THE CORNER IN GOLD. 
 
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 in 2007 with funding from 
 
 Microsoft Corporation 
 
 http://www.archive.org/details/corneringolditshOObainrich 
 
THE CORNER IN GOLD: 
 
 ITS HISTORY AND THEORY: 
 
 BEING A REPLY 
 
 TO 
 
 mr. robert giffen's 'case against 
 bimetallism: 
 
 BY 
 
 F. W. BAIN, M.A. 
 
 FELLOW OF ALL SOULS' COLLEGE, OXFORD ; AUTHOR OF 
 'THE PRINCIPLE OF WEALTH CREATION.' 
 
 ' " I will notch his shaft for him, however,' replied Locksley. 
 And letting fly his arrow, it lighted right upon that of his com- 
 petitor, which it split to shivers." Ivanhoe. 
 
 James fparher attfr ©o. 
 
 27 BROAD-STREET, OXFORD; 
 
 AND 6 SOUTHAMPTON-STREET, STRAND, LONDON. 
 1893. 
 

 ' If Bimetallists are sometimes revuea as lunatics, economists are 
 surely not without excuse. Mathematicians do not stop to argue witft 
 squarers of the circle, or with reasoners that the earth is flat.' The 
 Case against Bimetallism , p. 37. 
 
 ' Bimetallists have in fact made it necessary for us to go back to first 
 principles, to begin at the beginning, with the beggarly elements of 
 money and currency.' lb. p. 7. 
 
 ' It may be of some use to recall attention to the established ele- 
 mentary principles of money on which the English monetary system is 
 based, and which are the accepted creed of economists throughout the 
 world.' lb. p. 194. 
 
 4 The only way to deal with Bimetallists is to refer them back to 
 Adam Smith, and other expounders of the A B C of monetary science.' 
 lb. p. 207. 
 
 •It is always useful to have preconceived opinions questioned, and 
 the grounds for them examined.' lb. p. 43. 
 
 ' Of course, no question can be settled by authority.' lb. p. 107. 
 
 1 The persistence of error is remarkable.' lb. p. 149. 
 
 ' I have studied what governments can and cannot do a good deal.' 
 lb. p. 52. 
 
 * In the country of Locke, of Adam Smith, of Lord Liverpool, of the 
 Bullion Committee, of Ricardo. of Sir Robert Peel, it is surely a scandal 
 of the first magnitude that men of light and leading in other respects 
 should have talked seriously of any such idea as the possibility of a fixed 
 price between gold and silver.' lb. p. 131. 
 
 1 We, who are students of political economy.' lb. p. 117. 
 
EPISTLE DEDICATORY. 
 
 My Dear Mr. Giffen, — 
 
 Permit me, an obscure but most diligent student of The 
 Case against Bimetallism, to submit to you, as the Champion 
 of Gold, a letter which I have had the luck to intercept, 
 no matter how, from a friend of mine versed in these 
 subjects. It contains, I venture to think, some aspects of 
 the ' Case ' which have escaped your penetration. My friend 
 Willie is a dull enough dog, but has, like his countryman, 
 the 'creature Dougal,' ' glimmerings o' common sense ;' and 
 you know the bonny Scots have always been thought to 
 possess a pretty turn for finance. 
 
 As you have treated Bimetallists with such very scant 
 courtesy, you will not, I am sure, take it ill, if Willie has 
 here and there been betrayed by his nature, which is some- 
 thing peppery, into a Retort Courteous : nay, as a mono- 
 metallist, ought you not even to rejoice, to find yourself 
 repaid with interest in your own coin ? 
 
 With regard to Willie's correspondent, I can only say : 
 ne sit ancillcB tibi amor pudori. He would speak all the 
 plainer, no doubt, for having to make the young lady under- 
 stand. I am, Sir, 
 
 Your very humble Servant, 
 F. W. BAIN. 
 
 112117 
 
ANALYSIS. 
 
 Difficulty of the subject 
 Theory. Bimetallism an Economic Heresy 
 Radical error of Economic Dogma 
 
 (o) as to the Mercantile System 
 
 (£) as to the essential nature and 
 
 function of Money 
 
 Mr. Giffen's Logic 
 
 What Money is : and wherein consists 
 
 its essential difference from Com 
 
 modi ties 
 Mr. Giffen on Bimetallism 
 Fixing a Ratio, not an absurdity 
 
 and why 
 The True Standard of Value . 
 Decline in Silver, due not to Nature 
 
 (increase of supply) but Law (dimin 
 
 ution of demand) 
 Mr. Giffen on Money . 
 History. The Old System 
 
 The Arch Offender 
 
 The Bill of 1 819 and its effects 
 
 The Bank Charter Act of 1844 and its 
 
 effects 
 The Discoveries of Gold in 1850 
 Political Economy refutes its own 
 
 Dogma 
 The Anti-Silver Mania 
 Consequences of the Corner in Gold 
 Conclusion 
 
 Appendix 
 
 PAGE 
 
 5 W- 
 
 ib. „ 
 
 6 „ 
 9 » 
 
 19 M 
 
 35 m 
 
 40 
 52 
 
 56 
 64 
 
 66 „ 
 
 76 M 
 83 „ 
 85 „ 
 
 IOI „ 
 
 109 ,, 
 
 112 ,, 
 
 114 ,, 
 
 Il6 „ 
 
 121 ,, 
 
 129 „ 
 
Hold : there's money for thee to spend.' 
 'Tis silver : I disdain it' 
 How now : hast thou the gold?' 
 Ye*.' 
 : But came it freely ? ' 
 
 The Jew of Malta 
 
THE 
 
 CORNER IN GOLD: 
 
 IN A LETTER 
 
 From a Gentleman of East Lothian in Town 
 to his pretty cousin in the country. 
 
 So it seems, my dear Meg, that you ' cannot 
 make head or tail of Bimetallism.' You 
 assure me, that notwithstanding the most 
 prodigious and superhuman exertions you 
 invariably rise from the study of your autho- 
 rities with a feeling of utter despair and 
 a splitting headache. Your difficulties, you 
 say, have refused to disappear, although you 
 have actually purchased Mr. Robert Giffen's 
 Case against Bimetallism, and read it, by the 
 aid of wet towels and green tea, three times 
 
 B 
 
Tlie Corner in Gold. 
 
 'quite through' from cover to cover. At 
 length, like a drowning man catching at 
 straws, or a vessel in imminent danger of 
 foundering, and throwing out signals of 
 urgent distress, you have abandoned all 
 further effort, left off struggling ineffectually 
 with a superior agency, and appealed to 
 myself; declaring emphatically that unless 
 I can help you to bring order into your chaos, 
 you will presently burn all your books, 
 resign the presidency of the Fairyknowe 
 Ladies' Debating Society, cease to attend 
 the lectures of the University Extension 
 (a penalty all the greater because, as you 
 tell me, the young Oxford lecturer next on 
 the list is reported to be extremely good- 
 looking), forswear the higher culture, and 
 devote yourself to sick-nursing, or some 
 other pursuit at once more enlivening, more 
 suited to your intellect, and more fertile in 
 solid results, than what you petulantly term 
 
The Comer in Gold. 
 
 — mixing your metaphors somewhat, I fear* 
 under the influence of a pardonable irritation 
 — ' the pig-shearing treadmill ' of the novice 
 who aspires to penetrate the mysteries of the 
 Currency Question. I am, so you tell me, 
 your very last card : and you play it, because, 
 as you are good enough to say, you are quite 
 sure I know all about it ; and so I am to sit 
 down at once and compile an epistle ex- 
 plaining it all by return of post. 
 
 Really, my dear Meg, it is very seducing 
 to find you confiding so delightfully in me. 
 I am verily afraid lest, after the fashion of 
 your incorrigible sex, you should tempt me 
 to make a fool of myself. Do you suppose 
 that I shall actually dare to pretend without 
 blushing to the wisdom which you lay with 
 such flattering certainty at my door ? to say 
 I can honour the draft you have drawn upon 
 me, and pay you, to the full extent of your 
 credit, in gold ? It would be much too pre- 
 
The Corner in Gold, 
 
 sumptuous, Meg, even in the sacred privacy 
 of a letter. And yet in this case, since you 
 command me to speak, I can honestly say, 
 with Beatrice, • amor mi mosse, che mi fa 
 parlare. 1 There's a witchery and a fascination 
 in Political Economy, as well as in a certain 
 young lady I know of, which makes me 
 a slave to her: she leads you ever onward, 
 like the bird in the oriental story, which kept 
 always just out of reach of the prince who 
 pursued her for the sake of her talisman ; nor 
 at any time these many years, even though 
 I had wished it, could I have abandoned my 
 quarry : for ' the fiend in the heart of me,' 
 as Pushkin expresses it, * drove me along/ 
 and would not suffer me even so much as to 
 rest and take breath, till I had exhausted the 
 subject as well as my strength. 'Who will 
 know too much, grows old soon,' says the 
 Spaniard : well, you shall at least have the 
 benefit, Meg, of all my grey hairs. 
 
The Cofmr in Gold: 
 
 To point out the cause of an error is half- 
 way to the truth. Learn, then, Meg, that 
 the prime cause of all the obscurity and 
 perplexity besetting the problem lies in our- 
 selves. 
 
 The root and core of the difficulties you 
 have experienced, which render it, as you say, 
 next door to impossible to make 'head or 
 tail ' of Bimetallism, is simply, an initial and 
 radical error as to the nature and function of 
 money ; an error which, as Mr. Giffen in- 
 forms us, is the ' accepted creed of economists 
 throughout the world,' a received dogma of 
 that Public Opinion, to doubt or deny which 
 is heresy ; one of the thirty-nine articles of 
 that Economical Faith quod semper, quod 
 ubique, quod ab omnibus : handed down from 
 Adam Smith and the Fathers of the Catholic 
 Economical Church in direct succession, and 
 still reigning with despotic sway over her 
 unsuspecting disciples. And thus it is, that 
 
The Corner in Gold, 
 
 newspaper writers and leaders of public 
 opinion think they have said everything and 
 settled the question, when they pronounce 
 Bimetallism to be an ■ economic heresy' They 
 are perfectly right, Meg : but nobody speaks 
 with such truth as the man who doesn't know 
 what he is saying. Bimetallism is a heresy : 
 but then Galileo was a heretic, too. Bi- 
 metallists, so Mr. GifTen informs us, are the 
 detestation of men of sense. Curiously 
 enough, so was Galileo. We must not 
 appeal, my dear Meg, for the settlement of 
 difficult questions to the opinion of Mr. 
 Giffen's men of sense. The opinion of 
 sensible men is the same, and yet different, 
 in all ages : the individual specimens die, but 
 the species remains. The sensible men of 
 one age are carefully disclaimed by the 
 sensible men of the next. 
 
 Five sixths of the * demnition total ' of our 
 economical difficulty has been put there by 
 
The Corner in Gold. 
 
 inferior thinkers, and maintained by the 
 phalanx of sensible men. Quel imbroglio que 
 V economie politique ! Ah ! vraiment, sil rtex- 
 istait ni philosophes ni pretres, il suffirait des 
 econojnistes pour nous donner la mhure de la 
 de'raison et de la cre'dulite' humaine ! But 
 what could we expect, in the name of all 
 that is preposterous ? We start from pre- 
 misses palpably and wildly ridiculous, and 
 then wonder, when we suddenly find our- 
 selves landed in absurdities. 'Tis as though 
 we should base our arithmetical calculations 
 on the assumption that two and two are five. 
 We carefully tie our ballast to the mast- 
 head, and when the ship suddenly turns 
 turtle in a cap-full of wind, we go about ex- 
 claiming, Who would have thought it ! Clearly 
 the thing to do is to raise our centre of 
 gravity and get rid of the wind. It was the 
 wind : nothing wrong here : we're all right : 
 its that infernal wind. Cut down our com- 
 
S The Corner in Gold. 
 
 merce, but leave us, oh, leave us our financial 
 theory*. 
 
