sea, or forwarded 
 by Adelaide Escort, from the Provinces of New South Wales (Sydney) ; 
 and Victokia (Melbourne, Geelong, and Portland) ; during the periods 
 as under ; with such corrections introduced as prevent the inter-colonial 
 shipments of Gold from being included more than once : — 
 
 Periods. 
 
 The Pro 
 
 New S. Wales. 
 
 duce of 
 Victoria. 
 
 Total. 
 
 29 May, 1851, to 31 Dec, 
 1851 (7mos.) 
 
 Oz. 
 113,454 
 
 Oz. 
 
 Oz. 
 
 20 Oct., 1851, to 31 Dec, 
 1851 (2mos.) 
 
 — 
 
 145,116 
 
 1 258,570 
 
 1 Jan., 1852, to 30 June, 
 1852 (6mos.) ...... 
 
 333,082 
 
 797,904 
 
 1,130,986 
 
 1 July, 1852, to 31 Oct., 
 1852 (4 mos.) 
 
 (No return) 
 
 869,861 
 
 869,681 
 
 Total.... Oz. 
 
 446,636 
 
 1,812,701 
 
 2,269,237 
 
 "The official returns do not enable us to continue this last Table 
 beyond the 30th of June, 1852, as regards New South Wales: and 
 the 31st of October, 1852, as regards Victoria. From returns, 
 
Produce of Australia, l85 1 -52. 
 
 9 
 
 however, which were compiled at the end of 1852, by some of the 
 colonial newspapers, we may bring down the figures of Table iv. 
 to the 31st December of that year. It is to be observed, however, 
 that the supplemental figures do not go further than to furnish the 
 exports from the two Provinces : without distinguishing between the 
 produce of the two. The result will then be as follows : — 
 
 Table V. — Quantities of Gold Bullion exported, &o., being a continuation 
 of tie official figures in Table IV. : the supplemental figures not being 
 derived from official sources. 
 
 Periods. 
 
 Produce of, or 
 New S. Wales. 
 
 Exported fi:om, 
 Victoria. 
 
 Total. 
 
 Totals of Table iv 
 
 1 July, 1852, to 31 Dec, 
 1852 (6 mos.) 
 
 INov., 1852, to 31 Dec, 
 1862 (2 mos.) 
 
 abstkaot. 
 
 1851 ( 7 mos.) 
 
 „ ( 2mos.) 
 
 1852 (12 mos.) 
 
 Oz. 
 446,636 
 
 709,759 
 
 Oz. 
 1,812,701 
 
 666,267 
 
 Oz. 
 
 1,156,296 
 
 2,378,968 
 
 — 
 
 113,464 
 1,142,841 
 
 145,116 
 2,233,852 
 
 1 258,570 
 3,376,693 
 
 Total auANTiTT.. 
 Value at 77s. per oz. 
 
 1,256,295 
 
 2,378,968 
 
 3,635,263 
 
 £4,840,000 
 
 £9,160,000 
 
 £14,000,000 
 
 It is not to be supposed that the quantities actually exported from 
 the two Provinces represented the total produce; nor is it to be 
 supposed that the quantities of gold sent by public escort from the 
 gold-fields to the capital towns of Sydney, Melbourne, and Adelaide 
 represent the total produce. Considerable amounts of the metal are 
 conveyed by private persons — are retained in private hoards — remain 
 in a state of circulation — or are held awaiting higher prices ; or par- 
 ticuleir modes of conveyance to other parts of the world. In aU .the 
 returns which have thus far appeared, except the official and semi- 
 official statements of actual exports, and of actual deliveries by the 
 
10 Total of Australian Gold, 1851-52. 
 
 Government Escort, we find great confusion and perplexing contra- 
 dictions. Having availed ourselves as far as possible of the state- 
 ments of exports, we shall not embarrass the reader's attention by 
 any attempt to reduce to a general result the returns of the quanti- 
 ties conveyed by escort : but shall rather make the best use we can 
 of the most intelligent estimates which have been formed of the 
 total produce of the gold-fields of New South Wales and Victoria, 
 from the discovery of the metal in the summer and autumn of 1851, 
 to the end of the year 1852. Pursuing this plan, we have arrived at 
 the following result : — 
 
 Table VI.— Estimate of the Quantity of Gold raised in the Provinces of 
 New South Wales, and Victoria, during the period from May, 1851, to 
 the 31st December, 1852. 
 
 Ounces. Value at 77s. per Oz. 
 
 Victoria 4,000,000 £15,400,000 
 
 New South Wales 320,000 1,232,000 
 
 Totals 4,320,000 £16,632,000 
 
 Note.— In the quantity of 4,000,000 Ounces from Victoria, is included the 
 quantity of 228,000 ounces, which is stated to have been sent from the dig- 
 gings of Victoria to Adelaide, by the Adelaide escorts of March to Decem- 
 ber, 1862. 
 
 One of the best and most intelligent statements which have 
 reached this country from Australia, relative to the total produce of 
 gold to the end of 1852 ; is found in a Paper read before the Mel- 
 bourne Chamber of Commerce in February, 1853, by Mr. Westgarth ; 
 a member of the Colonial Council, and a gentleman whose name is 
 already known in this country as a writer on colonial statistics. 
 Mr. Westgarth's statement extends only to the Province of Victoria ; 
 and is, we think, exaggerated. If accepted, it would go to show 
 that the gold-produce of Victoria alone, to the end of 1852, was 
 no less than 1 8 J millions sterling. At present we are not prepared 
 to regard such a statement as accurate. We are happy, however, 
 to avail ourselves of Mr. Westgarth's table ; and we shall be glad if 
 any competent authority wUl enable us to detect errors which may 
 exist either in our own statement or in his. The following is the 
 Table :— 
 
Summaries of Total Produce, 1848 — 52. 
 
 II 
 
 Table VI. A. — ProVInoe op Viotobia (Australia). Statement and Estimate 
 of the total produce of Grold in that province, to the end of 1852, laid 
 before the Melbourne Chamber of Commeree, in February, 1853, by 
 William Westgarth, Esq., Member of the Legislative Coxmcil Of the 
 Province. 
 
 Exported, per official returns . . 
 „ Overland to Adelaide ... . 
 trnrecordfid Exports to : — 
 
 New South Wales 
 
 "Van Diemen's Land 
 
 Ascertained. 
 
 Estimated. 
 
 Total. 
 
 Oz. 
 
 2,120,121 
 228,533 
 
 364,913 
 177,680 
 327,913 
 
 Oi. 
 
 465,000 
 67,000 
 20,000 
 60,000 
 
 \ Oz. 
 
 2,348,654 
 
 829,913 1 
 
 244,680 
 
 347,913 i 
 
 60,000 
 
 England, India, &o 
 
 Total Exports .... 
 On Hand in the Colony 
 
 Total Produce . . . . oz. 
 
 Produce in 1861 oz. 
 
 1852 oz. 
 
 Oz 
 
 Value at 77s. per oz. 
 
 3,219,160 
 709,766 
 
 602,000 
 360,000 
 
 3,821,160 
 1,069,766 
 
 3,928,926 
 
 962,000 
 
 4,890,926 
 
 145,146 
 3,783,780 
 
 200,000 
 762,000 
 
 346,146 
 4,545,780 
 
 3,928,926 
 
 962,000 
 
 4,890,926 
 
 £15,026,365 
 
 £3,503,700 
 
 £18,630,065 
 
 (6) TOTAL PRODUCTION OP SOLD IN CALirORNIA AND AUSTRALIA, 1848—33. 
 
 Taking the results of Tables iii. and vi. it appears that the 
 following have been the Total Additions of Gold from California and 
 Australia, during the Five Years ended with 1852, to the previous 
 stocks of the precious metal in the markets of the world : — 
 
 Million £'s. 
 Estimated stock of Gold in Europe and America 
 
 in 1848 . . 657 
 
 Produced (1848-1862) in California (5 years) ... . 401 ,„ 
 
 ,, Australia (IJ years) 16 f 
 
 613 
 
 The produce of the Five Years was equal, therefore, to 10 per cent, 
 on the Stock of Gold in 1848. 
 
 And, still carrying out the principle of collecting into the smallest 
 focus the results at which we arrive in the progress of our inquiry, 
 •we have the following aTastract of the annual Supplies of Gold at the 
 three periods, 1800; 1848 ; and 1852. 
 
12 
 
 Californian Gold, 1853. 
 
 Table VII.— Estimated Value of the Annual Quantities of Golb brought 
 into the markets of the world in the year 1852, in MiUions and Decimals 
 of millions of pounds sterling. The corresponding figures for 1800 and 
 1848 are added for facility of comparison. 
 
 The Produce of 
 
 All sources except California and Aus- 
 tralia 
 
 1862. 
 
 1848. 
 
 1800. 
 
 9.40 
 12.50 
 14.40 
 
 9.91 
 
 3.26 
 
 
 Australia 
 
 Totals 
 
 Per centage on total stock of 557 \ 
 millions sterling of Gold existing in 
 Europe and America in the early 
 part of 1848 
 
 36.40 
 
 9.91 
 
 3.26 
 
 7 per ct. 
 
 2 per ct. 
 
 
 (6) PEODUCTION OE GOLD IN CALIPOENIA AND AUSTEAIIA — JANUAKT TO 
 MAY, 1833. 
 
 At the present time there are no complete accounts of the 
 yield of the Australian mines during the current year ; but, so far 
 as concerns California, the returns of the United States Mints show 
 conclusively that to the end of May, 1853, the produce of gold 
 during this year is at least fully equal to that of 1852. The foUow- 
 ing are the figures : — 
 
 Table VIII. — Deposits of Gold and Silver Bullion at the two principal 
 Mints of the United States (Philadelphia and New Orleans) during 
 the months as under of 1853: converting dollars into sterling at 5 
 dollars per £. 
 
 Gold. Silver. 
 
 1853. £ £ 
 
 January 1,054,400 4,000 
 
 February 753,400 3,320 
 
 March 1,502,000 4,500 
 
 April (Philadel. only) 
 May (ditto) 
 
 3,309,800 11,820 
 
 953,200 no return. 
 
 855,000 ditto. 
 
 5,148,000 
 
 To this statement of the progress of Californian supplies in the 
 current year, we may add the following figures : which, without 
 being official, are published ^t Melbourne as representing a large 
 
Ausiralian Gold, 1853. 13 
 
 portion of the yield of the Victoria Gold Fields, from 1st January to 
 31st March, 1853. It will be observed that the deliveries in Mel- 
 bourne show a decline in each month. It is said, however, that 
 there are local circumstances affecting gold mining quite sufficient 
 to account for this decline, without supposing any failure in the 
 quantity of the gold itself. 
 
 Table VIII. a. — ^Province or Viotohia (Australia). Statement of Gold 
 arrived in Melbourne by Escort, during the first three months of 1853. 
 
 Oz. ^ Value at 77s. 
 
 January,- 1853 186,016 .! £716,167 
 
 February 172,329 663,466 
 
 March 169,654 653,167 
 
 Oz. . . 527,998 £2,032,790 
 
 II. Application of the New Supplies of Gold raised 
 FROM 1848 to 1852. 
 
 (1) MINT LEGISLATION OP THE UlTITED KINGDOM. 
 
 We have thus far spoken only of the quantities of gold and silver 
 existing in the year 1 848 : and of the quantities of new gold pro- 
 duced since that year. 
 
 We must now endeavour to trace the uses to which those new 
 supplies of the metal have been applied ; and the most important of 
 them will be found to be that of Coinage. 
 
 We have access to very complete returns of the coinage of gold in 
 this country, in France, and in the United States, during the last 
 five years ; but before presenting abstracts of these returns, it wiU 
 be convenient to refer to the amount of the gold coin of those 
 countries before 1848, and at the present time: and to the circum- 
 stances affecting that gold coin. 
 
 As regards the United Kingdom, it is hardly necessary to say 
 that since 1816 we have had a standard exclusively of gold: — that 
 there is no seignorage on the coinage of that metal : — that the only 
 expense to those persons who deposit gold bullion at the Mint for 
 the purpose of coinage is confined to the loss of interest during the 
 period the bullion may lie at the Mint, on the amount of capital 
 
14 Coinage — Royal Mini. 
 
 •represented by that bullion:— and that silver is with us. in effect, 
 nothing more than a token-coinage, being debased when in the form 
 of coin to the extent of six per cent., and not being a legal tender 
 beyond forty shillings. In this country, therefore, the only causes 
 leading to the coinage of gold are either :— (1) the requirements, by 
 bankers and others, of gold coin for the supply of demands arising 
 in the usual course of business ; or (2), as occurred at the close of 
 last year, a demand for gold coin for export to some colony or 
 country where gold is more valuable in the shape of coin, than in 
 the shape of bullion.. It is well known that, towards the close of 
 last year, a large demand for gold coin for Australia suddenly 
 sprung up : arising out of the fact that at Sydney and Melbourne 
 gold dust and bullion of a quality better than standard were selling 
 at twenty-five per cent, below the Mint price. The gold coin sent 
 from this country was intended to buy the bullion of Australia at 
 prices calculated to yield a profit, more or less ample. 
 
 Previous to 1 848. it was generally supposed that the amount of 
 Gold Coin in circulation in the hands of the public in the United 
 Kingdom was equal to about £20,000,000 : not including in that 
 sum the amount which might form part of the bullion reserve of the 
 Bank of England. 
 
 (2) MINT LEOISIATION OP FRANCE AND THE UNITED STATES. 
 
 In France the law relating to the gold and silver coinage is 
 different from the law of this country. Among our neighbours, 
 both metals are legal tender according to a certain scale of relative 
 value ; and it depends therefore entirely on the degree in which the 
 actual value of gold and silver in the markets of the world coincides 
 with, or varies from, the arbitrary proportions of the Mint law of 
 France, whether in the payment of debts, gold shall he employed in 
 preference to silver ; or silver in preference to gold. If, for example, 
 gold coin bore a premium, or agio, compared with silver coin ; every 
 debtor would discharge his obligations in the cheaper medium of 
 silver : and gold coin would he comparatively unused. If, on the 
 other hand, the premium, or agio^ passed from tlie gold, and attached 
 itself to the silver coins ; then gold coin would be largely in demand. 
 
Coinage — Royal Mint, 8fc. 15 
 
 as the cheaper medium of payment. Gold bullion would be turned- 
 into coin : and silver coin would be turned into bullion. 
 
 This statement will fully explain the statistics to be presently 
 introduced, showing the large extent to which gold was coined in 
 France during the two years, 1850-51. Previously to those years, 
 gold had long borne a premium, or agio, at Paris, compared with 
 silver, equal to 3 or 4 francs per 1,000 francs; or, as the phrase 
 was, " the premium on gold was 3 per mille." There was, there- 
 fore, no coinage of gold; and the demand for gold coin was very 
 small. During 1850 and 1851, in consequence of changes which 
 we shall by-and-by investigate, the premium passed from the gold 
 and fixed itself on the silver : — in other words, gold coin fell to a 
 discount compared with silver ; and hence arose the large coinage of 
 the former metal, in the years in question. In 1852, however, the 
 former state of things was for the most part restored. Gold either 
 bore a premium, or was at par with silver ^ and, therefore, the coinage 
 of gold in France was but trifling. It is to be regretted, however, 
 that the available returns do not enable us to state precisely what the 
 amount of the gold coinage of 1852 really was. 
 
 The quantity of Silver Coin in actual circulation in France has 
 always been very large : and that of Cold Goin comparatively very 
 small. Prior to 1848, it was estimated, on good grounds, that the 
 amounts were 120 millions s-terling of silver coin; and 14 millions 
 sterhng of gold coin. 
 
 In the United States, the Mint legislation has resembled that of 
 France ; both metals being a legal tender. And as the Congress Act 
 of 1 834 over- valued gold as compared with silver — in other words, 
 made it cheaper to pay a debt in gold than in silver— there has been 
 a tendency to introduce gold into circulation in the United States as 
 the more advantageous medium of legal tender. It has also, been to 
 some extent, an object of State policy, to encourage the introduction 
 of gold coinage, as a means of reducing the circulation of the smaller 
 notes of the banks. It was estimated, prior to 1848, that the 
 amount of Gold in circulation in the United States was not more 
 than 10 milhons sterling. ^ 
 
 An Act of some importance as regards the Coinage of the United 
 States, was passed during the session of Congress just concluded : 
 
16 English Gold Coinage, 1848—53. 
 
 and came into force on the 1st of June (1 853). It is the object' of 
 this Act to increase the quantity of the coins of denominations lower 
 than the dollar. By the Act the weight of the half-dollar is reduced 
 from 206|- to 192 grains; and the lesser coins in proportion, care 
 being taken to make these lesser coins legal tender for no more 
 than five dollars. It is probable that the effect of the measure will 
 be to increase considerably the silver coinage of the Union. 
 
 (3) STATISTICS OF COINAGE OP THE B.OTAL MINT TO MAY 1863 — COIN SENT 
 TO AUSTKALIA. 
 
 We may now introduce the statements of the amount of gold and 
 silver coinage, and we commence with the returns of our own 
 Mint: — 
 
 Table IX. — Statement jErom official sources (Pari. Pap., 103 & 365, 1863) 
 of the Value of the Coinage of Gold and Silver at the Royal Mint 
 during the Years as under : — 
 
 Years ended 3lBt Deo. Gold. Silver. 
 
 1848 £2,452,000 ....,...£ 35,400 
 
 1849 2,178,000 119,600 
 
 1850 1,492,000 129,000 
 
 6,122,000 284,000 
 
 1851 4,400,000 88,000 
 
 1862 8,742,000 190,000 
 
 19,264,000 562,000 
 
 1853, 1st Jan. to SlstMarch, 
 
 3mos 4,336,000 93,000 
 
 £23,600,000 £655,000 
 
 The striking features of this Table are the large amount of gold 
 coinage in 1851: — the still larger in 1852: — and the yet further 
 increase in the first three months of the present year (1853). 
 
 It is very diflScult to ascertain, with any approach to precision, the 
 quantity of gold coin sent from this country to Australia in 1852 : 
 and also in the early months of '1853. It is stated in a circular 
 published at Melbourne in February, 1853, that the amount which 
 arrived in the Province of Victoria in 1852 was not less than 
 £2,500,000 ; and as gold coin arriving at Melbourne at the end of 
 
Coinage of France and United States. 17 
 
 December, 1852, must have left London, say in September, and as 
 considerable shipments of coin were subsequent to that date sent to 
 Australia ; it is not improbable that as much as £9,000,000 of gold 
 coin has, since January, 1852, been sent from this country to the 
 AustraUan colonies. 
 
 (4) SXATISTIOS OP THE COINAGE OP PEANOE, AND TTNITED STATES TO 1852. 
 
 The next return relates to France, and is as follows : — 
 
 Table X. — Statement from Officiail Sources of the Value of the Coinage of 
 Gold and Silver at Paris, during the Years as under : — Exchange 25 
 per £ ; — 
 
 fears. 
 
 Gold. , 
 
 Silver. 
 
 Total. 
 
 1849 .. 
 
 .. £1,090,000 . 
 
 . £7,360,000 . 
 
 . £8,450,000 
 
 1850 .. 
 
 4,600, 
 
 3,000, 
 
 . 7,600, 
 
 1851 .. 
 
 .. 9,640, 
 
 2,270, 
 
 . 11,910, 
 
 £15,330,000 £12,630,000 £27,960,000 
 
 The large Gold coinage of 1851 : and the small Silver coinage of 
 the same year : illustrate the pbservations made in a preceding page. 
 The returns of the United States Mints are next in order : — 
 
 Table XI. — Statement from Official Sources of the Value of the total 
 Coinage of Gold at the four Mints of the United States, during the 
 Five Years ended 31st December, 1852 : converting Dollars into Sterling, 
 at 5 dollars per £ : — 
 
 Years Hided Dee. 31, £ 
 
 1848 179,000 
 
 1849 1,416, 
 
 1850 7,388, 
 
 1851 10,626, 
 
 1852 10,803, 
 
 £30,411,000 
 
 ■ Note. — Not more than 3 per cent, of the total of the above gold coinage 
 is obtained ftom bullion the produce of places other than United States 
 territory ; in other words, 97 per cent, of the above amoimt is obtained fiom 
 gold bulUon the produce of CaUfomia. It is also important to state, that 
 the total amount of the gold coinage of the United States, from the esta- 
 blishment of the oldest of the Mints in 1792, to the end of 1847 (a period of 
 66 years), is, returned as being only £2,561,000.— The total coinage of Silver 
 in the United States during the five years above has been imder £900,000 
 per annum. 
 
 c 
 
18 
 
 Summary of Coinage Returns. 
 
 The following Table wiU conveniently collect into one view 
 the statistics of the Gold Coinage of the three countries for the 
 period 1848—1852 :— 
 
 Table XII. — Aqqregate Statement of the Value of the Coinaqb of Gold at 
 the Mints of Great Britain ; Prance ; and the United States ; during 
 the Years as under ; — 
 
 Years. 
 
 Great 
 Britain. 
 
 Prance. 
 
 United 
 States. 
 
 Total. 
 
 1848 
 
 1849 
 
 1850 
 
 Total, 3 yrs. . . . 
 
 1851 
 
 1852 
 
 Total, 2 yrs. .. . 
 
 Total, 5 yrs. . . . 
 
 1853—3 mos. 
 ,, 6 mos. 
 
 £ 
 2,452,000 
 
 1,49^, 
 
 £ * 
 no retn. 
 
 1,090,000 
 
 4,600, 
 
 £ 
 179,000 
 
 1,415, 
 
 7,388, 
 
 £ 
 2,631,000 
 
 4,683, 
 
 13,480, 
 
 6,122, 
 
 6,690, 
 
 8,982, 
 
 20,794, 
 
 4,400, 
 8,742, 
 
 9,640, 
 no retn. 
 
 10,626, 
 10,803, 
 
 24,666, 
 19,546, 
 
 13,142, 
 
 9,640, 
 
 21,429, 
 
 44,211, 
 
 19,264, 
 
 15,330, 
 
 30,411, 
 
 65,005, 
 
 4,336,000 no retn. 
 do. 
 
 6,000,000 
 
 . 9,336,000 
 
 Note. — ^The OOO's at the unit end are omitted. 
 
 (5) COMPARISON OP the TOTAL BECENT OOINAQB, "WITH THE TOTAL EECBNT 
 PBODUCTION, OF GOLD. 
 
 We have seen, that the total amount of gold produced in 
 California and Australia, during the five years ended with 1852, was 
 56 Millions Sterling. 
 
 And it appears by the preceding Table that the gold coinage 
 during the same period, and of which we have specific returns, 
 was 65 milhons; or 9 millions more than the total produce of 
 CaUfomia and Australia. 
 
 But of these 65 millions of Coinage, a considerable part was 
 supplied by the stocks of gold existing in Europe and America — 
 but mainly in Europe — in 1848. The gold coinage of France 
 in 1850 and 1851 was, in particular, largely furnished from this 
 
Recent Production and Recent Coinage. 19 
 
 source ; and there is reason to believe that of the 65 millions ; 
 15 millions is not too large an amount to assign to the stocks of 
 gold existing in 1848. According to such a supposition, it would 
 seem that, to the end of 1852, all the gold produced in California 
 and Australia had been converted into coin, with the exception of 
 6 millions. 
 
 It is hardly accurate, however, to make the statement in this 
 form : because we know as a matter of certainty that no such quan- 
 tity as 50 millions of the identical gold produced in California and 
 Australia had been converted into coin at the end of 1852. Of the 
 56 millions raised in these two countries, a very large sum was 
 scattered through a multitude of channels : and existed in a variety 
 of the rudest forms. 
 
 It is to be remembered also, that the 56 millions in question was 
 by no means the total produce from all sources of supply during the 
 five years 1848 — 52. In Table vii. we have estimated at 9|- 
 millions sterling the annual supply of gold in 1852 from sources 
 other than California and Australia ; and it is highly probable that 
 during the five years (1848 — 52) the quantity of gold obtained from 
 those other sources, was not less than 44 millions sterling : — making, 
 therefore, the total quantity produced in all parts of the world during 
 the period in question equal to (56+44) 100 millions sterling. We 
 must again remember, however, that of the 44 millions ; as of the 
 56 ; a very large portion existed in forms which precluded it from 
 exercising any influence either in Western Europe, or in America. 
 
 And it is further to be considered, that the annual suppUes of gold, 
 (equal to about nine millions sterling) before 1848, had been main- 
 tained for some time without producing any apparent disturbance in 
 the relation of gold, to silver, and to commodities. We may, there- 
 fore, in our reasonings on the new discoveries, assume that the old 
 supply of about nine millions suffices to meet old wants; and in 
 endeavouring to estimate the effects which may be expected to arise 
 from the new discoveries, it is not an inaccurate mode of investi- 
 gation to confine ourselves to the statistics of the gold production 
 within the sphere of those new discoveries. 
 
 c 2 
 
20 Further Questions to be considered. 
 
 III.^Facts connected with the Effects already produced 
 
 by the new suppltes of gold : and first, as to the 
 
 Effects produced in the United Kingdom on the Rate of 
 Interest; and on the Supply of, and demand for. Capital. 
 
 (1) OBDBK OP INaTIIEY. 
 
 We have now seen something of the Facts connected with what 
 may be called the first three elements of the inquiry, namely — 
 
 First, the total quantity of Gold and Silver existing in various 
 forms in Europe and America in 1848; Secondly, the annual supplies 
 of gold in 1848 : — and in 1852, when those annual supplies had been 
 augmented by the new discoveries ; and Thirdly, the extent to which 
 the new supplies of gold have been absorbed by Coinage, in 
 England, in France, and in the United States. 
 
 There still remain three other divisions of the question, upon which 
 it is necessary that we should have before us, as many facts as pos- 
 sible, before we attempt any generalization. These divisions are, — 
 First — the effects produced in this country on the Rate of Interest; 
 and on the supply of, and the demand for. Capital, by the influx of the 
 new gold. Secondly — the effects produced, directly or indirectly, on 
 the Prices of Commodities : and on the Wages of Labour. And 
 
 istly — the effects produced in the Australian Colonies themselves. 
 
 (2) condition op the kesertes and private securities op the bank op 
 england — jan. 1851, to june 1853. 
 
 Our inquiry on the first of these three topics may commence with 
 the following Table : — 
 
 Table XIH. — Statement of the Amount of the average Monthly Reserve of 
 the Banking Department of the Bank op England ; of the Amoiint of 
 Private Securities held by that Department ; of the Premium or Discount 
 on Gold at Pakis ; of the Market Price in London of Standard Silver ; 
 of the Drawing Bate in London of the East India Company on Bengal 
 and Madras ; of the Market Rate at Calcutta for Six Months' Bills on 
 London ; and of the Value in sterling of the Exports from Great Britain 
 of Gold and Silver to the East Indies and China : — from January, 1851 
 to June, 1853 (2i Years). 
 
IMe xiii.^— Price, and Exports, of Silver, 8fc. 21 
 
 Bank. Dep. of 
 
 Bank 
 
 of England. 
 
 1 
 
 Prem. or 
 Dia. 
 
 per Mille 
 
 on Gold in 
 
 Paris. 
 
 Market 
 Price in 
 London 
 of Stand. 
 SUver 
 per Oz. 
 
 E.LCo.'s 
 
 Eate 
 
 on 
 
 Bengal. 
 
 Market 
 Price at 
 Calcutta 
 Of 6 mo. 
 Bills on 
 London. 
 
 Export to 
 
 India 
 
 and China of 
 
 Re- 
 serve. 
 
 Priv. 
 
 Sects. 
 
 Silver. 
 
 Gold. 
 £ 
 
 £ 
 Mills. 
 
 £ 
 MillB. 
 
 18S1. 
 
 
 d. 
 
 d. 
 
 d. 
 
 £ 
 
 9.01 
 
 12.86 
 
 Jan. 
 
 par 
 
 61f 
 
 25 
 
 26i 
 
 no retn. 
 
 no retn. 
 
 9.27 
 
 11.40 
 
 Feb. 
 
 3dis. 
 
 ft 
 
 »» 
 
 a 
 
 »» 
 
 ,, 
 
 9.19 
 
 12.66 
 
 Mch. 
 
 if 
 
 " 
 
 )) 
 
 >i 
 
 J) 
 
 )f 
 
 7.85 
 
 11.89 
 
 Apri 
 
 » 
 
 61^ 
 
 it 
 
 244 
 
 )) 
 
 »» 
 
 8.08 
 
 11.31 
 
 May 
 
 )) 
 
 „ 
 
 „ 
 
 »> 
 
 >» 
 
 ,, 
 
 9.05 
 
 12.67 
 
 June 
 
 3, 5d. 
 
 602 
 
 »» 
 
 25i 
 
 it 
 
 tt 
 
 7.75 
 
 11.96 
 
 July 
 
 4,4id. 
 
 60;^ 
 
 24i 
 
 25 
 
 it 
 
 )t 
 
 8.10 
 
 12.02 
 
 Aug. 
 
 » 
 
 )» 
 
 It 
 
 24J 
 
 >> 
 
 tt 
 
 9.70 
 
 13.12 
 
 Sep. 
 
 2d. 
 
 J> 
 
 i) 
 
 23i 
 
 28,950 
 
 2,700 
 
 8.97 
 
 13.17 
 
 Oct. 
 
 1 d., par 
 
 60i,| 
 
 2ih 
 
 25j 
 
 112,000 
 
 11,400 
 
 9.92 
 
 11.42 
 
 Nov. 
 
 par 
 
 60|,i 
 
 24 
 
 26i 
 
 81,480 
 
 11,500 
 
 12.25 
 
 10.97 
 
 Dec. 
 
 par, 6 p. 
 
 60f 
 
 a 
 
 26i 
 
 199,800 
 
 60,000 
 
 11.20 
 
 11.03 
 
 1852. 
 
 Jan. 
 
 par 
 
 60| 
 
 
 26i 
 
 333,000 
 
 7,400 
 
 12.32 
 
 10.60 
 
 Feb. 
 
 » 
 
 60ai 
 
 >9 
 
 24J 
 
 133,700 
 
 102,600 
 
 13.51 
 
 11.13 
 
 Mch. 
 
 pai-, 2 p. 
 
 60| 
 
 ,i 
 
 234 
 
 95,000 
 
 103,000 
 
 12.11 
 
 10.70 
 
 Apri] 
 
 2 p. 
 
 60|, 60 
 
 jj 
 
 23i 
 
 65,300 
 
 33,500 
 
 12.70 
 
 10.26 
 
 May 
 
 4, 5 p. 
 
 60, 59| 
 
 ») 
 
 23| 
 
 7,350 
 
 — 
 
 13.94 
 
 10.25 
 
 June 
 
 5 p. 
 
 59|, 60i 
 
 )f 
 
 244 
 
 67,550 
 
 41,000 
 
 12.82 
 
 1D.64 
 
 July 
 
 4 p. 
 
 60i| 
 
 23, 24 
 
 25i 
 
 118,000 
 
 60,370 
 
 12.95 
 
 10.16 
 
 Aug. 
 
 Ip. 
 
 60| 
 
 )) 
 
 254 
 
 88,500 
 
 85,300 
 
 13.76 
 
 10.75 
 
 Sep. 
 
 Ip. 
 
 H 
 
 » 
 
 24J 
 
 471,000 
 
 47,400 
 
 12.44 
 
 11.17 
 
 Oct. 
 
 Ip. 
 
 60|,61i 
 
 25 
 
 241 
 
 263,900 
 
 114,850 
 
 12.31 
 
 11.05 
 
 Nov. 
 
 1 p., pai' 
 
 61| 
 
 »> 
 
 244 
 
 367,600 
 
 119,000 
 
 12.87 
 10.27 
 
 12.60 
 14.02 
 
 Dec. 
 
 1893. 
 Jan. 
 
 par 
 pai 
 
 61i 
 611 
 
 )» 
 
 24| 
 24f 
 
 482,000 
 
 56,000 
 
 2,492,800 
 
 760,360 
 
 175,000 
 
 51,000 
 
 10.13 
 
 13.60 
 
 Feb. 
 
 it 
 
 61i 
 
 
 25 
 
 495,500 
 
 61,500 
 
 11.23 
 
 IS. . 
 
 Mch. 
 
 t> 
 
 61| 
 
 
 »» 
 
 237,000 
 
 35,000 
 
 9.87 
 
 13.95 
 
 April 
 
 " 
 
 61|, 61 
 
 
 244 
 
 176,000 
 
 71,000 
 
 9.11 
 
 13.45 
 
 May 
 
 )» 
 
 61 
 
 24i 
 
 JJ 
 
 103,000 
 
 48,500 
 
 9.29 
 
 13.52 
 
 June 
 
 it 
 
 61i 
 
 
 ft 
 
 182,000 
 
 13,000 
 
 1,367,500 
 
 270,000 
 
22 Banh Reserve — Results of Table xiii. 
 
 The figures in this Table will enable us to trace the progress of 
 several important phenomena. In the columns of Reserve of the 
 Banking Department of the Bank of England ; and of the Private 
 Securities held by that Department ; we have a statement of two of 
 the principal elements which govern the Bank in the regulation of 
 its rate of discount. It will be seen that we give the reserve of the 
 Banking Department — not the total amount of bullion held in both 
 the Banking and Issue Departments : — and the distinction is a vital 
 one. The Reserve of the Banking Department represents resources 
 upon which the Directors can calculate with certainty for meeting 
 demands upon them ; but if the reserve of the Issue Department 
 were added, the result of the addition could no longer be so described. 
 In like manner, the Private Securities — under which head are com- 
 prised the Bills discounted by the Bank — represent, more or less 
 perfectly, those fluctuations of the demand for mercantile advances 
 upon which the market rate of discount mainly depends. 
 
 It will be seen from the Table that the largest amount of Banking 
 Reserve; and almost the lowest amount of Private Securities; oc- 
 curred in June and September, 1852; — and that the lowest amount 
 of Banking Reserve was in May last (1 853) ; and the highest amount of 
 Private Securities in March. Stated in general terms, the conclusion 
 to be drawn from the two first columns of the Table is : — ^that since 
 September, 1852, such changes have taken place in the Reserve, and 
 Advances, of the Bank oif England, as not only to lead, but to render 
 it imperative upon, the Directors materially to raise the rate of 
 discount. 
 
 (3) QUESTIONS CONNECTED WITH THE PRICE OF SILVER IN LONDON IN 
 1851-1852. — REMITTANCES OP SILVER TO INDIA. 
 
 The remaining six columns of the Table elucidate questions 
 connected with the price of Silver. 
 
 It win be seen from the first of these columns that while, in 1851, 
 gold was at a discount at Paris : in 1852 it has been either at par or 
 at a premium. And it will be seen from the second: that throughout 
 the years 1851, and 1852, the price of standard silver in London 
 remained pretty constant at within a fraction of 60d. per ounce : and 
 that the rise in the price to 61 Jd. since October, 1862, is to be traced 
 
Indian Exchanges. 23 
 
 mainly to the large demand for silver which sprung up about that 
 time, for the purpose of shipment to India and China. 
 
 The fifth and sixth columns of the Table give the Rates of 
 Exchange of London on Calcutta : and of Calcutta on London : and 
 in explanation of these rates a few words may be said. 
 
 The rate of London on Calcutta, is governed by the advertisements 
 of the East India Company. The Company require an annual trans- 
 mission of funds from India to this country, to the extent of about 
 £3,500,000 ; and for some years past it has been the desire of the 
 Directors to obtain this amount, rather by the sale of their own bills 
 in London, than by the purchase of private biUsiw India. It is clear, 
 that whether the revenues of Ipdia, are charged with £3,500,000 for 
 the payment in India, of bills sold in London : or for the payment of 
 bills bought in India, and remitted to London : the effect is the same. 
 The rate at which the Company can either sell bills in London ; or 
 buy bills in India ; depends upon the state of the exports to India 
 from this country ; and of the imports from India into this country. 
 The exchange being reckoned in pence sterling ; the quotation will be 
 highest in Calcutta when the exports thence to England are largest : 
 and lowest when the exports are smallest ; and the amount of the 
 exports depends naturally on the state of the English markets. It 
 will be seen that throughout 1851, and 1852, the exchange at Calcutta 
 ranged between 26d.and 24d.; and, taking the par at about 21d., 
 these were high rates. In other words, the balance of payments was 
 against England; and it became profitable to send silver in liquidation 
 of that balance. So long as the purchase in London of the bills of 
 the East India Company, yields a more favourable result to the English 
 remitter than the purchase and shipment of silver ; — so long bills are, 
 and silver is not, sent. It will be seen that the largest shipments of 
 silver from England took place from September to December, 1 852 : 
 or when the East India Company had raised their selling rate on 
 Bengal to 25d. ; and it will be seen also that the rise in the price of 
 silver in London began about the same time. | 
 
 The result, therefore, of these facts is as follows : — The price of 
 Sliver in England, as compared with Gold, during the last two years 
 and a half, has been nearly stationary; a slight rise has occurred 
 since September, 1852, and that rise is almost entirely attributable to 
 
24 Mr. Hankey^s Translation of 
 
 the demand for silver for the East ; the exports of Silver to the East 
 from this country during the twenty-one months from September, 
 1851, to June, 1853, have amounted to Four Millions sterling: and 
 the exports of Gold to the same quarter to One Million sterling; and 
 lastly, there has been at Paris since November, 1851, a restoration 
 of the premium on gold ; or, in other words, a diminution, as com- 
 pared with the previous twelve months, of the value of silver as 
 measured in gold. 
 
 (4) mSB IN THE PKIOE OP SILVER IN PARIS IN 1850.— M. FAUCHEb's 
 EXPLANATION. 
 
 The point of most interest and importance in this recapitulation is 
 the remarkable rise which took place in the price of Silver at Paris 
 in 1850; and which continued for so many months. The general 
 impression entertained with reference to that change in the value of 
 silver, as compared with gold, in France, is : that it must be regarded 
 as an indication of a fall in the relative value of gold, arising out of 
 the new supplies ; and it must be admitted that at first sight there is 
 great plausibility in this view. It will be hardly entertained, how- 
 ever, when the facts have been carefully examined. 
 
 Two difficulties occur at the very threshold of such an examina- 
 tion, as regards the depreciation hypothesis : — namely, first, the 
 sudden and excessive rise in the price of silver ; and secondly, the 
 gradual and complete disappearance of that rise, and the restoration, 
 in its place, of the former premium on gold. Two further 
 difficulties become apparent as the inquiry advances ; and these 
 are: thirdly, the occurrence in 1850 of special circumstances 
 affecting the gold and silver coinage of France, quite sufficient to 
 account for the rise of silver to a premium ; and fourthly, the rapid 
 increase which, since 1848, has taken place in the annual production 
 of silver. 
 
 As regards the two first difficulties, the facts contained in the last 
 Table (xiii.) leave no more to be said. 
 
 As regards the third point : — the occurrence of special circum- 
 stances sufficient to account for the facts; — we are fortunate in being 
 able to refer to a Memoir of great clearness, ability, and learning, by 
 M. Leon Faucher, originally inserted in the Revue des Deux Mondes 
 
M. Leon Faucher's Memoir. 25 
 
 for August 1852 ; and subsequently in a modified form in the 
 Anmtaire de I'Economie Politique for the present year. An 
 elegant, and opportune, translation of the original contribution to the 
 Revue was published by Mr. Thomson Hankey, Jun., in November 
 last;* and we avail ourselves of the following extract from Mr. 
 Hankey's second edition : — 
 
 " Before entering upon this inquiry, it may be worth while to examine 
 a circumstance of late occurrence, relating to monetary statistics, which has 
 given rise to some discussion, but which has not yet been explained ; I allude 
 to the fall in the price of gold, and the corresponding rise in that of silver, 
 throughout Europe, towards the end of 1850 and the beginning of 1851. 
 
 "At that period Russia had rather less gold than usual to exchange 
 against the produce of the West ; and siace 1847 the working of the Altai 
 mines had b^en on the decline : at all events, the government did not appear 
 inclined to allow gold to be exchanged ; for in 1848 and 1849 its export had 
 been forbidden. In 1850 the state of the exchanges did not admit of an 
 export of gold, and a part of the 4| per cent, loan, contracted at that period 
 by the Cabinet of St. Petersbtirg, was remitted to Russia, both in gold and 
 silver, from England. Doubtless, in spite of the prohibition, Russian gold 
 found its way into other parts of Europe ; it was calculated that between 
 1849 and the iirst few months of 1850, the great commercial towns in 
 Western Europe must have received from £2,400,000 to £2,800,000 from 
 Russia ; biit this was not equivalent to the large sums paid for grain 
 imported from Odessa and Riga during the famine of 1846-1847. There 
 could have been no real increase in the metallic reserves of Western Europe 
 during that period. 
 
 " The same remark will hold good towards America. The import of gold 
 thence in 1849 and 1850 could not have done more than replace the gold 
 coin exported to the United States two years earlier, in payment of bread 
 stuffs and salt provisions. A proof of this will be found by examining the 
 official reports of the mints of the United States. These mints, which, &om 
 the year 1834 — ^that is, since the working of the gold-fields of Carolina — had 
 coined gold at the average rate of 2,500,000 dollars (£540,000) per annum, 
 in 1847 put into circtdation about 20,000,000 dollars (£4,160,000). At that 
 time Californian gold was unknown : the rich 'placers ' of that coim^try did 
 not begin to kindle the gold fever, fiist in America, and subsequently in 
 Europe, until 1848. CaUfomian gold, before it found its way to the Old 
 World, had to supply the wants of the New. It is exported thence in the 
 shape of eagles and double eagles, bearing the stamp of the Republic. In 
 1848 the coined gold in the United States did not amount to £800,000 ; and 
 it did not exceed £1,800,000 in 1849. With this small supply an export 
 could not be expected. In 1850 the Californian stream began to flow, and 
 
 » Bemarfes on the Production of the Precious Metals, Sjc. By M. Leon 
 Faucher. Translatedby Thomson Hankey, Jun., Esq. Smith, Elder, and Co, 
 Svo. Second Edition. 
 
26 Mr. Hankey's Translation of 
 
 the mint of the United States, having received gold dust and bars to the 
 extent of £8,000,000, coined £6,400,000. Supposing that the hulk of this 
 coin had been exported to Europe, such a supply would but have restored 
 the loss in the circulating medium vfhich had occurred in 1846. We had 
 exchanged our gold against grain ; it was returned to us against the silks, 
 wines, and other articles from France. The monetary disturbance of 1850 
 must not, therefore, be set dovm to the score of an excess of imports : the 
 rich supplies from Siberia and California could then only have acted pro- 
 spectively. The real cause is to be found in the measures hastily and 
 somewhat rashly adopted by various European governments. To prevent 
 future evil they created immediate mischief; and, in order to shelter 
 themselves from the risk of a future depreciation of gold, they directly 
 produced it. 
 
 " The crisis of 1850, thus examined, explains itself. On the one hand, 
 silver, being annually taken out of the mjirket by circulation, was not to 
 be met with for other demands ; on the other hand, gold, excluded by some 
 governments from their circulation, flowed to those countries where it was 
 stiU used as legal coin, and produced there, at least, a temporary super- 
 abundance. Then occurred the fall in the price of gold, and the rise in 
 the price of silver ; which together showed a divergence of 8 per cent, 
 between their former relative prices. 
 
 " The explanation we have endeavoured to give appears to become clearer 
 as we investigate further into the subject. Let us iirst examine the facts 
 relating to the scarcity of silver. England, the principal market of Europe 
 for the precious metals, witnessed, in 1850, a reduction of about £1,080,000 
 in the ordinary import. This appUed principally to silver. Hemittances 
 from India, generally about £800,000, were almost completely stopped ; 
 •those from Turkey and Spain were materially diminished. At the same 
 time about £1,000,000 sterling was required to be shipped to India, and 
 remittances were made by Messrs. Baring to St. Petersburg of £320,000 
 to £400,000 more, in silver. Germany and Holland required more than 
 their usual supply. The Societe Maritime of Berlin had imported silver to 
 the extent of £450,000 or £600,000 ; so that, altogether, the import into 
 England, having diminished in 1850 to the extent of about £1,000,000 
 sterling, the export had been in excess by about double that amount ; 
 reducing the metallic reserve by about £3,000,000. In addition to which, 
 Spain and Russia, having prohibited the export of silver, the exchanges 
 with those countries could hardly be operated upon effectively by the 
 transmission of this kind of specie. It is easy, then, to conceive, that 
 where no modification of the monetary laws had taken place, the premium 
 on gold passed to a premium on silver. 
 
 " This win explain the reason for at least a temporary abundance and 
 depression in the price of gold, especially on the gold market of Paris. 
 There is no ground for imputing the change to California, from whence 
 the supplies were of little moment, rmtil the end of December 1850. 
 England so far had only received silver from the TTnited States, and the 
 Californian gold, which had found its way by Panama, during the year, 
 did not exceed, according to official returns, £682,000, or 17,060,000 francs. 
 
M. Leon Faucker's Memoir. 27 
 
 The Mint in London did not coin gold to a greater extent in 1850 than 
 £1,492,000, or 37,300,000 ftancs, which is oonclusiye against any very large 
 importation. 
 
 " The market of Paris might have experienced a superabundance of gold, 
 in consequence of the demonetisation of gold coin in Spain and Portugal', 
 and by the influx of Belgian and other foreign gold coin which had been 
 circulating in Belgium ; and it should be added, that England imported 
 into France, for the payment of reiilway shares, probably to the extent of 
 £1,000,000 sterling ; but the predominating cause of the depreciation was 
 undoubtedly the demonetisation of gold in Holland, for that step had the 
 immediate effect of cancelling at once the value of the gold coin there in 
 circulation, and of throwing simultaneously an amount of gold on the 
 commercial market, almost equal to the whole of the annual quantity of 
 gold produced in California. 
 
 " Prom 1816 to 1847 Holland had followed the example of Prance in 
 admitting a double monetary staiidard. Gold and silver were both received 
 in legal payment. The law of 26 Nov., 1847, altered this state of things ; 
 one stEUidard only was allowed, and the silver florin of 3 gramm.es 450 
 milligrammes fineness, became the monetary unit ; this simplification of 
 the national coin, however, was adopted in theory only ; the application of 
 the system was postponed. 
 
 " The article 23 of the law, decreed, that ' before 31 Dec, 1850, other 
 legislative arrangements should be enacted concerning the gold coins of five 
 and ten florins, but that till these new arrangements were carried out, the 
 gold coin should continue in legal circulation.' The Dutch government 
 might, therefore, retain the legal circulation of the gold coin, by applying 
 to the States-General to prolong the period of the law of 26 Nov., 1847 ; 
 but it preferred to carry out the system to its fullest extent. On 6 Aug., 
 1849, the government laid before the Assembly, the scheme of a law to 
 •demonetise' the pieces of flve and ten florins, and leaving to the adminis- 
 tration the moment for its execution. At the same time, the government 
 demanded authority for the issue of notes to the amotmt of £2,500,000, to 
 buy in the gold coin, which, although not in legal circulation, might yet 
 continue to serve as payment at its conventional value. 
 
 " In the Eosposi des Motifs, the Minister of Pinance, M. Van Hall, 
 acknowledged that the depreciation of gold would not be immediate. ' We 
 must examine the question,' he said, ' in order to know whether the pro- 
 portionate value of gold and silver has undergone much variation in con- 
 sequence of the discovery of the Califomian mines. The government is 
 of opinion that as yet this is not the case. In fact, a document com- 
 mimicated to the Assembly proves that the proportion between gold and 
 silver of 1 to 16'60 has been found to exist but once. Sixty- eight 
 quotations of the Exchange of Paris mark the price of gold higher, and 
 only four lower than this proportion ; at the Exchange at Amsterdam, we 
 find fifty-five quotations above, and fifteen only below. Por the present 
 there is no fear of too much gold being imported for the purpose of 
 exporting silver. It should also be observed, that the high price of gold 
 in France has latterly been occasioned by political events. 
 
28 Mr. Hankey's Translation of 
 
 " ' It is well known that the price of gold in Holland is regulated by the 
 exchange on London. If England sends more gold to the Continent than 
 she receives from it, then the rate of exchange on London rises, and gold is 
 obtainable only at an agio. On the contrary, if England receiyes from the 
 Continent more gold than she exports, the exchange on London is low in 
 Holland, and gold is plentiful. Peculiar circumstances may of course 
 modify these general rules ; for instance, it is possible that England may 
 have payments to make in Holland greater than Holland has in England, 
 while the case is the reverse between England and the other countries of 
 Europe ; then the state of exchange in those countries would naturally react 
 upon ours. 
 
 " ' It often happens that other circumstances occur seeming to contradict 
 these principles. Thus in August last (1849), pieces of ten florins were in 
 demand in Holland for foreign remittances, although the price of bar gold 
 was only at If per cent. agio. Again, the influence of the state of exchange 
 on the importation of gold may recently have been observed ; not long ago, 
 gold was imported from England to the United States at the very moment 
 that gold was supposed to be arriving from America in great quantities.' 
 I have repeated at full length these remarkable admissions, to prove that 
 the Dutch government was not arming itself against a pressing or even 
 nearly approaching danger, and that their precautions were not even taken 
 with foresight. To theoretical errors were' added practical faidts; the 
 Minister of Finance had not measured the importance of the operation with 
 sufficient accuracy ; he estimated the amount of gold coin in Holland at 
 £8,041,666; it proved to be £14,333,333. 
 
 " The law was voted on 17 Sept., 1849, and the government received the 
 full power they had demanded. A royal command appeared on 9 June, for 
 the execution of the measure. The following are the principal articles : — 
 ' 1st. The pieces of ten and five florins shall cease to be in circulation as 
 legal payment from Sunday, 23 June, 1850, but they may continue to be 
 employed in commerce : that is to say, that these coins may be accepted in 
 payment at a conventional value. 2nd. These coins shall be received in 
 payment by government, and by the collectors of the revenues of the 
 kingdom, at their nominal value, till 31 July, 1850, inclusive,' 
 
 " At the time this notice was published, it appeared that the exchange of 
 gold for bank-notes would take place under the most favourable auspices. 
 Gold was at a tolerably high premium in the market of Amsterdam, bills of 
 exchange on foreign countries were scarce, and consequently the payments 
 of international commerce could very advantageouslybemade in the precious 
 metals. Moreover, the government treasury was full, and the Netherlands 
 Bank declared itself ready to assist efficiently in the operation. But all these 
 chances of success were destroyed by the precipitancy of the government. A 
 complete panic was occasioned by the short period granted to the holders of 
 gpld coin : the people hastened to pour their gold into the state treasury 
 (which could not receive it all), or else to send it abroad. The government 
 had imagined that the sum likely to be exchanged would not exceed 
 £2,500,000; they had miscalculated by two-fifths ; for the sum amounted to 
 £4,166,666. The £2,500,000 of paper money that they had been authorised 
 
M. Leon Faucher's Memoir. 29 
 
 to issue, together with the money in the treasury at their disposal, not being 
 sufficient to pay for the amount of gold preesnted, they were obliged to have 
 recoui'se to the Bank of the Netherlands, and to borrow a sura of £614,583, 
 at an interest, moderate it must be admitted, of 2| per cent, per annum. 
 
 " The exchange being effected, it was necessary for the government to find 
 a means of disposing of the gold withdrawn from circulation. It could be 
 sold only in foreign markets ; and there, private industry had forestalled the 
 goverament, and the price of gold had fallen in consequence of the number 
 of Gmllaumes brought for sale. At first the Dutch government suffered 
 only a small loss, owing to a momentary reaction in favour of gold coin ; 
 but the first sales having increased the depreciation, they were obliged, for 
 fear of greatly adding to their loss, to stop after having disposed of 
 £1,819,666 : the loss then amounted to £20,370, being about li^,fo per cent. 
 By the middle of October, gold had fallen in valv.e 2J per cent, below the 
 legal price, and by the middle of December, 4 per cent. At this period, the 
 pieces of five and ten florins, banished from Holland, were scattered about 
 in the different markets of Europe ; London had received them to the 
 amount of £600,000 ; Paris to the amount of £2,520,000 ; Germany had 
 absorbed the rest: excepting fi:om £2,333,333 to £2,416,666, still lying 
 unsold in the treasury of the Netherlands. 
 
 " The Guillaumes have continued to be melted and coined, in Paris, into 
 20 and 40 franc pieces ; for I find in an official record furnished me by the 
 President of the Mint, that Dutch coin was exchanged at Paris in the last 
 six months of 1850, to the amount of £1,637,362; and in the first six 
 months of 1851, to the amount of £2,836,064— altogether £4,473,426. 
 
 "The gold coinage of Holland, from 1816 to 1847, was 172,683,956 florins, 
 equal to £14,480,000. Supposing that of this only two-thirds was in 
 existence in this shape of coin in 1850, there would be 116,000,000 florins, 
 or £9,440,000, all at once withdravrai from circulation, and thrown upon the 
 gold market : is it possible that the price of gold could be otherwise than, 
 affected ? The gold thus suddenly demonetised equalled at least twice the 
 annual produce of the world, previous to the discovery of California. The 
 Mint of Paris alone, which had not struck above £1,080,000 in gold during 
 the year 1849, coined £3,400,000 in 1850, and £10,760,000 in 1851. 
 
 " Fortunately, the crisis was of short duration ; the gold coined in Paris 
 rapidly flowed either towards Peidmont, to pay the first instalment of their 
 lean, or to Milan to pay for silks bought by Lyons and St. Etienne. Credit 
 is at a low ebb in Italy, there is little paper circidation, tending to simplify 
 accounts, and taking the .place of specie in the adjustment of debts ; gold is 
 therefore always in demand, and the supply was speedily absorbed. 
 Certainly, the apprehensions of the Dutch government have proved hitherto 
 groundless, and the desired object has been but partially attained : sUver, 
 having become the sole standard, has found its way (somewhat in excess) 
 throughout the country, but the loss of gold coin has given rise to a small 
 note paper-circulation : there is now a paper money of ten and five florins 
 (21 francs and lOJ), which, although at first but provisionally issued, will 
 probably become permanent circulation. Holland is following the steps of 
 Prussia and Austria. The Dutch government supposed that, notwith- 
 
30 Silver — Increased Produce. 
 
 standing the demonetisation of gold, the coinage might remain in circu- 
 lation, and be voluntarily accepted for its intrinsic value. This was a 
 misconception of the nature of money, which is accepted as a circulating 
 medium only on account of its positive value. As might have been antici- 
 pated, gold had ceased to circulate in Holland, and paper has taken its 
 place. It is doubtful whether the nation has gained by the change. 
 
 " "We think we have sufficiently considered the subject of the fall in price 
 of gold in 1850. During the last eighteen months the production of this 
 metal has made immense progress. The crisis, which was then imaginary, 
 may have taken a more serious turn, and may become hereafter a reality. 
 
 It would be difficult, we conceive, to find any satisfactory answer 
 to the facts and arguments which M. Faucher has here adduced; 
 and we are glad to be able to support by his authority; and to 
 express in his forcible language, as rendered by Mr. Hankey ; 
 our views relative to the extent, and consequences, of the demo- 
 netisation of Gold, in Holland, and in some other countries. 
 
 (5) INCBEASED PEODUOTION OP SILVEE SINCE 1848. — FALL IN THE PRICE OP 
 aUIOKSILVEK. — ^M. PAUOHEe'S STATISTICS. 
 
 There stiU remains the fourth difficulty, to which we referred 
 above, as opposed to the reception of the depreciation theory 
 viz. : — the increase which has taken place in the annual production 
 of silver since 1848. 
 
 M. Faucher devotes to this subject a considerable part of the 
 Memoir already quoted ; and from that Memoir we compile the 
 following Table : reducing the foreign weights and moneys into 
 pounds sterling : — 
 
 Table XIV. — Silver. — Estimates of the Total Aimual Production, at the 
 Dates, and by the Authorities, as under : — 
 
 Year 1800 (Humboldt) £7,720,000 
 
 „ 1847 (M. ChevaUer) 8,000, 
 
 „ 1851 (li. Faucher), viz. : — 
 
 Mexico £5,320,000 
 
 Chili 880, 
 
 Pure 1,000, 
 
 Bolivia and New Grenada . . 480, 
 
 Russia and Norway 200, 
 
 Saxony and Bohemia 200, 
 
 Hungary 280, 
 
 ' Spain 640, 
 
 Kest of Europe 200, 
 
 9,200,000 
 
 Year 1852 (L. Faucher) 10,000,000 
 
Quicksilver — More abundant. 
 
 31 
 
 It appears from this Table — in the substantial accuracy of which, 
 as regards recent years, we are disposed to agree — that in 1852 
 the annual produce of silver in Europe, and America, was not less 
 than 25 per cent, greater than in 1847. 
 
 The increase in the production of silver has been caused mainly 
 by the discovery of new and prolific mines of Quicksilver. Quick- 
 silver, as is well known, enters very largely into the economy 
 of silver mining; and after a silver mine has been carried to a 
 certain point; and has ceased to yield less than a certain per 
 centage of metal ; the further prosecution of the works becomes a 
 question to be determined only by the price of quicksilver. In 
 Mexico and the other American silver-mining countries, it is said 
 that 1| quintals of quicksilver are required to obtain 1 quintal of 
 silver. California is hardly more remarkable for its gold deposits, 
 than for its mines of quicksilver : and the mine of New Almaden, 
 situated at some leagues distance from San Francisco, is described 
 as producing 10001b. troy per day: or, at 300 working days in 
 the year, 300,0001b. troy per annum. New quicksilver mines 
 have also been discovered in Mexico ; and generally the course 
 of events during the last five years has been to extend greatly 
 the production both of mercury and of silver. 
 
 The importations and prices of Quicksilver in this country for 
 the last three years and a half will illustrate this part of the subject, 
 namely : — 
 
 QUICKSILVER. 
 
 Years. lb. 
 
 1860 355,079 
 
 1851 27,370 
 
 1852 2,113,186 
 
 5th. Jan. 5th June "I 
 1853 J 
 
 1,014,765 
 
 Prices per lb. 
 
 June, 1850 48d. 
 
 „ 1851 46d. 
 
 „ 1852 36d. 
 
 1853 
 
 28d. 
 
 These figures are remarkable. It will be seen that the fall in 
 price since June, 1850, is not less than 40 per cent. ; and this fall 
 appears to have arisen wholly from increase of supply., 
 
32 
 
 Bank of France Returns. 
 
 (6) METAILIO KESEB.VES, &0., OP BANK OP PBANOB, 1848 — 1852. 
 
 While on this part of the subject ; connected as it is with France ; 
 ■we may; conveniently introduce the following statement of the 
 variations in the condition of the Bank of France since 1848 : — 
 
 BANK OP PEANCE. 
 
 I.— Statement of Total Metallic Reserve (nearly all Silver Coin) of Bank 
 of Prance at the Head-office and Branches, at Dates as under : — 
 
 Dec. 1848 £14,000,000 
 
 „ 1850 19,600, 
 
 Oct. 1851 (highest point reached) 25,000, 
 
 Dec. „ 22,700, 
 
 June, 1853 . 21,300, 
 
 II. — Statement of Total Circulation of Bank-notes of Bank of France. 
 
 Average of the Year 1850 
 
 1851 . . 
 
 Dates of 24th Deo. 1850 . . 
 
 „ 1851.. 
 
 „ 9th June, 1853 . . 
 
 Head-office, 
 Paeis. 
 
 Branches. 
 
 Total. 
 
 ' £ 
 16,700,000 
 17,000, 
 
 19,000, 
 
 £ 
 3,000,000 
 4,200, 
 
 6,120, 
 
 £ 
 19,700,000 
 21,200, 
 19,880, 
 23,320, 
 25,120, 
 
 The Reserve has fallen nearly £4,000,000 from the highest point 
 in October, 1851 ; and the Circulation has risen £5,000,000 in about 
 the same time. The rise in the circulation of the Bank of France 
 corresponds in a great degree with the rise in the circulation of 
 the Bank of England. 
 
 (7) CIRCULATION OP BANK NOTES IN THE UNITED KINGDOM, 1848 — 1853. 
 
 Still continuing our collection of facts as regards the effects 
 produced in this country on the rate of interest ; and on the supply 
 of, and demand for, capital ; by the new discoveries : it is necessary 
 to refer in the next place to the progress of the Circulation of 
 Bank-notes in the United Kingdom since 1848; and the following 
 Table (xv.), reduced into Averages of Six Months, will bring under 
 review the changes which have occurred : — 
 
Note Circulation. 
 
 33 
 
 Table XV. — Statement of the Half-yeaily Average Note Circulation of 
 the United Kingdom during the Periods as under ; -with the Half- 
 yearly Average amount of Bullion in both Departments of the Bank of 
 England (compiled from Pari. Pap. 524, 1853). 
 
 
 
 Enoland. 
 
 Scotland. 
 
 Ireland. 
 
 Total 
 
 Bullion 
 
 in Bank of 
 
 England. 
 
 Periods. 
 
 Bank 
 
 ot 
 
 England. 
 
 Private 
 and 
 
 Joint- 
 Stock 
 
 Banks. 
 
 Total. 
 
 Private 
 and 
 Joint- 
 Stock 
 Banks. 
 
 Bank of 
 Ireland, 
 Private, 
 and Joint- 
 Stock. 
 
 1848. 
 
 Mill. 
 18.94 
 
 19.48 
 19.49 
 
 20.51 
 20.72 
 
 20.38 
 20.84 
 
 22.25 
 24.22 
 
 24.02 
 
 Mill. 
 6.26 
 
 6.27 
 6.14 
 
 6.38 
 6.27 
 
 6.33 
 11-6 
 
 6.32 
 6.53 
 
 6.78 
 
 Mill. 
 25.20 
 
 26.76 
 25.63 
 
 26.89 
 26.99 
 
 26.71 
 26.96 
 
 28.67 
 30.75 
 
 30.80 
 
 Mill. 
 3.22 
 
 3.05 
 3.20 
 
 3.14 
 3.30 
 
 3.20 
 3.27 
 
 3.27 
 3.66 
 
 3.62 
 
 MiU. 
 4.64 
 
 4.39 
 4.24 
 
 4.83 
 4.52 
 
 4.68 
 4.36 
 
 4.57 
 6.10 
 
 5.60 
 
 Mill. 
 13.82 
 
 14.88 
 16.40 
 
 16.88 
 17.85 
 
 14.04 
 15.01 
 
 19.72 
 21.60 
 
 19.04 
 
 1849. 
 Jan. — June . . 
 
 July— Dec. . . 
 
 1850. 
 Jan. — June . . 
 
 July -Deo. . . 
 
 1851. 
 Jan. — June . . 
 
 July— Deo. .. 
 
 1852. 
 Jan. — June . . 
 
 July— Deo. . . 
 
 1853. 
 Jan.-^June . . 
 
 
 With reference to this Table, it is necessary to explain that, 
 according to the Bank Charter Act' of 1844 (7 & 8 Vict., cap. 32), 
 the quantity of Notes which the Private Banks and Joint-Stock Banks 
 of England, Scotland, and Ireland respectively can have, on the 
 average of a month, in the hands of the public, is fixed at certain 
 amounts for each bank; and therefore at a certain specific amount 
 for the aggregate of the banks in each of the three divisions of the 
 United Kingdom ; and a bank exceeding the limits of its issue is 
 liable to penalties. In Scotland and Ireland, however, the banks are 
 allowed to exceed the statutory limits of issue, on retaining certain 
 resei-ves of gold. The following are the fixed amounts under the 
 Act as they stand at present : — 
 
34 
 
 Note Circulation 
 
 Table XV. a. 
 
 Private Banks .... 
 
 Joint-Stock Banka . 
 
 Total 
 
 England. 
 
 Scotland. 
 
 Ireland. 
 
 No. 
 
 Fixed Issue. 
 
 No. 
 
 Fixed Issue. 
 
 No. 
 
 Fixed Issue. 
 
 168 
 
 65 
 
 233 
 
 4,655,619 
 3,409,987 
 
 18 
 
 3,087,209 
 
 8 
 8 
 
 £ 
 
 6,354,494 
 £6,354,494 
 
 £8,065,606 
 
 18 
 
 £3,087,209 
 
 Note.— Under the Actof 1844, the Original Fixed Issue for England was : — 
 
 199 PriTate Banks £5,011,097 
 
 71 Joint-Stock Banks 3,477,321 
 
 Giving a Total of £8,488,418 
 
 or £412,812 more than the iixed issue at present. Under the Scotch Banking 
 Act (8 & 9 Vict., cap. 38, 21st July, 1845), the original fixed issue was, for 
 18 Joint-Stock Banks, £3,087,209 ; and that amount is the same at present. 
 Under the Irish Banking Act (8 & 9 Vict., cap. 37, 21st July, 1845), the 
 original fixed issue was, for eight Joint-Stock Banks, £6,364,494; and it also 
 remains unchanged. The only change therefore, in the Fixed Issues arising 
 from reductions in the number of Banks is in England — and at the com- 
 mencement of the period embraced in Table xv. — ^namely, July, 1848 — the 
 fixed issue for England was : — 
 
 187 Private Banlcs £4,880,389 
 
 67 Joint-Stock ditto 3,409,987 
 
 Making together £8,290,376 
 
 The decrease, therefore, in the fixed issues of the whole of the United King- 
 dom, since July, 1848, has been only £224,770. 
 
 It will be seen by Table xv. that in England and Ireland the 
 actual Country Circulation is considerably below the fixed issues 
 even during the present year. In England, the actual, is less than 
 the fixed circulation, by £1,280,000; and in Ireland, by £750,000. 
 In Scotland, on the other hand, the actual, is more than the fixed, 
 circulation by £440,000. As regards England, the disparity is ex- 
 plained by the banks keeping in use only as many notes as amount 
 to their authorised issue ; and by some of those notes always remain- 
 ing in their drawers to answer applications. In Ireland, the revival 
 
of the United Kingdom, 35 
 
 of trade has not yet absorbed the circulation which was required 
 before the famine. In Scotland, the banks find it profitable to 
 exceed the statutory amount. 
 
 This outline of the present state of the law will explain in a great 
 measure the uniformity of the figures in the column of the English 
 Country Circulation, But even as regards that circulation, it will 
 be seen that there is a sensible increase from Jan. — June, 1852, to 
 Jan. — June, 1853. In Ireland the circulation has increased more 
 rapidly during the same time ; and the same thing has happened in 
 Scotland. The most marked increase, however, has taken place in 
 the Circulation of the Bank of England. To the end of 1851 it 
 may be said that 20 millions sterling was about the fuU limit of 
 the circulation of the Bank ; and during some portions of the year 
 it fell considerably short of 20 millions. In the first half of 1852 
 it was on the average 22^ millions ; — in the second half, 24i ; — and 
 in the first half of 1853 it was 24 millions. The circulation for the 
 month of June (1853) was 24^ millions ; and that was not a dividend 
 month. 
 
 It is highly probable that the restraint on the Country Circulation 
 has materially increased the Circulation of the Bank of England ; 
 and it is also highly probable that a considerable part of the increased 
 circulation is attributable to the greater activity which has prevailed, 
 during the last twelve months, in what may be called the larger 
 retail trade ; in payments of wages and salaries ; and in operations 
 connected with emigration. 
 
 (8) ALTERATIONS IN THE BATE OP DISCOUNT, 1851-53. 
 
 The next Table contains a statement of the market rate of discount 
 for the Two Years and a Half ending June, 1853 ; — 
 
 Table xvr. 
 
 D 2 
 
36 
 
 Rate of Discount. 
 
 Table XVI.— Statement of the Monthly Average of the Total Amount of 
 Bullion in the Bank of England; of the average Price of Consols ; of 
 the Bank of England minimum Kate oe Discount ; and of the Rate 
 of Discount in the Market for first-class Bills ;— from January, 1851, 
 to June, 1853 (2^ years). 
 