 The nature and function of money were 
 totally misunderstood by the father of Po- 
 litical Economy : nor is there in all history 
 a more flagrant and ludicrous instance of 
 misrepresentation, a more absolute case of 
 plenary idiocy, of superficial ignorance falling 
 foul of an institution it could not comprehend, 
 of parvenu bumptiousness abusing its fathers, 
 and mistaking its own fatuous imbecillity for 
 superior lights, than the popular attitude of 
 Political Economy, which Adam Smith in- 
 augurated, towards the Mercantile System b . 
 
 ■ The drain of gold which causes our panics need never 
 cause a panic at all. It is we ourselves, who have carefully 
 turned an intrinsically insignificant drain of gold into a 
 necessary disaster by tying our ballast to the mast-head ; — 
 by tying our commercial security artificially to gold. Who 
 would care two straws for a temporary drain, if the law did 
 not restrict the currency during the drain ? It is like tying 
 a man's arms and legs, unless he has gold bangles on, and 
 then saying he cannot swim without gold. 
 
 b Adam Smith did not originate anything : he simply 
 
The Corner i?i Gold. 9 
 
 I beg you, my dear Meg, to lend me your 
 little ear : I promise you, your earnest atten- 
 tion shall be amply repaid. 
 
 The Mercantile Theorists, Economists tell 
 us, held, like economical heathen in their 
 blindness, money to be Wealth, and wealth 
 in a greater degree than anything else : they 
 consequently maintained, that in an ex- 
 change, between nation trading with nation, 
 what one side gained, the other lost. And 
 with the patronising smile of superior wis- 
 dom comes your Political Economist and 
 
 collected the existing sticks into a faggot, and thus gave 
 them strength. His cardinal thesis, that labour makes 
 •wealth, was never doubted by any Mercantilist ; but it did 
 not occur to Smith to analyse labour, or ask, what causes, 
 incites, and enables labour to make wealth in any quantity. 
 He would have learned something about money if he had. 
 He would have discovered that the complex and highly 
 differentiated labour machinery of a great wealth-creating 
 society essentially involves and depends upon money. The 
 unassisted hand, says Bacon, cannot do much : instrumentis 
 et auxiliis res proficitur : tools and instruments are necessary. 
 Well, money is the indispensable, the instrument of instru- 
 ments. 
 
10 The Corner in Gold. 
 
 says ; Ah ! mats nous avons change' tout cela : 
 but, poor fellows, we must not be hard upon 
 them. We know, we of the nineteenth cen- 
 tury ; A : that Money is not Wealth at all c : 
 B : that both sides gain equally in an ex- 
 change ; or rather, that that side which 
 gains money, positively loses, and that side 
 which parts with it, positively gains. 
 
 I almost despair, my dear Meg, of bring- 
 ing home to your mind in the compass of 
 a letter the full insolence, the curious un- 
 happiness, of this * orthodox ' criticism on 
 the Mercantile System ; but I will do what 
 I can. 
 
 Both sides gain ! What inconceivable 
 fools, then, must not the statesmen who 
 acted on the Mercantile Theory have been ! 
 What egregious, and let us add, what in- 
 
 e Although, the critic puts in parenthetically, this cardinal 
 economic doctrine, that money is not wealth, is in flat contra- 
 diction to another equally cardinal economic doctrine, that 
 money is a commodity : t,hat is to say, is wealth. 
 
The Corner in Gold. 1 1 
 
 comprehensible, unaccountable stupidity, to 
 base national policy on so glaring a con- 
 tradiction of the truth. Only see, exclaims 
 the Economist, in a fit of lofty intellectual 
 moralising, how error will dominate the 
 human mind, and direct the policy of na- 
 tions into the paths of perversity, — and so 
 on, with generally edifying remarks d . 
 
 Aye, only see I Did it never occur to the 
 Political Economist that the political wis- 
 dom and experience of statesmen, and the 
 practice of nations, for hundreds of years, 
 being on one side, and his own modern 
 and superior but still human intelligence, 
 on the other, it was just within the bounds 
 of possibility that the error might lie on 
 his side ? that there might be some ele- 
 
 d Mr. Bagehot, whose economical reputation can hardly 
 be wondered at in an age that took J. S. Mill, quite seriously, 
 for a 'thinker,' speaks of the 'extinct superstition that 
 money is wealth. ' It is not extinct : nor was it a supersti- 
 tion. It had a weighty significance that escaped the super- 
 ficial criticism of an abstract economist. 
 
12 The Corner in Gold, 
 
 ment in the problem that had escaped his 
 eagle eye ? that all the state policy of early 
 modern history might at least be pre- 
 sumed a priori not to have been directed 
 by such fools as he took these Mercantile 
 Theorists to be e . Did he never have 
 qualms, as he wrote them down asses ? Well 
 might he have paused ; for a deeper and 
 more sympathetic criticism, merely from 
 a historical standpoint, proves that such 
 indeed is the case : that the Mercantile 
 Statesmen knew only too well what they 
 were about : and that it is the orthodox 
 political economist, with his purblind want 
 of historical intuition or critical acumen ; 
 with his radically fallacious method of pro- 
 nouncing on historical moments and poli- 
 cies taken out of relation to their instigat- 
 
 • Recent economists are beginning to 'climb down* 
 gradually. Mr. Ingram for example {Hist, of Pol. Econ. 
 p. 50), says, ' The view of at least the extreme Afcrcantilists, 
 frc.' Yes, but it is (he general policy that is condemned. 
 
The Corner in Gold. 1 3 
 
 ing circumstances, and viewed in the light 
 of a superficial rationalistic theory ; with 
 his darkness unilluminated by even a soli- 
 tary spark of the truth, that things are 
 what their conditions require them to be 
 and that function makes structure:— 
 that it is himself who is wrong. 
 
 Read, my dear Meg, if you have not read 
 it already, a book which is, beyond doubt, 
 the very best book ever published in Eng- 
 land on economic history ; read Mr. Cun- 
 ningham's Growth of English Industry and 
 Commerce. There you will find a complete 
 and exhaustive refutation of our orthodox 
 Political Economist, c I do see the bottom 
 of Mr. Justice Shallow.' A policy, my 
 dear Meg, must always be judged strictly 
 with reference to its aim, l Kneel not, 
 neither adore it ; but, standing, look to the 
 end' Now the aim of the national states- 
 men who acted in the spirit of the Mercan- 
 
14 The Corner in Gold. 
 
 tile System was not, as the economist tacitly 
 assumes, material wealth : it was, national 
 power, independence, and permanence f . This 
 end determined the means. The condition 
 of things in which they lived and moved 
 and had their being was war ; and in war, 
 the longest purse won. Money was the 
 sinews of war. No money, — no soldiers, no 
 arms : money was the weapon of weapons. 
 The old method of preparing for war was for 
 the king to heap up treasure in his chests, as 
 readers of early English history know well. 
 But as this became ever more difficult, 
 the idea was hit upon of making ' the 
 needful ' come automatically into the coun- 
 try by regulating the balance of trade. In 
 exchanges, both sides did not gain. The 
 state which gained money, gained not 
 merely an equivalent, but it also obtained 
 
 ' Aristotle, as usual, sums up the truth in a word : the 
 end of the state is avrapKua. 
 
The Corner in Gold. 1 5 
 
 the instrument of war : the only thing good 
 for that purpose, for commodities would 
 not do s ; would not perform the function of 
 money ; least of all in that age, when na- 
 tional intercourse being infinitely less com- 
 mon than now, there was little or no de- 
 mand in one nation for the products of 
 another. To gain money in exchange for 
 your goods was to ensure the means of 
 fighting at need, and consequently, the 
 safety, independence, power, and perma- 
 nent prosperity of your country. And yet 
 the Political Economist, in the fulness of 
 time, cocksure of his miserable theory of 
 money, comes without a blush and assures 
 
 s 'To have demanded,' says the historian, 'a super- 
 fluity of sheep or oxen, and provender, from the people, 
 would not have met the King's wishes : he wanted money 
 that he could make use of abroad.' Or, as an old writer 
 expresses it : 'He that hath coin shall have soldiers to fight 
 for him, but he that hath none, though peradventure he 
 number many subjects, yet in his need he shall find but few 
 soldiers.' J ohn Hagthorpe : England's Exchequer, (1625). 
 
1 6 The Corner in Gold. 
 
 us, that these Mercantile Theorists knew 
 nothing of the Maws' of Political Economy, 
 ignored the sources of national wealth and 
 well being, and were, in fact, nothing less 
 than a parcel of boobies unfit for their busi- 
 ness 11 . But I think, my dear Meg, that if 
 "our Political Economist could stumble on 
 the Goloshes of Fortune, and transport him- 
 self back into the age of the Mercantile 
 Theory, the very first statesman whom he 
 began to lecture on his business would 
 swiftly show him the door, and possibly 
 accelerate his exit by unmentionable me- 
 thods. 
 
 h Mr. Macleod, who is horribly severe on the Mercantilists, 
 says, by way of illustration, that when the South Sea Islander 
 gave a ten-guinea shell to the sailor for a two-and-sixpenny axe, 
 both sides gained. Yes : but if they had both had to fight for 
 their lives, the one who had parted with the axe for a shell 
 would have looked rather blue. Now, money was to the Mer- 
 cantile System nations just what the axe would have been in 
 this case. Mr. Macleod omits just the special condition he 
 ought to have remembered, to point his illustration. The 
 Political Economist generally does : it is his little way. 
 
The Corner in Gold, 17 
 
 So much, then, from the purely historical 
 standpoint, but this is not all : nay, it is the 
 very least part of this exquisite economical 
 mistake. But thus far, what do you think, 
 Meg, of the wisdom and weight of those 
 economical ' authorities ' whom Mr. Giffen 
 so greatly regards, and with whose awful 
 verdicts he ballasts his argument? Was not 
 Malvolio a joke to them ? May we not say, 
 with the meditative philosopher in Mark 
 Twain : ■ Well, when you come to look at 
 it all around, and chew it and think it over, 
 don't it just bang anything you ever heard 
 of?' 
 
 But let us suppress our emotion for a 
 while : we have not by any means ' reached 
 the Nadir.' 
 
 Apart from their total neglect of the special 
 
 utility of money, and money alone, as the 
 
 sinews of war : apart from their total failure 
 
 to note that the end of the Mercantile policy 
 
 C 
 
1 8- Tfo Corner in Gold. 
 
 was something quite other than that with 
 which it was credited by the Political Eco- 
 nomy wiseacres : these same wiseacres have 
 still more entirely and radically misunder- 
 stood the nature and function of money, and 
 misconceived or overlooked its ordinary oper- 
 ation in the everyday business of production 
 and exchange 1 . They are not only utterly 
 out, judged from the point of view of the 
 Mercantile Theorists ; they are also abso- 
 lutely wrong, even when judged from their 
 own. Their end is, not the power and per- 
 manence of the State or Nation, a thing 
 
 1 * Exchange,' by the way, is a question begging word : 
 it ought to be banished from Economics, and 'sale' or 
 4 distribution ' substituted. Exchange was valid for the age 
 of barter : now, there is no such thing as ' exchange : ' there 
 is buying and selling. The values of commodities are not 
 expressed in each other, but always in money, and nothing 
 else. By exchange-value, if we mean anything, we mean 
 price: quantity of money. Nobody exchanges commodities 
 for commodities : money is always the go-between. Ex* 
 change smothers the paramount influence exerted by money 
 and its variations over the movements of commodities. 
 