 Average 
 Amount of 
 
 Bullion 
 in the Bank. 
 
 Month. 
 
 Average 
 
 Price 
 
 of 
 
 Consgls. 
 
 Minimum Eate of 
 
 Discount of 
 Bank of England. 
 
 Market Eate of 
 
 Discount on 
 first-class BiUs. 
 
 14.6 
 14.4 
 14.4 
 
 Jan., 1861 
 Feb. „ 
 March „ 
 
 96^ 
 96i 
 96| 
 
 per ct. p. aim. 
 3— (26 Bee:, '50) 
 
 per ct. p. an. 
 
 it 
 
 13.6 
 13.5 
 14 
 
 AprU „ 
 May „ 
 June ,, 
 
 97 
 
 97i 
 
 98 
 
 >) 
 
 2| „ 2| 
 2| „ 3 
 2i „ 3i 
 
 14 
 
 14.2 
 
 14.6 
 
 July, 1851 
 Aug. „ 
 Sept. „ 
 
 96| 
 96i 
 96| 
 
 
 3 „ Sl 
 2f „ 3 
 
 15.1 
 15.8 
 17 
 
 Oct. „ 
 Nov. „ 
 Dec. „ 
 
 97 
 
 981 
 
 96i 
 
 
 2^,. 2f 
 
 18 
 
 18.5 
 
 19.6 
 
 Jan., 1862 
 Feb. „ 
 March ,, 
 
 ' 97 
 97 
 971 
 
 2|— (2 Jan., '52) 
 
 2 „ 2i 
 1|„ 2 
 
 It 
 
 19.6 
 20.5 
 21.6 
 
 April „ 
 May „ 
 Jime „ 
 
 99i 
 
 99| 
 
 lOOi 
 
 2— (22 April, '62) 
 
 1) 
 
 11 
 
 22 
 
 21.8 
 
 21.9 
 
 July „ 
 Aug. „ 
 Sept. „ 
 
 lOOi 
 
 100 
 
 100 
 
 »» 
 
 It 
 )» 
 11 
 
 21.6 
 21.3 
 21.3 
 
 Oct. „ 
 
 Nov. „ 
 Dec. „ 
 
 lOOi 
 
 ioo| 
 
 101 
 
 
 11 
 11 
 )I 
 
 19.6 
 
 18.4 
 19 
 
 Jan., 1853 
 
 Feb. „ 
 March ,, 
 
 100 
 
 99^ 
 99| 
 
 2i— (6 Jan., '63) 
 3— (20 Jan. „ ) 
 
 )» 
 
 2|„ 3 
 
 3 „H 
 
 It 
 
 18.8 
 18.1 
 18.6 
 
 April „ 
 May „ 
 June „ 
 
 lOOi 
 
 ioo| 
 
 98 
 
 3J— (2 Jilke, 1853) 
 
 H '.', 3i 
 
 As regards the figures contained in this Table, the most convenient 
 mode of comment will, perhaps, be to reprint certain passages from 
 
Rate of Discount. 37 
 
 articles which appeared in the Morning Chronicle on the 12th July, 
 1 852 ; and on the 6th June last ; and which were written in the 
 midst of discussions then taking place relative to the alterations in 
 the rate of discount ; alterations then prominently engaging attention 
 in consequence of events which were of very recent occurrence. 
 
 The following extract is from the article of the 12th July, 
 1852: — 
 
 " "We resume this subject from our paper of 5th instant, by taking up the 
 second of the questions which we then started — namely, What share have 
 the increased supplies of gold had in bringing about the present abundance 
 of capital and low rate of interest ? 
 
 " The facts of the case with which we have to deal are as follows : — At 
 the present time the minimum rate of discount at the Bank of England is 2 
 per cent, per annum — and at that rate very few bills are sent to the Bank. 
 The rate of discount in Lombard-street on first-class bills is between I5 and 
 2 per cent, according to dates. The interest allowed by the bill-brokers on 
 funds left with them ' on call ' is If per cent., but with the qualification that 
 the brokers are not always able to take charge, at that rate, of the sums 
 which may be offered to them. The supply of capital, therefore, in London 
 is so abundant that in certain quarters it does not readUy and at once find 
 employment at any rate of interest. As regards the interest on other secu- 
 rities, there is at present a general tendency towards decline. Railway 
 debentures carrying 5 per cent., are renewed at 4, and even the less eligible 
 class of mortgages may often be efiected at reduced rates of interest. Consols 
 are above par; and there has been a rapid and considerable rise during the 
 last six mouths in the market price of most interest-bearing securities — 
 British, colonial, and foreign — ^which have any reasonable pretensions to 
 solidity. 
 
 "These are the facts at present. But is this the first time that such a 
 state of things has prevailed ? By no means. The description juat given of 
 the state of the money market at the present moment applies, with scarcely 
 the alteration of a word or figure, to its condition during the greater part of 
 1844. The rate of discount at the Bank of England was practically 2§ per 
 cent, during the greater part of that year ; and the market rate of discount 
 for good bUls was for some time between IJ and 2 per cent. There was then, 
 as at present, considerable difficulty in placing money ' at call ' with the 
 brokers, at 1| to If per cent. ; and we know that in the summer of 1844, 
 considerable sums were refused at those rates, on the ground that there was 
 no immediate means of employing them. What is taking place now, there- 
 fore, has taken place before, and that within the last eight years ; and it is 
 the more important to notice this fact, because, as frequently happens on 
 the occurrence of anything at all varying from the most ordinary routine, 
 there is a mischievous disposition to increase the excitement by representing 
 the events as new and unparalleled. 
 
38 Rates of Discount, July, 1852. 
 
 " Iii-1844 there were no increased supplies of gold as there are now : and 
 the state of the money-market, and the rate of interest, did nevertheless very 
 closely correspond with what we see at present. We are not justified, there- 
 fore, on the face of the evidence, in attributing the present plethora and its 
 attendant phenomena wholly, or even mainly, to the increased supplies of 
 gold. The causes which led to the plethora of 1844 may have led to that of 
 1852 ; and before we can connect the increased supplies of gold with the 
 low rates of interest now prevailing, we have first of all to satisfy ourselves 
 that the causes which led to a simUar state of things eight years ago have 
 not been wholly or principally concerned in. producing the low rates of the 
 present time. Now, what were the most important of those causes ? In 
 the most general terms; — abundance of food and employment among the 
 industrial classes : and, as a result of that employment and abundance, con- 
 fidence on the part of capitalists, leading them to employ freely masses of 
 capital which a previous state of distress and disquiet had led them to retain 
 inactive. The same description applies at present. It is at once the good 
 and the bad fortune of this coimtry that its accumulations of capital go on 
 so rapidly, and are so vast, that the rate of interest is much more under the 
 influence of what may be called moral than of numerical causes. The rate 
 of interest in England, during the last twenty or thirty years, has hardly 
 ever been very high because the capital of the country was inadequate to 
 the demand : but because the prevalence of danger and alarm induced large 
 holders of capital to withdraw from the market, and to stand aloof until 
 perfect confidence was restored. ^ 
 
 " We are disposed, therefore, to trace the present plethora, primarily and 
 mainly, to the natural causes which produced a similar plethora in 1844, and 
 on several previous occasions. 
 
 " But have the increased supplies of gold had no influence in producing 
 this plethora ? To some extent they have. We shall see by-and-by that it 
 by no means follows that, because the quantity of metallic money may be 
 increased, the rate of interest on capital necessarily falls. Ajxd it is most 
 important to bear in mind that, thus far, the increased supplies of gold have 
 not bx this country passed into circulation as metallic money at all, but exist 
 almost whoUy in the form of deposits in the Bank of England ; and it is only 
 as such that they have produced any eflect on the money market. In 1844, 
 the Bullion slightly exceeded 16 mOlions sterling ; it now exceeds 22 millions. 
 For this reserve the Bank of England has to find profitable employment, in 
 order to make a dividend for its proprietors ; — and more particularly so since 
 the act of 1844, which is construed by the Bank Directors as placing them 
 on the level of any other large establishment carrying on the business of 
 banking. It is easy to understand, therefore, that when, with so immense a 
 reserve, the Bank found that 2^ per cent, did not bring them business, they 
 should be disposed to try 2 per cent. The latter rate has not brought them 
 much, if any more business than the former ; and numerically, therefore, it 
 maybe true, that so far the large bullion reserve in the Bank has not actually 
 come into the money market through the mediiun of discounts. But that is 
 not the whole case. The Bank exerts a moral influence — an influence of 
 
Rate of Discount, June, 1853. 39 
 
 example — at seasons like the present, far beyond the influence directly arising 
 from its advances. From the movements of the Bank of England, people 
 infer the tone and direction vrhich may be safely given to their own engage- 
 ments and speculations ; and it is in this way that we are feeling the effects 
 of the six or seven millions of new gold at present ia the Bank. It is not 
 that the new gold has been actually added to the metallio circulation outside 
 the Bank of England ; or to the amount of bank-notes in the hands of the 
 public. Neither of these things has taken place ; for we believe that scarcely 
 a single sovereign has been added to the metallic circtdation of this country 
 in consequence of the Californian and Australian discoveries ; and the weekly 
 accounts in the Gazette prove beyond all doubt that the quantity of bank- 
 notes in the hands of the public remains without any material change. The 
 fact is, that the new gold has been added to the reserve in the ' Banking de- 
 partment ' of the Bank of England ; — that, under the act of 1844, the directors 
 are at full liberty to find employment for that reserve by operating on the 
 rate of interest ; — and that the example of lowering the rate of interest, as 
 set by the Bank of England, has a powerful effect on the whole financial 
 system of the country." 
 
 The next extract is from the article of the 6th of June last, and it 
 continues the narrative brought down to July, 1852, by the preceding 
 extract : — 
 
 " The resolution of the directors of the Bank of England, on the 2nd inst. 
 (2 June, 1853), to adopt 3J per cent, as their minimum rate of discount, 
 establishes a rise in the rate of interest on bUls of exchange, and on com- 
 mercial securities of an analogous character, fully equal to Ij per cent, in 
 the space of little more than five months. So important an alteration in so 
 short a time, and one so little corresponding with views and anticipa- 
 tions which are very generally entertained, can hardly fail .to excite some 
 attention. 
 
 " In the autumn of last year, the condition of the money market, as 
 regarded the rate of interest, was very different from what it is at the present 
 moment. The Bank of England minimum rate was 2 per cent.^ — ^the total 
 stock of bullion in the two departments of banking and issue was larger than 
 at almost anyformer period — and, apparently, the prospective arrivals of gold 
 from Australia and other places, could not fail to increase largely a reserve 
 which was already considered excessive. The effect of this state of things 
 out of doors was very marked. It was generally supposed that the rate of 
 interest must be regarded as permanently reduced, in consequence of the 
 rapid increase of money capital — the immediate result of the importations of 
 gold ; and there can be no doubt that large transactions betvveen borrowers 
 and lenders were materially affected by views of this nature. The rate of 
 interest on advances previously made was reduced ; and new advances were 
 obtained on easier terms than had been before known. Nor was this alU 
 The reduction of the rate of interest ; the apparent abundance of capital 
 seeking employment ; and the confident opinions which were entertained 
 
40 Mate of Discount. 
 
 and expressed as to the continuance of such a state of things ; had gradually- 
 generated a spirit of speculation, bearing a close resemblance in its boldness 
 and diffusion to the early stages of the great speculations of 1836 and 1845. 
 The formation of public companies was, as in those years, the most striking 
 and conspicuous form in which the tendency in question manifested itself. 
 But there had also sprung up an extensive speculation in several kinds of 
 commodities, particulary in metals, and in some descriptions of Russian 
 produce. Nor was the universal activity the mere result of speculation. A 
 large, a profitable, and an increasing business was to be found in nearly 
 every part of the coimtry. There was a sound and vigorous demand for 
 nearly aU the objects produced by our artisans and manufacturers ; and a 
 movement had been already commenced by the working classes for obtaining 
 higher wages. 
 
 " Such was the state of things in the closing months of last year. In the 
 first week of January the Bank of England raised its rate of discount from 
 
 2 to 2| per cent. ; and that measure, taking the public very much by surprise, 
 led to discussions and investigations which were of infinite service in cor- 
 recting many prevalent opinions. It was found that our foreign trade, 
 notwithstanding the rapid increase in the value of our exports, was in a 
 condition which seriously affected the rates of exchange ; for it had led to 
 an export of bullion from this country, of suificient magnitude not only to 
 carry off, as they arrived, the supplies from Australia, but also to diminish 
 the stock of bullion previously in the possession of the Bank of England. 
 And it was also found that, whatever might have been the previous theories 
 as to a necessary reduction of the rate of interest, the time had arrived when 
 the directors of the Bank of England, guided by the ordinary rules of that 
 establishment, could no longer discount biUs at the low rate which had 
 prevailed for some months. In short, it became clear that, whatever might 
 be the cause, there had been some precipitation in concluding that the supply 
 of capital in this country had become so much greater than the demand as 
 to render necessary a sensible reduction both in the rate of discount and of 
 interest; — that is to say, both in the rate at which money or capital is 
 advanced on mercantile securities for short periods ; and also in the terms on 
 which capital is advanced on mortgages, debentures, and analogous securi- 
 ties of a permanent cheiracter for long periods. 
 
 " As is well known, a second rise of the Bank rate took place, from 2| to 
 
 3 per cent. ; and the increase of Thursday last has further raised the minimum 
 rate to 3i per cent. The question, then, arises, in what essential respects 
 are the circumstances affecting the rate of interest different from what they 
 were in November or December last, when there was a general opinion that 
 2 per cent., instead of 3J, correctly represented the value of capital seeking 
 employment in the discoimt of bills of exchange ? The question is a large 
 one, and not readily answered, but something, perhaps, may be said to 
 elucidate it. 
 
 " In the first place, there is reason to believe that 2 per cent, was a rate 
 not really justified by the facts of the case. The extreme depression of 
 the rate of interest during the simimer and autumn of last year, arose, 
 
Foreign Exchanges. 41 
 
 there is good reason to believe, mainly from one cause, and that cause of a 
 trmisitory character ; — namely, the rapid and excessive accumulation in the 
 hands of the Bank of England, and of other dealers in money, of the earlier 
 importations of gold from Australia. A considerable period elapsed between 
 the first arrival of Australian gold and a commencement of the vast conse- 
 quences to which it is manifest the gold discoveries must lead. During 
 that period it was, perhaps, inevitable that false appearances should present 
 themselves ; ajid that false inferences should be drawn. We saw the rapid 
 rise of the bullion reserves of the Bank ; — we heard of the untold treasures of 
 the land from which those reserves were derived ; — and we knew that almost 
 every day brought into our harbours ships laden with farther additions to 
 a stock of gold already without any precedent. It was not unnatural that 
 such a state of things should foster unduly sanguine anticipations." 
 
 We have nothing to add to the statements made in these extracts. 
 
 (9) STATE or THE rOBBie.V EXCHANGES, 1851 — 185S. 
 
 In connection with this part of the subject, the following State- 
 ment of the average monthly quotations of the exchange (at London) 
 on Paris and Hamburg ; and on London at New York ; will be 
 useful; and the columns which are added, of the comparative 
 dearness of gold in London in relation to the three places, will be 
 still more useful. 
 
 As regards the terms "comparative dearness of gold"; and 
 "for England"; and "against England"; — As, for example, 
 in March, 1851, when" gold is said to be 0.30 per cent, against 
 England; — the meaning is, that in March, 1851, on the average 
 of the month, gold was dearer in Paris than in London to the 
 extent of 0.30 of a £ ; or 6s. per cent. ; and consequently that 
 if the cost of sending gold to Paris should happen to be only (say) 
 Zs. per cent., there would be a profit in consigning gold thither ; — 
 and the higher the per centage against England, of course, the 
 stronger the inducement to send gold. 
 
 Table xvii. 
 
42 
 
 Foreign Exchanges, 1851 — 53. 
 
 Table XVII. — Foreign Exchanses : Statement of the Average Monthly 
 Rates of Exchange at London on Pakis, Hambubg, and New York: and 
 of the Arbitrated Value of Gold between London and those Places 
 from January 1851, to Jxdy 1853 (2i Years). 
 
 Months. 
 
 Paris. 
 
 gas 
 3-S 
 
 Gold Bullion. 
 
 < W 
 
 Hamburg. 
 
 lis 
 as 
 
 Gold Bullion. 
 
 .1 I 
 
 < H 
 
 New Yoke. 
 
 
 Gold Bullion. 
 
 1851. 
 Jan. . . . 
 
 Feb. . . . 
 Mch. . . 
 
 April , 
 May. . 
 June . 
 
 July. 
 
 Aug. 
 Sep.. 
 
 Oct 
 
 Not. . , 
 Dec. . . 
 
 1853. 
 Jan. . , . 
 Feb.... 
 Mch. . . 
 
 April . 
 May. . 
 June . 
 
 July. 
 Aug. 
 Sep.. 
 
 Oct 
 
 Nov. . . 
 Dec. . . 
 
 1853. 
 
 Jan. . . . 
 Feb 
 
 Mch. . . 
 
 April . 
 May. . 
 June . 
 
 July.. 
 
 26.22 
 26.20 
 26.20 
 
 26.30 
 25.25 
 25.20 
 
 25 20 
 25.25 
 25.35 
 
 25.30 
 25.40 
 25.47 
 
 25,47 
 26.6U 
 25.55 
 
 25.60 
 25.65 
 25.60 
 
 25.50 
 25.50 
 25.60 
 
 25.50 
 26.40 
 26.35 
 
 25.30 
 25.30 
 25.27 
 
 25.30 
 25.25 
 25.30 
 
 25.27 
 
 p. ct. 
 0.65 
 0.46 
 0.30 
 
 0.25 
 0.35 
 0.10 
 
 0.18 
 par 
 par 
 
 0.38 
 
 p. ct 
 
 0.05 
 0.10 
 
 0.48 
 0.38 
 0.43 
 
 0.42 
 0.45 
 0.46 
 
 0.58 
 
 0.32 
 0.22 
 
 0.41 
 0.44 
 0.63 
 
 0.56 
 0.63 
 0.46 
 
 0.27 
 0.39 
 0.34 
 
 0.30 
 
 13 6 
 
 13.6i 
 
 13.7 
 
 13.8 
 
 13.74 
 
 13.7J 
 
 13 71 
 13. 8 J 
 13.10 
 
 13.101 
 
 13.11 
 
 13.10i 
 
 13.10^ 
 13.10J 
 13.11 
 
 13.11 
 13. Hi 
 13.11 
 
 13.9i 
 13.9§ 
 13.9i 
 
 13.8i 
 
 13-7 
 
 13.5i 
 
 13.6 
 13.7 
 13.8 
 
 13.8i 
 13.8J 
 13 8i 
 
 13.74 
 
 p.ct. 
 0.66 
 0.60 
 0.70 
 
 0.49 
 0.54 
 0.57 
 
 0.47 
 0.35 
 0.42 
 
 0.28 
 0.05 
 0.18 
 
 0.80 
 
 p.ct. 
 
 0.20 
 0.25 
 0.26 
 
 0.10 
 0.40 
 0.40 
 
 0,46 
 0.61 
 0.58 
 
 0.60 
 0.77 
 0.64 
 
 0.42 
 0.60 
 0.56 
 
 0.37 
 0.56 
 0.41 
 
 llOJ 
 
 110 
 
 110 
 
 110 
 
 110| 
 
 llOJ 
 
 liOi 
 
 110 
 
 110 
 
 110 
 110 
 llOi 
 
 110 
 
 1101 
 
 UOi 
 
 109j 
 109J 
 110| 
 
 llOf 
 llOi 
 UOJ 
 
 1104 
 
 110 
 110 
 
 1094 
 109i 
 109f 
 
 109 
 109 
 1094 
 
 1091 
 
 p. ct. 
 
 08 
 
Results of Foreign Exchanges, 1851 — 53. 43 
 
 Applying the explanations just given, it will be seen that the 
 difference between the value of gold in London and in Paris and 
 Hamburg was small till about October, 1852 ; and that gold had, on 
 the whole, a tendency — occasionally a strong tendency — to flow into 
 this country from the Continent. Since October last, however, the 
 former state of things has been reversed. Gold has generally been 
 an advantageous mode of remittance both to Paris and Hamburg ; 
 and for some weeks past, as a matter of fact, considerable amounts 
 of gold have been sent to those cities from hence. 
 
 With the United States, the margin has not been sufficient to 
 cover the expenses of transit. 
 
 The Table, therefore, shows a marked change in the results of the 
 foreign exchanges during the last nine months. 
 
 IV. — Facts connected with the Effects already Produced 
 BY THE New Discoveries on the Prices op Commodities 
 AND the Wages of Labour in this Country. 
 
 (1) PRICES OP THIRTY NINE COMMODITIES IN LONDON, 1851 — 1853. 
 
 We may now examine the facts connected with the effect of the 
 new discoveries upon the Prices of Commodities and the Wages of 
 Labour in this country ; and with that view we insert the following 
 Table of the Prices in London from June, 1851, to July, 1853, of 
 Thirty-Eight leading commodities : — 
 
 Table xviii. 
 
44 Prices of Commodities, 1851 — 53. 
 
 Table XVni. 
 Prices in London (compiled from actual Prices Current) of Thirty- 
 
 Aktioles. 
 
 I. Ashes, Can. pearl' per cwt. 
 
 i. CoEFEE, Jam., fine ord. to mid., „ 
 
 3. Cotton, bowed Georg p. lb. 
 
 4. LoowoOD, Jam p. ton 
 
 5. Flax, Riga, P.T.R 
 
 Hemp, St. Petersbxirg, clean new „ 
 
 Indigo, Bengal p. lb. 
 
 Leather, Eng. butts, 28 to 36 „ 
 
 CoppEE, tough cake p. ton 
 
 Iron, Brit, bars 
 
 „ Swed., in bond „ 
 
 Lead, Eng. pig „ 
 
 Steel, Swed , 
 
 Tin, Eng. bars „ 
 
 Oils, Seal p. 252 gal 
 
 „ Olive Galipoli p. tun 
 
 „ Palm „ 
 
 Butter, Waterford p. cwt. 
 
 Beef, Amer. and Can p. tierce 
 
 1 1 . Saltpetre, rough p. cwt. 
 
 12. Silk (raw), Cossim p. lb. 
 
 13. Rum, Jam., 15 to 25 0. p p. gal. 
 
 14. Sugar, Brit. Plan., yel., d. p p. cwt. 
 
 „ Bengal, g. y „ 
 
 1851. 
 
 Jan. 4. 
 
 30s 6d ® 31s 
 
 63s „ 58s 
 
 7Jd „ 8d 
 
 70s „ 80s 
 
 £38 „ £46 
 £30 „ £30J 
 
 3s „ 6s lOd 
 
 Is „ Is lid 
 
 £84 
 £5 15s 6d 
 £11 ISs 
 £174 
 £15 
 £84 
 
 £37 
 £43 
 £29 
 
 78s „ 80s 
 75s „ 90s 
 
 27s 6d „ 
 29s 6d 
 
 )s „ 17s 6d 
 
 2s 6d „ 2s 8d 
 
 37s „ 39s 
 34s 6d „ 46s 
 
 July 5. 
 
 43s 'CO 46s 
 5Jd „ 6d 
 65s „ 70s 
 
 £42 „ £48 
 same 
 
 2s 9d „ 6s 6d 
 
 same 
 £5 7s 
 same 
 
 £17 
 same 
 
 £85 
 
 £31 
 £39 
 
 £28 
 
 72s „ 74s 
 same 
 
 26s „ 28s 6d 
 9a „ 18s 
 
 34s „ 35s 
 32s „ 43s 
 
Prices of Commodities, 1851 — 53. 
 
 45 
 
 Table XVIII. 
 EIGHT Articlbs, at the Dates as under, between Jan., 1851, and July, 1853. 
 
 
 1832. 
 
 1853. 
 
 
 
 Jan. 3. 
 
 July 3. 
 
 Oct. 9. 
 
 Jan. 1. 
 
 April 2. 
 
 Julyl. 
 
 
 I 
 
 28s m 28s 6d 
 
 27s 6d ® 28s 
 
 same 
 
 same 
 
 283 ® 28s 6d 
 
 same 
 
 I 
 
 2 
 
 44s „ 47s 6d 
 
 43s „ 46s 6d 
 
 47s ® 66s 
 
 48s ® 59s 
 
 50s „ 68s 
 
 same 
 
 2 
 
 3 
 
 5d „ 6d 
 
 51d „ 6|d 
 
 5| „ 6i 
 
 6d „ 6d 
 
 6i „ 6| 
 
 same 
 
 3 
 
 4 
 
 same 
 
 same 
 
 60s „ 70s 
 
 80s „ 86s 
 
 106s „ 110s 
 
 same 
 
 4 
 
 5 
 
 same 
 £304 „ £31 
 
 £42 „ £53 
 £30 
 
 same 
 £30i 
 
 same 
 £39 
 
 £42 „ £66 
 
 same 
 
 same 
 £364 
 
 5 
 
 6 
 
 23 6d „ 6s 3d 
 
 3s „ 6s 2d 
 
 4s „ 6s 6d 
 
 4s 6d „ 7s 6d 
 
 5s 3d,, 7s 6d 
 
 4s9d®73 8d 
 
 6 
 
 7 
 
 same 
 
 Is „ Is 9d 
 
 same 
 
 same 
 
 lsld„lslOd 
 
 l3 2d„.lslOd 
 
 7 
 
 g 
 
 £884 
 £5 2s 
 same 
 same 
 same 
 
 £90 
 
 £98 
 £5 10s 
 same 
 £174 
 same 
 
 £88 
 
 £102| 
 £7 16s 
 £11 
 £18 
 £15i 
 £97 
 
 same 
 £9 10s 
 
 £llj 
 £24 
 £20 
 
 £103 
 
 £135 
 same 
 
 £114 
 £25 
 £20 
 £123 
 
 £1074 
 same 
 same 
 £244 
 £17 
 £108 
 
 g 
 
 9 
 
 £33 
 £43 
 £27 
 
 £35 
 £46 
 £284 
 
 £34i 
 
 £55 
 
 £30 „ £36 
 
 £364 
 £594 
 £344 
 
 £35 
 £70 
 £334 
 
 £334 
 
 £71 
 
 £36 
 
 9 
 
 lO 
 
 same 
 same 
 
 64s „ 68s 
 same 
 
 743 „ 80s 
 120s 
 
 80s „ 86s 
 same 
 
 863 „ 90s 
 136s „ 1403 
 
 84s 
 same 
 
 lO 
 
 II 
 
 same 
 
 same 
 
 24s „ 29 
 
 same 
 
 24s „ 30s 
 
 24s „ 28s 
 
 II 
 
 12 
 
 93 6d„14s6d 
 
 10s 6d „ 16s 
 
 same 
 
 same 
 
 12s „ 15s 6d 
 
 same 
 
 12 
 
 ' 13 
 
 2s 2d „ 2s 4d 
 
 2s „ 2s 2d 
 
 same 
 
 2s8d„2sl0d 
 
 same 
 
 same 
 
 13 
 
 14 
 
 28s „ 31s 
 
 27s „ 31s 
 
 f 19s „ 22s 
 \ d n p 10s 
 
 21s „ 26s 
 
 22s „ 25s 6d 
 
 20s „ 23s 
 
 14 
 
 
 26s „ 40s 
 
 26s „ 39s 
 
 27s „ 32s 
 
 27s „ 32s 
 
 same 
 
 27s „ 31s 
 
 
46 
 
 Prices of Commodities, 1851 — 53. 
 Table XVIII. — continued. 
 
 Aeticles. 
 
 15. Tallotv, St. Peters., 1st y. c p. cwt. 
 
 16. Tea, Congou, com. to mid p. lb. 
 
 17. Timber, Dan. and Mem p. load 
 
 Can., Y. P „ 
 
 18. Tobacco, Virg. leaf p. lb. 
 
 19. Wools (Sheep's) Engl., S. Down, p. 2401b. 
 
 ,, South Austral., Comb. . . p. lb. 
 
 „ South Austral., Lambs . . „ 
 
 „ Ditto, Locks „ 
 
 20. Provisions (Newgate Market) : — 
 
 Beep — 
 
 Inferior mid p. 81b. 
 
 Prime large „ 
 
 Mutton — 
 
 Mid „ 
 
 Prime „ 
 
 Pork — 
 
 Large „ 
 
 1851. 
 
 Jan. 4. 
 
 36s 6d 
 12d © 12id- 
 
 60s „ 70s 
 dSs „ 60s 
 
 4Jd „ lOd 
 
 £14 
 13d „ 22d 
 16d „ 19d 
 lOd „ 14d 
 
 d d 
 
 28 „ 30 
 
 32 „ 36 
 
 34 „ 42 
 
 44 „ 46 
 
 30 
 
 42 
 
 Julys. 
 
 37s 6d 
 
 lOid 
 
 50s ® 6ds 
 50s „ 60s 
 
 £14J 
 
 lOd „ 16d 
 
 13d „ 19d 
 
 6d „ 13d 
 
 d 
 30 
 34 
 
 d 
 32 
 
 34 „ 38 
 
 42 „ 44 
 
 28 „ 40 
 
 This Table is, perhaps, the most important in our collection ; and, 
 considering the number and character of the Thirty-Eight articles it 
 includes, it may be considered not unfairly as representing the effect 
 — ^if any — which has been produced on the great articles of raw 
 material and consumption in this country by the new supplies of 
 gold. 
 
 To analyse fully the different columns of the Table would lead us 
 into a digression incompatible with our limits and our design ; and 
 while it is desirable that the whole Table should be carefully ex- 
 amined, article by article, and date by date, in order fairly to arrive 
 at a true result, we can do no more than refer to a few of the more 
 remarkable changes of price which it exhibits, 
 
Prices of Commodities, 1851 — 53. 
 
 Table XVIII — continued. 
 
 47 
 
 
 1852. 
 
 1853. 
 
 
 Jan. 3. 
 
 July 3. 
 
 Oct. 9. 
 
 Jan. 1. 
 
 April 2. 
 
 July 1. 
 
 '5 
 
 37s 
 
 38s 
 
 42b 
 
 4ds 
 
 same 
 
 49s 
 
 i6 
 
 7d® 9d 
 
 OJd <a SJd 
 
 8d ® Sid 
 
 lOJd 
 
 same 
 
 lid® 12d 
 
 I? 
 
 45s „ 60s 
 50s „ 70s 
 
 62s „ 65s 
 70s „ 80s 
 
 67s „ 70s 
 same 
 
 67a ® 77s 
 70b „ 85s 
 
 67s ® 80s 
 same 
 
 72s „ 80s 
 
 same 
 
 i8 
 
 24d „ 74d 
 
 2Jd „ 6d 
 
 2§d „ 7d 
 
 same 
 
 same 
 
 m „ nd 
 
 '9 
 
 £13i 
 13d „ 17d 
 lid „ 18d 
 6d „ 16d 
 
 £15 
 12d „ 24d 
 15d „ 24d 
 lOd „ 19d 
 
 £16? 
 
 same 
 
 lld„ 21d 
 
 6d „ 17d 
 
 £17i 
 
 15d „ 20d 
 
 14d „ 20d 
 
 7d „ 17d 
 
 £19 
 same 
 same 
 same 
 
 £19j 
 
 same 
 
 17d 
 
 same 
 
 20 
 
 d d 
 32 „ 34 
 36 „ 38 
 
 d d 
 
 32 „ 46 
 same 
 
 d . d 
 28 ,, 30 
 32 „ 34 
 
 d d 
 32 „ 34 
 36 „ 38 
 
 d d 
 36 „ 38 
 40 „ 42 
 
 d d 
 40 „ 42 
 42 „ 44 
 
 
 38 „ 44 
 
 46 „ 48 
 
 34 „ 40 
 42 „ 44 
 
 36 „ 42 
 44 „ 50 
 
 44 „ 60 
 52 „ 54 
 
 44 „ 48 
 50 „ 54 
 
 46 „ 60 
 52 „ 56 
 
 
 32 „ 44 
 
 30 „ 38 
 
 34 „ 36 
 
 32 „ 50 
 
 34 „ 40 
 
 40 „ 44 
 
 19 
 
 We think that the general impression produced by the whole 
 Table is, that during the Two Years and a Half which it includes, 
 there has been a tendency towards a rise of prices in leading 
 articles of raw material and consumption; and that this rise of 
 prices is not, on the whole, to be explained entirely by the causes 
 which may have affected the supply of, and the demand for, 
 the several commodities. We arrive at this conclusion, however, 
 not without some hesitation : and we neither hold nor express 
 it strongly. A very cursory inspection of the Table will show 
 that there is but little uniformity either as regards the commence- 
 ment, the continuance, or the extent of the rise in prices. 
 There have been large advances in some important articles ; and 
 
48 
 
 Results of Table xvm. 
 
 either no advance, or a slight decline, in others.. And it is im- 
 portant to bear in mind that causes affecting supply and demand 
 are quite sufficient, in many instances, to explain the variations of 
 the Table. It is desirable to insist strongly on this point, because, 
 if we have arrived at a time when discussions are to take place as to 
 how far prices have risen purely in consequence of alterations in the 
 relative value of gold and silver ; it is certain that we shall only 
 involve ourselves in confusion and injustice if we do not carefully 
 attend to those circumstances in the supply of, and demand for, an 
 article which, in a large proportion of cases, will be found amply 
 sufficient to account for alterations in price. 
 
 The articles which, according to the preceding Table, appear to 
 have Risen most in Price, are as follows : — 
 
 Articles. 
 
 Logwood 20 p. ct, 
 
 Flax 12 ,, 
 
 Hemp 30 ,, 
 
 First Rise. 
 , Jan. to Apr. '53 , 
 
 July '52 
 
 Jan. '63 
 
 Subsequent Price, 
 maintained to July, '53. 
 