The Corner in Gold. \c) 
 
 which tltey pay no attention to, and even 
 throw aside with contempt, but the increase 
 and accumulation of individual wealth : and 
 yet their theory of money, if consistently and 
 thoroughly acted upon, would utterly and 
 instantaneously defeat their own end and 
 annihilate the wealth. What a glorious tri- 
 bute to their theoretical genius a severe 
 application of their theory to practice would 
 pay ! The instant abolition of wealth, — what 
 a delightful catastrophic vindication of a 
 sound economical method ! But luckily, the 
 practice of the world stands in flat contra- 
 diction to the economical theory of money : 
 unluckily \ this theory has to some extent 
 interfered most disastrously with the practice 
 and welfare of the world. 
 
 This error so baneful in its effects is 
 simply, the failure to remark that function of 
 money which DIFFERENTIATES it from all 
 other commodities : which makes it accord- 
 
20 The Corner in Gold. 
 
 ingly something essentially different from all 
 other commodities, and bestows upon eco- 
 nomical laws of its own. The vulgar, says 
 Aristotle, cannot draw fine distinctions ; and 
 yet it is just on the drawing of these dis- 
 tinctions, where necessary, that salvation or 
 perdition may depend. It is precisely the 
 want of this discriminating perception that 
 lies at the bottom of the economical dogma ; 
 the most fatal and insidious of all pernicious 
 economical dogmas, just because it is ap- 
 parently so obvious and incontrovertible ; 
 the dogma that money is a commodity, or 
 that commodities are purchased with commod- 
 ities, or that money is subject to the laws of 
 ordinary commodities k . Mr. Giffen says truly, 
 
 k * Is it possible that there should be a deficiency of demand 
 for all commodities for want of the means of payment ? 
 Those who think so cannot have considered what it is, 
 which constitutes the means of payment for commodities. 
 77 is simply, commodities' J. S. Mill, Pol. Econ., p. 338. 
 Verily, there is but one J. S. Mill. ' Is it possible that 
 there should be a deficiency of water on a hill, for want of 
 
The Comer in Gold. 2 1 
 
 —and let us agree with our adversary quickly, 
 Meg, while he is in the way, for we shall 
 never have a chance of agreeing with him 
 again, — that this is the crucial point. It is. 
 No man, or maid, Meg, can ever ' make head 
 or tail ' of Bimetallism, or of any other 
 question of finance, till he has eradicated 
 from his mind every vestige of the sophistical 
 dogma, that money is a commodity^ subject to 
 the laws of commodities in general 1 . 
 
 the necessary pipes to convey it ? Those who think so cannot 
 have considered the natural way in which water spon- 
 taneously flows. It is simply -, uphill' 
 
 How this eminent person ever managed to pass for a 
 c thinker ' is a problem which would have robbed CEdipus 
 of his hair and his reputation. 
 
 1 The following pages will make this point clear : but to 
 prevent the prejudice possibly existing in the mind of the 
 reader, it is as well to state that what constitutes the 
 essential distinction between money and commodities is, 
 that the demand for money is inexhaustible. Money is to 
 commodities what the potential is to the actual : it is the 
 potentiality of any particular commodity ; of satisfying any 
 particular demand. Hence the demand for it is the sum of 
 all particular demands. The potential is, in everything, 
 better than the actual : for the potential (money) can 
 
22 The Corner in Gold. 
 
 Arguing on that assumption, which is the 
 accepted \ creed of economists throughout 
 the world,' the Political Economists have 
 always maintained that the quantity of 
 money in a community is a thing of no 
 moment ; which settles itself automatically. 
 Being merely a commodity like the others, 
 it should be left to itself like the others. 
 Why should we make an exception to it 
 alone ? It is true, that, outside of economical 
 theories, the world does distinguish and 
 make a great pother about money alone, but 
 Political Economy is not based upon the 
 facts of this world, but a world of its own ; 
 a world of arbitrary assumptions and the 
 thin ghosts of antique agricultural conditions, 
 stretched upon Procrustean beds to suit com- 
 mercial exigencies. The economists, of course, 
 know perfectly well, or at least we may 
 
 always become actual (commodity) : but not vice versd. 
 The potential, also, endures, but the actual perishes. See 
 below. 
 
The Corner in Gold. 23 
 
 charitably hope so, that if, from any particu- 
 lar cause, buying and selling could not go 
 on, trade and industry, production and dis- 
 tribution, must instantly come to a dead 
 stop. Similarly, when buying and selling 
 are very brisk, trade flourishes : when they 
 are very slow, trade is depressed. But owing 
 to this fatal error about money, they have 
 fallen into the colossal mistake of supposing 
 that in the operation of buying and selling 
 any commodity will do, as under a system 
 of barter, which they maintain to be the 
 legitimate normal condition of trade m : be- 
 cause they have falsely identified buying and 
 selling with the exchange of commodities. But 
 IN FACT, it is not so. IN FACT, buying and 
 selling are a totally different thing from the 
 exchange of commodities. A purchase or sale 
 
 m I beg the reader to recollect that it is especially the 
 Political Economy of ■ classical ' fame, on which ottrmonetaiy 
 system is based, which I am considering. 
 
24 The Corner in Gold. 
 
 is only half an exchange : money is neither 
 extreme, but a mean, or a mediator 11 . In 
 FACT, there is only one thing that can buy, 
 through which it is possible to express and 
 effect demand for commodities : that is, the 
 legally and customarily recognised money of 
 the country in point. It is perfectly true, 
 that, originally, money must have been 
 merely a commodity, before it was money, 
 far back in the night of the ages, before the 
 dawn of civilisation ; a point to which history 
 does not reach back. But whenever and 
 wherever, as in all civilised societies is and 
 must be the case, money has become the 
 
 n It is just for this very reason that people all try, instead 
 of making or exchanging the extremes, commodities, to get 
 hold of the mediator, money. Hence, gambling, betting, 
 theft, ' bulling and bearing,' company floating, pawnbroking, 
 and financial swindling generally. They all aim at the 
 golden mean between the extremes. 
 
 For without money, to measure values, and their 
 fractions, there can be neither division of labour nor saving 
 of time nor inducement to accumulate: consequently no 
 wealth- creation worth speaking of. 
 
The Corner in Gold. 25 
 
 customary and indispensable medium, then 
 it stands alone, apart from and opposed to 
 all commodities, as something essentially 
 different from them all, sui generis, with 
 a law to itself It is not humble and suppli- 
 cating, like commodities, but proud, insolent 
 and domineering, because it knows its own 
 power, and that no one can do without it, 
 let it give itself what airs it likes. Here and 
 there, some strange eccentric person is found 
 who despises it, but he is a black swan : 
 most people will grovel to money. Now it 
 is, when money has won its way to a recog- 
 nised position, that, barter being a thing of 
 the past, plenty or scarcity of money essen- 
 tially determines the prosperity or adversity 
 of trade. For if trade is to flourish, com- 
 modities must be effectually demanded: that 
 is, bought: and to BUY, is to offer money. 
 If there is no money, things cannot be 
 bought ; and conversely, when people have 
 
26 The Corner in Gold. 
 
 money, they buy. It is a pure delusion to 
 suppose, as Political Economy always does, 
 that increase of money necessarily raises 
 prices p. The argument is, that because 
 money is a commodity, increase in its quan- 
 tity lowers its value, and must do so. But 
 IN FACT, it does nothing of the kind. This 
 absurd nonsense comes from arguing from 
 theory, and treating of the relations between 
 money and commodities mechanically, i.e. 
 without taking into consideration the MEN 
 who stand behind and use them. It assumes, 
 that the various demands of buyers, and the 
 commodities they buy, remain exactly the 
 same as they were, before the new increase of 
 money q. Bu* this is just what they don't. 
 
 p It does so only in a few special cases, where supply is 
 absolutely limited. The great mass of commodities do not 
 come under this category. When more are demanded, more 
 come. 
 
 * Adam Smith, who founded this error, actually says so 
 in the locus classiats, (Wealth of Nations, p. 86, McCullocfCs 
 
The Corner in Gold. 27 
 
 Double a man's money: he does not only 
 want what he did before. He wants more. 
 He goes off and buys a number of things 
 which previously he would have bought if he 
 could, but could not, because he could not 
 effect his demand: he had not the money. 
 In every human being there are potentially 
 infinite demands. They are limited actually 
 by the money he possesses. Who has more, 
 buys more : who has less, buys less. What 
 
 edition of 1863). ' When more abundant mines are dis- 
 covered, a greater quantity of the precious metals is brought 
 to market, and the quantity of the necessaries and conveniences 
 of life for which they must be exchanged being the same as 
 before, equal quantities of the metals must be exchanged for 
 smaller quantities of commodities.' 
 
 This passage contains in embryo all the financial soph- 
 istries of this century. Its error lies in its false cardinal 
 assumption, due to Smith's ignorance of the funciion of 
 money, and the working of the productive labour machinery 
 of society. His proposition is true only at the new mines, if 
 they are far from the supply of commodities ; or for those 
 commodities of which the supply is absolutely limited. 
 
 The same fallacy is contained in the common phrase 
 1 pouring more money into the channel of circulation' The 
 channel will expand when more is ' poured in.' 
 
28 The Corner in Gold. 
 
 he does not do, is just what the Political 
 Economist assumes : i.e., maintain precisely 
 the same quantity of effective demands 
 whether he has more or less money. And 
 though it is true, that an increase of demand 
 tends to raise prices, yet it will not do so, 
 in a productive community, because it also 
 tends to increase the quantity of commodities 
 supplied. That is to say, its tendency to 
 raise prices, instead of actually raising them r 
 really increases the demand for services, and 
 leads to greater employment of labour. In- 
 crease of money, increase of employment, 
 increase of commodities, increase of pros- 
 
 r There is one case, it is true, where increase of money 
 necessarily raises prices, and produces evil instead of good : 
 the case of paper money, fictitious or suspicious. I beg the 
 reader to note, that the value of this money falls, not, as the 
 Economists say, because being a commodity, its quantity is 
 increased, but because of loss of confidence in it. People 
 distrust it. Now, the essence of money is its reputation. 
 However small in quantity, loss of reputation is fatal to its 
 value. With good metal money, this cause is impossible. 
 People will always take it. 
 
The Corner in Gold: 29 
 
 perity and general happiness. That is what 
 happened in 185 1. 
 
 Hence you see, my dear Meg, that the 
 Mercantile Theorists were perfectly right, as 
 the Bimetallists are now, in spite of Mr. 
 Giffen, in ' attaching great importance to 
 keeping money abundant.' And in fact, 
 the Political Economists, on whose ignorant 
 and preposterous theories modern financial 
 legislation is based, in doing all they can 
 to minimise money and keep it scarce, in 
 denouncing the increase of money, are in 
 reality denouncing, only imagine ! — the buy- 
 ing of commodities ! I fear it is not all pure 
 ardour for science. They fear, if new money 
 comes in, the value of their own 'ringing 
 coin ' may grow less. Why do they not 
 abolish Banking and cheques altogether? 
 But of this anon, Meg. Yet on their theory 
 will they explain how, in spite of the enor- 
 mous increase of gold after 185 1, prices. 
 
30 The Corner in Gold, 
 
 in gold remained substantially just what they 
 were 8 . Stick to them, Meg, like a leech, 
 till they answer you that : non missura cutem 
 nisi plena crnoris hirudo. 
 
 The simple fact is, Meg, that none of the 
 Political Economists have ever understood 
 either the nature or function of money : its 
 operation in buying and selling, on which all 
 our prosperity depends. They argue not 
 from the observation of the facts, but pre- 
 liminary assumptions which they make the 
 facts fit, or if not, pretend they are not facts. 
 They will have it, that money is a commodity, 
 and subject accordingly to the laws of com- 
 modities. 
 