 Indigo. 
 
 50 
 
 Copper 14 
 
 Iron 40 
 
 Lead 40 
 
 Steel 30 
 
 Tin 14 
 
 OH, Galipoli 30 
 
 on, Palm 25 
 
 Beef, Amer 50 
 
 Butter 7 
 
 TaUow 20 
 
 Timber 25 
 
 "Wool, Eng 10 
 
 Beef, Eng 20 
 
 Mutton, Eng 30 
 
 not quite maintained 
 
 to July, '63. 
 
 progressive over tlie 2§ 
 
 years. 
 
 July '52 higher and then lower. 
 
 Oct. '52 40 p. ct. more. 
 
 Jan. '53 maintained. 
 
 Jan. '53 not quite maintained. 
 
 Oct. '52 10 p. ct. more. 
 
 Oct. '52 to Jan. '53. 30 p. ct. more. 
 Oct. '52 to Jan. '63. maintained. 
 
 Oct. '52 20p. ct. more. 
 
 Oct. '52 maintained. 
 
 Jan. 6 to Dec. '62 . . 10 p. ct. more. 
 July to Oct. '52.. .. maintained. 
 
 Oct. '62 20 p. ct. more. 
 
 , , '62 maintained. 
 
 Dec. '52 
 
 And the following are the articles which have either remained 
 stationary or have slightly dechned : — 
 
 Ashes sUghtly declined. 
 
 Coffee no material change. 
 
 Cotton Wool declined. 
 
 Leather stationary. 
 
 Oil — seal declined. 
 
Causes of Rise of Prices. 49 
 
 Saltpetre stationary. 
 
 Silk, raw „ 
 
 Bum » 
 
 Sugar no material change. 
 
 Tea declined. 
 
 Tobacco „ 
 
 In looking over these Two Lists, it will be quite obvious that, in 
 many cases, the alteration of price is fully explained by con- 
 siderations of supply and demand. This we believe to be the case 
 as regards Flax and Hemp — the Metals — Tallow and Timber — and 
 notoriously so as regards Wool and articles in the Provision Trade. 
 It is also the case with respect to CoiFee, Cotton, Sugar, and 
 Tobacco . 
 
 In speaking, however, of considerations connected with supply 
 and demand, it is necessary to draw a distinction. 
 
 A rise in price in consequence of a scarcity of the article — or, in 
 other words, from a falling off in the ordinary quantity required to 
 meet an ordinary demand — is one thing; a rise in price in conse- 
 quence of increased speculation or increased consumption acting* 
 upon an ordinary supply, is another thing. In the first case, the 
 alteration of price is wholly on the side of the supply — in the latter, 
 whoUy on the side of the demand. Now the increased speculation, 
 or consumption, or both, may arise from an activity in general 
 business, the consequence of some general cause operating over 
 the whole industry of the country; — such a general cause, for 
 example, as we saw last year, when the low rate of interest, and 
 the expanding colonial and foreign trade, imparted great activity to 
 enterprise. We think that the rise, in the prices of several of the 
 articles in the Table, is to be traced to a speculation and con- 
 sumption of the nature we have here described ; and while, there- 
 fore, the increased prices have not arisen, positively and directly, 
 from an increase in the quantity of metallic money, they do appear 
 to be more or less connected ; — though we do not attempt to state 
 the degree of that connection ; — with the effects already produced 
 in this country by the new supplies of gold. 
 
50 
 
 Rise in Wages, 1852i-53. 
 
 (2) RISE IN THE WAGES OP LABOTIK— STATISTICAL EVIDENCE. 
 
 The question as regards the Wages of Labour will come before us 
 in the next Table. We have compiled that Table from figures given 
 in a pamphlet recently issued, entitled The Strikes ; apparently- 
 written by a working man; and entitled by its good sense and 
 moderation to commendation. The writer has considerable acquaint- 
 ance with the facts of the movement for higher wages ; and it is to 
 be regretted that his manner of stating those facts is not more 
 precise and methodical. 
 
 Table XIX. — ^Wages of Handiceaet Trades. — Statement, more or less 
 approximative, of Wages in the Trades, and at the Places, as under : — 
 
 Trades. 
 
 Places. 
 
 At end 
 
 of 
 1852. 
 
 In- 
 crease, 
 
 July In- 
 
 1853. crease. 
 
 I 
 
 Brickmaiers. .. 
 Bricklayers .... 
 Carpenters .... 
 
 Masons 
 
 Painters 
 
 Plasterers 
 
 Plumbers 
 
 Slaters 
 
 Factory hands . 
 
 Ashton , 
 
 Leeds , 
 
 Brighton 
 
 "Wolverhampton, 
 
 Stonehouse 
 
 Sheffield 
 
 Liverpool 
 
 Glasgow 
 
 Manchester 
 
 per 1000. . 
 per week 
 
 generally 
 
 s. d. 
 3 8 
 27 . 
 24 . 
 24 . 
 18 . 
 24 , 
 24 . 
 15 . 
 
 s. d. 
 4 
 3 . 
 3 . 
 
 3 . 
 
 2 . 
 2 . 
 
 d. 
 4 
 30 
 27 
 27 
 21 
 27 
 26 
 17 
 
 per ct, 
 9 
 
 IH 
 12i 
 12i 
 17 
 
 12| 
 
 8 
 
 13 
 
 10tol2 
 
 The agitation for higher wages seems to have commenced in the 
 autumn of 1852; and it has extended to nearly all handicraft and 
 manual occupations. The Table just given includes only a few trades 
 and places : but the general result of the movement throughout 
 Great Britain appears to be that wages have risen, during the last 
 nine months, not less than from 10 to 20 per cent. 
 
 (3) INCREASE IN THE EXPORT TRADE — GENERAL RESULTS. 
 
 The great extension which has taken place in the Export Trade 
 of the country during the last nine months, has afforded in many 
 cases a leading argument for an increase of wage^ ; and that this 
 argument is borne out by the facts will appear by the following 
 statement ; — 
 
Increase of Export Trade, 1850 — 53. 
 
 51 
 
 Table XX.— Expoet Trade op United Kingdom, 1850-1853.— Declared 
 Value of EXPOETS of certain Articles, arranged in Periods of Three 
 Months. 
 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 i 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 
 eo" 
 
 o* 
 
 cq 
 
 <« 
 
 o 
 
 Tj« . 
 
 00* 
 
 r-T 
 
 3* • 
 
 © *C oo • 
 
 N 
 
 1:^ 
 
 OS 
 
 iH 
 
 t* 
 
 1^ . 
 
 
 i-t 
 
 -* 
 
 *^ 00 o 
 
 
 
 W5^ 
 
 00^ 
 
 I-H 
 
 
 os^ 
 ccT 
 
 «- 
 
 os" 
 
 00 
 
 o" 
 
 tH OS 1-H 
 
 lo" tjT tC 
 
 rH 
 
 rH 
 
 i-C 
 
 (M 
 
 I-H 
 
 I-H 
 
 T-l 
 
 rH 
 
 I-H 
 
 01 
 
 iH f-H r-( 
 
 ji 
 
 1 
 
 <N 
 
 I-H 
 
 ccT 
 
 00* 
 
 c<r 
 
 CO* • 
 
 *^ 
 
 os" 
 
 «a* 
 
 n « .. 
 
 O CO 
 
 ^ 
 
 CO 
 
 (N 
 
 '^if 
 
 OS 
 
 CO • 
 
 (N 
 
 CO 
 
 N 
 
 ^ .°2 2 
 
 ^^ 
 
 00_ 
 
 
 
 
 
 I-H 
 
 00 
 
 I-l 
 
 
 co^ 
 
 OS 
 
 go" 
 
 t>-^ «3^ OS^ 
 
 f-t rH rH 
 
 . 
 
 O 
 
 
 
 
 
 
 
 
 
 
 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 M:ta 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 s 1 
 
 ^lo- 
 
 oT 
 
 1— r 
 
 ^h" 
 
 cT 
 
 co" 
 
 oo" • 
 
 t*r 
 
 oo" 
 
 -** : 
 
 ef « -* ; 
 
 tC S 
 
 co 
 
 OS 
 
 tH 
 
 ■* 
 
 U3 
 
 
 
 (M 
 
 CD 
 
 t* 
 
 tH 00 ^ 
 
 
 (N 
 
 (M 
 
 (M 
 
 tH 
 
 « 
 
 CN 
 
 c^ 
 
 CO 
 
 CO 
 
 CO 
 
 <N rH CO 
 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 "i 
 
 o 
 o 
 
 
 
 
 
 
 
 
 
 ^ 
 
 « « « 
 
 
 ^t>r 
 
 to 
 
 CO* 
 
 CO* 
 
 o" 
 
 
 <=>" : 
 
 
 CO 
 
 TjT 
 
 oT *-r iF-T ; 
 
 
 (O 
 
 OS 
 
 CO 
 
 ■«H 
 
 ua 
 
 
 ^ ' 
 
 
 cq 
 
 00 • 
 
 QO t-H *^ 
 
 % 
 
 s 
 
 i-H 
 
 °i> 
 
 O 
 
 "*„ 
 
 "^ 
 
 CO 
 
 ■^ 
 
 «5 
 
 °1 
 
 Q0_^ *^ "*^ 
 
 
 •-<" 
 
 N 
 
 t-l 
 
 CO 
 
 e^T 
 
 cf 
 
 N 
 
 M 
 
 of 
 
 of 
 
 rn" rT C<r 
 
 § g 
 
 o 
 o 
 
 
 
 
 
 
 
 
 
 
 
 Ai- 
 
 ^ o 
 
 
 
 
 
 
 
 
 
 
 
 
 'rt« 
 
 
 
 
 
 
 
 
 
 
 
 "=3 £ 
 
 o 
 
 00 
 
 U3 
 
 CO 
 
 W5 
 
 CO 
 
 CO 
 
 "* 
 
 00 
 
 tH O « 
 
 >^l 
 
 '^ 
 
 ■* 
 
 CO 
 
 CO 
 
 ■^ 
 
 '«J< 
 
 OS 
 
 t^ 
 
 CO 
 
 W3 
 
 '^ W3 <M 
 
 
 I-H 
 
 I-H 
 
 CO 
 
 f-l 
 
 I-H 
 
 I-H 
 
 I-H 
 
 
 (N 
 
 rH rH Ol 
 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 
 o 
 o 
 
 
 
 
 
 
 
 
 
 
 
 «" 
 
 QO" 
 
 j>r 
 
 CO* 
 
 us" 
 
 oT '• 
 
 ^ 
 
 wa" 
 
 CO ', 
 
 t-T CO* 00* * 
 
 Oi 
 
 ■* 
 
 pH 
 
 i^ 
 
 CO 
 
 CO 
 
 <M 
 
 CO 
 
 OS 
 
 CO 
 
 ril IQ t^ 
 
 U3 
 
 CD 
 
 CO 
 
 !>. 
 
 CO 
 
 t^ 
 
 CD 
 
 l>- 
 
 t- 
 
 *>- 
 
 CO CO CD 
 
 i^ 
 
 O 
 
 o 
 o 
 
 
 
 
 
 
 
 
 
 
 
 
 'rtcf 
 
 CD* 
 
 cT 
 
 cT 
 
 TtT 
 
 «r 
 
 ^ \ 
 
 •oT 
 
 t-T 
 
 oT - 
 
 CO CO OS • 
 
 «3 
 
 o 
 
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 N 
 
 CO 
 
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 '^ 
 
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 CD 
 
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 O (N CO 
 
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 ^ 
 
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 !>. 
 
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 CO 
 
 OS^ 
 
 00^ 
 
 l>- 
 
 ■* 
 
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 t^ 
 
 CM 
 
 CO 
 
 tH oa >0 
 
 CO 
 
 Ms" 
 
 iflT 
 
 to 
 
 ko" 
 
 ^ 
 
 wa" 
 
 «5 
 
 CO* 
 
 CO 
 
 »0 kO wT 
 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 
 ^ 
 
 ^ 
 
 
 
 
 
 
 
 
 , 
 
 
 ef 
 
 -^iT 
 
 QCT 
 
 t-T 
 
 CO* 
 
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 pq 
 
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 t^ 
 
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 us 
 
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 i-t 
 
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 1-* 
 
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 pH 
 
 
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 rH rH rH 
 
 
 o 
 
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 ^ 
 
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 O rH Oq CO 
 
 S 
 
 U3 
 
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 W3 
 
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 lO 
 
 lO 
 
 W3 W3 
 
 
 W3 
 
 «a U5 
 
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 00 
 
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 oo 
 
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 00 00 
 
 
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 CO 00 
 
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 St3 
 
 l-H 
 
 <— ( 
 
 ^H 
 
 I-H 
 
 -H 
 
 1-H 
 
 iH I-H 
 
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 rH 
 
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 rH r-l rH rH 
 
 Quar 
 ende 
 
 1 
 
 U3 
 
 
 
 
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 CO 
 
 E 2 
 
62 Results of Export Trade. 
 
 The increase shown by these figures in the last three Quarters (5th 
 Oct., 31st Dec, 5th April), compared with former years, is exceed- 
 ingly remarkable; and it will probably appear from a subsequent 
 part of our inquiry that those articles of Export in which there is the 
 largest increase, are those entering most extensively into the Austra- 
 lian trade; and that the process which is now going on, as regards 
 the new supplies of gold from Australia, may be briefly described as 
 consisting of three steps : — 
 
 First, there is a large demand in Australia for certain articles of 
 British manufacture and export. 
 
 Secondly, the production of those articles of export involves the 
 extensive consumption in this country of foreign produce. And, 
 
 Thirdly, in payment for this foreign produce, this country employs, 
 in a great measure, the gold it receives for its manufactures from 
 Australia. 
 
 In other words, the new supplies of Australian gold are in process 
 of distribution over the world, through the medium of the colonial 
 and foreign trade of this country. 
 
 V. — Facts connected with the Effects, already produced- bt 
 THE NEW Supplies of Gold, on- the Condition and Trade, 
 OF THE Australian Colonies. 
 
 (1) IMMIURATION, and licenses to gold DIOGEK8. 
 
 We may now investigate the last division of the subject ; — 
 namely, the immediate effect of the gold discoveries in the Australian 
 Colonies themselves. 
 
 And first, as regards the Emigration from this country, we have 
 the following facts : — 
 
Emigration, 1825 — 53. 
 
 53 
 
 Table XXI.— Emigration from United Kingdom for Twenty-seven Years, 
 from 1826 to 1852, both inclusive : — 
 
 Years. 
 
 Destination of Emigrants. 
 
 Total. 
 
 North 
 American 
 ColonieB. 
 
 Unitea 
 States. 
 
 Australia 
 and New 
 Zealand. 
 
 Other 
 Places. 
 
 16 yrs., 1826 — 40, 
 average 
 
 16 yrs., Totals to 
 
 1840 .. 
 
 1841 . . 
 
 1842 .. 
 
 Aver.of 1841— 42.. 
 Totals to 1842 .. 
 
 1843 .. 
 
 1844 . 
 1846 .. 
 
 1846 .. 
 
 Aver.of 1843— 46.. 
 Totals to 1846 .. 
 
 1847 .. 
 
 1848 . . 
 
 1849 .. 
 1860 .. 
 
 Aver.of 1847— 50.. 
 
 Totals to 1850 .. 
 
 1851 .. 
 1862 .. 
 
 Aver, of 1851-52 . . 
 
 Totals to 1862 . 
 
 1863.— Jan.— Mar., 
 3mos 
 
 April — June, 3 mos, 
 13 ports only 
 
 25,770 
 
 24,280 
 
 4,630 
 
 320 
 
 ■ 66,000 
 
 412,300 
 
 388,500 
 
 74,100 
 
 5,200 
 
 880,100 
 
 38,100 
 54,100 
 
 46,000 
 64,000 
 
 32,600 
 8,500 
 
 2,800 
 1,800 
 
 118,600 
 128,300 ' 
 
 46,100 
 
 54,600 
 
 20,660 
 
 2,300 
 
 123,460 
 
 494,600 
 
 497,600 
 
 116,200 
 
 9,800 
 
 1,127,000 
 
 23,600 
 23,000 
 32,000 
 43,400 
 
 28,000 
 43,600 
 68,600 
 82,200 
 
 3,600 
 
 2,200 
 
 830 
 
 2'300 
 
 1,800 
 1,800 
 2,300 
 1,800 
 
 57,200 
 
 70,700 
 
 93,600 
 
 130,000 
 
 30,500 
 
 63,100 
 
 2,200 
 
 1,920 
 
 87,860 
 
 616,400 
 
 709,900 
 
 124,030 
 
 17,500 
 
 1,478,400 
 
 109,700 
 31,000 
 41,300 
 33,000 
 
 142,100 
 188,200 
 219,400 
 223,000 
 
 4,900 
 24,000 
 32,000 
 16,000 
 
 1,600 
 .4,900 
 6,500 
 8,800 
 
 258,000 
 248,000 
 300,000 
 281,000 
 
 63,750 
 
 193,200 
 
 19,260 
 
 .6,450' 
 
 271,760 
 
 831,400 
 
 1,482,600 
 
 200,930 
 
 39,200 
 
 2,666,400 
 
 42,000 
 33,000 
 
 267,000 
 244,000 
 
 21,000 
 88,000 
 
 4,600 
 3,700 
 
 336,000 
 369,000 
 
 37,600 
 
 266,500 
 
 54,500 
 
 4,100 
 
 352,600 
 
 906,400 
 
 1,993,600 
 
 309,930 
 
 47,400 
 
 3,270,40a 
 
 641 
 20,107 
 
 42,981 
 78,206 
 
 16,765 
 17,162 
 
 473 
 495 
 
 60,865 
 115,969 
 
 We cannot discuss here the questions suggested by this Table. 
 We content ourselves with referring to the circumstance that in 
 
54 Number of Gold Diggers. 
 
 1852 as many as 88,000 persons; — a number more than eqnal 
 to the entire population of the province of Victoria in 1850; — left 
 this country for AustraUa ; and that this enormous emigration took 
 place in spite of a prodigious increase in the amount of Passage- 
 Money. In June, 1851, the Emigration Commissioners took up 
 vessels to Australia at the rate of £10 per head; in June, 1852, 
 the rate had risen to £17 ; and before the end of the year to £23 
 per head. So far as the first six months of 1853 are concerned, 
 the outward pressure of the population has been but Uttle, if at 
 all, abated. 
 
 The next Table gives the number of Licenses issued to Gold Diggers 
 in 1852, and the amount of revenue thence arising- 
 
 Table XXII. — Statement from Official Sources of the Number of Licenses 
 issued to Gold Biggers at the Gold Fields of Victoria (Australia) 
 during the Months as under : — 
 
 Month. 
 
 Mount 
 Alexander. 
 
 BaUarat. 
 
 Other 
 Places. 
 
 Amount of 
 
 HeTenue from 
 
 Licenses. 
 
 1852 
 January . . . 
 February . . 
 March 
 
 April ..... 
 
 May 
 
 June 
 
 July , 
 
 August .... 
 September . 
 
 October 
 
 No. 
 
 12,053 
 13,826 
 
 19,149 
 24,012 
 25,000 
 
 24.786 
 24,000 
 28,408 
 
 32,634 
 
 No. 
 302 
 626 
 871 
 
 839 
 527 
 734 
 
 761 
 
 980 
 
 2,074 
 
 4,700 
 
 12 
 
 286 
 
 £ 
 30,138 
 23,661 
 
 29,669 
 
 32,612 
 
 2,762 
 
 63,024 
 27,369 
 27,707 
 
 83,269 
 
 £310,091 
 
 Note. — Returns in the same complete form are not available from New 
 South "Wales ; but as regards that province there is an official paper which 
 gives the number of licenses granted "during the quarter ended 30th June, 
 1862," as 10,139, and the revenue therefrom as £14,001. 
 
 We are justified, by this Table, in concluding that in January, 
 1853, there were about 50,000 persons actually engaged in gold 
 digging in Australia. 
 
Price of Gold in Australia, 8{c. 
 
 55 
 
 (2) PRICE OP OOLD : BATE OF EXOHANOE ON LONDON ; AND BATE OP INTEEEST 
 AT SYDNEY AND MELBOURNE, 1852-1853. 
 
 The Price of Gold and rate of Exchange on London furnish 
 the next topic. 
 
 Table XXIII. — New South Wales and Victoria. — Statement of the 
 Price of Grold and Bate of Exchange since January, 1852. 
 
 Bates, 
 
 Sydney. 
 
 Melbourne. 
 
 Gold 
 per oz. 
 
 Exch. on London. 
 
 Exch. on London, 
 
 Banks' 
 
 Drafts 
 
 seU. 
 
 Bills against 
 
 Gold 
 per oz. 
 
 Banks' 
 
 Drafts 
 
 sell. 
 
 Bills 
 
 against 
 
 Gold. 
 
 Gold. 
 
 Produce. 
 
 1852. 
 
 3 Jan 
 
 7Peb 
 
 27 March... 
 
 22 May 
 
 10 July 
 
 7Aug 
 
 4 Sept 
 
 11 
 
 1853. 
 
 1 Jan 
 
 29 „ 
 
 26 Feb 
 
 4 March .... 
 
 2 April 
 
 s. 
 62 
 66 
 62 
 64 
 65 
 67 
 66 
 70 
 
 70 
 72 
 75 
 74 
 77 
 
 p. ct. 
 5i,dis. 
 6j ,. 
 
 6i"„ 
 8 "„ 
 
 6§ „ 
 
 i „ 
 
 par 1 pm 
 
 1 pm. 
 
 p. ct. 
 
 7 dis. 
 
 8 „ 
 
 io"„ 
 
 12 „ 
 12 „ 
 
 10 „ 
 
 2 » 
 
 p. ct. 
 
 7 dis, 
 
 8 „ 
 
 8 ■■„ 
 
 8 „ 
 
 H „ 
 
 8 „ 
 
 • • 
 
 1 ,. 
 
 s. 
 61 
 60 
 58 
 63 
 64 
 65 
 67 
 68 
 
 70 
 73 
 
 75 
 77 
 77 
 
 p. ct. 
 
 8j'dis, , 
 10 „ 
 
 7i „ 
 5 ,. 
 par 
 1 pm, 
 1 ,. 
 
 10 dis. 
 7§ „ ' 
 14 ,< 
 
 1 ■■» • 
 
 The columns of this Table, particularly as regards Melbourne, 
 are frequently imperfect ; but it is by no means easy to compile a 
 full and satisfactory statement of the rate of exchange, notwithT 
 standing the multiplicity of gold circulars. In addition, however, 
 to the figures appearing in the Table, we may give some supple- 
 mentary information. 
 
 During the period from January, 1853, the rate of interest on 
 mortgage at Sydney is stated to have ranged from 6 to 10 per cent, 
 per annum. The debentures of the Colonial Government of New 
 South Wales, bearing interest at the rate of 3jd. per cent, per diem 
 (or, say 5^ per cent, per annum), bore a premium of 20s. per cent; 
 till towards the end of 1853 ; when the premium rose, and in March, 
 1853, was 110s. per cent. ; the interest on the debentures remaining 
 the same. This would indicate a fall at Sydney in the rate of 
 
56 Low Rate of Interest in Australia. 
 
 interest ; and this inference is supported by a statement in a Sydney 
 circular of 2nd April last, to the effect that " one of the Sydney 
 banks has borrowed from the Savings Bank £50,000 for one year 
 at 1^ per cent, per annum ; and the Savings Bank is ready to lend 
 £100,000 to individuals, on certain securities, at 4 per cent, per 
 annum." The result, therefore, of the influx of capital has been 
 materially to reduce the rate of interest; and it can hardly be 
 doubted that the effect of a low rate of interest, and of abundance 
 of capital, in a communitv in the circumstances of New South Wales 
 will be very great. All kinds of enterprise will be stimulated ; and 
 production will take place upon the largest scale compatible with the 
 material appliances of the colony. 
 
 The freight of gold to London has been very steady, at 10s. per 
 cent. ; or about 4d. per ounce. The insurance on gold in the early 
 part of 1852 was 259. and 30s. per cent. It is now as high as 
 63s. per cent. ; and the increased rate has arisen mainly from the 
 very large sums which the importers find it necessary to insure ; and 
 the reluctance of the underwriters to increase their risks beyond a 
 certain point. Taking into account the cost of insurance, freight, 
 commission, and charges, it is very doubtful whether, to yield a 
 profit, gold bullion can be cflnsigned from Australia to London at a 
 higher buying price than 67s. to 68s. per ounce. The last advices 
 give the price as 77s. ; but that cannot last. 
 
 The freight of dead- weight — Tallow, for example — has been 
 pretty uniform at 35s. per ton from Sydney ; and 50s. from Mel- 
 bourne. The freight of Wool has been from Jd. to Id. per lb. 
 
 (4) CONDITION or THE BANKS OF NEW SOUTH WALES AND VICTOEIA 1851- 
 1852:— CIRCULATION, DEPOSITS, ADVANCES :—INTLUENCE OF THE LOW 
 RATE OP INTEREST. 
 
 In connection with the two next Tables (xxiv. and xxv.), 
 a short outline of the Banking System of New South Wales in 
 the early part of 1852 may be convenient. There were then in 
 existence at Sydney, with branches at Melbourne and some other 
 places, four joint-stock banks, viz. :^-The Bank of New South- 
 Wales, established in 1817; the Bank of Australasia, founded in 
 
Banks — New South Wales. 
 
 57 
 
 London in 1834; the Commercial Bank of Sydney, established by 
 local'parties also in 1 834 ; and the Union Bank of Australia, formed 
 in London in 1838. An institution, called the Bank of Australia, 
 founded in 1826, failed in 1843. 
 
 The original capital of the Bank of New South Wales was 
 £20,000, and some of its early notes were as low as 2s. 6d., 5s., 
 and 10s. In 1852 the capital was £150,000. The capital of the 
 Bank of Australasia is £200,000: — that of the Commercial Bank 
 is £150,000. 
 
 A Colonial Act requires from each of these banks the publication 
 of certain quarterly and half-yearly returns, and we believe that, as 
 regards two of the banks, their circulation was by that Act limited 
 to the amount of their paid-up capital. 
 
 Since the summer of last year several new Australian Banks have 
 been started in the colony and in London. 
 
 The first Table relates to the Banks of the Province of New 
 South Wales. 
 
 Table XXIV. — New South Wales. — Abstkaot of the Official Returns of 
 the four Banks carrying on business in the Province of New South 
 Wales (Bank of New South Wales, Bank of Australasia, Commercial 
 Bank, and Union Bank) during Quarters as under : — 
 
 Quarters ended 
 
 Circulation. 
 
 Deposits 
 
 Coin and 
 Bullion in 
 Reserve. 
 
 Bills 
 Discounted. 
 
 30 Sept., 1851 
 
 31 Dec. „ 
 
 30 Sept., 1852 
 
 £ 
 262,000 
 
 406, 
 
 731, 
 
 £ 
 1,128,000 
 
 1,276, 
 
 2,001, 
 
 £ 
 670,000 
 
 685, 
 
 1,079, 
 
 £ 
 1,226,000 
 
 1,321, 
 
 1,573, 
 
 The increase of Circulation and Reserve shown in this Table is 
 remarkable ; but it is slight in comparison with the similar ex- 
 pansions which appear by the next Table to have taken place in 
 Victoria : — 
 
58 
 
 Banks — Victoria. 
 
 Table XXV.— Victokia.- 
 
 -Abstract of Bank Returns for Quarters ended 
 Dec. 1851 and 1852. 
 
 Quarters ended 
 
 Circulation. 
 
 Deposits. 
 
 Coin & Bullion 
 in Reserve. 
 
 No. of 
 Banks. 
 
 Dec. 1851 
 
 „ 1852 
 
 £ 
 180,000 
 
 1,327, 
 
 £ 
 822,000 
 
 4,334, 
 
 £ 
 310,000 
 
 3,034, 
 
 No. 
 3 
 
 5 
 
 Note. — There are no Bank returns for Victoria, as distinguislied from New 
 South "Wales, prior to 1st of July, 1851. Of -the £4,334,000 of deposits in 
 , the Banks in the December quarter of 1852, the sum of £700,000 belonged 
 to Government. The Banks allow no interest on deposits. Of the 
 £3,034,538 of coin and bullion in Banks in the December quarter of 1852, 
 the sum of £1,129,420 consisted of gold-dust taken at cost or valuation 
 prices. 
 
 The results exhibited by these abstracts of the Bank returns of 
 New South Wales and Victoria — but especially of Victoria — are of 
 the most remarkable character. In both Provinces the effect of the 
 production of gold has been to increase largely the circulation of 
 bank-notes : and also to increase largely the fund of capital available 
 by the banks for advances and discounts : such fund being, of course, 
 the result of a large extension both of the circulation and deposits. 
 Examining the question from this point of view, the following 
 epitome of the last two Tables will be interesting : — 
 
 Table XXVI. — Banks — New South Wales and Victoria. 
 
 Quarters 
 ended 
 
 Pro- 
 vince. 
 
 Total of 
 Circulation 
 
 eind 
 Deposits. 
 
 Cash 
 Reserves. 
 
 Fund avail- 
 able for Ad- 
 vances and 
 Discounts. 
 
 
 1851. 
 31 Deo. 
 Ditto . . 
 
 Totals. . 
 
 N.S.W. 
 Vict. 
 
 £ 
 1,682,000 
 1,002, 
 
 £ 
 585,000 
 310, 
 
 £ 
 1,007,000 
 692, 
 
 1,653, 
 2,627, 
 
 Increase. . 
 
 £ 
 1 1,699,000 
 
 } 4,280, 
 
 2,684, 
 
 895, 
 
 1852. 
 
 30 Sept. 
 
 31 Deo. 
 
 Totals . 
 
 N.S.W. 
 Vict. 
 
 2,732, 
 5,661, 
 
 1,079, 
 3,034, 
 
 8,393, 
 
 4,113, 
 
 2,581,_ 
 
 Increase 
 
 
 6,709, 
 
 3,218, 
 
 
 
Larger Resources of the Australian Banks. 59 
 
 The results of this Table bear out the statements already made 
 respecting the comparatively low rate of interest in New South 
 Wales : and we believe also in Victoria. The increase in the amount 
 of the circulation of the banks — especially in New South Wales — con- 
 sidering the scattered character of the population, their rude pursuits, 
 and the scarcity of coin, is rather under, than over, what might have 
 been expected. It is stated that in Victoria the banks allow no 
 interest on deposits : and we believe that the same observation 
 applies to New South Wales. The non-allowance of interest would 
 of itself tend to increase the circulation, and to check deposits. 
 But whether the fund available to the banks for advances and 
 discounts was derived from circulation or deposits, the aggregate 
 effect as concerned the public would be essentially the same ; and, 
 as we see from the figures, in the course of less than a single year, 
 the amount of capital seeking employment at interest, through the 
 medium of banks in the two Provinces, was increased very nearly 
 threefold ; viz., from 1| to 4\ millions sterling. 
 
 We may assume, therefore, with considerable confidence, that even 
 in Australia the new supplies of gold will produce their effect, not 
 through the amount of the circulation, but by means of a material 
 reduction in the rate of interest ; or, to speak perhaps more accurately, 
 the circulation will act a purely subsidiary part. The effects on enter- 
 prise and prices will be produced by advances of capital, appUed in a 
 great measure under the inducements of a low rate of interest ; and 
 when the consequences of those advances of capital exhibit them- 
 selves, it is not improbable that the state of the markets may render 
 necessary a larger amount of circulation. For the first time in 
 modem experience, we are about to witness the effects of an abund- 
 ance of capital obtainable at a low rate of interest in a new country : 
 a country possessing a sound and adequate system of banks : 
 having before it a boundless field of enterprise : and inhabited by a 
 race adventurous, intelligent, industrious, and impatient to become 
 rich. The spectacle wiU be as extraordinary as it is new. 
 
 (5) IMPORTS AND EXPORTS OF VICTORIA, 1850 — 52. 
 
 The next two Tables relate to the Import and Export trade of 
 Victoria : — 
 
60 
 
 Imports and Exports of Victoria, 
 
 Table XXVII.— Province op Viotoeia.— Statement from Official Sources 
 of the Value of the Imports and Exports, 1860—1862. . ,.^^. 
 
 Years. 
 
 Imports prom 
 
 Total , 
 ExppRTS 
 
 from 
 
 Victoria to 
 
 all parts. 
 
 "United 
 Kingdom. 
 
 Other British 
 Possessions. 
 
 Foreign 
 
 States. 
 
 Total 
 Imports. 
 
 1860 
 1851 
 1852 
 
 £ 
 517,000 
 690, 
 2,013, 
 
 £ 
 102,000 
 190, 
 1,028, 
 
 £ 
 126,000 
 175, 
 1,028, 
 
 £ 
 746,000 
 1,066, 
 4,069, 
 
 £ 
 1,041,000' 
 1,422, 
 7,451, 
 
 , And the following figures analyse to some extent the component 
 parts of the preceding general results : — 
 
 Table XXVIII. — Province op Victoria. — Statement of the Principal 
 Articles of Import and Export, 1850 — 1852. 
 
 I. — ^imports. 
 
 Apparel and Slops £ 
 
 Beer and Ale galls. 
 
 Cottons £ 
 
 Plour and Bread cwts. 
 
 Haberdashery £ 
 
 Hardvf are £ 
 
 Iron and Steel tons 
 
 Spirits galls. 
 
 Sugar tons 
 
 Tea., , lbs. 
 
 Tobacco, Cigars, &c lbs. 
 
 Timber £ 
 
 Wine galls. 
 
 1850. 
 
 42,000 
 
 381,000 
 
 51,000 
 
 14,000 
 
 63,000 
 
 44,000 
 
 2,310 
 
 296,000 
 
 3,100 
 
 722,000 
 
 288,000 
 
 35,000 
 
 78,000 
 
 1861. 
 
 1852. 
 