 I will bring out for you presently, Meg, 
 
 • Some theorists, in order to save the theory, have en- 
 deavoured to maintain that they did rise : but the fact that 
 the thing should even be doubtful proves that the rise, if 
 any, was utterly insignificant. The truth is, the theorist is 
 thinking of his theory : Increase in quantity must lower 
 money's value, because it is a commodity. Yes : but it is 
 not. 
 
The Corner in Gold. 3 I 
 
 the full absurdity of that dogma, by placing 
 it in glaring contrast with notorious facts, 
 and then you will see the essential point of 
 distinction between money and any com- 
 modity emerging spontaneously and defying 
 any one to deny its existence. But I can- 
 not refrain from stopping on the way to 
 show you a delicious economical blossom 
 sprung from that root ; a doctrine laid down 
 by one of the too logical patriarchs of Po- 
 litical Economy, on the assumption that 
 money is a commodity. It will make you 
 laugh, Meg, and that will do no one any 
 harm : but it will show you at the same 
 time, in Euclid's fashion, by a reduclio ad 
 absurdum i to what unlimited regions of para- 
 dox you will arrive, if you allow a Political 
 Economist to waft you along in his theo- 
 retical balloon. 
 
 Arguing, and observe, with the strictest 
 logical severity from the position that money 
 
32 The Corner in Gold, 
 
 is a commodity, or what is the same thing, 
 that commodities are purchased with com- 
 modities, J. B. Say, one of the brightest 
 luminaries in the economical firmament, ob- 
 serves, that considering the sum total of 
 commodities in the mass, the one half con- 
 stitutes the means of payment for the other 
 half : thus, he argues, every fresh batch of 
 commodities produced furnishes ipso facto 
 the market for as many others, their vis-a-vis, 
 —to borrow a metaphor from the ball-room, 
 Meg, — in the economical quadrille. Hence 
 he concludes, that every time that a com- 
 modity is consumed, a market for anotJicr is 
 destroy ed*. 
 
 1 Un produit consomme" ou detmit est un dibouchi fermi. 
 Why, certainly, when a schoolboy devours an apple, his 
 mouth is closed. But the consumption of that commodity 
 is not unlikely to lead to the purchase of another of the same. 
 A penny is all that is necessary. M. Say could no doubt 
 have told us how a penny is consumed. Apparently it differs 
 from other commodities in furnishing a constant de'bouche', 
 or market.. The function of a commodity destroys it, sooner 
 
The Corner in Gold. 33 
 
 1 What think you of this fool, Madam ? ' 
 Why, this is very Midsummer madness. 
 The best thing, according to this illustrious 
 * authority,' would be to produce commodities 
 for ever, and 'circulate' them, but never 
 consume any at all. Then there would 
 indeed be a splendid market for all of them. 
 It did not occur, you observe, to Monsieur 
 Say, that behind the commodities stand MEN, 
 with appetites unsatiated, and even whetted, 
 by consumption. It did not occur to him, 
 that commodities do not exist to be i circu- 
 lated,' but consumed. But see, Meg, into 
 what sloughs logic without insight, reason 
 without eyes, can, like a wood-goblin, plunge 
 its deluded pursuers. A thinker of this 
 
 or later : whereas a penny may function thousands of times, 
 and be a penny still. The fact is, it is not a commodity, 
 but the instrument of purchase. 
 
 Ricardo said of this chapter of Say's, ' Des DSbouchisJ 
 that • it contained some very important principles, first 
 explained by this ' distinguished writer.' The above is one ; 
 ex ungue leonem. 
 
34 The Corner in Gold, 
 
 kind, Meg, should let money alone ; cease 
 to bungle over that miraculous problem, the 
 focus of all the passions and unseizable, 
 intangible wonderful forces of life and society, 
 and stick to statistics : there he is safe ; 
 there is his native and original element : 
 over that dark charnel-house of hollow skulls 
 and mouldering bones, bereft, in their dis- 
 connection and decay, of all the colour and 
 the motion, the varied play and spiritual 
 essences of that life which gave to them all 
 their significance, he rises like an Ignis 
 Fatuus, and flickers fitfully in the general 
 economical gloom ; a scare to the vulgar, 
 a beacon to the misguided, a familiar and 
 unregarded exhalation to the wise; most 
 brilliant at midnight : fading and paling and 
 mixing with the twilight, as the first faint 
 streaks of dawn glimmer in the sky : finally 
 overpowered and vanishing altogether in the 
 full bright glare of day. 
 
The Corner in Gold. 3 5 
 
 And now, Meg, for the analysis of our 
 dogma, that money is a commodity. See 
 how Mr. GirTen, revering his ■ authorities,' 
 utterly misses the solution which he places 
 himself right under his nose. 
 
 He says : ' the ignorance of the elementary 
 principles of money on the part of leading 
 bimetallists accounts very much for their 
 delusions. Their error is initial.' Then he 
 proceeds to instruct them as follows : ■ Money, 
 then, as regards its primary function, that of 
 serving as a common measure of value, is 
 simply a commodity selected first by custom 
 and (often, not always) confirmed by law, 
 as an intermediary in transactions, — a some- 
 thing for which in a civilised community any 
 other thing can be sold and with which any 
 other thing can be bought. In other words, 
 a particular commodity is selected to perform 
 the function of a common measure of value, 
 but it is and remains a commodity. Gold, 
 
36 The Corner in Gold. 
 
 silver, copper, iron, cattle, nails, shells and 
 many other articles have been used as such 
 intermediary commodity u ; and in performing 
 this function they are spoken of by the 
 name of the function, that of money: but 
 money is not a new and separate substance 
 into which they are converted. Gold remain 
 gold, silver remains silver, cattle remain 
 cattle, and so on, while they are performing 
 this function of money ; and they remain 
 subject to exactly the same laws of exchange 
 after they are used as money as before. 
 A new use is ' imposed upon the substance^ 
 THAT IS ALL ; the substance itself is un- 
 changed \' 
 
 * The question is not what has been, but what is used. 
 I should like to see the faces of business men and financiers, 
 if it was proposed to substitute ■ cattle, iron, nails, or shells ' 
 for gold and silver, in our community. Custom canonises 
 these metals, and makes them money par excellence in any 
 civilised community. 
 
 1 The Case against Bimetallism, p. 194. The italics are 
 mine. Even from the purely material point of view, the 
 
The Corner in Gold. 37 
 
 * Money is not a new - and separate 
 substance;' — but who ever said that it 
 was ? ' A new use is imposed, THAT IS 
 ALL.' All ? Is there, in all econo- 
 mical literature, anything more delicious 
 than this ? All, forsooth ! Is . not that 
 enough and to spare ? Mr. Giffen is par- 
 ticularly anxious that Bimetallists should 
 resume their economical ABC, and begin 
 again at the \ beggarly elements of money 
 and currency,' {beggarly is very fine : these 
 miserable elements we all know all about, 
 especially Mr. Robert Giffen !) well, Meg, 
 we are doing that: we have taken his 
 advice ; and now we may in return hint 
 to Mr. Giffen that it would be as well if 
 he were to return to the beggarly elements 
 of logic, and learn that, of which he does 
 
 last statement is false. Bullion is always coined, in a civilised 
 society : nor will it pass for money, as bullion, within that 
 society. 
 
38 The Corner in Gold. 
 
 not seem at present to entertain were it 
 even a suspicion ; viz. : that it is not in their 
 substance, but in their use or function, and 
 THAT IS ALL, that different things differ: 
 that producing wealth in all its varieties 
 simply consists in imposing new uses upon 
 substances, and THAT IS ALL : for man can 
 but alter the form to suit a purpose, and 
 making a new thing is simply changing 
 its form, while retaining the substance, 
 and THAT IS ALL : that everything is 
 what it is, and is made what it is, and is 
 defined to be that which it is, by its use or 
 function, and THAT IS ALL : It is just pre- 
 cisely in its function that money DIFFERS 
 from any commodity : essential difference 
 is just difference in function, and THAT IS 
 ALL : yet here we have Mr. Giffcn, past 
 master of the ' beggarly elements ' of eco- 
 nomical science, sweeping away, with mag- 
 
The Corner in Gold. 39 
 
 nificent indifference, the difference of func- 
 tion : annihilating the whole economy of 
 Nature at a blow : pronouncing, in parties 
 ular, money and commodities the same, be- 
 cause the substance is unchanged. The 
 same piece of steel may be made a nail, 
 a stiletto, a fish-hook, an egg-drill, a knife- 
 blade, a pistol-trigger, a rivet, or what not : 
 the same piece of glass may be converted 
 into a tube, a tumbler, a window-pane, a 
 flask, a lamp-chimney, or what you please : 
 the same substance in short, may become 
 anything, according to its function deter- 
 mining its shape : and here is Mr. Giffen 
 to tell you, that all these things are precisely 
 the same. Will Mr. Giffen admit that such 
 a gross and astounding ignorance of the 
 most beggarly elementary principle of defi- 
 nition in one who sets up to instruct the 
 world on the abstrusest of all questions 
 is, to borrow the language he has himself 
 
40 The Corner in Gold, 
 
 employed about the bimetallists, 'a scandal 
 of the first magnitude z ? ' 
 
 The loose way in which the vulgar, among 
 whom I fear, my dear Meg, you will now 
 be apt to class Mr. Giffen, habitually think, 
 disguises the gigantic fallacy lurking in the 
 statement that money is a commodity. Peo- 
 ple who attach no definite meaning to the 
 term commodity, who mean by that sim- 
 ply ' something ' they can handle and touch» 
 (as Mr. Giffen himself calls it, in the above 
 quoted extract, 'a something') may pass 
 the assertion without question : or even ob- 
 stinately maintain it to be ■ obviously true. 
 
 » The fundamental error and cause of stumbling in all the 
 Political Economists is simply, a want of logic. Not one of 
 them all knows how to define. This is why they have never 
 understood money. If they had ever attempted to define 
 it, they could not at once have declared it to be a commodity, 
 and yet not Wealth. Trying to harmonise Political Econo- 
 my's dogmas is like guessing the old conundrum : a man 
 and not a man, seeing a bird and not a bird, hit it and did 
 not hit it with a stone and not a stone. 
 
The Corner in Gold, 41 
 
 All we can ' do with these persons, Meg, 
 is to break to them gently our conviction 
 that they mistook their vocation when they 
 went in for honours in political economy. 
 If a man will not work, neither can he think, 
 Meg. For though ' commodity ' is but 
 a word, the point is not one of mere words. 
 Call money, if you please, by all means 
 a commodity, provided that you never fail 
 to remember, that it is a commodity with 
 a special function of its own ; a commodity 
 whose special function it is, to call into 
 operation and set going the functions of all 
 other commodities, by introducing to them 
 a consumer or customer : a commodity 
 whose function no other commodity can 
 discharge a , for it is Master of the Ceremo- 
 
 * Ricardo lays it down as his fundamental financial prin- 
 ciple that ' no nation will pay a debt in the precious metals f 
 if it can do it cheaper by commodities? Works ^ p. 291. 
 The only ' little oversight ' in this sapient aphorism is, that 
 nations have no choice in the matter at all. They must pay 
 
4 2 The Corner in Gold. 
 
 nies in the great dance of Commodities ; 
 it knows all their languages, and can speak 
 to each Commodity in its own ; whereas 
 they know none but their own. Now, if 
 the Master of the Ceremonies makes him- 
 self scarce, how can the Commodities dance 
 to the pipers? Formerly he had two legs, 
 one gold and one silver : but the financial 
 authorities have broken his silver leg, and 
 so now he cannot get about with sufficient 
 alacrity. Hence Commodities sit pining 
 and ■ fading upon the stalk ; ' nay, their 
 Mammas do not even bring them in such 
 quantities to the ball-room, for what is the 
 use ? they cannot get partners. The ' gold 
 leg ' monopoly is fatal to the interests of 
 producers. 
 
 And now, Meg, let us see how this song 
 which is sung by the whole Economical 
 
 in bullion, and nothing else. Buying foreign bills is of 
 course a mode of doing this. 
 
The Corner in Gold. 43 
 
 chorus chimes in with the facts of the 
 world. Let us apply to this dogma that 
 money is a commodity like the others^ the 
 touchstone of facts. 
 
 How is it, then, if money and commo- 
 dities stand on the same level and are 
 subject to the same laws, if money is just 
 a commodity like the others, that, unlike 
 the others, gold is so carefully looked after, 
 placed in secure fortresses, and convoyed 
 about the world under escort and guard ? 
 Why is it thought necessary to protect it 
 from violence and rape in a peculiar de- 
 gree? Why has the news of a gold mine 
 a magnetic attraction? Why will it lure 
 away legions of hunters to risk death in 
 every hideous form at any distance from 
 home on the chance of securing it b ? Why 
 
 b 'In July, 1849, the population of San Francisco was 
 about 5,000; in the autumn of that year it almost relapsed 
 into a solitude. The tidings of nuggets caused a rush to 
 the mines. Merchants and their clerks abandoned the 
 
44 The Corner in Gold. 
 
 has even the word ' gold ' a magic and in- 
 describable flavour? Why is it the recog- 
 nised expression for something invaluable ? 
 Why is there a halo round its head ? Why 
 would every one prefer five pounds in gold 
 to its * equivalent ' in any commodity ? Why 
 would Mr. GifTen look rather blue if his 
 bankers sent him a notice that they were 
 intending to return him his deposits to their 
 full value in soap or candles ? Why will any 
 shopman in Bond Street or Cheapside in- 
 stantly and gladly part with everything in 
 
 counting-house. Lawyers, doctors, and even State officials, 
 joined in the rush to the gold-fields. Soldiers and police- 
 men deserted : and no sooner did a ship drop anchor in 
 the bay than the crew, eluding or defying their captains, 
 hurried ashore to join in the race for gold. ' Patterson, New 
 Golden Age y vol. i. p. 127. 
 
 So, in Australia ' half the population of Victoria left their 
 legitimate occupations, workshops stood idle, business 
 places were closed, ships lay empty at the wharves : — but 
 one thing was thought of, — gold.' p. 185. 
 
 And yet gold is merely a commodity like the others ! See 
 Appendix to this book. 
 
The Corner in Gold. 45 
 
 his shop to the man who offers money, but 
 would laugh in the face of the man who 
 tried to make him take commodities in- 
 stead in exchange ? Why can you never 
 re-sell what you have bought for the same 
 money you gave for it ? Why must a man 
 who wants money, — why did the Barings 
 in 1890, for example, — sell goods and se- 
 curities at a loss ? Though you may be 
 worth hundreds of thousands in goods of 
 all kinds, can you travel by rail or by road, 
 by land or by water, with anything but 
 money ? Can you bet, without money ? Can 
 you gamble, without money ? Can you help 
 a friend, without money ? Can you go to 
 law, without money ? Can you pay your 
 debts, without money ? Can you govern, 
 without money c ? Can you stir, without 
 
 c Fakredeen was right : * princes go for nothing now 
 without a loan. Get me a loan and you turn the prince 
 into a government.' The Stuarts lost their crown because 
 
46 The Corner in Gold. 
 
 money ? What can you do, without money ? 
 You can do without any commodity ; can 
 you do without money ? But what, after 
 all, is the use of talking to blind men of 
 colours, or a Political Economist about 
 money, which he takes to be a commodity^ 
 nothing more? I will tell you, Meg, what 
 money is, more. Money may be compared 
 to the key of a door, on the one side of 
 which is the seller, with a commodity : on 
 the other, the man who has money. This 
 man can open the door, whenever he choses ; 
 but the other, though the law permits him 
 unfortunately to howl, kick, blow his own 
 trumpet and exhaust his ingenuity in en- 
 
 Edward I. had expelled the Jews. It was Nemesis. The Jews 
 are Tories : they would have supported the King with those 
 funds, the want of which, in an age before Credit and 
 Banking, was the rock on which Charles I. split. The 
 Jews would have been to him what the Bank was to 
 William III. 
 
The Comer in Gold, 47 
 
 deavouring to draw public attention upon 
 himself, can yet never open the door from 
 his side; he must, will-he, nill-he, wait till 
 some one shall pass by on the other, who 
 has the key and wishes to get at him. This 
 last man, the man who has money, is the 
 man on the right side of the door. Money 
 is, in strict accuracy, the Open, Sesame ! to 
 the Cave of Mammon. And the difference 
 between money and commodities is pre- 
 cisely analogous to the difference which 
 Cassim in the story found to his cost to 
 exist between Sesame and any other grain : 
 for he found he could not open the door with 
 1 Barley/ ' Wheat,' or any other name he 
 could think of. Just so, nothing but money 
 will avail to perform its function : to BUV. 
 Money is not a commodity : commodities 
 are not purchased with commodities : buying 
 and selling are not identical operations : 
 these things are perfectly familiar to every- 
 
48 The Corner in Gold. 
 
 one, except Mr. Giffen and the Political 
 Economists. 
 
 Call it, however, by all means a commo- 
 dity, always provided that you are not the 
 dupe of a word : always provided that you 
 never forget that it is the only Commodity iti 
 permanent universal 'demand* •, because it does 
 everything, answers every need, stands be- 
 tween man and all his desires. Money is 
 
 d Mr. Giffen ' holds most fully to the view that the ratio 
 of exchange between the precious metals and other commo- 
 dities is fixed in no other way than is any other ratio, viz. 
 by supply and demand, and by the cost of production of the 
 last margin of supply necessary to meet the last margin of 
 demand.' p. 82. 
 
 Apart from speaking here of the ' precious metals ' as 
 if it made no difference to their value whether they are 
 used for money or not, (whereas it is just their use as money 
 which makes them precious), Mr. Giffen is arguing sophisti- 
 cally from commodities to money. In the case of the former, 
 there is no doubt a limit to the demand, but to speak of the 
 1 last margin of demand ' in the case of money is pure non- 
 sense. There is no limit to the demand for money, not 
 only in the case of the whole world, but in the case of one 
 man. Who ever met a man who had enough money ? 
 
The Corner hi Gold, 49 
 
 the power of realising your demands; The 
 point is there. Money will do everything 
 (almost) that anything else will : while on 
 the other hand it will do innumerable things 
 that nothing else will. It is a total error to 
 call it a commodity. It is both more and 
 less than any of them all. It is actually, 
 none : it is potentially, all. When you are 
 hungry, thirsty, or cold, food, drink, and 
 clothing are better than money : yet in 
 general, not so : for while you can always 
 get these things for your money, you can- 
 not get money, i.e. other things, for food, 
 drink, or clothing, just when you want to. We 
 might in algebraical language style money 
 the «th power of any commodity. It does 
 not go bad, mouldy, motheaten, rusty ; it is 
 not subject to the caprices of fashion : it 
 does not, relatively speaking, wear out : 
 it responds instantly to a call upon its 
 powers: and last, but chiefest of all, it in- 
 E 
 
50 The Corner in Gold, 
 
 creases when not used : i.e. lent out at 
 interest: it is Capital 15 : the only thing 
 in the world which gives a return without 
 any expenditure on it: for rent and profits 
 are in this respect inferior to capital bear- 
 ing interest. In production or action, in 
 commerce or trade, in love or in war, money 
 is the human instrument : the instrument of 
 instruments : you cannot stir a step in any 
 direction without it, and that's why it 
 DIFFERS essentially from any commodity. 
 It is the only thing in the world of which you 
 can predict with absolute certainty that it 
 will be in constant, universal, inexhaustible 
 
 • Nobody pays Interest upon ' Capital,' in the econo- 
 mical sense of that word, meaning * commodities repro- 
 ductively employed.' These are not borrowed, but bought : 
 the Capital on which Interest is paid is the money that buys 
 them. How, then, could Political Economy possibly ex- 
 plain Interest when it denies that money is Capital ? The 
 truth If that nothing but money is Capital, i.e. that which 
 bears Interest. 
 
The Corner in Gold, 5 1 
 
 demand: no man ever has enough of it f : 
 and it is therefore not subject to the laws of 
 other commodities. It is outside their laws, 
 outside of time, place, and individual caprice 
 or taste, because it holds good equally for 
 all. The value of all commodities depends 
 on and varies with place, time, and person ; 
 of money, not : its value is not special, but 
 general, equally adapted to all times, places, 
 and preferences : all things to all men : it 
 is itself merely concrete, external, exchange- 
 able demand : the actuality of demand. Mark 
 this, Meg : you will see presently how it 
 solves the difficulty that baffles Mr. GirTen. 
 
 f This is the result of the general adoption of payments 
 in money instead of payments in kind. We are all like the 
 Pope was in 1229. If the Pope had been obliged to receive 
 his tenths in kind, as of old, his appetite would have been 
 sooner satisfied, especially if the produce had had to be con- 
 veyed to Rome : but when sheep and oxen and other pro- 
 duce became commuted to an absolute money payment, then 
 his appetite became insatiable : he could not have too much. 
 
5 2 The Corner in Gold. 
 
 And now, Meg, when we turn, thus pre- 
 pared, to Bimetallism, we note, first, that if 
 we may judge from his book, Mr. Gififen does 
 not seem to have grasped what Bimetallism 
 is, or Bimetallists want. Bimetallism is 
 simply an option : payment either in silver 
 or gold, as you please. Yet would you 
 believe it, Meg ? — Mr. Giffen calls this a 
 violation of Free Trade principles *. There 
 is no indication that he is trying to be 
 facetious : he is reckoning, without doubt, 
 on the gravity of his readers : and yet I 
 must confess that this is almost too much 
 for my own. Free Trade •, to compel pay- 
 ment in one metal only, difficult, frequently 
 almost impossible to procure ! Free Trade, 
 to give gold a monopoly of money ! Free 
 Trade, to eliminate silver! Free Trade, to 
 block up one time-honoured passage, and 
 charge an exorbitant rate for the use of the 
 
 * The Case against Bimetallism, p. 49. 
 
The Corner irTGold. 5 % 
 
 other ! Free Trade, to enslave the whole 
 world to the fetish of a yellow metal! to. 
 stake the commercial prosperity of the world 
 on the accidental movements of two' or three 
 cartloads of dross! Free Trade, my dear 
 Meg, seems to me marvellously like a very 
 poisonous form of ^Protection in disguise : 
 a corner in gold : the wolf id. sheep's 
 clothing. Do I deceive myself, or do I spy, 
 under that old woman's hood, the sharp 
 features of Monopoly ? * What terrible eyes 
 you have, grandmother ! ' ' The better to see 
 you with, child.' Shall we give Mr. Giffen 
 a hint for his next Christmas pantomime, 
 Meg ? Harlequin Free Trade : or Little 
 Red Riding Hood and Little Jack Home? 
 who sat in the^ Corner and said What a good 
 boy am I. »*--".. 
 