 66,000 
 
 641,000 
 
 72,000 
 
 66,000 
 
 74,000 
 
 71,000 
 
 1,293 
 
 221,000 
 
 3,400 
 
 864,000 
 
 450,000 
 
 35,000 
 
 62,000 
 
 149,000 
 
 823,000 
 
 161,000 
 
 461,000 
 
 220,000 
 
 138,000 
 
 1,492 
 
 811,000 
 
 7,800 
 
 2,167,000 
 
 1,316,000 
 
 135,000 
 
 408,000 
 
 II. — ^exports. 
 
 Beef tons. 
 
 Cattle No. 
 
 Sheep No. 
 
 Tallow tons. 
 
 Wool lbs. 
 
 Gold oz. 
 
 1860. 
 
 976 
 
 6,287 
 
 67,000 
 
 4,600 
 
 18,000,000 
 
 1861. 
 
 1,391 
 
 6,281 
 
 69,000 
 
 4,200 
 
 16,345,000 
 
 146,146 
 
 1862. 
 
 397 
 
 4,695 
 
 49,000 
 
 2,000 
 
 20,247,000 
 
 1^974,976 
 
Progress of Victoria, 1850 — 52. 
 
 61 
 
 It will be observed from these Tables, that the Imports from the 
 United Kingdom into Victoria alone, were, in 1852, three times as 
 large as in 1851 ; and in the list of articles of import given in the 
 last table will be found articles of British manufacture, the demand 
 for which we know to have greatly increased in this country. Nor 
 is the Australian demand confined to articles of mere utility. We 
 were told,, a few weeks ago, of an order from a firm in Sydney for 
 50,000 pairs of patent leather boots and shoes, intended for the full- 
 dress wear of the diggers and their wives ; and we were also in- 
 formed by the shippers, of several extensive consignments, to order, 
 of gold watches, of the invoice value of not less than £20 each. 
 
 The next Table (xxix.) is compiled from materials furnished 
 in the Paper by Mr. Westgarth, already referred to; and gives a 
 general view of the progress of Victoria during the last three years. 
 
 Table XXIX. — Pkovince of Victobia. — Statement of Population, 
 Eevenue, and Trade, in 1850, 1851, and 1852. 
 
 1850. 
 
 1851. 
 
 Population (December) 
 
 / Annual Value of Property in \ 
 \ the -City of Melbourne ) 
 
 1852. 
 
 75,000 
 
 £ 
 154,000 
 
 124,000 
 136,000 
 
 744,000 
 1,041,000 
 
 Tons. 
 
 108,000 
 
 No. 
 
 555 
 
 96,000 
 
 £ 
 174,000 
 
 180,000 
 200,000 
 
 1,056,000 
 1,423,000 
 
 Tons. 
 
 126,000 
 
 No. 
 
 669 
 
 200,000 
 
 £ 
 638,000 
 
 846,000 
 730,000 
 
 4,043,000 
 7,451,000 
 
 Tons. 
 
 408,000 
 
 No. 
 
 1657 
 
 
 
 S:&ports 
 
 Shipping Inwards — Tonnage . . 
 .. No 
 
 Note.— The £180,000 of ordinary revenue of 1851 includes £24,004 of 
 revenue from gold licensed ; and the £846,000 of ordinary revenue of 1852 
 includes £438,845 from gold licenses. 
 
 (6) FIRST EFFECTS OP THE BOLD DISCOVERIES ON PRIOBS IN MELBOUKNE. 
 
 We arrive finally at the following statement of prices in Mel- 
 bourne in the years immediately preceding 1852; at several dates 
 of that year ; and in February, 1853 : — 
 
62 
 
 Prices in Melbourne, 1852-53. 
 
 Table XXX.— Statement compiled from Blue Book of February, 1853, 
 of Prices, Wages, &c., in Melbourne (Victoria), in April, July, and 
 October, 1862, as compared with the average Bates of previous Years ; 
 ■with corresponding Figures for February, 1853, compiled from Prices 
 Current. 
 
 
 fH 
 
 I I ® 
 
 
 CO 
 
 I I 
 
 IS I I 
 
 
 trt 
 
 US-* 5^5^, 
 
 «rt i^ 
 
 
 «rt 
 
 CO ^ 
 
 
 
 '•'lOlo'T' 
 
 .CO ■* J5 
 
 .^ "fl r^ 13 
 ^ O IC U3 
 ■^ CO 
 
 > . 7 , -^ >-■< 
 
 O 
 
 =irt 
 
 C+l OS Hi -^ ■^ -^ 
 
 • OO o o _; 
 
 o 55 TO JO r; ?o SI « 
 
 - ,3 M 2 -a T) 
 
 o o 
 00 -* 
 
 O TO 
 CO CO 
 
 SS oiMTO;^;;r;i^;7^;TO 
 
 oO ■ • .OCOOW3_ 
 
 
 O ^ ^ "•' *■ ^ " o o 
 
 O O f^CD HielHKS ^" 
 OS CO ^ CO CO CO hKh\ 
 
 
 W3 O 
 
 _i 50 r-H I— ! 
 „ ^ i-T-J CO 
 
 
 .s.s 
 
 ; - - - "S " "1 
 
 =4) "i 
 
 Ph °° ■ 
 
 &p.--i CO 
 
 ^ .-1 (N IM 
 
 00 00 r^ rQ f^ 
 
 eq o 
 
 =fl 
 
 OTO rtp? 
 
 
 5rt^ 
 
 trt S 
 
 DO 00 
 
 O «3 
 
 ; „■ o o S N ^ .3 
 
 < 3 srt ^ § =rt 3 ^. 
 - « .» . 9 . . 
 " " * * n - " 
 
 ■»■ S 2 o<2 « 
 
 = • S r? 
 
 0} v 
 
 •a 
 
 IK 
 
 CQ is 
 
 h <u 
 
 
 rOjH 
 
 Ph 
 
 Pi 
 
 la CO 
 "8 
 
 03 d 
 
 .iS 
 
 0, S 
 
 o P^ 
 
 p< . 
 
 
 a g : 
 
 SDd'g 
 ,c8-0 
 
Prices in Melbflume, 1852-53. " 63 
 
 The figures in this Table are curious ; and we trace in them very 
 clearly the vast and rapid revolutions in the value of certain kinds of 
 commodities, occasioned by the energies of nearly a whole com- 
 raunity being suddenly diverted to a description of enterprise which 
 does not produce articles of food, clothing, or comfort ; and also by 
 a sudden and large addition of new comers to a society already so 
 disorganized. 
 
 The demand of the immigrants for houses increased twelve-fold 
 the price of bricks ; and eight-fold the wages of those who were to 
 put them to their proper use. The impatience of the people in 
 Melbourne to reach Mount Alexander quadrupled the price of 
 bullock drays, and of dray horses. Weapons of defence, or offence, 
 rose, at a step, 300 per cent. As regards provisions, the community 
 had to submit at once to famine prices. Flour rose from £8 a ton 
 to £44; beef and mutton from Id. to 6d. per pound; butter from 
 Is. to 3s. ; and fat cattle — till then valuable for their tallow rather 
 than their flesh — became scarce at an advance of three times the 
 former price. House-rent, however, seems to have run the wildest 
 career ; for it appears that a space of a few months was sufficient to 
 raise the annual letting value of a two-storied house in Melbourne, 
 from a sum equal to a moderate interest on its cost, to an amount 
 positively as large as that cost itself. Houses in Melbourne, — ^like 
 colonial produce in London during some periods of the last war, — 
 were, in the summer of 1852, not so much a commodity sold in the 
 ordinary way, as a luxury sought at any price which the owner might 
 strain his fancy to fix. Wages were very much in the same condition. 
 A footman became a priceless luxury. Maid-servants found themselves 
 distracted between offers of high wages and enterprising husbands. 
 Common sailors were elevated to a position of importance and pre- 
 eminence which they must have found exceedingly embarrassing — 
 for the difference between four, and twenty times four, pounds a 
 month, is a leap in affluence and arithmetic beyond the calculations 
 of the forecastle. 
 
 These, however, were the violent changes which marked the first 
 months of the new state of things ; and, as will be seen by the last 
 column of the Table, there was a sensible abatement of many of 
 the extravagances of price in the early part of the present year. 
 
64 Inferences. 
 
 VI. — Inperkncbs from the Facts now brought forward. 
 
 (1) PRELIMINARY OBSERVATIONS. 
 
 We have now arrived at the termination of the first and most 
 important part of our inquiry ; namely, the collection of Facts calcu- 
 lated to exhibit the consequences already produced by the New 
 Supplies of Gold. 
 
 The discussion may have seemed lengthy and tedious ; and we 
 will not presume to say that the reader might not have been con- 
 ducted, by a livelier path and a shorter journey, to results even 
 more striking than any we have ventured to introduce. But for 
 the purpose in view, it may be doubted whether we have adduced 
 sufficient evidence. The field is wide, the subject is intricate, its 
 ramifications are various and subtle, and the fresh events of every 
 day to some extent modify, or invalidate, conclusions which seemed 
 to be true the day before. It is an inquiry in which we can only 
 hope to avoid serious error by fortifying our inferences with the 
 largest possible number of independent observations. And beyond 
 the danger of resting satisfied with an insufficient basis of facts ; 
 there is the danger arising from the facihty with which speculation 
 takes the place of inference. The temptation is strong and con- 
 stant to raise, upon an imperfect knowledge of what has really 
 happened, ingenious and plausible theories of what is likely to 
 occur ; and there have been instances already of the confusion and 
 error arising from this inversion of the order of inquiry. We shall 
 be quite content if we succeed, to some extent, in applying to the 
 large and vital questions connected with the new supplies of gold, a 
 method of investigation; not perhaps so attractive as might be 
 desired ; but at all events in unison with those rules of philosophy, 
 which enjoin upon us the necessity of patient and thorough observa- 
 tion, before we resort to abstraction and generalization. 
 
 Former schools of political economy, gave undue and mischievous 
 encouragement, to displays of ingenuity and argumentative acute- 
 ness. Truth was practically at the mercy of the boldest and 
 readiest debater; and for a time it seemed to be forgotten that 
 the phenomena of society cannot, any more than the properties of 
 
Impressions Generally Entertained. 65 
 
 a physical substance, be discovered by refinements of disputation. 
 We now pursue a more satisfactory method ; and there is no pre- 
 sumption in saying, that we are both richer, and happier, because, 
 in our economical theories and reforms, we proceed very little on 
 speculation, and very much on fact. 
 
 J 
 
 (2) IMPEESSIONS OENEEALLT ENTERTAINED RELATIVE TO THE ErFBCTS OP 
 THE NEW G0L13. 
 
 In desisting from the further collection of Evidence ; and entering 
 upon that part of our plan which leads us to consider Opinions and 
 Speculations ; it will be convenient, in the first instance, to frame a 
 statement of the views which are generally entertained with reference, 
 to the new supplies of gold. 
 
 We apprehend that, in effect, those views are as follows :— 
 
 ' It is believed that there is Eilready a depreciation of gold as com- 
 pared with silver. — or, in other words, that the gold price of the 
 ounce, for example, of standard silver, has more or less risen ; and in 
 support of this view the state of the bullion market in Paris in 1 850 
 and 1851 is referred to. • It is beheved also that the new supplies 
 of gold have already begun to raise wages : and also the prices of 
 many kinds of commodities : — and particularly that they have produced 
 a marked effect in depressing the rate of discount. It seems also to 
 be very generally supposed that these effects have been produced in 
 consequence of some depreciation of the circulating medium, arising 
 from the new supplies of gold. It is not easy to reduce the impres- 
 sion which prevails on this part of the case into a specific state- 
 ment, without appearing to exaggerate it. In substance, however, it 
 seems to be supposed that, comparing the amount of the new supplies 
 of gold with the amount of coin and bank-notes known, or assumed, 
 to be in circulation five years ago ; — and taking for granted that all 
 the new gold has been converted into coin ; — the addition to the pre- 
 vious volume of circulation has been so great as of necessity to raise 
 prices and wages, and lower the rate of discount.' 
 
 Now, comparing the views expressed in this outline with the facts 
 of the case, as they have been ascertained in the previous portions 
 of this Paper, we arrive at the following results ; — 
 
^ ." Increased Bequirements for 
 
 First, as Regards the price of Silver, we have seen (Table xiii.) 
 
 .that it is exceedingly doubtful whether, up to the present time, the 
 
 market price of silver as measured in gold can be said to have risen 
 
 at all. The phenomena of the bullion market of Paris in 1850-51, 
 
 are accounted for by purely local causes. 
 
 Next, as regards the prices of Commodities, we have also seen 
 (Table xviii.) that the assumption of a recent rise, not to be 
 accounted for by considerations of supply and demand, is unsupported 
 by any evidence of a conclusive character. We admit, however, that 
 in some directions there does appear to be a rise in prices, traceable 
 indirectly to the effects of the new gold. 
 
 And we conceive that this statement may be applied to Wages 
 ■with far less hesitation than to prices ; and to that extent, therefore, 
 the evidence of facts confirms the popular view. 
 
 As regards the fall in the Rate of Discount, also, it is true that the 
 occurrence and duration of the depression corresponded generally 
 with the increase in the amount of the Bank reserves. We have 
 seen, however, that even on that point it would be rash to infer that 
 the sole cause of the low rate of discount was the unusual height of 
 the Bank treasure. 
 
 There remains only the notion that these effects on prices and 
 wages and the rate of discount have taken place in consequence of 
 the quantity of the Circulation being increased by the new gold. 
 
 A notion of this kind raises two questions : — one of fact, and one 
 of general reasoning. 
 
 In the first place, is it true, according to the evidence before us, 
 -that the whole, or nearly the whole, of the new gold has been con- 
 verted into coin, and has increased by its amount the previous 
 volume of circulation ? And, in the next place, what is the mode in 
 which, under the present Banking System of this country, an increase 
 in the quantity of gold, is likely to operate on the rate of discount ? 
 
 We will take these questions in their order. 
 
 (3) EXTENT TO 'WHICH THE NEW GOLD HAS IN THIS COUNTRY BEEN ADDED TO 
 THE CIECULATION ; INCB.EASED EEaUIREMENTS EGB COIN AND BANK-NOTES. 
 
 It appears (see Tables ix. to xii.) that while 56 millions sterling 
 of new gold were produced during the five years ended with 1852, 
 
Coin and Bank Notes. 67 
 
 as much as 65 millions was converted into coin in England, 
 France, and the United States ; and, adopting the corrections 
 ■which have been applied to those four Tables, there is good 
 reason to believe that, with the exception of 6 millions sterling, 
 the whole of the new gold has been converted into coin in this 
 and the other two countries mentioned. Further, it appears (see 
 Table xv.) that the Circulation of Bank Notes (including in that 
 term the notes of the Bank of England, and of Private and Joint- 
 Stock banks) has increased in England and Wales since Jan. 1852, 
 by about 4 miUions sterhng; — and that the circulation of bank- 
 notes in France has increased since the end of 1850 by about 5 
 miUions sterling. The popular notion, therefore, which attributes 
 the assumed increase of prices and wages : and the formerly 
 diminished rate of discount : to the action of a greatly expanded 
 circulation of coin and bank-notes, seems at first sight to derive 
 some support from facts. 
 
 It is necessary, however, to apply corrections. The simple cir- 
 cumstance of the Circulation of a country being increased, does not 
 necessarily imply a depreciation of that circulation compared with 
 commodities, labour, and the rate of discount. The occasions on 
 which, and the extent to which, the intervention of a circulating 
 medium is required may be increased. Increase of quantity may 
 indicate, not the existence of two coins or two bank-notes for the 
 satisfaction of requirements previously supplied with one ; but such 
 an expansion, or deepening, of the channels which a circulating 
 medium is needed to fill, as renders it necessary, for the maintenance 
 of existing facilities, that two coins or two bank-notes should be 
 employed. 
 
 In this country, in the space of five years, 20 millions sterhng 
 of new gold coins have issued from the Mint ; and during the last 
 year and a half the quantity of outstanding Bank and bankers' notes 
 has increased to the extent of four millions. Or, expressing the 
 same results in the form of per-centages, the quantity of gold coin 
 has increased 60 : and the quantity of Bank and bankers' notes 15 : 
 per cent. We know that the increase of the paper circulation 
 remains wholly within the country ; and of the increase of the 
 gold circulation we may safely assume that, at the end of 1852, 
 
 r 2 
 
68 Increased Requirements for 
 
 one-third — equal to seven millions, or about 30 per cent, of the 
 previous quantity of gold coin — also remained within the country. 
 The exportations to Australia and elsewhere will account for the 
 remainder. 
 
 Evidence furnished in the previous portions of this Paper : and 
 the personal knowledge and observation of nearly every one : leave 
 no room to doubt the vast and extraordinary increase which has 
 taken place in every branch of industry in this country during the 
 last three years. There has been, in particular, a great increase of 
 transactions in those branches of retail and local trade in which the 
 intervention of a circulating medium is most required. The money 
 transactions of the working and poorer classes have augmented both 
 in number and in amount. It is impossible to prove — ^but there 
 is strong reason to believe — that the expansion both of the coin 
 and paper circulation has arisen gradually, but mainly, from these 
 causes. The increased quantities of coin and paper have, as a 
 matter of fact, not been placed or thrown upon the market, and 
 thereby led to greater activity in trade, and to higher prices and 
 wages. On the contrary, the increase in the quantity of the cir- 
 culation has gradually grown out of the increase in the activity of 
 trade. Brisk markets for British goods in Australia, America, 
 India, or Europe, first provided full employment for the working 
 classes at former rates of wages. The expenditure of those wages 
 stimulated the requirements for a circulating medium in the retail 
 trades of the country^. Emigration, adding its effects to those of 
 expanding markets, then led to a rise in the price of labour ; and 
 the weekly demand for larger quantities of coin and notes necessary 
 for the payment of higher wages ; and for the circulation of the 
 commodities in the purchase of which those higher wages were 
 expended ; has naturally rendered the former amount of circulation 
 inadequate to the present business of the country. In short, the 
 increased amount of coin and paper circulation has been drawn out, 
 not put out. It is emphatically an effect, and not a cause. 
 
 If it were compatible with our design to enter into a digression in 
 support of these views, we might refer to several circumstances which 
 go to prove that in the retail trades of the country there has been 
 an immense increase in the demand for coin ; but we confine our- 
 
Coin and Bank Notes. 69 
 
 selves to two points only — \\z., the great and notorious inconvenience 
 occasioned by a scarcity of silver coin ; and the necessity for more 
 coin and notes resulting from the mere circumstance of the rise of 
 30 or 40 per cent, in the price of animal food. 
 
 The conclusion, therefore, at which we arrive is : — That, so far as 
 this country is concerned, there is good reason to believe that the 
 increased quantities of coin and paper are no more than are sufficient 
 to supply the enlarged requirements for a circulating medium ; and 
 further that, as a matter of fact, the increase of the Circulation has 
 not preceded, but has followed, the greater activity in trade ; and the 
 rise in wages, and in the prices of some descriptions of commodities. 
 
 (4) THE SAME INatriKY AS BEGAEDS PKANCE AND THE UNITED STATES. 
 
 GENERAL BESULTS. 
 
 There remain to be considered the additions of 15 millions sterling- 
 of coin, and of 5 millions sterling of bank-notes, to the circulation of 
 France during the five years ended with 1 852 ; and the addition, 
 during the same time, of 30 millions sterling of gold coin to the 
 circulation of the United States. It is not necessary, however, that 
 we should investigate these two cases as much in detail as the similar 
 changes in our own country. 
 
 As regards France, there is no doubt of the increase of trade, and 
 the greater abundance of employment, during the last two years ; and 
 ■we conceive that any augmentation in the quantity of the circulation. 
 which may have recently taken place in that country is adequately 
 accounted for by these causes ; and by the circumstance that in 1850~ 
 and 1851 the gold coin introduced into France was almost wholly^ 
 a simple replacement of the silver coin, which the agio in the Parir 
 market rendered it profitable to convert into bullion. 
 
 The United States present no exception to the causes which ex- 
 plain the increased volume of the circulations of this country and of 
 France. Rapid as may have been the extension of enterprise in 
 Europe, it has not kept pace with the progress of the American 
 people. 
 
 We have now answered the question of fact ; namely — How far it 
 is true that the -whole,' or nearly the whole, of the new gold has been 
 converted into coin, and has increased by its amount the pre-vious 
 
70 Effects on the Bate of Discount. 
 
 volume of circulation ? And in answering that question we have 
 almost answered another of scarcely less importance— namely. Have 
 the additions of coin and paper made in this country to the previous 
 volume of circulation, preceded or followed, the increase in trade, 
 wages, and prices; and how far has the order of similar events 
 in France, and the United States, corresponded with their order in 
 England ? 
 
 The answer to this question seems to he, that in each of the three 
 countries, the augmentations of Circulation have followed, and not 
 occasioned, the increase of Trade, Wages, and Prices. 
 
 On this part of the subject there now remains only another topic 
 of inquiry, namely ; — What is the mode in which, under the present 
 Banking System of this country, an increase in the quantity of gold 
 is likely to operate on the Rate of Discount ? 
 
 (5) opehation op the new goid on the kate of disoodnt. 
 
 We again commence our investigation with the facts. 
 
 It is quite clear (see Table xxi.) that practically the depression of 
 the rate of discount corresponded in date, and degree, very closely 
 with the increase of the Reserve of the Banking Department. In 
 the extract from the article of 12th July, 1852, we have adverted, 
 however, to some of the causes which prevent the variations of the 
 rate of discount from being controlled by the influence even of the 
 Bank of England ; and the changes which have taken place in the 
 money market, during the last eight months, illustrate and confirm 
 the statements made in that extract. 
 
 Speaking in the most general terms, the causes of a low rate 
 of discount in this country are threefold : — First, an increase of 
 the deposits placed with, and of the reserves held by, the Bank 
 of England and by other bankers ; Secondly, the non-existence 
 of financial uneasiness or distrust ; and Thirdly, the existence of 
 no more than an ordinary demand for mercantile discounts and 
 advances. The low rates of discount in 1843 and 1844 were 
 produced by the joint operation of all these causes. The- 
 quantity of capital in the hands of bankers seeking employment 
 was in excess of the demand, and the price of course declined. The 
 same process was repeated last year ; but with this additional circum- 
 
Increased Quantity of Capital Required. 71 
 
 stance, that the treasure of the Bank, instead of being twelve or 
 thirteen millions, was then more than twenty. It was necessary to 
 maJse a profit out of this treasure ; and that profit could only be made 
 by increasing the applications for discount: and, without tracing 
 again all the steps of a process which is sufficiently obvious, we are 
 justified in concluding that, under our present Banking System, an 
 increase in the quantity of gold, can only operate on the rate of 
 discount by rendering Bankers — or, perhaps, more accurately, by, 
 in the first instance, rendering the Bank of England — desirous to 
 find employment for unproductive fands by increasing the facilities 
 of borrowers. The operation of the new gold on the rate of discount 
 is accomplished whoUy through the medium of Advances : and not 
 in the shghtest degree through that of the Circulation. 
 
 (6) EFFECTS OP A REDUCED BATE OP DISCOXTNT; — INCREASED REatJIEEMENTS 
 
 POE CAPITAI;, 
 
 Modern experience has made us acquainted with few things more, 
 extraordinary than the rapid and wonderful effects produced by a 
 considerable fall in the rate of discount : or, what is the same thing, 
 by the facilities of borrowers being so enlarged that capital goes in 
 pursuit of persons who will undertake to employ it. In most coun- 
 tries, but especially in England, there is at all times a profusion 
 of enterprises to be undertaken : of experiments to be tried : of 
 schemes to be worked out : of improvements to be made ; of in- 
 genious men to be set up with capital : of trades already profitable 
 to be made more so by vast extensions : — all awaiting some period 
 of a low rate of interest to bring them into light ; or to obtain for 
 them a favourable hearing. That a considerable portion of these 
 adventures are ruinous and impracticable, is but too true. But 
 many of them are sound, and not a few successful : and the success 
 of some, fosters and extends — if the rate of interest does not rise too 
 rapidly — that disposition to embark capital ; the inevitable efiect of 
 which is sooner or later to increase the demand for capital, until 
 the demand exceeds the supply, and higher rates of discount are 
 established. 
 
 This is the change which has taken place in our own money 
 market sipce October last. The depressed rates of discount of the 
 
72 Influence on Prices. 
 
 spring and summer of last year; acting in conjunction with the moral 
 and material effects of the Australian discoveries; stimulated a dis- 
 position to emhaik capital in new and adventurous pursuits : and the 
 ahsorption of capital has already gone so far as to occasion a con- 
 siderable rise in the rate of interest. And at present there is little 
 likelihood of the process being checked. As a whole, the trade of 
 the country is in a sound condition ; the inordinate speculation in 
 shares and scrip appears to have been effectually stopped ; profits 
 are large ; and markets are generally rising. The constant employ- 
 ment, and the augmented wages, of the working classes, keep up an 
 enormous ready-money demand in the home trade ; and there appear 
 to be, on every hand, legitimate reasons for vigorous extensions of 
 prudent enterprise. In some special trades the inducements to 
 extensive outlays of fresh capital are very striking — as in the Ship- 
 building Trade, for example. Whatever, therefore, may be the 
 extent of the production of new gold in Australia, it is in the 
 highest degree probable that it will not operate to lower the rate of 
 discount ; or, if to lower it at all, to do so for a short period only. 
 The accumulation of a few millions of treasure in London ; although 
 in itself a fact of no small significance ; becomes of comparatively 
 little moment, when measured against the impatience, of a whole 
 community to grow rich, by expending capital in every conceivable 
 m^dertaking; old and new. 
 
 (7) iNFLtrENCfiS -WHICH MAV PEEMANENTLY EA16E PUIOES. 
 
 But while we entertain these decided views as to the manner in 
 which the accumulations of new gold have produced ; and will pro- 
 duce ; through the medium of Advances, and not through that of 
 Circulation, their efiiect on the rate of discount ; we are perfectly 
 sensible that the extension of trade, and the rise in wages and prices 
 — in producing which the low rate of discount has had not a small 
 share — may, and in the end must, permanently enlarge the circu- 
 lating medium of coin and bank-notes ; and thus occasion a depre- 
 ciation of the circulating medium compared with, perhaps, most 
 commodities ; or, in other words, a rise in wages and prices solely 
 on the ground of large permanent additions to the quantity of 
 money ; — meaning, by money, coin ; and notes convertible on 
 
Influence on Prices. 73 
 
 demand into coin. But the arrival of that state of things is much 
 more tardy than is generally supposed. Instead of being the first, 
 it is the last, stage of the process. 
 
 As far as this country is concerned, we are disposed to think, 
 that, we witness at the present time the commencement of this 
 final process ; and that we witness it more in the rise of Wages than 
 in any other part of the phenomena. In producing the rise of wages, 
 the operation of the new gold has been threefold ; and we will state 
 the causes in what appears to be the order of their, importance. 
 First, there have been the effects on enterprise of the low rate of 
 interest during the year and a half ended with December last : 
 Secondly, there has been the expansion of the Australian and 
 American markets for articles of British export, and the consequent 
 increase in the demand for labour in this country : and Lastly, there 
 has been the very large Emigration, of persons belonging to the 
 artisan and labouring classes. 
 
 It seems probable that the higher rate of wages will be the 
 medium through which we shall arrive at a permanently higher 
 scale of prices ; and eventually at the ultimate incorporation of the 
 new gold with the existing mass of gold coin and bullion in circu- 
 lation, and use, in the commercial parts of the world. It is important 
 to bear in mind, that the expenditure of large wages, by a vast 
 working population, constitutes a rapid and ready-money daily de- 
 mand. The operation of that expenditure on the prices of the 
 articles most in request is very powerful ; and in all probability the 
 demand will be so progressive, as to prevent any important reaction ; 
 and permanently to draw out, and keep out, considerable additions 
 to the former amount of circulating medium. 
 
 Nor will this process be confined to this country : or to any 
 one country merely. In commenting upon Table xvii. — and that 
 Table should be again examined with reference to this part of the 
 subject — we have pointed out that, during the last seven months, 
 the state of the Foreign Exchanges, has been such as to carry gold 
 in considerable quantities, from this country to the continent of 
 Europe ; and that the gold so exported is used for the payment of 
 Imports required, either as materials of manufacture ; or as articles of 
 luxury or comfort ; for the consumption of our own popvdation. 
 
74 Speculative Questions. 
 
 VII. — Speculative Questions relating to the future pro- 
 bable Effects op- the New Gold. 
 
 (1) statement of some op these questions. 
 
 We have now considered most of the topics suggested hy the 
 evidence before us. There still remain many questions of great 
 interest, but almost wholly speculative, and too large and intricate 
 to be, on this occasion, satisfactorily discussed. Some of these will 
 immediately occur to the minds of most readers — as, for example^ 
 the inquiries — 
 
 (1) How far it is likely that rising prices, brisk markets, and 
 dear labour, will stimulate enterprise and invention : and in that 
 manner prevent the prices of many important commodities, from 
 rising in exchangeable value, as rapidly as gold becomes more 
 plentiful ? 
 
 (2) In what manner and to what extent it is probable that the 
 changes occasioned by the new supplies of gold, will affect debtor 
 and creditor contracts, entered into, prior to the appearance of those 
 supplies .' How they wiU ^affect, also, the condition of annuitants and 
 others, wholly, or mainly, dependent on money incomes of fixed 
 amount ? How they will affect the quantity of Capital employed 
 through the medium of private firms, and public companies, in 
 various kinds of trade ? And how they will affect the price of 
 Land, of Houses, of Consols, and of Railway and Other Shares ? 
 
 (3) Whether it is likely that a bad harvest, and the importation 
 of 15 or 20 millions sterling worth of Corn, will produce any effects 
 on our money market and trade approaching in violence and disaster 
 to those of 1841 and 1847? 
 
 (4) Whether it is likely that the present large demand, at high 
 prices, for British goods in Australia, will lead to excessive shipments, 
 — to a consequent violent reaction in prices, — and to more or less 
 severe discredit in this country from the failure of merchants and 
 speculators ? 
 
 (5) Whether it is likely that gold will so fall in value in com- 
 parison with silver, as to lead to the substitution of a gold for a 
 silver currency in France : and the consequent liberation of the. 
 
Effects on Production. 75 
 
 1 20 millions sterling of silver coin, composing the present circulation 
 of that country ? 
 
 (6) Whether in all calculations, and reasonings, on the effects of 
 the new suppHes of gold ; it is not very necessary to leave a wide 
 margin to cover consequences which may arise from large absorp- 
 tions of gold and silver in India ; in South America ; and in Central 
 and Eastern Europe ; — regions of whichj as regards their requirements 
 for a metallic circulation, we know exceedingly little ? 
 
 (7) How long will be the continuance— and what we may reason- 
 ably expect wUl be the effects on the progress and development of the 
 Australian Colonies — of the abundance of capital, and the extremely, 
 low rates of interest, which prevail at present at Sydney and 
 Melbourne ? 
 
 These are a few of the speculative inquiries which suggest them- 
 selves ; and it would not be difficult to increase the list. We will 
 endeavour, to examine to some extent, the First Three of the 
 questions stated. 
 
 (2) EPFECT OF INCREASED DEMAND ON PKODUOTION AND PEIOES. 
 
 The point raised by the first question — namely. How far new 
 inventions, and greater production, will tend to keep down the prices 
 of many important commodities ; notwithstanding the depreciation 
 which appears to be, sooner or later, inevitable in the exchangeable 
 value of gold "i; — is one of great interest, and of no small practical 
 importance. 
 
 The first observation which occurs, is, that nearly all the con- 
 trivances and mechanical inventions, by means of which the produc- 
 tion of articles largely in demand has been increased ; and the price 
 largely diminished ; have had their origin either in a vigorous com- 
 petition on the part of manufacturers to make the most of brisk and 
 rising markets : or in the necessity of reducing, by new methods, the 
 cost of production, at periods when a rise in price threatened to 
 reduce considerably the previous extent of consumption. It is difficult 
 to say whether the influence of the competition for an extending 
 field : or the anxiety to retain by diminished cost of production a 
 field already won : has been the most powerful in stimulating 
 ingenuity and energy. When trade is brisk: orders greater than 
 
76 Increased Production; — Inventions. 
 
 can be executed : and prices rising : the inducements to expend 
 capital in improved methods are exceedingly great. The profits 
 attending success are so enormous and so rapid ; — the advantages 
 gained over competitors who have to perform the same work with 
 costly manual labour is so prodigious ; — that the accomplishment of 
 great revolutions in invention at such periods can hardly excite 
 surprise. An immense premium is placed on the successful attain- 
 ment of a given end ; and so effectually has that end, been thus 
 far attained that ; — to take only the single illustration of the Cotton 
 Manufacture ; — for half a century we have seen a progressive decline 
 in prices in the face of a progressive extension of demand ; and the 
 supremacy of this country, as the seat of an industry wholly de- 
 pendent on foreign raw material, every year become more undoubted 
 and confirmed. 
 
 It is not unreasonable therefore — or rather it is quite in accordance 
 with our experience — to expect that the influence of brisk markets : 
 of rising prices : of high wages : and of a moderate rate of interest : 
 will be to stimulate, in a most marked manner, those efforts of 
 energy and invention, by means of which the cost of producing 
 many articles of manufacture has been, and will be, lessened : and 
 consequently the prices of those articles kept comparatively low. 
 
 As a matter of fact, there are at present already several striking 
 illustrations of this tendency. We will mention only three. First, the 
 great rise in the price of the Oils, employed in the manufacture of 
 woollen cloths ; has led to experiments, having for their object the 
 substitution of milk, in those processes in which oil is used. The 
 experiments have been, to a great extent, successful; and the effect of 
 the discovery will, in all probability, have several important conse- 
 quences. In the first place, it cheapens the production of woollen 
 cloth ; in the next, it raises the value of grazing land and the price of 
 cows in the woollen districts ; and in the third place, as the animals will 
 furnish beef when they have ceased to supply milk, it is probable 
 that the discovery which has substituted milk for oil in the mills, 
 will indirectly increase the quantity, and diminish the price, of anima^ 
 food in the cottages of the workpeople. 
 