 --It need not surprise us, Meg, after this, 
 to find Mr. Giffen proving to his own satis- 
 faction that Bimetallism is a slieer impossi- 
 
54 The Corner in Gold. 
 
 bility h , although it existed for hundreds of 
 years in England alone, down to 1816. Like 
 the old feudal baron who was superior to 
 grammar, and set number and gender at 
 defiance, Mr. Gifien, when facts are against 
 him, takes, like ancient Pistol, a most horrible 
 revenge ; he proves they are not facts at all. 
 Certainly, he admits in one place that there 
 is 'a kind of surprising phenomenon to be 
 explained.' The truth is, he does not under- 
 stand the aim of Bimetallism. Bimetallism 
 does not aim at keeping two metals circula- 
 ting side by side. Its two metals are not 
 an end, but a means. It says that the 
 currency is too small in volume and ought 
 to be increased. It aims at steadying the 
 standard, and keeping money from con- 
 stantly rising in value and thus taxing pro- 
 duction in a constantly increasing ratio. It 
 aims at preventing financial panics, due to 
 
 k The Case against Bimetallism, p. 203. 
 
The Corner i?i Gold. 55 
 
 insane legislation. The aim of that legisla- 
 tion, on the contrary, misguided by false 
 economical theories, has been to restrict the 
 currency, in the teeth of an increasing popu- 
 lation and trade, by expelling silver, limiting 
 note-issue, forcibly giving gold a monopoly 
 of money, and thus constantly cutting at the 
 roots of production, by causing the means of 
 demand to grow automatically smaller and 
 smaller. Gold is favoured exclusively and 
 arbitrarily, no one can tell why : anyone 
 who has gold can go to the Mint or the 
 Bank, and turn it into coin. Why not make 
 money of diamonds ? There are not enough ? 
 Exactly : and Bimetallists say the same 
 about gold. They contend, that the currency 
 of the world requires to be augmented by the 
 re-introduction of silver, on a level with gold, 
 to perform the function of money. Why, in 
 the name of all that is ridiculous, should 
 not money be white as well as yellow ? 
 
5 6 The Corner in Gold. 
 
 ~ Now, then, Meg, for this question of fixing 
 a ratip, which as Mr. Giffen informs us, 
 baffles the genius of Sir, William Harcourt, 
 and which Mr. Giffen is of opinion that no 
 one can understand : an admission from 
 which we -may at least collect this, that it 
 has eluded his own comprehension. Truly, 
 we may turn, pale before a problem which 
 laughs at intelligences of the first order. 
 But the fact is, Meg, that the paradoxical and 
 contradictory appearance of this point is 
 given to it by .the radically false doctrine 
 of the Economists concerning money, which 
 'Mr. Giffen shares. No one could ever under- 
 stand how birds fly, if he invariably argued 
 on the assumption that legs are identical 
 with wings. And similarly, to understand 
 this question of fixing a ratio between gold 
 and silver, it is an essential preliminary to 
 have mastered that vital difference between 
 money and .commodities, which we have 
 
The Corner irTGvldl 5£ 
 
 analysed here : a "preliminary condition 
 which Mr. Giffen fails to fulfil, and having 
 therefore no insight into the heart of the: 
 matter, pronounces the whole "thing a delu- 
 sion, never suspecting that the puzzle is put 
 there by his own understanding. Instead of 
 allowing for the chromatic aberration in his 
 telescope, the astronomer sets to ' and abuses, 
 f he stars. . . . ; 
 
 The way you approach any question, Meg, 
 is half the solution. Look at the matter 
 like this. Holding, as he does, that money is 
 a commodity, and therefore subject to the laws 
 of commodities, Mr. Giffen asserts that fixing 
 a ratio between gold and silver is identical 
 in nature with fixing a price for a commodity, 
 Which he rightly pronounces absurd. Now,. 
 if Mr. Giffen had only gone on to ask himself 
 why it was absurd to fix a price for a com- 
 modity, he would perhaps have discovered 
 the solution of his difficulty. \ 
 
58 The Corner in Gold. 
 
 See, now, Meg, the importance of clearly 
 grasping that essential distinction between 
 money and commodities which has escaped 
 Mr. Gififen. It is perfectly true, that you 
 cannot fix a price for commodities : but 
 WHY? Because you cannot fix the demand 
 for them. You cannot force people to give 
 more of their money than they choose for any 
 particular commodity ; for the amount of 
 money a man will give for a thing is the 
 measure of his demand for it : nor, again, 
 can you force people to take less money for 
 a thing than they insist upon having. Fixing 
 a price for a commodity is absurd, because 
 it assumes that the demand for that thing is 
 constant, and that you know beforehand exactly 
 how much it will be. But this, in the case 
 of commodities, you never do know or can 
 know, for the demand for any particular com- 
 modity varies indefinitely according to times, 
 places and persons ; changes in the com- 
 
The Corner in Gold. 59 
 
 modity itself, and changes in the money 
 which must buy it, all bringing to bear. 
 But now, it is just the reverse with money. 
 You do know beforehand exactly what the 
 demand for that will be> simply because it 
 is itself the medium in which any demand 
 whatever it be, and however much it may 
 vary, must be expressed : the vehicle of 
 demand. Whoever demands anything has 
 first to demand money : its value is divested 
 of all those special circumstances which vary 
 the value of commodities ; it is independent 
 of change ; and as long as there is any 
 demand for anything, there will always be 
 the same demand for money to realise it. 
 Hence the demand for money in exchange 
 for commodities is so infinite that no con- 
 ceivable supply arising gradually from mines 
 can catch it up. Let people buy as much 
 as they like, they will always find sellers 
 and producers ready and eager to find com- 
 
66 The Corner in Gold: 
 
 modities in exchange for their money: the 
 more money there is to demand, the more 
 will commodities and services rush forward 
 to answer it: the money is the prior con- 
 dition 1 . People will always take it : always 
 provided that the money is not suspicious,— 
 like inconvertible paper money, to which 
 some doubt must : always attach. But there^ 
 as we saw before, it is not quantity \ but want 
 of confidence, that lowers its value. Hence 
 
 * The economical dictum of Adam Smith and his fol- 
 lowers, that a 'greater quantity of commodities requires 
 a. greater quantity of money to circulate them,' is a radical 
 inversion of the truth. The greater quantity of commodities 
 cannot appear until the money has first come to demand 
 them, The word 'circulate,' in the above .application, 
 indicates and arises from a total inability to understand the 
 process of production. Commodities do not come forth, 
 and then require to be 'circulated,' any more than wheels 
 first come into being and then require some one to twirl 
 them. The initial originating final cause, money, is prior : 
 it is the ' reason why ' of the generation of commodities* 
 The ' circulation ' of commodities is not an explanation, but 
 a description, after the fact. Who in the world ever wanted 
 to ' circulate ' commodities ? 
 
The Corner in Gold. 6 1 
 
 instead of being an evil; an increase of good 
 money is the greatest conceivable blessing, 
 and that has been proved by the gold dis- 
 coveries in our own day. ~ / - 
 
 However much Mr. Giffen labours to dis- 
 prove it, nevertheless it remains true, and 
 obvious, that silver and gold get their dis- 
 tinctive value because they are Wanted for 
 money : it is this function that makes all 
 men glad to get hold of them, because this 
 function is, of their possible uses, the only- 
 one in universal demand. And now you see 
 why, Meg, it is, that fixing a ratio between 
 them is a totally different thing from fixing 
 the price of a commodity. When either 
 silver or gold can be indifferently used for 
 money, when either serves equally well for 
 tendering in payment, then the demand for 
 them, in general, is equal, and fixing a ratio 
 merely determines, in special, what exact 
 quantity of each shall be an equivalent for 
 
62 The Corner in Gold. 
 
 the other. The ratio simply converts two 
 metals, one white and one yellow, into 
 a common money material, and it is the 
 ratio fixed that determines to what extent 
 each will be demanded. A thing of great 
 weight in settling this point is hereditary 
 custom, which began in pre-historic times, 
 and has led to a tolerably general relative 
 estimation of the two metals : though no 
 one can ever say why it should be just what 
 it is. Like all custom, it has only a historical 
 and no rational basis. But only a fool or an 
 eighteenth century philosophe would neglect 
 it or leave it out of account. The high 
 reputation of silver and gold rests on the 
 traditionary testimony of the ages. Fixing 
 a ratio between them, taken, for example, 
 on an average, suppose 1:15, simply means 
 and settles that where one part of gold is 
 required, fifteen will be needed in silver. 
 Gold being less bulky would have, a priori, 
 
The Corner in Gold. 63 
 
 the preference, but this again would restore 
 it to silver, as being more easily obtainable : 
 and thus the demand would oscillate to and 
 fro about a point with which it might perhaps 
 never coincide. But fixing a price for any 
 commodity is a totally different thing : that 
 is fixing how much money is to be given for 
 a commodity. It is not the price of money 
 you fix, in fixing a ratio between gold and 
 silver used as the money material. Price 
 means only ' quantity of money ' given for 
 a commodity : how, then, can you possibly 
 fix the * price ' of money ? Money cannot 
 have a ' price/ any more than the hand can 
 grasp itself k . Priceless itself, money prices 
 all. It stands over against commodities, like 
 a magnet against steel : the antagonism is 
 polar. To become money, is to cease to be 
 a commodity, cease to vary in demand, cease 
 
 k Of course, the ' price ' of money, meaning the interest 
 paid per cent, for its use, is another matter altogether. 
 
64 S%i Corner in GolcL 
 
 to have a price, cease to answer to any 
 particular end, cease to be at the mercy of 
 tyrannical popular whim or caprice ; it is to 
 fear no more the heat of the sun, or the 
 furious winter's rages ; to rise up out of the 
 sphere of nervous anxiety, apprehension and 
 uncertainty, subservient dependence on con- 
 stant variations in esteem, and soar aloft as 
 the sublemated etherialised incarnation of 
 general human demand l . 
 
 And now, Meg, I do beseech you to mark 
 this. It is a vital error to suppose, as Mr. 
 GifTen and the Economists all do, that gold, 
 qnd gold, is the standard of value : that the 
 material of money is the standard. The 
 material of which money is composed is no 
 more the standard of value than the dial of 
 
 1 The deep reader will perceive, that when not being used, 
 money has a universal value : in the particular act of a 
 special exchange, on the contrary, its value becomes just 
 that of what it is purchasing. In exerting its power, it 
 loses it, like a bee stinging, or an heiress getting married. 
 
The Corner in Gold, 65 
 
 a watch is the time. It is not the standard, 
 but the register in which the standard is 
 recorded. The real standard is the human 
 mind. According as the human esteem or 
 value of things grows quantitatively or quali- 
 tatively larger or smaller, so will the amount 
 of money given for them grow more or less. 
 Money is only the notation and vehicle of 
 demand : DEMAND IS THE STANDARD. 
 When it soars too high to be expressed in 
 money, then its object is said to be in- 
 valuable ; a common market price for a thing, 
 on the other hand, means that men value it, 
 on an average, the same. 
 
 This is the heart of the money question, 
 and it has never been understood by Political 
 Economy, owing to her neglect of the final 
 cause of commodities. Gold is only the stand- 
 ard by reference to its position and function 
 as money : because, qua money, and not qud 
 gold, it is the externality of demand. Money 
 F 
 
66 The Corner in Gold. 
 
 is to demand, what speech is to thought, 
 words to conceptions, body to soul. 
 
 And therefore, Meg, it is obvious that the 
 condition of fixing a ratio is that both metals 
 shall be on the same level as money : both 
 equally valid in payment as legal tender. 
 Of course, if you demonetise one, silver for 
 example, its value will drop. Fixing a ratio 
 will then be absurd because, by demonetisa- 
 tion, you have robbed it of its use and its 
 function ; you have annihilated it, as money, 
 and turned it into a commodity : and then 
 its value, like that of all other commodities, 
 becomes no more universal and general, but 
 local and variable. Then you will find that 
 the supply is far in excess of the demand, 
 as now reduced. But mark, that it is not 
 because the supply was too great, before you 
 demonetised it : it is too great now, because 
 you have annihilated the demand. Demone- 
 tise gold, and precisely the same thing will 
 
The Corner in Gold. ' 
 
 J UNIVERSITY 
 
 \ „ of 
 
 happen. The moment silver and gold cease 
 to be money, nobody wants them : they are 
 drugs in the market : even their non-mo- 
 netary uses will then fall away because these 
 are, to a large extent, dependent on the 
 esteem in which they are held as money. 
 It is not merely their beauty which leads 
 men to accumulate gold and silver orna- 
 ments. Oust gold and silver from their com- 
 manding position as money, and their value 
 will dwindle away. But nature has nothing 
 to do with it. The arrant nonsense which 
 is talked on this head is enough to drive 
 anyone capable of thinking mad. To talk 
 of a natural value in the case of silver and 
 gold used for money, — well, it means only 
 that you are a natural idiot or a Political 
 Economist, Meg. Money is a political in- 
 stitution, and therefore, like the material of 
 which it is made, it has a political value. 
 Every one who has an oz. of gold can go 
 
68 The Corner in Gold. 
 
 to the Mint or the Bank, and compel 
 them to give him £3 lys. gd. for it: that 
 is to say, his metal gives him a claim on 
 the services and products of the community 
 to the extent of that sum of money. Now 
 this state of things was established by law : 
 abolish the law, and where is the value of 
 gold? Who would waste his time in accu- 
 mulating a metal not convertible into money ? 
 Well, that is just what has happened to 
 silver. The law has annihilated its value, 
 by demonetising it : yet Mr. Giffen and his 
 financial ' authorities/ the Political Econo- 
 mists, tell you that its depreciation is due to 
 the discoveries of silver. But these new 
 discoveries would have had no such effect, 
 had not the law first degraded silver to the 
 rank of a mere commodity. Why, what does 
 Mr. Giffen tell us himself? 'The significant 
 fact that silver prices HAVE NOT RISEN 
 during the last fifteen years in silver-using 
 
The Comer in Gold, 69 
 
 countries ought never to be lost sight of.' 
 No indeed, Meg, I should rather think not. 
 But did not Mr. Gififen ever try to explain 
 this ? Does he not see that it knocks all his 
 theories about money to pieces ? Or what 
 will he say to this still more noteworthy fact, 
 that silver has only increased in quantity 
 100 per cent, during the last eighteen years, 
 and yet only see how, relatively to gold, 
 its value has dropped : whereas between 1847 
 and 1853, a period of only six years, gold 
 production increased 500 per cent, and never- 
 theless gold varied in value relatively to 
 silver only \\ of a penny. There is a fact 
 for Mr. GifTen to account for, on his theory 
 that money is subject to the laws of commo- 
 dities. ' Unless^ however, the cardinal rule 
 of commerce, that quantity governs price, 
 which applies infallibly to all other commo- 
 dities, loses its force when gold is concerned \ 
 this sudden and great increase in gold must 
 
70 The Corner in Gold. 
 
 be followed by a reduction in its value.' So 
 wrote Richard Cobden in 1859 m : and yet 
 gold did not fall in value. Therefore ac- 
 cording to his own criterion, it follows, that 
 gold is not a commodity : not subject to the 
 ordinary laws which regulate the value of 
 all commodities. Have I not shown you, 
 Meg, otherwise, beyond all possibility of 
 refutation, that such is the case ? Is it not 
 as clear as noonday, that what differentiates 
 money from commodities, the inexhaustible 
 demand for it, is just the very thing that 
 neutralises the effect of the increase of supply? 
 Yet who can change the dogma ; who shall 
 eradicate the deep-rooted lie in the soul of 
 the Political Economist? 
 
 Natural accidents, forsooth ! it is not 
 nature, it is law, the fruit of false theory 
 and misguided economy, that has altered 
 
 ro Preface to his translation of Chevalier's book ' On the 
 Trobable Fall in the Value of Gold.' 
 
The Corner in Gold. j i 
 
 the position and brought about the fall in 
 the value of silver. And yet Mr. Giffen 
 tries to persuade us — is it conceivable? — 
 that the State has no business to meddle 
 with the question. To suppose that it has, 
 is a Bimetallist Fallacy, says Mr. Giffen. 
 Now, Meg, let us ask Mr. Giffen a question. 
 Is money private property, or the property 
 of the State ? If he says, the State, then of 
 course it's the State's business to see to it. 
 If he says, private property, then I should 
 like to know what he can say in defence of 
 the State, which by its legislative fiat de- 
 prived the property of the holders of silver 
 of a great part of its value. Is the State 
 only to meddle with the question in the 
 interests of gold, and then stand magnifi- 
 cently aloof, saying : Let me mind my own 
 business : let things manage themselves ? 
 Fancy the howl that would go up to heaven 
 if some one proposed to demonetise gold, 
 
72 The Corner in Gold. 
 
 and substitute diamonds ! We should not 
 hear much more of the natural value of 
 silver and gold. Yet what greater right had 
 the statesmen who demonetised silver ? And 
 yet the Bimetallists are called hard names ; 
 and it is much, if people do not wink and 
 significantly tap their foreheads when a Bi- 
 metallist comes in to the room. But the 
 gold holders — ah ! — they are on the right 
 side of the door. Possession is nine points 
 of the law. Bimetallists, it is true, have per- 
 mission to speak : at least, speech is silver : 
 but silence, Meg, silence is gold. 
 
 They talk a good deal nowadays, Meg, 
 about methods of discovering truth. That 
 is all very well ; but to me, as it seems, 
 there is and can be but one method : it is, 
 to be gifted by Nature with a brain and an 
 eye and no prejudice. I will not presume 
 to pronounce on the first qualification in 
 the case of Mr. Giffen ; but as to the second 
 
The Corner in Gold. 73 
 
 and third, — why, he cannot see the facts 
 through the spectacles of his orthodox eco- 
 nomical prejudices. His vision is blocked 
 by the dogmas he borrows second hand 
 from ' Ricardo and other great authorities V 
 Mumpsimns wins, all along the line. But in 
 fact, these authorities have left out of their 
 account just the one thing that constitutes 
 the core of the question, — Human Nature. 
 They all write and talk about money and 
 commodities as if, instead of being instru- 
 ments, they were automata, going of them- 
 selves : making themselves and exchanging 
 themselves for each other at their own sweet 
 will, simply for the pure pleasure of ' circu- 
 
 n For example, he says (p. 199) ' to all intents and purposes, 
 the identity between coined and uncoined gold is complete.' 
 Was ever a more flagrant absurdity printed ? We might as 
 well identify leather and boots. In Australia, for example, 
 when it was deluged with gold, there was a great scarcity of 
 money, because there was no Mint, and it could not be 
 coined. 
 
74 The Corner in Gold, 
 
 lating.' The last thing that ever occurs to 
 them is the fact that thunders in their ears 
 and glares in their eyes and crawls about 
 under their nose : the fact, that all these 
 things are mere special cases of the activity 
 of men, called into existence to serve his 
 pleasure and pursuits : to answer to his de- 
 mand : which is conveyed and realised by 
 money, the great Human Instrument. How 
 can you understand money, the pivot of the 
 world, if you abstract it from the world that 
 makes use of it ? It takes its colour, like the 
 chameleon, from the hand that holds it : it is 
 the organ of will. Parties and law makers 
 do not act as they do merely in order to 
 illustrate beautiful theories, Meg : they have 
 an end and an object. So when you want 
 to discover a man's secret designs, it is not 
 what he says, directly : it is his casual ad- 
 missions that you must pay heed to : the 
 cloven hoof will be sure to peep out. Few 
 
The Corner in Gold. y 5 
 
 people are clever enough to guard all their 
 approaches, especially if they keep talking : 
 as lawyers know well. Do you suppose 
 that the laws of this century have all been 
 made simply at the dictation of pure truth 
 and philanthropy ; or that it is simply from 
 a desire to benefit their kind that the powers 
 that be in France, England, and elsewhere 
 have been willing, to borrow Mr. GifTen's 
 delicious phrase, to let gold become stand- 
 ard ° ? Bless your pure soul, my dear Meg. 
 Cherchcz la femme ; cherchez la cause finale. 
 Look for the motive, the steam power. 
 Not without reason have modern philo- 
 sophers sought to eliminate final causes 
 from the study of Nature. Politicians, at 
 any rate, have every reason to be grateful 
 
 p. 205. * England, France, and the United States, 
 have all been willing to let gold become their standard 
 substance.' How extremely kind of them ! 
 
j6 The Corner in Gold. 
 
 to them. The ' final cause ' of much modern 
 legislation is apt to shun the light, and 
 disguise itself under the accommodating 
 shadow of a pretext. 
 
 But let us pause, before proceeding to 
 history, to take some ' sidelights ' on ' our 
 Mr. Giffen.' He says : ' A fall in prices 
 is substantially due to the necessary diffi- 
 culty (why necessary, Meg?) of increasing 
 the stock of precious metals so as to keep 
 pace with the multiplication of commo- 
 dities and the multiplication of the numbers 
 of the people p.' Mark that, Meg. Then 
 he says again, ■ The demand for gold for 
 non- monetary purposes appears almost equal 
 to the entire annual production V There- 
 fore, Meg, according to Mr. Giffen himself, 
 the present stock of gold used for money 
 can never materially increase ; while on 
 
 p P . 74. o p. 85. 
 
The Corner in Gold. 77 
 
 the other hand ' every fool knows ' that 
 wear and tear and accidents keep con- 
 stantly wasting and wasting it ; and conse- 
 quently, while population and its accesso- 
 ries grow, the money must be getting spon- 
 taneously and progressively, apart from any 
 increase of demand, small by degrees and 
 beautifully less. There seems to be some- 
 thing wrong here, according to Mr. Giffen 
 himself. Yet on the other hand, when he 
 is pressing his dogma, elsewhere he tells us 
 that the quantity of money has no influence 
 on the wealth and welfare of a commercial 
 community, and that gold and silver would 
 be equally serviceable to the world if they 
 were only half as abundant r . The half 
 is as good as the whole, such is the financial 
 dictum of the modern Hesiod, Mr. Giffen s . 
 
 » p. 17. 
 
 » Mr. Giffen takes this from Ricardo. * The smaller 
 quantity of money would perform the functions of a cir- 
 
J% The Corner in Gold. 
 
 Carry that out, and it seems that the world 
 would be just as well off, if it had only £10 
 in gold altogether : and even the half of that 
 would do just as well. What a prodigious 
 discovery ! See what it is, to have an eco- 
 nomical genius, Meg. But really, as to calling 
 Bimetallists lunatics, why, surely Mr. Giffen 
 must be the Man in the Moon, my dear Meg. 
 But now, let us take a look at the his- 
 torical origin of the present state of affairs, 
 and trace the gradual progress towards this 
 
 culating medium as well as the larger. Ten millions would 
 be as effective for that purpose as 100 millions.' Ricardo's 
 Works, p. 263. The fallacy is, of course, the ordinary Ricar- 
 dian fallacy in all his * laws ; ' the assumption of absolute 
 fluidity in the division of the money. If coins could suddenly 
 be changed to half their size, no doubt this would be true : but 
 this is just where the impossibility comes in. Custom fixes the 
 coins : i.e. the quantitative divisions of bullion : hence 
 Ricardo's fluidity is impossible. It is just the same with 
 his ■ law ' of rent, wages, and the rest. They all assume 
 absolute fluidity, and become palpably ridiculous in a world 
 where it does not exist. 
 