 The second illustration relates to Agriculture. It is stated on 
 respectable authority, that the scarcity of farm labourers in several 
 
Fixed Incomes. 77 
 
 counties, has led to the invention of a machine, which performs the 
 operation of digging in an efficient manner; and, if this be true, we 
 shall not only diminish the cost of cultivation, but at the same time 
 increase the produce. 
 
 And lastly; it is also stated on respectable authority that the 
 Sewing Machine, recently introduced from America, is an invention 
 from which important results may be expected. It is described as 
 performing satisfactorily, and with great economy, kinds of work 
 which can at present be executed only by the labour of semptresses. 
 We must be understood as in no way committing ourselves to any 
 opinion as to the merits of these machines. Like many other inven- 
 tions of a similar kind, and of which great success has been at first 
 predicted, they may be found failures when tried upon a large scale; 
 We allude to the statements respecting them, simply as proving, that 
 the competition of capitalists for larger markets, is already vigorously 
 bent in a direction, from which we have already derived, the means of 
 our manufacturing supremacy. 
 
 The practical inference to be drawn from these efforts to increase 
 production is obvious : — 
 
 If we suppose that, in consequence of the new supplies of gold, an 
 income of £200 a year, should ultimately, as respects a few articles, 
 be only equivalent to £100 a year at present : — or, what is the same 
 thing, that the price of those articles should rise 100 percent.: — 
 and if we suppose, further, that in consequence of new contrivances, 
 and inventions, the prices of leading articles of manufactiire ; such as 
 cottons, woollens, silk, hosiery, hats, and the like ; are, by the new 
 supplies of gold, ultimately raised only 50 per cent. : — then the effect 
 would bev as concerns fixed incomes, that the cheaper methods of 
 production, would save them from half the depreciation, which they 
 would otherwise, according to the supposition, ultimately sustain 
 from the operation of the new gold : and it is by no means impro- 
 bable that this will happen. 
 
 (3) INFLL-EXCB ON DEBTOK AKD OBEDITOR CONTKA0T3 AND ON FIXED INCOMES. 
 NECESSARY aUALIEICATIONS OE THE IKQUIKY. 
 
 The second inquiry, relates to the question of contracts now 
 existing : — to annuitants : — to the quantity of capital employed in the 
 trade of the country : — and to the prices of land and securities. 
 
78 Qualifying Circumstances. 
 
 Inquiries of the nature here suggested fender necessary one 
 ohservation of considerable importance, and of very extensive ap- 
 plication — viz. : That it is not possible to conduct such inquiries at 
 all, except upon certain assumptions of the most radical character. 
 We have to assume, for example, that a time has arrived when the 
 value of gold as compared -with commodities — it is usual, and 
 certainly convenient, to say all commodities — has fallen 50 per cent. 
 We have to assume that other circumstances remain the same ; and 
 we have to argue on the supposition that nothing will occur during 
 the interval — probably a long interval — which may elapse between 
 the present time, and the arrival of the period, when the new supplies 
 of gold shall have produced their ultimate eflfects. In other words, 
 we have to argue on the supposition that we retire at night in 
 the midst of the state of things which we now actually see around 
 us : and that we awake next morning in the midst of an entirely 
 new economical dispensation ; — and a dispensation, corresponding 
 precisely, with the abstract notions we are now able to form, of the 
 consequences which would arise, from reducing the value of every 
 man's income by 50 per cent. The mere statement of these con- 
 ditions of the inquiry ought to render us exceedingly cautious in our 
 reception of speculative conclusions ; no matter what may be their 
 apparent reasonableness and ingenuity. 
 
 All speculative inferences and doctrines relating to the New Gold 
 are open to the objection ; — that their advocates, cannot possibly 
 pretend to form any estimate, of what may happen, in the progress 
 of this, and other countries, to the period of what may be called the 
 ultimate depreciation of gold. For example; — four, or even three 
 years ago, who would have ventured to predict that, before the 
 spring of 1853, Wages in England would rise from 10 to 20 per 
 cent. : and that the most profitable branch of enterprise would be 
 Shipbuilding ? 
 
 Let it, therefore, be constantly borne in . mind that, in all the 
 hypothetical reasonings of this Paper as concerns the future ; we 
 express our views, and draw our conclusions, subject to the large 
 and important quali6cations required by the considerations just 
 referred to. 
 
 We revert to the points suggested by the second question : — 
 
Existing Contracts. 79 
 
 The first of these points relates to the eflfects which it is probable 
 will ultimately be produced by the new supplies of gold, upon debtor 
 and creditor contracts existing prior to the appearance of these sup- 
 plies. As we have said already, we can only consider this point by 
 starting with the very large assumption, that a time has arrived 
 when the prices of All Commodities, as measured in gold, have riseti 
 100 per cent. : or been doubled; or, what is the same thing, when 
 the value of gold has fallen 50 per cent. ; or when two sovereigns 
 will buy only as many commodities, as one will buy at present. 
 
 If, — to employ our former illustration, — we imagine a moinentous 
 revolution of this nature to be accomplished in the course of a single 
 night, the answer to the inquiry is very easy. It is plain that, if all 
 commodities double in price : while the money incomes of any par- 
 ticular class of persons remain without change : the command of 
 that class over commodities will be diminished one-half. The effect 
 to them of doubled prices, and stationary income ; will be exactly the 
 same as that of stationary prices and incomes, reduced one-half ; and 
 this is the answer which is generally given to the inquiry under dis-- 
 cussion. But it is an answer purely hypothetical. It is by no 
 means certain that a fall of 50 per cent, in the value of gold, would 
 ■double the prices of all commodities. It might double the prices of 
 a few; but it is a great oversight to speak of Price, even in the 
 language of hypothesis, as depending wholly, or even mainly, on 
 the quantity of gold. Abundance ; invention ; enterprise ; new dis- 
 coveries ; — all the manifold causes which contribute to diminish the 
 cost of production, exert the predominant influence over Price ; and 
 in the present state of the world; and with the expanding resources of 
 mankind; it is out of the question, to assume, that causes which have 
 already been sufficiently powerful to meet increasing demand by 
 falling prices; will, in future, when their strength is multiplied 
 many times, cease to produce the like effects. The recipients of 
 fixed incomes have in their favour one of the largest and most prolific 
 chapters of accidents which can be conceived. 
 
 Let us apply this reasoning to the Thirty Millions sterling raised 
 every year for the interest of the National Debt. 
 
 If all prices were doubled, the 30 millions would fall in com- 
 modity-value, and also in taxation- value, to 15 millions. The fund- 
 
80 Increased Quantity of Capital. 
 
 holder, or creditor, would lose what the taxpayer, or debtor, would 
 gain. The 30 millions of taxes would constitute only the same per- 
 centage of the property and income of the nation as 15 millions 
 do now. The taxable surface would be so extended, that a deduc- 
 tion of 30 millions could be spared with only half the inconvenience 
 it occasions at present. This result would follow on the supposition 
 that the prices of all commodities were doubled. Suppose, however, 
 that the increased production of some commodities caused their 
 prices to remain unaltered, in spite of the fall of 50 per cent, in the 
 'value of gold. Under such circumstances, would it still be true 
 that a taxation of 30 millions would occasion no more pressure 
 than a taxation of 15 millions now 1 We decline to investigate 
 the problem. Whatever the theoretical answer to it may be ; we 
 are satisfied that at present, the real answer depends so entirely on 
 influences and events of which we know nothing, that no useful 
 purpose can be served by the discussion. And, however incon- 
 sequential . it may appear, we fully believe that the real course of 
 events will be such as to relieve Debtors materially, without seriously 
 impairing the position of Creditors. 
 
 (4) EFFECTS AS HEGAEDS THE AMOUNT OF CAPITAL BEQUIBED, 
 
 The next question relates to the effect of the new supplies on the 
 amount of Capital required to carry on the trade of this and other 
 countries ; and we again resume our illustration of a doubling of the 
 prices of all commodities in a single night. 
 
 It is clear, under such circumstances, that the amount of capital 
 required to carry on the extent of business which previously existed, 
 would be doubled. A banker with a capital of £50,000 could only 
 make advances to hdf his fonner customers : — or to all his former 
 customers for half the former amount ; and the reason is plain. A 
 man, for example, engaged in the business of making hats, would 
 find, when the cost of producing them had risen from (say) 10s. to 
 20s. each ; that a capital, or an advance, of £1000, would enabk 
 him to do only half as much business as formerly. And there 
 would be this further result: that as — under the ultimate circum- 
 stances implied by the supposition— the rate of profit on capital 
 employed in trade would remain at the same per-centage as at 
 
Effects on the Value of Land, Houses, 8fc. 81 
 
 present, it would be incumbent on the hatter, and on all persons 
 living on profits, to double their business— or, in other words, to 
 double their capital— in order to maintain the same command over 
 commodities as at present. 
 
 This conclusion has a considerable practical application even at 
 this time ; for it will be readily perceived that whatever causes tend 
 to increase the amount of capital required to carry on the trade of 
 the country, tend directly to absorb any surplus capital seeking 
 employment : and tend, also, directly to raise the rate of discount and 
 interest. We may find an apt illustration in the circumstances, at 
 this moment, of the trade of a wholesale butcher. There has been a 
 rise of 30 per cent, in the price of beef and mutton : and a man now 
 entering into that line of business must employ in it £130 instead 
 of £100, which twelve months ago would have purchased the stock 
 in trade which is now to be had only for the larger outlay. 
 
 Practically, therefore, we may consider that one of the changes 
 now in progress is a change which in the end will probably render 
 it necessary for traders to increase largely the capitals employed in 
 their respective branches of business, as the only means of retaining 
 the relative positions they hold at present; and further, that the 
 necessity for these extensions of capital will greatly contribute to 
 maintain, most likely to raise, the rates of discount and interest. 
 
 (6) EFFECTS ON THE VALUE OF LAND AND SECUBITIES — SPECIAL CIRODMSTAHCES ■ 
 
 The last point under the second question raises the inquiry — What 
 will be the effects of the new gold on the prices of Land, of Houses, 
 of Consols, and of Railway and other Shares .' 
 
 In considering this question, an important distinction is to be 
 drawn Ijetween different kinds of investments. On Consols, for 
 example, the annual return per cent, is fixed and specific, and is 
 not subject to be increased or diminished by alterations in the prices 
 of commodities and labour ; and the same remark applies to India 
 Stock and to some similar securities. On investments in Land and 
 Houses, however, the annual return per cent, is not fixed and specific; 
 but is subject to increase or diminution, in obedience to a variety of 
 causes : — As, for example — if the prices of agricultural produce should 
 permanently rise, the rent of land would also rise ; and, founded on 
 
 o 
 
82 Effects on the Value 
 
 that increase of rent, the price of land would rise. The same ob- 
 servation applies to Houses ; and almost, but not quite to the same 
 extent, to shares in PubUc Companies — such as Banking, Insurance, 
 and Trading Companies — where the dividend is regulated by the 
 profits realised for the time being. 
 
 For the sake of convenience, let such investments as Consols, 
 upon which the annual return per cent, is fixed and specific, be 
 called Fixed Investments ; and such investments as I^and and Houses, 
 upon which the annual return per cent, is not fixed and specific, be 
 called Variable Investments. It wUl be clear, then, that the answer 
 to any inquiry respecting the effects of the new gold upon the price, 
 or market value, of Fixed Investments, will depend almost wholly on 
 the manner and the degree in which the new gold ultimately affects 
 the rate of interest : that is to say, how far it will increase, or dimi- 
 nish, the quantity of capital seeking employment, compared with the 
 demands for that capital ; and in considering this point, we must 
 again revert to our supposition of a doubling of the prices of All 
 Commodities in a single night. 
 
 Suppose that, under the ultimate circumstances implied by that 
 illustration, the rate of interest on advances taken for long terms ; — 
 say on mortgages taken for seven years certain; — should fall to 
 2y per cent, per annum ; the occurrence of such a fall would indicate 
 a superabundance of capital; — that is to say, the presence in the 
 market of large masses of capital seeking employment. Suppose, 
 further, that the rate of interest payable on Consols stiU remained at 
 3 per cent, per annum. Under such circumstances, it seems to be 
 inevitable that the price of Consols and of all Fixed Investments 
 would materially rise ; — and would rise for reasons, of which at pre- 
 sent we see repeated illustrations — namely, on the ground of the 
 comparatively higher annual return. 
 
 If we conceive an opposite state of things to take place : — as, for 
 example, a rise in the interest on mortgages to 5 per cent, per annum 
 — opposite results would be produced in the prices of Consols and of 
 similar investments. 
 
 There is a material consideration, however, as regards Consols, 
 and as regards other similar species of investments, the amount of 
 which is limited. 
 
of Land, Houses, 8(c. 83 
 
 The whole amount, for instance, of Consols is £500,000,000 
 sterling ; and so long as the quantity of capital seeking investment 
 in Consols is not more than £500,000,000, the price will hardly 
 exceed par. Suppose, however, that in consequence of such aug- 
 mentations in the amount of accumulated capital, and in the amount 
 employed in the business of the country, the capital seeking invest- 
 ment in Consols should rise to £750,000,000 ; then the price might 
 be 150 ; — or 50 per cent, above par ; and that price might arise so 
 entirely from the limited nature of the investment as to be inde- 
 pendent, to a great extent, of fluctuations in the rate of interest. 
 The same reasoning will apply to Exchequer Bills, India Bonds, 
 India Stock, and shares in the more select public companies. 
 
 Railway Shares also might exhibit the influence of special causes 
 afiecting their value as securities yielding interest ; — and for' these 
 reasons : — 
 
 The capital already expended in making the principal parts of the 
 Railway — such as buying land, making earthworks and excavations, 
 building bridges and stations, and the like — is a capital which wear 
 and tear will not render it necessary greatly to increase. Other 
 portions of the capital expended on the railway; — as, for instance, in 
 providing rails, locomotives, carriages, and all working contrivances 
 — is such as to require perpetual reproduction. Call the first kind 
 of capital Constant, and the last Perishing. Now, the interest, or 
 dividend, on both kinds is obtained by rates of toll on the work done. 
 Suppose those rates of toll to be doubled ; — expenses remaining the 
 same — the dividend would be doubled ; — and the value of the shares 
 would be doubled. But the expenses could not remain the same 
 under higher wages, and higher prices of commodities. Suppose 
 that, on the plea of higher wages and prices, the railway companies 
 should induce Parliament to double the rates of toll— then the 
 dividend would increase in proportion to the magnitude of the 
 Constant capital; for, if a present toll of Id. per ton per mile will 
 pay a dividend of 3 per cent, on that constant capital ; a toll of 2d. 
 will pay 6 per cent. As regards the Perishing capital and the working 
 expenses, the outlay upon them would be fully in proportion to the 
 altered circumstances of the markets. It must be remembered, 
 however, that if the expenditure on working charges, and for 
 
 G 2 
 
84 Effects on Land, Houses, 8fc. 
 
 perishing capital, should be largely increased ; and the rates of toll 
 either not at aU, or not adequately, increased, the result would, in all 
 likelihood, be a large decrease of dividend. But even then there 
 might be compensating circumstances. — The Traffic, for instance, 
 might very largely increase. 
 
 This reasoning, as regards Railway Shares, will tend to show the 
 important distinction between what we have called Fixed, and 
 Variable, Investments. It would seem that, even if we suppose the 
 prices of AU Commodities to be doubled in a single night, the price 
 of Fixed Investments after such a change would still mainly depend, 
 as it does at present, upon the magnitude of the general rate of 
 interest. But in the case of Variable Investments — such as Land 
 and Houses — upon which the annual return is subject to increase 
 and decrease in obedience to important changes in the prices of 
 commodities and labour, the effect of such a sudden revolution as has 
 been supposed would be essentially different. In the simplest case, 
 — that of Land — we have already pointed out the reasons which 
 would cause its price to rise. There would be, first, a rise in the 
 price of articles produced by land ; — then a rise in rents ; — and then 
 a rise in land as a subject of property. In the case of Houses the 
 process would be similar. The cost of building new houses would 
 be doubled; — as a general result we may suppose that the demand 
 for new houses would be as great as at present ;■ — and first the 
 rent, and then the value, of existing houses, would be raised. 
 
 These would be the leading causes which would regulate the 
 market value of Land and Houses. 
 
 The magnitude of the general Rate of Interest would affect 
 them in a secondary degree. For instance; — with interest at 2|- 
 per cent, per annum, the purchase-money of a freehold yielding 
 a hundred pounds a year, would be higher than if the rate of interest 
 was 5 per cent. -. and vice versd. 
 
 Practically, therefore, the reasoning amounts to this: — Outlays 
 of capital in Fixed Investments, taking place before the sudden 
 doubling of All Prices supposed in the illustration, would be less 
 ehgible than outlays of similar amount in Variable Investments. 
 In the case of Variable Investments, it seems to be certain that 
 the annual return per cent, would rise quite in proportion to the 
 
Mitigation of the Effects of a Bad Harvest. 85 
 
 enhanced prices of commodities and labour ; and as a consequence, 
 that the market value of the investment itself would also rise 
 in a corresponding degree. The owner, therefore, of such an 
 investment would, under the conditions supposed, find himself 
 neither relatively poorer, nor relatively richer, than he was before : 
 for, although the rent of his land or houses might have risen from 
 £50 to £100 a year, the prices of commodities and labour would 
 have been doubled ; and although the market value of the land 
 or houses might have risen from, say £1000 to £2000, still the 
 larger sum then would — under the ultimate circumstances supposed — 
 go as far, and would buy only as many articles, as the smaller one 
 does now. 
 
 There still remains the case of Shares in Public Companies, where 
 the rate of dividend from year to year, depends on the profits realised 
 from year to year. 
 
 We still assume a doubling of the prices of All Commodities and of 
 labour in a single night : and we will suppose the case of a trading 
 company, at present employing, fully, a capital of £100,000, in 
 order to pay a dividend of £5000 ; or 5 per cent, per annum. 
 Then the following changes would take place: — The £100,000 
 would suffice to do only half as much business as at present — the 
 profit of £5000 would not be increased in amount — and the market 
 value of the shares would, like the market value of Consols, be mainly 
 determined by the magnitude of the general rate of interest. As 
 concerned the shareholders, this result would be improved to whatever 
 extent the company might be able to obtain higher profits than at 
 present, by the employment of its capital of £100,000. If the 
 £100,000 was made to yield a profit or dividend of £10,000 ; or 10 
 per cent, per annum ; then the price of the shares— like the price of 
 land or houses— would be a price mainly governed by the increased 
 returns ; and would be governed only in a secondary degree by the 
 magnitude of the general rate of interest. 
 
 (6) MITIGATION OP THE EFFECTS OF A BAD HARVEST. 
 
 The third general inquiry asks— Whether, in the event of a Bad 
 Harvest in the present year, rendering it necessary for this country to 
 import Corn of the value of fifteen or twenty millions sterling ; it is 
 
80 Mitigation of the Effects of a Bad Harvest. 
 
 probable that the changes occasioned by the new supplies of goldj 
 will prevent that importation from producing upon the money 
 market, and upon trade, the violent and disastrous effects of 1841 
 and 1847 ? 
 
 The answer seems to be, that the changes produced by the new 
 supplies wmM avert those violent and disastrous effects ; and further, 
 that the export of gold, which, under such circumstances, must take 
 place from this country, would contribute — in a manner more striking 
 and extensive than has yet occurred — to the complete and absolute 
 dispersion of a considerable part of the new supplies into regions which 
 they have not yet reached. Even if the Old Corn Law had not 
 happily been repealed : and if we had still been condemned to 
 suffer from vicious legislation as well as from the failure of the 
 seasons : it is exceedingly probable that the large accumulation of 
 bullion in both Departments of the Bank — for it is impossible to 
 suppose the separation of these Departments under circumstances of 
 pressure — added to the continuous arrivals of gold from Australia — 
 would have been sufficient to carry us with conlparative ease even 
 through the first two months of a large and sudden Corn Importation. 
 We have the good fortune, however, to live in the seventh year 
 after the great change of 1846 : and to have witnessed so total 
 an alteration in the Corn Trade that, from being one of the most, 
 it is now one of the least, speculative branches of commerce. 
 
 The repeal of the Corn Laws renders it likely that a large importation 
 of foreign grain will no longer occasion a rapid and violent drain on 
 the treasure of the Bank. Such an importation would undoubtedly 
 cause an export of gold more or less considerable : but the foreign 
 exchanges would adjust themselves with rapidity ; and a few millions 
 would probably be all that would be required in addition to the usual 
 exports of goods: — ^Just as in 1847, when our importation of corn 
 from the United States, led to the largest increase of the exports to 
 that country, so far on record. 
 
 There is now a general agreement in the doctrine of Mr. Tooke ; 
 that the commercial disasters of the years from 1835 to 1843 were 
 seriously aggravated by the attempt to carry on the foreign trade of 
 the country — and especially under the old corn law — with a reserve 
 of Bullion in the Bank of England very much too small. In looking 
 
Conclusions. 87 
 
 back at the history of those years, the wonder is, that on several 
 occasions, cash payments were maintained at all. The Australian and 
 Californian discoveries have now furnished us with the means of 
 avoiding that peril ; — at all events for the present ;— and we shall 
 do so. 
 
 We pass over the fourth, fifth, sixth, and seventh of the specu- 
 lative questions on our list: contenting ourselves with suggesting 
 them. 
 
 VIII.— CONCLUSIONS. 
 
 Our inquiry may now terminate by a statement of the General 
 Results which the Facts and Statements collected, and employed, 
 appear to justify, iind, still adhering to the method we have fol-. 
 lowed throughout, we will state, first, the conclusions which rest on 
 foundations of Fact. 
 
 We have seen, then, that the quantity of New Gold produced in 
 California and Australia to the end of 1852, is equal to at least Ten 
 Per Cent, of the total Quantity of gold existing in Europe and 
 America in the early part of 1848: or immediately previous to the 
 first appearance of the Californian supplies. We have seen, also, 
 that the Annual Production of Gold from All Sources ; — ^which in 
 1848 was equal to Two Per Cent, on the total quantity of gold then 
 existing in Europe and America; — had risen in 1852 to Seven Per 
 Cent, on that quantity. 
 
 So far, the whole, or nearly the whole, of the new supplies of gold 
 
88 Conclusions. 
 
 have been absorbed as Coinage in America; in this country, and 
 Australia; and in France. And not only has there been a large 
 increase of the Gold Coinage in these countries ; but the amount of 
 the convertible Paper Circulation — probably in each of them — - 
 certainly in three, viz., England, France, and Australia — has 
 been considerably increased within the last twelve months. And 
 it appears that the increase in the Circulation of coin and paper, 
 has arisen almost wholly from a prior increase, in transactions. It 
 is a question, however, for investigation, whether the absorption of 
 the new gold as coin, can proceed to a much greater extent, without 
 affecting the value of gold as compared with a larger or smaller 
 number of commodities. 
 
 In this country there has been, since the summer and autumn of 
 last year, a marked increase in the Price of several descriptions of 
 Commodities ; and it does not appear that that increase of price can 
 in all cases be adequately explained, as concerns the commodities 
 themselves, by considerations of Supply and Demand ; nor, on the 
 other hand, does it appear that we are justified, by the evidence, in 
 attributing to the influence of the new supplies of gold, any extensive 
 or decided influence in raising prices in this country. The facts, 
 however, do justify us in believing, that the new supplies have 
 certainly begun — indirectly, and perhaps directly also — to operate 
 in this country in a manner which does, and will, lead to Higher 
 Prices. 
 
 As regards "Wages, the indirect and direct, operation of the 
 new gold in establishing higher rates is manifest and unquestion- 
 able; and, since the autumn of 1852, the rise in the wages of artisan 
 and manual labour in this country is equal to between Twelve and 
 Twenty Per Cent. 
 
 It seems to be established by the evidence that whatever effects 
 may have been produced in the United Kingdom in raising wages 
 
/ 
 
 Conclusions. 89 
 
 and prices: and in extending and increasing trade: have been 
 accomplished by means of reductions in the Rate of Discount and 
 Interest ; and by Advances of Capital :— and not in any way through 
 the medium of the Circulation. It appears, also, that the effect of 
 the nevy gold in depressing the rate of discount was essentially of a 
 temporary character : and was confined to the period during which 
 the new gold was lodged, chiefly in the Bank of England, in its 
 progress from the mines to the general markets of the world. 
 
 Since those temporary effects have disappeared, the increased 
 demands for capital ; excited by the low rates of discount ; and 
 arising out of an extending trade ; have raised those rates to fully 
 their previous height. 
 
 It is the fact, also, that the apparently permanent increase of 
 four millions in the outstanding Circulation of the Bank of England 
 has rendered it necessary to consider whether; — if the Charter Act 
 of 1 844 is to be maintained ; — the amount of fourteen millions as 
 the limit of the issue of notes on securities should not be 
 considerably enlarged. 
 
 In the Australian Colonies, the effect of the new gold has been to 
 add the stimulus of a very low rate of interest ; and of an abundance 
 of capital ; to the other great, and manifold, causes of rapid develop- 
 ment, which they previously possessed. 
 
 And, generally, we are justified in describing the effects of the 
 new gold as almost wholly beneficial. It has led to the development 
 of new branches of enterprise ; to new discoveries ; and to the esta- 
 blishment, in remote regions, of populations carrying with them 
 energy, inteUigence, and the rudiments of a great society. In our 
 own country, it has already elevated the condition of the working 
 and poorer classes ; it has quickened and extended trade ; and ex- 
 
90 Conclusions. 
 
 erted an influence which, thus far, is beneficial wherever it has 
 been felt. 
 
 Such are the conclusions justified by Evidence and Facts. 
 
 There still remain the conclusions which seem to be justified 
 by Speculation; and these may be compressed within a smsJler 
 compass. 
 
 Apparently there is good reason for beheving that the future results 
 of the new supplies of gold will be, on the whole, not less devoid 
 of evil than they have been hitherto. There seems to be no autho- 
 rity for expecting that, under contracts now existing, creditors will 
 be sacrificed to debtors ; that the recipients of fixed incomes will be 
 hopelessly impoverished ; or that capital will cease to command a 
 reasonable rate of interest. On the contrary, the great revolution 
 pursues its course so gradually ; it is moderated and checked in 
 modes so infinite and subtle ; and moulded by influences too delicate 
 to be laid bare by any appliance of statistics : — that, so far as we 
 can judge of the Future by that which now occurs around us, we 
 may contemplate without fear, a change in the economical condition 
 of the world ; — new, and startling, doubtless ; — but already ad- 
 justing itself, without shocks or convulsions, to the expanding 
 intelligence and resources of mankind. 
 
ADDITIONAL CHAPTERS. 
 
 (A) ANALYSIS of the Circulation of Bank of England 
 Notes — June 1849, 1851, 1853. 
 
 Since the appearance in the Morning Chronicle, of the Paper now 
 reprinted in a revised form, I have been favoured by the Governor 
 of the Bank of England (J. G. Hubbard, Esq.), with materials for 
 a Table, which throws considerable light, on the character of the 
 increase of about four millions sterUng, which has taken place in the 
 outstanding Circulation of the Bank of England since 1851. The 
 Table itself is as follows : — 
 
 Table XXXI.— Circulation of Bank of England Notes, in tlie Hands of the 
 Public — Statement of the Component Parts of that Circulation, as regards 
 the Denominations of the Bank Notes : — on Three Dates, viz., 2 .Tune, 1849 : 
 7 June, 1851 : and 4 June, 1853. 
 
 Denomi- 
 nation 
 of Bank 
 
 Notes. 
 
 2 June, 1849. 
 
 7 June, 1861. 
 
 4 June, 1853. j 
 
 Total Notes 
 in hands 
 of Public. 
 
 Pro- 
 por- 
 
 tiOTlS. 
 
 Total Notes 
 in hands 
 of Public. 
 
 Pro- 
 por- 
 tions. 
 
 Increase 
 
 on 
 
 1849. 
 
 Total Notes 
 
 in hands 
 .ofPubhc. 
 
 Pro- 
 por- 
 tions. 
 
 Increase 
 
 on 
 
 1851. 
 
 £ 
 5 
 
 10 
 20®100 
 
 S00®500 
 1000 
 
 Bk.P. 1 
 
 Bills i 
 
 £ 
 5,165,000 
 
 3,488, 
 
 p. ct. 
 
 28.13 
 
 '9- 
 
 £ 
 5,566,000 
 
 3,677, 
 
 p. ct. 
 29.28 
 
 19-34 
 
 £ 
 401,000 
 
 189, 
 
 £ 
 6,479,000 
 
 4,236, 
 
 p. ct. 
 27.65 
 
 18.09 
 
 £ 
 913,000 
 
 559, 
 
 8,653, 
 5,269, 
 
 47-13 
 28.70 
 
 9,243, 
 5,563, 
 
 48.62 
 29.27 
 
 590, 
 294, 
 
 10,715, 
 6,545, 
 
 45-74 
 27.94 
 
 1,472, 
 982, 
 
 13,922, 
 1,464, 
 2,975, 
 
 75-83 
 
 7-97 
 
 16.20 
 
 14,806, 
 1,566, 
 2,636, 
 
 77.89 
 
 8.24 
 
 13-87 
 
 884, 
 
 102, 
 
 -339, 
 
 17,260, 
 1,923, 
 4,240, 
 
 73.68 
 
 8.22 
 
 18.10 
 
 2,454, 
 
 357, 
 
 1,604, 
 
 18,361,000 
 1,076, 
 
 100. 
 
 19,008,000 
 1,073, 
 
 100. 
 
 647,000 
 
 23,423,000 
 1,390, 
 
 100. 
 
 4,415,000 
 
 
 
 
 
 
 19,437,000 
 
 20,081,000 
 
 
 
 24,813,000 
 
92 Analysis of the Circulation [Add^' 
 
 II. — Analysis of the Increase of 1853 over 1849. 
 
 Denomination 
 
 of 
 Bank Notes. 
 
 Per Centage 
 
 of 
 
 Total Increase. 
 
 Increase of 
 
 1853 
 over 1849. 
 
 Per Centage, as regards 
 
 Sach Denomination, of 
 
 tlie Increase of 1853 
 
 oyer 1849. 
 
 £ 
 
 p. ct. 
 
 £ 
 
 p. ct. 
 
 5 
 
 25.96 
 
 1,314,000 
 
 24-54 
 
 10 
 
 14-77 
 
 748, 
 
 21.44 
 
 40.73 
 
 2,062, 
 
 20 ® 100 
 
 25.21 
 
 1,276, 
 
 24.40 
 
 65-94 
 
 3,338, 
 
 200 ® 800 
 
 9.06 
 
 459, 
 
 31-35 
 
 1000 
 
 25- 
 
 1,265, 
 
 42.52 
 
 100. 
 
 5,062,000 
 
 Bank Post Bills 
 
 
 314, 
 
 
 5,376,000 
 
 Note. — The Second Part of the Table may be read as follows. For 
 example, as regards £5 Notes : — the increase of 1853 oyer 1849 is£l, 314,000 : — 
 that sum is equal to 25.96 per cent, of the total increase of £5,062,000 on the 
 total Note Circulation : — and it is also equal to 25.44 per cent, of the sum 
 of £6,165,00, which constituted the total circulation of £5 notes in 1849 : — 
 similarly for the other denonuSiations. 
 
 This Table both does, and does not, support the views expressed in 
 the preceding Paper (page 35 ante) as to the causes of the increase 
 in the Bank Circulation. In substance, those views are — That the 
 increase has been mainly caused by an augmented requirement for 
 Bank Notes in the Retail TJtades ; and for the payment of Wages 
 and Salaries. An absorption of Notes for such purposes would seem 
 to be mostly confined to the smaller notes of £5 and £10. Is it so .'' 
 To a certain extent, the Table says it is. ' We see, for instance, 
 that of the total increase of five millions, as much as two millions, 
 or 40 per cent., belongs to the £5 and £10 notes ; — leaving three 
 millions, or 60 per cent., for notes of £20 and upwards. And if we 
 look still closer; and draw a line at the £100 denomination; the 
 notes of that, and the lesser grades, absorb 3\ milUons, or 66 per cent, 
 of the total increase of the two years. 
 
CHApS] of Bank of England Notes. 93 
 
 To apply another test : — namely, the proportion borne by the increase 
 in each denomination to the amount of that particular denomination 
 in 1849 :— we find that the increase of the £5 ; of the £10 ; and of 
 the £20 a £100 notes ; is tolerably uniform at about 24 per cent. 
 But the increase in the £200 a £500 is 31 per cent. ; and on the 
 £1000 notes it is 42 1 per cent. 
 
 The facts, therefore, do not admit of the inference, that the principal 
 cause of the increased Bank Circulation, is an augmented demand for 
 the smaller denominations of notes. There has been a considerable 
 increase in the amount of those smaller denominations ; but there 
 has been a larger increase in the amount of the notes above £100 
 each. 
 
 A Table similar to that which the kindness of Mr. Hubbard has 
 now enabled me to form, occurs in the Appendix (App. b. 3) to the 
 Lords' Report on Cash Payments in 1819. The Return in that 
 instance extends from June 1817 to April 1819; it contains two 
 entries in each month ; and analyses the circulation at each of the 
 dates given, as to the amounts of the several denominations of Bank 
 Notes, then existing. The return has attracted considerable attention 
 at various times, as in the highest degree valuable and interesting ; 
 and it is a matter of some surprise that, in the profusion of returns 
 connected with the Currency printed by Parliament since 1819, a ' 
 continuation of the analytical account in question has never appeared. 
 The general and most striking result of the Table of 1819 is; — that 
 the amount of the circulation of the smaller notes remained as nearly 
 as possible stationary ; and, that all the marked fluctuations, in the 
 amount of the total outstanding Circulation, were occasioned by the 
 rise and fall of the columns, representing the largest description of 
 notes. 
 
 As regards the Table (xxxi.) presented above, I shall not attempt, 
 at present, to offer any explanatory theory. It is desirable, if pos-. 
 sible, to collect further facts before forming a judgment. 
 
94 Additions to Gold Coin. [Add^- 
 
 (B) Additions to the Quantity -op Gold Coin in the United 
 
 KiNQDOM QUANTITT OP ENGLISH GoLD COIN DERIVED FROM 
 
 THE MELTING OP AMERICAN CoiN. 
 
 I HAVE also been favoured by the Governor of the Bank 
 with certain Memoranda relative to the additions made during 
 the last two years and a half, to the quantity of Gold Coin in 
 the United Kingdom ; and also relative to the quantity of EngUsh 
 Gold Coin which during the same period, has been derived from the 
 melting of American Coin. The following statement embodies 
 the information which Mr. Hubbard has kindly given. 
 
 First, as regards the amount of Gold actually imported into this 
 country from Australia, we have the following figures : — 
 
 £ 
 
 1851 28,000 
 
 1852 6,913,718 
 
 1853 (first 6 mos.) 8,812,040 
 
 £16,753,758 
 
 There are no means of ascertaining the amount of Gold Coin sent 
 from this country to Australia since the beginning of 1852. At 
 page 17 ante, that amount is estimated at Nine Millions sterling 
 (£9,000,000). Mr. Hubbard conceives that the real amount was 
 considerably more ; and he thinks that Twelve and a Half Millions 
 (£12,500,000) is nearer the truth. Taking therefore, £15,753,758 
 as the amount of Australian Gold imported ; — assuming the whole to 
 be coined; — and taking £12,500,000 as the amount of EngUsh Gold 
 Coin sent to Australia; — there would remain a difference of £3,253,758 
 of Gold Coin as added, (with the exception of a few trifling sums 
 exported to places other than Australia) to the metallic circulation of 
 this country since, say, Jan. 1862. 
 
 There is another mode of endeavouring to ascertain the amount of 
 the Export of English Gold Coin since Jan. 1852 ; and it is shown 
 in the following statement : — 
 
Chai*®] American Coin — Quantity Melted. 95 
 
 1852—3 Jan.— Total amount of Gold, and Gold Coin, in the 
 
 Bank of England £17,658,000 
 
 Add— 
 
 1852— "Whole Year.— Gold Coined at Royal Mint 8,461,000 
 
 1853—1 Jan.— 30 June Do. 9,372,000 
 
 ,, 1 July— 6 Aug. Do. Nn 
 
 ^ 35,391,000 
 
 Deduct — 
 
 1853—6 Aug.— Total amoimt of Gold, and Gold Coin, in 
 
 Bank of England 17,435,000 
 
 Leaving £17,956,000 
 
 as the amount of Gold Coin, and Gold Bullion, taken from the Bank 
 of England, and from the Royal Mint, during the nineteen months 
 from 3rd Jan. 1852, to 6th Aug. 1853. 
 
 In the next place, as regards the amount of English Gold Coin 
 derived from the melting of American Coin, we have the following 
 figures : — 
 
 1851. — ^Import of Gold Specie (chiefly Eagles) from the 
 
 United States, to the value of £7,028,410 
 
 1852.— Do. do 6,126,000 
 
 13,154,410 
 Value of American Gold Coin purchased by Bank of 
 England during the Years 1861-62 1,660,000 
 
 Leaving £11,494,410 
 
 Of this amount of £11,494,410, the probability is, that a very 
 large proportion has been melted, for the purpose of conversion into 
 English Gold Coin, or into Bullion Bars. 
 
 In 1845, the Bank first began to purchase Russian Gold Coin; 
 and in 1851, it first bought United States Gold Coin. Previous to 
 these dates the importers of these Coins respectively, were under the 
 necessity of melting them into Bars (the only shape in which the 
 Bank would buy their Gold) ; and as those countries were the then 
 chief gold-producing countries ; and extensively trading with Great 
 Britain • and the movements of commerce occasionally directed large 
 exDorts of Gold to this country; a considerable destruction of property 
 resulted from the reconversion of the manufactured, into the raw, 
 commodity. 
 
96 Amount of Funds. [Addi- 
 
 It was considered desirable that an alteration should be made 
 in this practice; not only with a view to prevent the loss and incon- 
 venience occasioned by the destruction of so much coinage ; but also 
 with a view to affording greater facilities on the part of the Bank to 
 its customers and to the public ; and the regulations were modified 
 accordingly. The results have fully answered all the especta,tions of 
 the promoters of the change. In the event of Gold being required 
 for export to America, or the North of Europe ; it can generally be 
 obtained from the Bank in the form of coin, of the country to which 
 the remittance is to be made. 
 
 (C) Amount of the Funds Employed in the London Money 
 
 Market. 
 
 Thkee years ago, I submitted to the Statistical Society, the 
 results of an inquiry of some extent, relative to the Circulation of 
 Bills of Exchange in Great Britain, and various divisions of it, 
 during the Twenty Years, 1828 — 47 ; and the First Part of that 
 Inquiry was printed in the Statistical Journal, for 1851 (vol. xiv., 
 May, 1851). Considerable progress had been made in preparing 
 the Second — and I am disposed to think, the more important 
 and interesting — Part, for the printer, when I was interrupted by 
 engagements which wholly occupied me. I very much regret that, 
 hitherto, I have been unable to complete, that which I promised the 
 Statistical Society, to carry through ; and I regret also, that the 
 unfinished state of the Paper, very materially diminishes any use or 
 interest it may possess. 
 
 One of the principal chapters of the Part already printed, is 
 occupied with an attempt to form an Estimate ; as near the truth as 
 circumstances will permit ; of the amount of the Funds employed in 
 the London Money Market ; and of the amount of Bills of Exchange 
 constantly under discount in Great Britain : and occupied as we 
 have been, in th^ preceding pages, in discussing questions connected 
 with the present and probable rate of discount, it will be convenient 
 
ChapS] Funds in London Money Market. 97 
 
 to quote here the conclusions which were arrived at in 1849, hy an 
 independent process ; and by a process, of course, quite free from the 
 influence of speculations which may have been subsequently suggested 
 by the increase of the gold discoveries. 
 
 In a subsequent part (pages 107, &c.) of the present pubhcation, I 
 continue to the end of 1852, the Statistics of Bills of Exchange, 
 carried by the Statistical Journal only to the end of 1847 ; — and I 
 venture to direct attention to that continuation. 
 
 It is necessary to add. that there are several terms and allusions 
 in the following extract, for a full explanation of which it is desirable 
 that reference should be made to the first part of the Paper itself, as 
 printed in the Statistical Journal. 
 
 The following is the extract : — 
 
 (IX.) — Estimates, Statistical and General, of the Amount of the Funds 
 employed in the London Money Market, and at the command 
 of the Provincial Bankers ; and also of the Amount of Bills 
 of Exchange constantly under Discount in London and in the 
 Provinces ; Series of Tabular Estimates and Statements. 
 
 " If I have succeeded in making myself intelligible in the exposi- 
 tion just concluded, it will be apparent that the fund constantly 
 employed in the Discount of Bills of Exchange may, in the first place, 
 be divided into two principal parts, namely : — 
 
 I. The Fund collected in London, and administered chiefly by the 
 Bank of England and the London Bill Brokers ; and 
 
 II. The fund remaining in the hands of the Country Bankers, and 
 employed by them in meeting the demand for discounts within their 
 local circles. 
 
 It will further be apparent, in the second place, that by far the 
 most considerable of these two funds is that which is collected in 
 London ; and that the sources from which the London discount 
 fund is derived admit of some such classification as the following, 
 
 viz. : — 
 
 (1) Part of the circulation and deposits of the Bank of England. 
 
 (2) The deposits of the country bankers with the London bill- 
 brokers. 
 
 (3) Part of the deposits held by the London bankers. 
 
98 Amount of Bills of Exchange [Km>^ 
 
 (4) The deposits of Assurance Companies and other parties, with 
 the London bill-brokers. 
 
 Now, assuming the correctness of this mere outline of the facts, — 
 and I believe that it may be assumed with great safety to be correct 
 in the general form in which it is here employed, — I have been 
 desirous to settle, as far as possible, one or two questions of consider- 
 able theoretical interest, and of some practical moment : — 
 
 (1) In the first place, it would be very satisfactory if we could 
 ascertain what amount of bills of exchange are always under discount 
 in Great Britain ; that is to say, what amount of ready capital is 
 constantly employed in advances to merchants and traders upon the 
 security of bills of exchange ; or, what is almost the same thing, upon 
 the security of commodities. 
 
 (2) In the next place, it would be very satisfactory to know what 
 portion of this total sum is advanced in Scotland ; what portion in the 
 provincial districts of England ; and what portion in London. If we 
 could ascertain this, we should be able to estimate numerically the 
 influence which the money-market of London exerts over the whole 
 country ; and also to estimate numerically the influence which the 
 Bank of England exerts over the money-market of London. 
 
 (3) In the third place, it would be extremely useful if we could 
 arrive at some reasonably safe estimate of the amount of ready 
 capital wielded by the Country and the London bankers. 
 
 (4) And, finally, it would also be extremely useful if we could be 
 enabled to form a somewhat exact opinion of the amount of the 
 Floating Balances held in London by Assurance companies and other 
 wealthy Corporations and persons. 
 
 I cannot* hope, and I do not pretend, to answer any of these 
 questions dogmatically ; but I have taken some pains to arrive at an 
 approximate estimate with reference to each ; and, at all events, I 
 will undertake to describe the whole data upon which I found my 
 reasoning, and the whole process by which I arrive at my con- 
 clusions. 
 
 The results of the present inquiry have clearly put me in posses- 
 sion, with a tolerable degree of accuracy, of one of the first and most 
 important elements in the investigation, namely; — The amount of bills 
 of exchange in existence at one time in the whole of Scotland, the 
 
CiiApS] Under Discount at One Time. * 99 
 
 whole of England, and the whole of Lancashire. As we know that 
 some bills are not discounted, the amount, therefore, of bills in 
 existence, is of course greater than the amount of the funds 
 employed in the business of discounting. Now what is the ordinary 
 amount of bills in existence at one time, as shown by the calculations 
 of the present paper ? The following statement will answer this 
 question : — 
 
 (Table VII.)— Totai Averabe Amount of Bills in Circulation at One Time 
 during the years 1843—46, as shown by the Calculations of the present 
 Paper. 
 
 In Scotland (Inland Bills) £18,000,000 
 
 In Lancashire „ 12,000, 
 
 In rest of England „ 70,000, 
 
 100,000, 
 iPoreign Bills 16,000, 
 
 £116,000,000 
 
 The next question that occurs is, — What portion of this gross sum 
 of £116,000,000 of bills of exchange is not discounted ? I am sorry 
 to say that the only answer that can be given to this inquiry must 
 proceed altogether upon estimate. My own estimate is as follows. 
 I arrange the figures, first, in the more convenient form of an 
 
 (Table VIII.) — Estimate of the Amount of Bills op Exohanse under 
 Discount at One Time in Great Britain, 
 
 in Scotland (Inland Bills) £15,000,000 
 
 In Lancashire „ 12,000, 
 
 In rest of England,, 60,000, 
 
 87,000, 
 Foreign Bills 13,000, 
 
 Total under Discount at One Time 100,000, 
 
 Leaving as the amount of BiUs and Notes not \ jg ^^^ 
 discoxmted by the holders of them j ' ' 
 
 Total Bills in Circula.tion £116,000,000 
 
 Now, upon the suppositions expressed in these figures, the amount 
 of bills and promissory notes not discounted will be as follows : — 
 
 H 2 
 
100 * Bills not Discounted. [Add^ 
 
 In Scotland (Inland Bills) £ 3,000,000 
 
 In Lancashire ,, . . • . 
 
 In rest of England ,, 10,000, 
 
 13,000, 
 Foreign Bills 3,000, 
 
 Total Bills not Discounted £16,000,000 
 
 I have assumed that the whole of the £12,000,000 shown to he 
 created in Lancashire are discounted, because, as I shall have occasion 
 to explain presently, it is quite certain that the Stamp-office returns 
 do not enable us to ascertain the real amount of bills created in that 
 county by a mere reference to the sale of stamps within it. 
 
 At first sight, £16,000,000 may seem to be a large amount for the 
 quantity of bills and promissory notes which are not discounted ; but 
 reasons can be given which at least weaken the force of the first 
 impression. 
 
 It must be remembered that a considerable portion of the bills and 
 promissory notes created are intended to serve legal, rather than com- 
 mercial, purposes. Of this nature are most of the joint and several 
 promissory notes given to bankers and private persons for temporary 
 loans of money : and obligations of this nature are exceedingly com- 
 mon in the agricultural districts. Further, with many firms of ample 
 capital and long standing, it is a sort of point of honour never to part 
 with a biU after it comes into their possession until the time of its 
 maturity. On the whole I am inclined to believe that, if the estimate 
 of £16,000,000-errs at all, the fault is more likely to be one of under 
 statement than the contrary. 
 
 We have arrived, therefore, at the conclusion, that it is very pro- 
 bable that the amount of bills of exchange (inland and foreign) con- 
 stantly under discount, at one time in Great Britain, is £100,000,000. 
 Now, what are the sources from which this large sum is obtained ; 
 and what portion of it is contributed by the Provincial and what by 
 .by the London dealers in money ? 
 
 We will first inquire into the Provincial part of the question. 
 
 in jEngland and Wales, exclusive of London, but including the 
 circle of sixty-five miles round London, within which country bank- 
 notes are forbidden, tliere are at present about 900 Bank Offices ; not 
 separEite banking firms, but 900 places where the business of banking. 
 
Chap^] Capital at Command of Bankers. 101 
 
 either by means of a central office or a branch office, is daily carried 
 on. After considerable inquiry, I believe that, one with another, 
 the amount of capital of all kinds employed by these 900 bank offices 
 is certainly as much as £100,000 each. When I say capital of aU 
 kmds, I mean the private capital of the partners and shareholders of 
 the banks invested in their business; the capital placed in the banks 
 by depositors, and by those who keep banking accounts ; and the 
 capital acquired by means of the circulation of country bank-notes. 
 For the month ended 29th December, 1849, the amount of country 
 notes in circulation in England and Wales was £6,140,913, divided 
 among the 900 offices, an amount of capital equal to £6830 would 
 fall to the share of each office as obtained from the circulation alone. 
 The private capital employed in the business of banking in the country 
 is very considerable ; and the deposits are also in a great number of 
 cases of surprising extent. ' 
 
 In Scotland there are about 360 bank offices ; and I estimate the 
 amount of capital of all kinds employed by them at £100,000 each, 
 the same as on the south side of the border. I confess, however, that 
 as regards Scotland I am not able to speak with the same confidence 
 as with reference to the southern division of the island. 
 
 During the four weeks ended 29th December, 1849, the amount of 
 Scotch bank-notes in circulation in Scotland was £3,242,448; or 
 equal to an average sum of £9000 to each of the 360 bank offices. 
 
 In Ireland there are about 170 bank offices ; and the Irish circula- 
 tion of £4,634,503 gives an average sum of £26,900 to each. And 
 it is probable that private capital and deposits raise the average to 
 £100,000. 
 
 The following, therefore, will be the recapitulations : — 
 
 £ 
 900 Bank Offices in England and Wales atabout £100,000 each, | 97 qoO.OOO 
 
 or say ' 
 
 360 „ Scotland „ Z6fi(i0, 
 
 — 133.000, 
 
 170 „ Ireland „ 17,000. 
 
 —^ £150,000,000 
 
 This sum of £133,000,000 constitutes the gross amount of capital 
 employed in the business of banking in the provincial districts of 
 
102 Amount of Capital [Add^ 
 
 Great Britain; and, of course, out of this sum of £133,000,000 the 
 bankers have to provide the funds employed : (1) in advances to their 
 customers : (2) in the purchase of government and other securities ; 
 (3) in the maintenance of a sufficient reserve of coin and Bank of 
 England notes : (4) in the retention at their credit in London of an 
 adequate balance: (5) in investments in bills of exchange procured in 
 London upon the plan pointed out in a preceding chapter in the 
 supposed case of the £50,000 from Lincoln : and (6), finally, in the 
 discount of the local bills of their own local connection. 
 
 Still speaking of Great Britain, exclusive of London, the following 
 statement will recapitulate these particulars, thus : — 
 
 Estimate of the Proportion of the Gross Banking Capital of Great Britain 
 (exclusive of London) employed ia the Principal Divisions of the Business 
 of Banking, namely ; — 
 
 £ 
 In Advances to Customers ; Balances in London ; Government 1 ,,, f,(,„ „(>/, 
 
 Securities ; Coin and Bank Notes J »'•"""'""" 
 
 In Investments in Bills of Exchange obtained from London .... 30,000 
 
 111,000 
 In the Discount of Local BiUs— 
 
 England and Wales £12,000,000 
 
 Scotland 10,000, 
 
 — 22,000 
 
 £133,000,000 
 
 The estimate of £10,000,000 for bills locally discounted in Scotland 
 ia made with reference to the peculiarity in Scotch bills of making 
 them payable not in London ; a circumstance which confines them very 
 much to their own circle. 
 
 According to this estimate the amount of capital contributed by the 
 provincial bankers to the London money-market is £30,000,000, 
 namely, the extent of the investments in bills of exchange obtained 
 from London. And to this sum must be added the amount of the 
 floating balances retained by the country bankers with their London 
 correspondents and brokers. 
 
 Let us now turn our attention to the London branch of the question. 
 
 Including joint-stock banks, and omitting mere dealers in bullion 
 and money-changers, there are at present in London 35 City bankers, 
 and 1 6 West End bankers. The pubUshed accounts of the joint-stock 
 banks enable us to state with great accuracy the amount of capital 
 
ChapS] 
 
 at Command of' Bankers. 
 
 103 
 
 employed by them in their business. And taking the accounts ren- 
 dered to the 31st December, 1849, by the four principal joint-stock 
 banks, the following is the result : — 
 
 (Table IX.) — London Joint-Stock Bane.s, — Statement of the Assets of the 
 Four Joint-Stock Banks in the Metropolis, whose Operations are con- 
 fined to London. Compiled from the Aoooimts of 31st December, 1849. 
 
 Capital 
 paid up. 
 
 Banks. 
 
 GoTcmment 
 
 Secui'ities, 
 
 India Bonds, 
 
 Exchequer 
 
 BUls. 
 
 Discounted 
 
 BiUs, 
 
 Advances, 
 
 Bonds, 
 
 &o. 
 
 Total 
 
 Assets. 
 
 £ 
 
 1,000,000 
 
 422,900 
 
 600,000 
 
 128,280 
 
 (London and ■Westmin-l 
 
 \ ster Bank J 
 
 TJnion Bank 
 
 £ 
 
 973,691 
 not stated. 
 
 671,976 
 not stated. 
 
 £ 
 
 3,844,777 
 
 3,337,135 
 
 2,921,480 
 
 699,580 
 
 £ 
 
 4,818,468 
 
 3,337,135 
 
 3,593,456 
 
 699,580 
 
 London Joint-Stock Bank . 
 Commercial Bank, London 
 
 Totals 
 
 2,151,180 
 
 1,645,667 
 
 10,802,972 
 
 12,448,639 
 
 Averages 
 
 537,795 
 
 822,833 
 
 2,700,743 
 
 3,112,159 
 
 The average total amount of assets, or of capital employed in these 
 four instances, is as high as £3,112,159. We cannot suppose, how- 
 ever, that a similar average would be afforded by an equally formal 
 statement of the position, either of all the thirty-five City, or all the 
 sixteen West-end, bankers. It will be nearer the truth to assume an 
 average of £1,250,000 for each of the fifty-one estabhshments. And 
 if to the result aflForded by such a computation we add £10,000,000 
 for the deposits of Insurance companies and others, in the hands of 
 bill-brokers and large money- dealers, it is probable that we shall at 
 least obtain an approximate estimate of the magnitude of the Metro- 
 politan Banking Fund. 
 
 The calculation will then stand thus :— at present excluding the 
 
 Bank of England : — 
 
 35 City Bankers (Private and Joint-Stock) IJ mHUons each, say £44,000,000 
 
 leWestEnddo ^'''°°°' 
 
 Insurance Oifice, &c.. Deposits . 
 
 64,000, 
 10,000, 
 
 London Fund ^74,000,000 
 
104 Application of the Funds [Add^ 
 
 To this sum must be added, say, £12,000,000 for the amount 
 employed by the Bank of England — speaking generally — in com- 
 mercial loans and discounts. And there must also be added the sum 
 of £30,000,000, which we have already seen that the Country 
 bankers contribute to the London money-market, in exchange fpr 
 the usual kind of bills; but this £30,000,000 must not be increased 
 for our present purposes by the floating balances of the Country 
 bankers, because we have just reckoned those balances in the 
 average sum of 1^ millions assigned to each of the fifty-one London 
 bankers. 
 
 We have, therefore, a further summary of results, thus : — 
 
 London Fund, as before shown £74,000,000 
 
 Bank of England 12,000, 
 
 ToTAi, London Pund 86,000, 
 
 Contributed by Country Bankers to London Fimd 30,000, 
 
 £116,000,000 
 
 We have already estimated that — 
 
 (1) The total amount of Bills under discount at one time 
 
 in Great Britain, including London, is £100,000,000 
 
 (2) The amount of Bills under discount 
 
 locally in Scotland is, say £10,000,000 
 
 (3) „ England- 12,0~00, 
 
 22,000, 
 
 Leaving £78,000,000 
 
 as the amount of bills discounted from the resources, or by the 
 intervention, of London. Of this £78,000,000, we have seen that 
 £30,000,000 are carried off by the Country bankers, leaving us the 
 amount discounted in London, purely by the aid of London resources, 
 a sum of £48,000,000. Of this £48,000,000, a sum of £5,000,000 
 is generally taken by the Bank of England. The following, therefore, 
 will be the conclusion : — 
 
Chap*] Accumulated in London. 105 
 
 Sills (Inland and Foreign) under Discount at one time in Great Britain, 
 including London, 
 
 I. Discounted locally — 
 
 In Scotland £10,000,000 
 
 In England 12,000, 
 
 22,000,000 
 
 II. Discounted in London — 
 
 With Conntry Funds £30,000,000 
 
 By Bank of England 5,000, 
 
 With London Funds 43,000, 
 
 78,000, 
 
 Total tjndeb Biscount at one Time £100,000,000 
 
 We saw above, that the amount of capital at the command of the 
 London bankers may be estimated at se64,000,000, and that the 
 deposits of Insurance companies, &c., might be taken at £10,000,000. 
 To this £10,000,000, we must add £33,000,000, to make the 
 amount of £43,000,000 employed in discounts. The greatest 
 portion of this £33,000,000 is no doubt furnished by the London 
 bankers, either in direct discounts to their own constituents, or in 
 indirect modes. But, if even £30,000,000 was contributed by the 
 bankers, there would still remain £34,000,000 (64—30) to be 
 employed by them in purchases of Government stock, in advances 
 and loans upon various kinds of security, and in the maintenance- of 
 an adequate cash reserve. 
 
 We may now reduce to a general outline the results at which we 
 have arrived by the aid of these computations. 
 
 At a former page we reckoned only the £12,000,000 generally 
 employed by the Bank of England in commercial advances and dis- 
 counts. In forming, however, an estimate of the whole of the funds 
 engaged in the London money-market, and employed in the various 
 modes of investment and the various kinds of banking business com- 
 mon in the metropolis, it is obviously incumbent upon us to extend 
 our view from that portion (£12,000,000) of the resources of the 
 Bank of England employed in exclusively commercial operations to 
 the whole of the fund at the command of that body, whether 
 furnished by the circulation or by the public and private deposits of 
 the Bank of England. According to this view of the case, we must 
 
106 Application of the Funds [Add^ 
 
 compute the share of the London fund belonging to the Bank of 
 England, not at £12,000.000, but at £36,000,000. 
 
 We may say, therefore, that, as far as we see at present, the whole 
 of the fund constantly employed in the money-market of London is 
 composed as follows : — 
 
 London Banters £64,000,000 
 
 Deposits of Assurance Companies and Others 10,000, 
 
 Bank of England 36,000, 
 
 Country Funds 30,000, 
 
 £140,000,000 
 
 The principal kinds of employment which absorb the whole, or 
 nearly the whole, of this very large sum, may be arranged thus : — 
 
 1. Bullion in Bank of England. 2. Investments in Government 
 securities. 3. Investments in Bonds and other securities. 4. Ad- 
 vances to merchants on various securities and under various circum- 
 stances. 5. The discount of foreign and inland Bills of Exchange. 
 6. The maintenance by bankers and money-dealers of adequate 
 Reserves of coin and bank-notes in their own hands. 
 
 The extent to which the Bullion in the Bank of England absorbs 
 the £140,000,000 is, of course, readily ascertained at any given date. 
 I have not ventured to offer any estimate of the extent of any of the 
 remaining five modes of employing these funds, with the exception 
 of the fifth, viz., the sums engaged in discounting bills, and these 
 sums I have, as already seen, estimated at £48,000,000, including in 
 that amount £5,000,000 from the Bank of England. 
 
 The following figures will represent the per-centage proportions of , 
 the several constituent elements of the £140,000,000 : — 
 
 p. ct. 
 
 London Bankers 46-71 
 
 Assturance Companies, &c ^ . . 7'14 
 
 Bank of England 26-71 
 
 Country Funds 21-44 
 
 100-00 
 
 It will be observed, from these figures, that a very considerable 
 portion of the total amount is furnished by the Bank of England and 
 by the Country bankers. Thus, the funds administered by the Bank 
 of England amount to more than one-half of the sums furnished 
 
"^^^ ] -Accumulated in London. 107 
 
 by all the other contributors in London to the general fund of 
 £100,000,000, and the amount furnished by the Country bankers 
 approaches very nearly to that furnished by the Bank of England. 
 
 Further, continuing our assumption t at the amount of biUs of 
 exchange constantly under discount at one time is £100,000,000, the 
 following figures will represent the per-centage proportions of that 
 sum furnished from the various quarters. Thus :— 
 
 Bills under Discount. p. ot. p. ct. 
 
 In Scotlaad 10 
 
 In England (except London) 12 
 
 22 
 
 In London — 
 
 With. Country Punds 30 
 
 By Bank of England 5 
 
 With London Funds 43 
 
 ■ — 7S 
 
 100 
 We observe, again, in these figures, the considerable extent of the 
 influence of the Bank of England and of the Country bankers. It 
 appears, for instance, that, even in ordinary seasons, the discounts by 
 the Bank of England are about one-eighth (5 to 43) of those absorbed 
 by all other parties from London resources ; and that of the total 
 amount of discounts in London, more than three-fourths (30 to 78} 
 are effected by funds obtained from the provinces." 
 
 (D) Circulation of Bills op Exchange for the Twenty 
 Ybaks 1828-47 — With a Continuation por the Five 
 Years 1848-52. 
 The principal object of the Paper in the Statistical Journal, so 
 largely quoted in the last chapter (C), was to introduce, and apply, a 
 more complete method than had been previously employed, for 
 ascertaining the average yearly amount of Bills of Exchange in 
 circulation at One Time in Great Britain, during a period of some 
 length— say twenty years. The previous researches of Mr. Leatham, 
 although most important and valuable, admitted of great extension. 
 
 The calculations of the Paper had the advantage of proceeding 
 on a basis settled by an extensive series of recorded observations. 
 
108 Bills of Exchange, 1828— 52. [AddI- 
 
 obtained by the assistance of five of the largest Banking Houses in 
 the City of London; and, applying the data furnished by these 
 observations (called in. the Paper "the Bankers' Returns") to the 
 accounts of the sale of Bill Stamps issued by the Stamp-office, it was 
 considered that the statistics of the Bill Circulation resulting from 
 the whole process, were entitled to considerable confidence on the 
 ground of accuracy. 
 
 These statistics extended over the Twenty Years, 1828 — 47, and 
 applied to Great Britain ; to England ; to Scotland ; to Lancashire, and 
 to Cheshire respectively. The whole period was divided into Terms 
 or Groups of Years ; — the division being made up with reference to 
 the peculiar commercial character of the years included in each Term. 
 
 The Bills also were placed in three Groups or Classes, described as 
 follows: — 
 
 " Group I. is confined to Small Bills, of which the utmost legal 
 limit is £30 ; and the average amount, as ascertained by the bankers' 
 returns, is £21'7 : with an usance of 2'7 months. 
 
 The next group (Group IL) includes bills of a Medium Size, of 
 which the highest legal limit is £300 ; and the ascertained average 
 is £140'4 : with an usance of 3'6 months. 
 
 The last group (Group III.) contains all bills Above £300. 
 
 Now, the chief object of this classification is to obtain, if possible, 
 some insight into the difierent causes which influence the extent and 
 fluctuations of difl^erent portions of the bill currency ; for it is very 
 important to bear in mind that there is a most marked distinction to 
 be drawn between several classes of bills; and that these lines of 
 separation have reference chiefly to the magnitude of the bills 
 themselves. 
 
 If I have succeeded in the arrangement of these groups, I have 
 included in 
 
 (1) Group III., the bills which are drawn for considerable sums 
 between merchants, producers and manufacturers, and wholesale 
 dealers ; and between importers and large consumers of raw material ; 
 01-, speaking generally, between • merchants and dealers.' 
 
 <2) Group II„ in like manner, is intended to contain the class of 
 bills drawn between houses of less extent of business, and wielding a 
 less powerful capital, and also between large wholesale houses and 
 
CHApS] Different Classes of Bills. 109 
 
 the better class of retail dealers ; in general terms, between • dealers 
 and retailers.' 
 
 (3) Group 1. is meant to include the small biUs which belong 
 essentially to retail trade, and may be described with considerable 
 propriety as drawn between 'retailers and consumers'; or where 
 the acceptor does not happen to be the actual consumer, still carrying 
 on a business of so limited an extent that he is only one step above 
 the class who do literally consume on the supply of their own per- 
 sonal wants the commodities they purchase. 
 
 The general result, therefore, is this — That, by the introduction of 
 this arrangement into groups, we have before us, with more or less of 
 completeness, the three great departments into which the trade of the 
 country may be distinguished, with considerable propriety, namely : — 
 
 In Group III. we have the trade carried on by what are called 
 ' first hands,' that is to say, importing merchants, extensive manuj 
 facturers, and the largest class of dealers. 
 
 In Group II. we have the trade carried on by what may be called 
 ' second hands,' that is, by houses who supply themselves in a great 
 measure from the importers and manufacturers, and, to a considerable 
 extent, come in contact with the actual consumers. This group also 
 includes ' first hand ' merchants, and manufacturers of comparatively 
 limited capital and connections. 
 
 In Group I. we have the retail trade of the country; such as 
 shopkeepers, small farmers, dealers in cattle, and'the like." 
 
 Such, in its design and arrangement, was the Inquiry of 1850; 
 and, if my leisure had permitted, I should, long ago, have com-^ 
 pleted the investigation then commenced. 
 
 During the last few weeks, however, I have been able to continue 
 
 the principal statistics from 1848 .to 1852 (both years inclusive):* 
 
 and I avail myself of the reprint of the Paper on the New Supplies 
 
 of Gold to insert the more important Tables ; with the addition of 
 
 the results arrived at by the calculations just completed; and I may, 
 
 perhaps, venture to assume, that the information afforded by Returns 
 
 of the Bill Circulation of the last Twenty-Five Years, will, at this 
 
 iuncture, be not unacceptable. 
 
 * I have to express my thanks to Mr. Oswald, of the Statistical Depart- 
 ment of the Board of Trade, for MS. Stamp Office Returns for 1851-52. 
 
110 Results of Bill Circulation. [Add^ 
 
 I cannot, in this place, enter into any discussion of the general 
 views which seem to be justified by the whole of the facts of the Bill 
 Circulation. I will say merely, in general terms, that we are quite 
 justified in concluding, that the amount of the Bill Circulation 
 does not depend — as it has been the custom to suppose — upon 
 the amount of the Bank-note Circulation. The two things have 
 scarcely a single result in common. The cause principally aflfecting 
 the amount of the Bill Circulation is the rate of interest, and the 
 state of the money-market. A high rate of interest and financial 
 pressure lead to the creation of more Bills ; and that, too, in spite 
 of the diminution and suspension of business. On the other hand, 
 a low rate of interest and great facilities in the money-market : 
 unless accompanied by a very remarkable increase of business indeed : 
 lead to the creation of fewer Bills. If the following Tables are 
 carefully examined, they will be found to bear uniform testimony to 
 the truth of these deductions. 
 
 The other general result is ; — That, during the last five-and-twenty 
 years, there has been a marked decline in the amount of theCircu^ 
 lation of the smallest kind of Bills — that is, in Group I. : — a tendency 
 to decline in Bills of the next degree of magnitude — or in Group II. : — 
 and a great increase, and great fluctuations, in the amount of the 
 Circulation of Bills of the largest kind — that is, in bills drawn 
 between merchants and merchants ; or merchants and manufac- 
 turers ; — as in Group III. 
 
 These are results which, d, priori, would scarcely suggest them- 
 selves ; and they are results which seem to indicate changes of 
 considerable importance in the amount of capital employed; in the 
 magnitude of the stocks of goods held ; and in the state of credit 
 prevailing : in different branches of trade. But these are questions 
 which I cannot pursue at present. 
 
 The title of each of the following Tables will sufficiently explain 
 its nature and object.* 
 
 The first Table (xi.) of the series gives a general summary of the 
 Bill Circulation during the twenty-five years. 
 
 * The original numbering of the Tables as they stand in the Statistical 
 Journal is retained ; and a few clerical errors have been corrected. Some 
 discrepancies are occasioned by apparent defects in the Revenue Returns. 
 
ChapS] 
 
 Bill Circulation, 1828 — 52, 
 
 111 
 
 (Table XI )— Inland BiiIls.— Total Amount in Circulation at One Time in 
 l«eat Bntam and certain Parts of it as under, during the Twenty Years, 
 1828—1847 (both inclusive); with Columns showi^ the Per Centage 
 above or below the Average of the Twenty Years of the Bill Circulation 
 
 *l ^^- ■f^'' ' ^"^ °^ ^^"^ ^°'^P °f Years :-With a Continuation for 
 the Five Years 1848—1852, both inclusive. 
 
 Years. 
 
 Great Beitain. 
 
 Enoland. 
 
 Scotland. | 
 
 1828 
 
 £ 
 80,908 
 78,946 
 74,034 
 81,490 
 
 20"1 
 I2-S 
 
 + 
 • • 
 
 £ 
 
 • ■ 
 
 + 
 
 £ 
 
 •• 
 
 + 
 
 1829 
 
 1830 
 
 1831 
 
 Aver 
 
 1832 
 
 78,845 
 
 lS-( 
 
 .. 
 
 •• 
 
 • • 
 
 • • 
 
 ■ ■ 
 
 • • 
 
 • • 
 
 72,215 
 80,589 
 78,549 
 83,942 
 
 22-7 
 
 I3-S 
 i6- 
 
 IO*2 
 
 ■• 
 
 68,606 
 66,893 
 64,327 
 69,839 
 
 25-9 
 15-5 
 i8-7 
 II-7 
 
 • • 
 
 13,603 
 14,092 
 14,203 
 14,098 
 
 21'8 
 
 18-9 
 i8-3 
 i8'g 
 
 • ■ 
 
 1833 
 
 1834 
 
 1835 
 
 Aver 
 
 1836 
 
 78,884 
 
 IS'I 
 
 •• 
 
 64,916 
 
 18- 
 
 ... 
 
 13,999 
 
 19 6 
 
 •■ 
 
 106,562 
 95,035 
 97,722 
 
 •• 
 
 12-9 
 
 88,689 
 78,908 
 80,703 
 
 •3 
 
 9-4 
 
 2' 
 
 16,823 
 16,119 
 17,020 
 
 9- 
 
 7-3 
 
 2-1 
 
 61 
 
 •• 
 
 1837 
 
 1838 
 
 Aver 
 
 1839 
 
 99,440 
 
 •• 
 
 64 
 
 82,066 
 
 •■ 
 
 3-7 
 
 16,321 
 
 113,119 
 
 113,319 
 
 107,903 
 
 92,751 
 
 "•8 
 
 21' 
 
 2I-4 
 
 '5-4 
 15- 
 
 93,114 
 92,099 
 87,567 
 76,978 
 
 4' 
 
 .7-7 
 i6"4 
 io'6 
 
 19,996 
 20,069 
 20,316 
 16,761 
 
 3-6 
 
 15- 
 
 1840 
 
 1841 
 
 1842 
 
 Aver 
 
 1843 
 
 107,524 
 
 
 87,189 
 
 •• 
 
 10-2 
 
 19,285 
 
 •• 
 
 10-9 
 
 86,659 
 
 91,004 
 
 106,030 
 
 112,532 
 
 6-2 
 2-6 
 
 i3'4 
 20-4 
 
 70,038 
 75,010 
 86,670 
 89,944 
 
 "•5 
 5"^ 
 
 9 '4 
 
 I3-7 
 
 16,467 
 15,222 
 19,436 
 22,580 
 
 If 
 
 12-4 
 
 i'i'-8 
 
 29-9 
 
 1844 
 
 1845 
 
 1846 
 
 
 Aver 
 
 99,306 
 
 
 6-2 
 
 80,390 
 
 1-6 
 
 18,176 
 
 •• 
 
 4-6 
 
 1847 
 
 113,161 
 
 •• 
 
 21- 1 89,859 
 
 •• 
 
 13-5 23,286 
 
 •• 
 
 33-9 
 
 
 AVG.of20yrs 1 
 1828—1847 J 
 
 93,473 
 
 ■ • 
 
 
 78,127 
 
 •• 
 
 •• 
 
 16,380 
 
 •• 
 
 •• 
 
 1848 
 
 86,621 
 86,068 
 
 8-4 
 9"i 
 
 , , 
 
 68,145 
 67,447 
 
 i3-9 
 I4'8 
 
 
 17,476 
 17,611 
 
 • ■ y^ 
 
 1849 
 
 
 Aver 
 
 85,339 
 
 8-7 
 
 
 67,796 
 
 14 3 
 
 
 17,648 
 
 
 0-6 
 
 1850 
 
 91,786 
 98,609 
 98,216 
 
 1-8 
 
 s'-s 
 
 5- 
 
 73,561 
 79,066 
 80,502 
 
 7*i 
 I 
 
 1-7 
 
 18,233 
 19,663 
 17,714 
 
 
 1-9 
 
 1851 
 
 1852 
 
 
 Aver 
 
 96,203 
 
 
 2-9 
 
 77,703 
 
 1-8 
 
 ■• 
 
 18,500 
 
 ■ ■ 
 
 6-4 
 
 
 
 
 
 
 
 
 
 [K 
 
 0T£ 
 
112 Bill Circulation, \^2%— 52. [Add^^ 
 
 Note to Table xi. — In this Table, the three O'b (000) at the unit end of 
 each amount are omitted. Thus, 80,908 must be read £80,908,000 ; and 315 
 must be read £315,(300. 
 
 The Average lines -will mostly explain themselves. For example, 
 £78,845,000 is the average yearly amount of Inland Bills of Exchange in 
 circulation at one time in Great Britain, during the group or term of four years 
 from 1828 to 1851, both inclusive ; and passing to the last line but seven of the 
 Table, we find that £93,473,000 weis, in like manner, the.similar average for 
 the whole of the twenty years embraced in the inquiry, that is, 1828 — 1847. 
 These observations will explain theother lines of average sums. 
 
 The columns of Per Centages may also be alluded to here. It wUl be seen 
 that the whole of the Per Centages are measured from the General Averages 
 of the Table, as from a fixed Datum Line. Thus, selecting col. 2 (Great 
 Britain), it appears that £80,908,000 (year 1828) is 13'5 per cent, less than 
 £93,473,000, the general average of col. 2 ; and also that £78,845,000 
 (Average 1828 — 31) is 15'6 per cent, less than the same sum of £93,473,000. 
 The .Per Centage cols, also afford a ready means of ascertaining the difference 
 per cent, between any two amounts in any of the cols, of the Table, as far as 
 these differences can be ascertained, by measuring throughout from a third 
 and uniform number ; — ^found, in this instance, in the general average line of 
 the Table. Thus — still adhering to col. 1 (Great Britain) — ^it appears that 
 the Inland Bill circulation of the year 1828 was 13'5 per cent, below the 
 general average of the twenty years; and that the average circulation of- 
 1828—31 was 15'6 per cent, below the same general average ; and of course, 
 between the amounts of £80,908,000 (year 1828) and £78,845,000 (years 
 1828 — 31), there is a difference of 2'1 per cent., as measured from a fixed 
 point. 
 
 I have been thus careful in my reference to the reading and construction 
 of this Table, because what has now been said will apply to several sub- 
 sequent Tables of the same character. 
 
 As regards the Continuation of the Table for the Five Years 1 848 — 52, it 
 win be seen those five, years are divided into Two Groups of Years, namely, 
 1848-49: and 1850 — 52: and that the Per Centages of increase or decrease on 
 these Groups are measured (as are the twenty years 1828 — 47, of the Original ' 
 Table) from the Datimi Line afforded by the General Average of the 
 Twenty Years. This course will be found to be most consistent and con- 
 venient. To prevent misapprehension, I give the following example of the 
 reading of the Continuation part of the Table. Thus, the Bill Circulation 
 of Great Britain in 1848 was £85,621,000 : aildi that amount was 8-4 per 
 cent, below the Average BiU. Circulation during the Twenty Yea/rs 1828 — 47. 
 
 Of the detailed results contained in the last Table (Table xi.) the 
 following abstract of the Average Bill Circulation of the Eight Groups, 
 or Terms, of years into which the Twenty-five Years 1828 — 1852 
 have been divided, will be found convenient. 
 
 [Table xii, 
 
CHApS] 
 
 General Table, 1828—52. 
 
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114 Small Bills {Group i.), 1828—52. [hjm^ 
 
 I continue these statistics by introducing next in order the follow- 
 ingThree Tables (Tables xiii., xiv., and xv.), which contain a state- 
 ment m detail of the Bill Circulation from 1 828 to 1 852 ; in the form 
 in which it appears, When the general mass of bills is divided into 
 the Three Groups (i., ii., in.) described at some length- on a former 
 page (page 108 ante). The Second Part of the Paper of 1851 will, 
 whenever it may appear, discuss at some length the facts contained 
 in the whole series of Tables. 
 
 (Table XIII.)— Inland Bitts-GEOup I. -(consisting of Bills of the 
 Average Amount of £21 -i each, and an Average ITsanee of 2-7 Months 
 each ; and ranging from £18-2 to £28-9, as by Bankers' Returns)— Total 
 Amottnt of Inland Bills of this Group in Circulation at One Time in 
 Great Britain and the Parts of it as under, during the Twenty Years 
 1828 — 1847, both inclusive ; with Columns of the Per Centage above or 
 below the Average of the Twenty Years, of the Bill Circulation of 
 Group I. of each Year.— "With a Continuation, for the Five Years 
 1848—52, both inclusive. 
 
 GROtTP I. 
 
 Tears. 
 
 Gbeat Britain. 
 
 EnsiiAin). 
 
 Scotland. 
 
 Lanca- 
 shire. 
 
 Che85ire. 
 
 1828.... 
 1829.... 
 1830.... 
 1831.... 
 
 Average .... 
 
 1832.... 
 1833.... 
 1834.... 
 1835.... 
 
 Average 
 
 1836.... 
 1837.... 
 1838.... 
 
 Average .... 
 
 1839.... 
 1840.... 
 1841.... 
 1842.... 
 
 Average .... 
 
 £ 
 
 7,076 
 7,025 
 6,677 
 6,569 
 
 p. ct. 
 
 + 
 
 p. ct. 
 
 iz-3 
 
 II-5 
 
 6- 
 
 4-1 
 
 £ 
 
 £ 
 
 £ 
 
 222 
 201 
 
 £ 
 
 27 
 29 
 
 6,837 
 
 ■• 
 
 85 
 
 • • 
 
 •• 
 
 212 
 
 28 
 
 6,288 
 6,304 
 6,900 
 6,067 
 
 •a 
 
 6-; 
 
 3-7 
 
 •• 
 
 5,006 
 5,461 
 4,673 
 4,894 
 
 1,281 
 1,242 
 1,226 
 1,172 
 
 196 
 168 
 166 
 178 
 
 26 
 26 
 24 
 24 
 
 6,139 
 
 2-6 
 
 •• 
 
 5,008 
 
 1,280 
 
 177 
 
 25 
 
 6,283 
 6,417 
 6,435 
 
 •3 
 
 i-g 
 2" I 
 
 5,146 
 5,169 
 5,160 
 
 1,175 
 1,266 
 1,271 
 
 187 
 215 
 213 
 
 32 
 44 
 44 
 
 6,378 
 
 •■ 
 
 1-3 
 
 S,1S5 
 
 1,234 
 
 20s 
 
 40 
 
 6,588 
 6,710 
 6,589 
 6,368 
 
 •• 
 
 4-5 
 
 5,237 
 6,387 
 6,308 
 6,123 
 
 1,325 
 1,321 
 1,280 
 1,241 
 
 223 
 239 
 234 
 205 
 
 48 
 46 
 44 
 46 
 
 6,564 
 
 
 41 
 
 5,264 
 
 1,292 
 
 226 
 
 46 
 
CHAps] Medium Bills {Group n.) 1828—52. 
 
 115 
 
 Table XIII. (Group 1.)— continued. 
 
 Years. Geeat Britain. 
 
 Enoland. 
 
 SCOTLAKS. 
 
 Lanca- 
 
 SHIBE. 
 
 Cheshire. 
 
 1843.,.. 
 1844.... 
 1845.... 
 1846.... 
 
 Average . . 
 
 1847.... 
 
 Avof20yrs\ 
 1828-47J 
 
 1848. . . . 
 1849.. .. 
 
 Average . . 
 
 1850.... 
 1851.... 
 185^ 
 
 Average . . 
 
 £ 
 
 6,514 
 6,947 
 5,904 
 6,889 
 
 p. ot. 
 
 iz-S 
 5-6 
 6-3 
 6-6 
 
 + 
 p. ct.. 
 
 £ 
 
 4,986 
 4,886 
 4,876 
 4,881 
 
 & 
 1,127 
 
 1,068 
 1,027 
 1,008 
 
 & 
 
 192 
 172 
 194 
 219 
 
 £ 
 
 48 
 43 
 47 
 46 
 
 5,813 
 
 7-8 
 
 •• 
 
 4,907 
 
 1,055 
 
 194 
 
 •• 
 
 6,961 
 
 S-4 
 
 •• 
 
 4,966 
 
 992 
 
 •• 
 
 •• 
 
 6,325 
 
 • • 
 
 •• 
 
 6,070 
 
 1,188 
 
 201 
 
 32 
 
 5,813 
 6,900 
 
 8-1 
 6-7 
 
 •• 
 
 4,795 
 4,874 
 
 1,017 
 
 1,026 
 
 noretn. 
 
 noretn. 
 
 91 
 
 5,856 
 
 7-4 
 
 • • 
 
 4,834 
 
 1,021 
 
 
 
 5,816 
 5,862 
 5,877 
 
 8-1 
 
 7 '4 
 7"i 
 
 •• 
 
 4,787 
 4,786 
 4,813 
 
 1,029 
 1,076 
 1,064 
 
 it 
 
 II. 
 II 
 II 
 
 5,851 
 
 7-5 
 
 •• 
 
 4,795 
 
 1,056 
 
 
 
 (Table XrV.)-lNLAND Bills.-Gkoup II.— (consisting of. Bills of the 
 Average Amowat of £140-4 each, and the Average Usance of 3-6 Months 
 each J a^d ranging from £46-1 to £284, by Bankeijs' Betnms)-ToTAi 
 Amount of Inland Bills of this Group in Circulation at One Tnne, 
 1828-1847, as explained in title of Table xiii.-With a Cokiihuaiiow 
 of the Five Years, 1848—52, both inclusive. 
 
 Gkoup n. 
 
 Years. 
 
 - Geeat Bbitaih. 
 
 England. 
 
 SCOTLAKD. 
 
 Lanca- 
 
 SHIEE. 
 
 Cheshibb. 
 
 1828.... 
 1829.... 
 1830.... 
 1831.... 
 
 Average . . 
 
 £ 
 
 36,833 
 34,231 
 32,618 
 33,737 
 
 p. ct. 
 
 7.-2. 
 
 6-9 
 3-7 
 
 + 
 p. ct. 
 z-3 
 
 £ 
 
 £ 
 
 £ 
 
 2,236 
 2,182 
 
 £ 
 
 'U5 
 145 
 
 34,105 
 
 S-6 
 
 - 
 
 " 
 
 •- 
 
 2,209 
 
 140 
 
116 
 
 Medium Bills (Group ii.) 1828—52. [Add^ 
 
 Table XIV. (Group U.)—eontimied. 
 
 Years: 
 
 Gkeat Bkitain. 
 
 England. 
 
 Scotland. 
 
 Lanca- 
 
 SHIEE. 
 
 Gheshirb. 
 
 1832.... 
 1833.... 
 1834.... 
 1835.... 
 
 Average .. .. 
 
 1836..., 
 
 ■ 1837 
 
 1838.... 
 
 Average .... 
 
 1839..., 
 1840..., 
 
 1841 
 
 1842.... 
 
 Average .... 
 
 1843.... 
 1844.... 
 1845-.. 
 1846 .... 
 
 Average 
 
 1847.... 
 
 Av.of20yTs\ 
 1828-47, 
 
 1848.... 
 1849 
 
 Average .... 
 
 1850.... 
 1861.... 
 1852.... 
 
 Average 
 
 £ 
 
 32,099 
 34,362 
 33,080 
 34,116 
 
 p. ct. 
 8.3 
 
 1-6 
 
 + 
 p. ct. 
 
 . £ 
 
 25,608 
 27,641 
 26«392 
 §7(638 
 
 £ 
 
 6,488 
 6,710 
 6,686 
 6,473 
 
 £ 
 
 2,161 
 2,049 
 2,169 
 2,425 
 
 £ 
 
 133 
 147 
 135 
 165 
 
 33,411 
 
 4-6 
 
 86,820 
 
 6,589 
 
 2,196 
 
 145 
 
 38,065 
 36,909 
 37,900 
 
 •• 
 
 5-4 
 8-a 
 
 31,436 
 29,946 
 30,666 
 
 6,892 
 6,962 
 7,242 
 
 2,569 
 2,749 
 2,862 
 
 198 
 246 
 270 
 
 37,625 
 
 •• 
 
 7-5 
 
 30,682 
 
 7,032 
 
 2,723 
 
 238 
 
 41,900 
 41,826 
 39,847 
 34,663 
 
 I' 
 
 19-7 
 19-4 
 I 3-8 
 
 33,776 
 33,906 
 31,918 
 28,142 
 
 8,143 
 7,920 
 7,912 
 6,508 
 
 3,333- 
 3,297 
 3,093 
 2,638 
 
 294 
 249 
 221 
 207 
 
 39,556 
 
 •■ 
 
 13- 
 
 31,935 
 
 7,621 
 
 3,065 
 
 243 
 
 32,286 
 33,272 
 35,913 
 36,622 
 
 7'S 
 
 5- 
 
 Z.6 
 4-6 
 
 26,421 
 27,451 
 29,648 
 29,786 
 
 5,863 
 6,817 
 6,244 
 6,830 
 
 2,276 
 2,117 
 2,237 
 2,369 
 
 211 
 228 
 266 
 271 
 
 34,523 
 
 1-4 
 
 
 28,327 
 
 6,189 
 
 2,249 
 
 242 
 
 36,768 
 
 •• 
 
 s- . 
 
 30,038 
 
 6,721 
 
 • • 
 
 • • 
 
 35,801 
 
 •■ 
 
 
 29,401 
 
 6,838 
 
 2,502 
 
 206 
 
 32,281 
 32,356 
 
 9'9 
 97 
 
 
 26,631 
 26,501 
 
 6,760 
 6,864 
 
 no retn. 
 
 no retn. 
 
 32,319 
 
 98 
 
 
 26,516 
 
 5,802 
 
 33,300 
 34,802 
 34,669 
 
 T 
 
 2-8 
 
 3-8 
 
 ■• 
 
 27,318 
 28,344 
 28,374 
 
 5,981 
 6,458 
 6,194 
 
 )( 
 
 
 34,223 
 
 4-5 
 
 ■• 
 
 28,012 
 
 6,211 
 
 [Table xv. 
 
CHApS] Large Bills {Group m.), 1828—52. 117 
 
 (Table XV,)— Inland Bills,— Group III.— (consisting of Bills of an 
 Average Amount of £1968-8 each, and an Average Usance of 3-8 Months 
 each ; and ranging from £428-5 to £4505-8, as by Bankers' Returns)— 
 Total Ajmount of Bills of this Group in Circulation at One Time, 
 1828 — 1847, as explained in title to Table xiii.— With a Continuation 
 of the Five Years, 1848—52, both inclusive. 
 
 Group III. 
 
 Years. 
 
 Gheat Beitaik. 
 
 England. 
 
 Scotland. 
 
 Lanca- 
 
 SHIBE. 
 
 CnxmntE. 
 
 1828.... 
 
 1829 
 
 ■ 1830 
 
 1831.... 
 
 Average ; . . . 
 
 1832.... 
 1833.... 
 1834..,. 
 1835 ... 
 
 Average .... 
 
 1836.,,, 
 
 1837,,.. 
 
 " 1838,,. . 
 
 Average , , , ■ 
 
 1839..., 
 1840.... 
 1841,.,, 
 1842,,.. 
 
 Average .... 
 
 1843 
 
 1844..., 
 
 1845.,,, 
 
 •1846,,,, 
 
 Average . . , , 
 
 1847..,, 
 
 Av.of20yrs) 
 1828-47/ 
 
 1848..,, 
 1849. ... 
 
 Average 
 
 185.0. . . . 
 1851,... 
 1862 
 
 Average . , . . 
 
 £ 
 
 37,999 
 37,690 
 34,739 
 41,184 
 
 p.ct. 
 zS-6 
 z6-i 
 32- 
 19-3 
 
 + 
 p.ct. 
 
 £ 
 
 £ 
 
 £ 
 
 3,814 
 4,293 
 
 £ 
 
 163 
 153 
 
 37,903 
 
 25 8 
 
 • • 
 
 • ■ 
 
 • • 
 
 4,053 
 
 153 
 
 33,828 
 39,933 
 39,569 
 43,760 
 
 33-7 
 
 21-8 
 . 22- S 
 
 142 
 
 •• 
 
 27,992 
 33,791 
 33,262 
 37,307 
 
 6,834 
 6,140 
 6,291 
 6,453 
 
 4,393 
 6,223 
 6,076 
 7,452 
 
 144 
 166 
 168 
 214 
 
 39,872 
 
 23- 
 
 •• 
 
 33,088 
 
 6,179 
 
 5,786 
 
 173 
 
 61,214 
 51,709 
 53,387 
 
 •• 
 
 ao- 
 1-3 
 4-6 
 
 8-6 
 
 53,007 
 43,804 
 
 44,877 
 
 7,756 
 7,902 
 8,507 
 
 9,379 
 9,573 
 9,298 
 
 225 
 261 ■ 
 
 312 ; 
 
 56,437 
 
 •• 
 
 46,229 
 
 8,055 
 
 9,417 
 
 266 
 
 64,631 
 64,783 
 61,467 
 51,730 
 
 •• 
 
 26-7 
 32-9 
 20S 
 
 54,101 
 52,807 
 50,341 
 42,713 
 
 10,528 
 
 10,828 
 
 11,124 
 
 9,012 
 
 12,137 
 
 10,831 
 
 9,327 
 
 8,251 
 
 287 
 183 
 171 
 126 • 
 
 61,403 
 
 •• 
 
 20-3 
 
 49,990 
 
 10,373 
 
 10,136 
 
 192 
 
 47,859 
 51,785 
 64,213 
 70,021 
 
 2-3 
 
 V-5 
 25-9 
 37-2 
 
 38,631 
 42,673 
 52,047 
 55,277 
 
 8,477 
 
 8,347 
 
 12,165 
 
 14,742 
 
 7,770 
 
 8,783 
 
 10,224 
 
 10,711 
 
 121 
 136 
 199 
 242 
 
 58,970 
 
 
 15-6 
 
 47,157 
 
 10,933 
 
 9,372 
 
 174 
 
 70,432 
 
 • • 
 
 38-1 
 
 64,855 
 
 15,672 
 
 ■ • 
 
 
 51,046 
 
 .. 
 
 
 44,649 
 
 9,354 
 
 8,090 
 
 191 
 
 47.526 
 46,802 
 
 69 
 
 3 3 
 
 — — 
 
 36,818 
 36,071 
 
 10,708 
 10,730 
 
 no retu. 
 
 no retn. 
 9 J 
 
 47,164 
 
 7-6 
 
 36,444 
 
 10,719 
 
 
 
 52,668 
 57,945 
 67,770 
 
 
 32 
 
 i3-S 
 i3 I 
 
 41,445 
 45,926 
 47,315 
 
 11,222 
 12,019 
 10,465 
 
 
 > > 
 
 57,127 
 
 
 9-9 
 
 44,895 
 
 11,232 
 
 
 
118 
 
 Summary, 1828 — 52. 
 
 [Add^ 
 
 (Table XVI.)— Total Amount of Bills, Inland and Foreign, in Circulation 
 at One Time, for the Period 1828 -47, embraced in the present Inquiry; 
 and the Period 1832—39, embraced in Mr. Leatham's Tables. With a 
 Continuation for the Pive Years 1848 — 52, both inclusive. 
 
 Present Inquiry, 
 
 By Mr. Leatham's Tables. 
 
 I 
 
 Great 
 
 BniTAIN. 
 
 Inland 
 Bills. 
 
 < 
 
 Total 
 
 ofBillain 
 
 Circultn. 
 
 at One 
 
 Time in 
 
 6h-eat 
 Britain. 
 
 GHEAT 
 
 Bbztain 
 
 Inland 
 Bills. 
 
 Ireland 
 
 Inland 
 Bills. 
 
 £ 
 
 401 
 
 519 
 656 
 674 
 
 794 
 
 Total 
 
 (Inland) of 
 
 Great 
 
 Britain, 
 
 Ireland, & 
 
 Bankers' 
 
 Drafts. 
 
 < 
 
 Total 
 of Bills in 
 
 at One 
 Time in 
 
 United 
 Kingdom, 
 
 1828 
 1829 
 1830 
 1831 
 
 1832 
 1833 
 1834 
 1836 
 
 1836 
 1837 
 1838 
 
 1839 
 1840 
 1841 
 1842 
 
 1843 
 1844 
 1845 
 1846 
 
 1847 
 
 1848 
 1849 
 
 1850 
 1851 
 1852 
 
 £ 
 80,908 
 78,946 
 74,034 
 81,490 
 
 72,215 
 80,589 
 78,649 
 83,942 
 
 105,662 
 95,035 
 97,722 
 
 113,119 
 
 116,319 
 
 107,903 
 
 92,761 
 
 87,669 
 
 91,004 
 
 106,030 
 
 112.632 
 
 113,161 
 
 85,621 
 86,068 
 
 91,978 
 98,609 
 98,216 
 
 £ 
 13,485 
 13,166 
 12,339 
 13,682 
 
 12,036 
 11,765 
 13,091 
 13,974 
 
 17,592 
 15,840 
 15,287 
 
 18,853 
 19,387 
 17,984 
 15,458 
 
 14,609 
 15,r67 
 17,671 
 18,755 
 
 18,860 
 
 14,270 
 14,176 
 
 15,329 
 16,435 
 16,369 
 
 £ 
 94,393 
 92,102 
 86,373 
 96,072 
 
 £ 
 
 73i693 
 
 88,822 
 83,317 
 85,486 
 
 98,550 
 
 £ 
 
 12.777 
 
 14,788 
 13,544 
 13,689 
 
 13,903 
 
 £ 
 
 86,871 
 
 104,129 
 97,517 
 99,749 
 
 113,247 
 
 • ■ ■ 
 
 £ 
 
 14,480 
 
 17,338 
 16,253 
 1 6,625 
 
 18,875 
 
 £ 
 
 89,038 
 
 96,914 
 
 94,788 
 
 101,350 
 
 121,486 
 113,771 
 116,376 
 
 132,123 
 
 91,985 
 
 84,351 
 92,264 
 91,640 
 97,916 
 
 91,540 
 
 123,164 
 lip,876 
 114,009 
 
 116,016 
 
 131,972 
 136,706 
 125,887 
 108,209 
 
 125,693 
 
 102,268 
 106,171 
 123,701 
 131,287 
 
 120,857 
 
 132,021 
 
 110,018 
 
 99,891 
 99,234 
 
 99,862 
 
 107,307 
 115,044 
 114,585 
 
 113,313 
 
Chap^] Results, 1848—52 119 
 
 It would be improper to pass over the Returns given in the pre- 
 ceding Tables of the Bill Circulation for the Five Years 1848 — 52, 
 without adverting to the striking illustration furnished by them 
 of the severe commercial depression which prevailed during the 
 two years 1848-49. The whole term of Five Years is divided into 
 two groups of years, for the purpose of bringing together years of 
 analogous commercial character. In 1848 and 1849 there was 
 great depression in nearly all branches of trade ; but there was no 
 financial pressure. The rate of interest was reasonable, and the 
 money-market was in a quiet state. In 1847 an opposite state 
 of things prevailed ; and in that year ; in obedience to what 
 appears to be the most constant law of the Bill Circulation ; — the 
 amount of Bills was the highest, with one exception, to be found in 
 the whole series of twenty-five years ; and the exception referred to 
 was another year — 1840 — memorable for its commercial gloom. 
 
 In 1848 and 1849, therefore, we seem to have, in the very serious 
 decline in the amount of the Bill Circulation, a fair index of the 
 decline in the number and magnitude of transactions. 
 
 In the three succeeding years — 1850, 1851, and 1852 — we also 
 seem to have, in the rapid rise of the Bill Circulation, a fair index of 
 the increase of transactions. Let it be observed, however, that even 
 in 1852 the Bill Circulation is very far short (16 per cent.) of the 
 amount of the Circulation of the bad year 1847. 
 
 It will be also observed, with interest, that the fluctuations of the 
 five years are almost wholly confined to the Large Bills which com- 
 pose Group III. The amount of the smallest bills in Group I. 
 varies scarcely at all j and the Bills of the next degree of magnitude 
 in Group II. are stationary, compared with Group III. 
 
120 Coin in Circulation. [Add 
 
 (E) Gold Coin in Circulation in United Kingdom. — 
 Coinage, 1800—50. 
 
 At page 14 ante, I have estimated the amount of Gold Coin in 
 circulation in the United Kingdom, in 1848, at 20 miUions sterling;— 
 that sum heing exclusive of the Reserve held by the Bank of England. 
 Considerable discussion has taken place at various times on this 
 particular point; and, so far, with not very satisfactory results. 
 
 In the Appendix (App. No. 16) to the Commons' Report on Cash 
 Payments of J 819, there is an interesting return by Mr. Morrison; 
 Deputy-Master of the Mint ; in which positive figures are given for 
 placing at £20,052,890, the amount of gold coin in circulation 
 in the United Kingdom in 1780; — or after the great recoinage in 
 1773-76; — and certain assumed supplemental figures are added, 
 which, in Mr. Morrison's opinion, justified a belief that the total 
 amount of gold coin in circulation in 1780 was not less than 
 £26,003,135. 
 
 In 1841, the late Mr, Leatham estimated the amount of the gold 
 coin in the hands of the public at so small a sum as 10 millions 
 sterling. But the amount of Light Gold called in between, 1 842 and 
 1844, was very nearly 1 1 millions ; and there was, beyond all doubt, 
 a considerable quantity of gold coin of full weight, in use, con- 
 temporaneously, with the deficient coin affected by the measures of 
 1842. 
 
 On the whole, Twenty Millions is a sum which may be supposed 
 to be rather under, than over, the truth. If, for example, we take the 
 total population of the United Kingdom in 1848 at 26 millions of 
 persons of all ages; — and suppose that 15 millions of these persons 
 were of the age of 18 and upwards : — Twenty Millions of gold coin 
 does not sippear to be a disproportionate quantity of specie to be 
 in use, among such a population. 
 
 In connection with this subject, the following Table, compiled 
 from statistics collected by Mr. Birkmyre, will be useful : — 
 
 [Table xxxii. 
 
CHApS] 
 
 Coinage of 1800—50. 
 
 121 
 
 Table XXXII. — Statement of the Coinage of Gold and Silver during 
 the Period 1800 — 1850 in the United Kingdom ; in France ; and in 
 the United States ; compiled from a Paper by Mr. Birkmyre, in the 
 Times Newspaper of — May, 1853. 
 
 (I.) GOLD. 
 
 Periods 
 (Tears botli 
 ineliisive). 
 
 United Kinodom. 
 
 France. 
 
 United States. 
 
 Total 
 Coined. 
 
 Yearly 
 Average. 
 
 Total 
 Coined. 
 
 Yearly 
 Average. 
 
 Total 
 Coined. 
 
 Yearly 
 Average. 
 
 1800—1840 
 (40 Years) 
 
 1841—1847 
 (7 Years) 
 
 1848—1850 
 (3 Years) 
 
 £ 
 64,418,000 
 
 30,264, 
 
 6,121, 
 
 £ 
 1,610,000 
 
 4,232, 
 
 2,040, 
 
 £ 
 43,434,000 
 
 3,500, 
 
 5,726, 
 
 £ 
 1,085,000 
 
 500, 
 
 1,908, 
 
 £ 
 5,647,000 
 
 8,158, 
 
 9,324, 
 
 £ 
 141,000 
 
 1,165, 
 
 3,108, 
 
 100,805, 
 
 52,660, 
 
 23,130, 
 
 (II.) SILVER. 
 
 Periods 
 (Years ioth 
 inclusive) . 
 
 United Kingdom. 
 
 France. 
 
 United States. 
 
 Total 
 Coined. 
 
 Yeai-ly 
 Average. 
 
 Total 
 Coined. 
 
 Yearly 
 Average. 
 
 Total 
 Coined. 
 
 Yearly 
 Average. 
 
 1800—1840 
 (40 Years) 
 
 £ 
 11,202,000 
 
 £ 
 280,000 
 
 £ 
 125,500,000 
 
 £ 
 3,137,000 
 
 & 
 11,203,000 
 
 £ 
 280,000 
 
 1841-1847 
 (7 Years) 
 
 2,672, 
 
 367, 
 
 8,600 
 
 1,228, 
 
 3,413, 
 
 487, 
 
 1848-1850 
 3 Years) 
 
 284, 
 
 95, 
 
 15,622, 
 
 5,207, 
 
 1,264, 
 
 94, 
 
 14,058, 
 
 149,722, 
 
 16,871, 
 
 [Note. 
 
122 Coinage of 1800—50. 
 
 Note.— The large Coinage of £30,264,000 of Gold in the United Kingdom 
 in the seven years 1840 — 1847 (both inclusive) was principally occasioned by 
 the calling in, under the Proclamations which began in June 1842, of the 
 Light Gold Coin at that time largely in circulation. Between 1 Jan., 1842, 
 and 5 Feb., 1844 (2 years) Light Gold Coin to the value of £10,820,731 was 
 delivered at the Bank of England. 
 
 The coinage of the Esist India Company's Mints in India during the seven 
 years ended 1 May, 1847, was 
 
 . £ £ 
 
 Gold Total 161,868 or p. ann. 23,124 
 
 Silver , , 14,086,969 , , 2,012,423 
 
 Clayton, Printer, Crane-court, Fleet-street, London.