The Corner in Gold. jg 
 
 consummation so devoutly to be wished, 
 if we are to believe Mr. Giffen : this per- 
 fection of a currency system*, this mono- 
 metallic Papacy of Gold, so much admired 
 by Mr. Giffen. People are apt to look upon 
 the system of things they are born in as 
 the eternal and immutable as-it-was-in-the- 
 beginning-is - now- and -ever- shall - be. But 
 history will tell a very different story. She 
 will tell us that gold is a mushroom upstart 
 who, like all parvenus,, has every reason to be 
 ashamed of his origin, and the steps of his 
 ascent. Mr. Giffen loves to contrast what 
 he calls an 'automatic coinage, such as we 
 
 * p. 80. ' A good standard should be like an ordinance 
 of nature, so that practically no changes are ever required. 
 In this last raped at least our own metallic currency for the 
 last eighty years has been perfection.' 
 
 This is truly a Giffenian gem. Perfection is that in which, 
 as in a law of nature, ' practically ' no changes are ever 
 required ; no changes have ever been required in our cur- 
 rency during the last eighty years (!!), and so it is perfection ! 
 This it is to be a financial expert. 
 
80 The Corner in Gold. 
 
 have in this country' with a 'managed cur- 
 rency, such as is involved in Bimetallism.' 
 Of course the distinction is futile and merely 
 verbal, for either system, and every system 
 of money, is and must be ' managed ' and 
 not ' automatic' But if, to oblige Mr. Giffen, 
 we wish to keep his nomenclature, I will 
 tell him, Meg, where he will find a skilfully 
 ' managed currency : ' in the history of Eng- 
 land during this century. 
 
 History, Meg, is my hobby: there is 
 nothing like history, when the historian is 
 a man of the world, and is skilful accordingly 
 to catch the spirit of events ; like Autolycus, 
 1 a snapper up of unconsidered trifles : ' but 
 alas ! nowadays that is next door to im- 
 possible. It is true, no age ever attached 
 more value to facts than our own : but the 
 fact is nothing : it is the interpretation of 
 the fact which is all. History, which of 
 old was written by statesmen for statesmen, 
 
The Corner in Gold. 8 1 
 
 and aimed at imparting political wisdom, 
 is now compiled by students, partisans, re- 
 ligious monomaniacs, or pedantical anti- 
 quaries for the ' general reader ! or the 
 ' middle forms of schools/ and aims at tick- 
 ling the palate, enforcing a theory, or 
 enabling idiots to pass their exams. Is it 
 astonishing that history degenerates, and 
 the kernel escapes ? if the spirit of action 
 evaporates, the political lesson leaks out and 
 is lost, and men of the world are the last 
 people expected to know anything about 
 the matter ? The men who make history and 
 the men who write history are not of the 
 same species : they differ as widely as a 
 hawk and a barn-door fowl : and how can 
 the one give an account of the ways of the 
 other ? How can we expect a Warren Hast- 
 ings from a Mill, a Napoleon from a Lanfrey, 
 a Mary Stuart from a Regius Professor, or 
 a Lord Beaconsfield from a Mr. T. P. 
 G 
 
82 The Corner in Gold. 
 
 O'Connor? Qui petit done e*crire la ve'rite' que 
 ceux qui Font sentie? asks one who well 
 understood the way of the world, the Cardinal 
 de Retz : though it is only fair to inform 
 you, dear Meg, that he asks that question at 
 the moment that he is passing off a fiction 
 as a fact. Who knows does not write: and 
 who writes does not know : there is an 
 epigram as true nowadays as when its 
 great author (one of your own sex, by the 
 way, Meg) first felt and expressed it. Even 
 the wiseacres who write to the papers to 
 instruct their generation are apt to display 
 more zeal than profundity. It is true, that 
 The Case against Bimetallism is to some 
 extent a reprint of letters contributed to the 
 pages of The Times. But we have seen 
 reason to doubt, Meg, whether the 'cur- 
 rency specialist ' whose letters embellish the 
 columns of The Times is always an angel 
 fearing to tread. We have tested his theory : 
 
The Comer in Gold, 83 
 
 let us see whether history strengthens his 
 « Case.' 
 
 The old national money of England was 
 silver money : and Locke, one of Mr. GifTen's 
 .' authorities/ even goes so far as to say that 
 ' gold is not the money of the world, nor 
 fit to be so' But on this point, apparently, 
 Mr. Giffen does not bow to the authority 
 of his ' authority.' The monometallic 
 scramble for gold is not, according to Locke, 
 a case of the survival of the fittest. Locke 
 did not hold with Mr. Giffen that the ideal 
 state and perfection of currency was for the 
 nations of the world to struggle for gold, 
 to use Locke's own simile, like children in 
 a bed for a coverlet too scanty to cover 
 them. The old historic money of England 
 was silver. But ever since the law of 
 Edward IV. to legalise gold money, people 
 could pay either in silver or gold, down to 
 1816. During the War with Napoleon, how- 
 
84 The Corner in Gold. 
 
 ever, specie payments were suspended. 
 Why ? Because we had to send all our 
 specie, our silver and gold, abroad, to sub- 
 sidise the Allies : and a Rothschild himself 
 has told us what happens then u . Well, not 
 being able to get silver and gold, and not 
 being able, in spite of the Economists, to 
 do without money, we had to make shift 
 with some other material. We had to make 
 paper promises, to be repaid after the war, 
 perform the function of silver and gold ; and 
 we did so. Accordingly, in spite of the war 
 money was plentiful, and trade, commerce, 
 
 * ' Then whenever there is a demand upon a country for 
 a metal which is the standard of value, it will produce 
 a scarcity of money? Certainly.' Mr. N. M. Rothschild to 
 the Bank Committee oj "1832. 
 
 Few people know to what an enormous extent currency 
 was the cause of the popular miseries in the Middle Ages. 
 Payments in kind having been commuted by Henry I. to 
 payments in money, and the money being taken by the 
 king for State necessities, the people could often get none. 
 Hence the weight of taxation, famine, and so on. 
 
The Corner in Gold. 85 
 
 and industry expanded enormously during 
 the war. No sooner was the war over, how- 
 ever, than payments in specie were restored, 
 but restored with a vengeance, and a differ- 
 ence, by Peel. 
 
 Personal character, we know, as modern 
 philosophers tell us, has no influence on the 
 course of historical events. Unfortunately, 
 the peculiar character of Peel has cost Eng- 
 land a heavy price, and will cost her still 
 more, before the end. 
 
 Peel was, in reality, totally incapable of 
 dealing with the question. He was, both 
 as a statesman and a financier, during the 
 whole of his career, utterly inferior to his 
 reputation, gained in an age of little men : 
 and like all mediocrities in high place, he 
 was constantly forced by his position to 
 verify Chamfort's aphorism, that if one would 
 not be a charlatan, one must avoid the 
 hustings. He had constantly to put forth 
 
86 The Corner in Gold. 
 
 and act upon pretensions of which time was 
 as constantly proving the hollowness. Men 
 who by a combination of circumstances and 
 their own ambition find themselves called 
 upon to deal with intricate questions with 
 which they are not fitted to cope, have their 
 hands forced by events. They are obliged 
 to pronounce ex cathedra to expectant crowds 
 on difficult points which all the time they 
 cannot understand : they must at least ap- 
 pear to master their problem : they are there- 
 fore perpetually afraid of being found out, 
 as Peel was at last : and you can see this 
 expression in their eye. A vulgar ambition 
 drives them into situations which Nature 
 never destined them to fill. Such men are 
 accordingly by turns dogmatic and dicta- 
 torial, shifty and irresolute : now cringing 
 to public opinion, now yielding to theorists, 
 now catching at nostrums, in default of any 
 interior authority : ever shuffling and hesi- 
 
The Corner in Gold. 8/ 
 
 tating when pressed for direct answers on 
 unsettled questions x ; awkward, evasive, and 
 ambiguous, when asked to declare them- 
 selves : tenacious of their dignity, yet in- 
 wardly conscious of their own incapacity ; 
 never placing unreserved confidence in others, 
 just because they have none in themselves : 
 with no spark of the frankness and straight- 
 forward repose that comes of insight and 
 strength, and marks the man who is master 
 of his trade. Inward uncertainty, want of 
 knowledge of his ground, with a rhetorical 
 varnish of plausibility spread over it : that 
 was the essential characteristic of Peel, the 
 great Tory-Whig Opportunist, Mr. Every- 
 
 x Peel never refuted the extremely awkward charges, 
 backed by still more awkward dates, brought against him 
 by Bentinck and Disraeli, in regard to his change of opi- 
 nion on the Catholic Question. His 'explanation ' in the 
 House on that head is a skilful piece of disingenuous 
 shuffling, which evaded but never met the point : a specimen 
 of his injured • innocence ' and Parliamentary tactics, attend- 
 ing to the form rather than the matter of the thing. 
 
88 The Corner in Gold. 
 
 thing-by-Turns, afterwards Sir Fretful Pla- 
 giary. The formal management of the 
 House, Parliamentary tactics, was the con- 
 stant subject of his thoughts : that which is 
 but the means of a statesman was his end : 
 for the essence of the matter, the thorough 
 comprehension of his age and its forces, was 
 entirely beyond him. He was not an actor, 
 but a stage-manager. He was a Parliament- 
 ary bully, just because he was an economical 
 incapable. All his great measures were taken 
 second-hand from some other person : he felt 
 it, and felt that others were aware of it : hence 
 his constant discourtesy to his inferiors, who 
 sometimes touched him only too nearly. 
 
 He knew, at this time, and at all 
 times nothing whatever about currency or 
 finance y ; but, having read Lord Livcr- 
 
 t I Peel, who is Chairman of the Bank Committee, 
 professes, I find, to have as yet formed no opinion on 
 the subject, but to be open to conviction ' (Wynn. Court 
 
The Corner in Gold. 89 
 
 pool's book on the Coins of the Realm, 
 he leaped to the position of a master ; in- 
 stantly conceived himself to have acquired 
 a complete command over the whole sub- 
 ject. Though here, as usual, he was but 
 making use of other people's originality, 
 he called up his best Parliamentary atti- 
 tude, made a great speech stuffed with 
 cheap learning, *■ improved ' from his au- 
 thority, and easily succeeded in throwing 
 
 of England ii. 321). So Peel said himself 'he was ready 
 to avow without shame or remorse that he went into the 
 Committee with a very different opinion from that which 
 he at present entertained, for his views on the subject were 
 most materially different when he voted against the reso- 
 lution brought forward by Mr. Horner as the Chairman 
 of the Bullion Committee.' 
 
 This is all very well ; but what is forgiven to the child 
 cannot be forgiven to the hoary statesman. Like a barber's 
 boy learning to shave on the chins of his customers, Peel edu- 
 cated himself as he went along, and never finished. His 
 education was not progressive, like a building : but circular, 
 like a weather-cock. We have all heard of the bishop who 
 commenced his theological education after he had grasped 
 the crozier. 
 
90 The Corner in Gold: 
 
 dust in the eyes of the House, who knew 
 less, if that were possible, on the subject 
 than even Peel himself. And yet he 
 had studied his authority to so little pur- 
 pose as to mistake the very heart of the 
 whole question. It ought to be trumpeted 
 abroad, Meg, that the monometallic gold 
 standard was introduced into England (and 
 thus into the world, for other nations did 
 but copy her) owing to a vital error on the 
 part of the 'open minded' Financier. This 
 absolutely new departure, this financial 
 experimentum in corpore vili } this untried 
 theoretical currency, was actually described 
 by Peel as a return to the old standard 1 . 
 
 ■ He asserted that ' every sound writer on the subject ' 
 (he wisely refrains from giving any names) ' came to the 
 conclusion,' ' the old, the vulgar doctrine* (!!) ' that a certain 
 weight of gold bullion with an impression on it, denoting it to 
 be of that certain weight and of certain fineness, constituted 
 the only true intelligible and adequate standard of value : ' 
 and then, confounding, consciously orunconsciously, thisstand- 
 ard with the standard from which we had departed twenty-two 
 
The Corner in Gold. 91 
 
 The House took him at his word. All 
 were unanimously in favour of Peel's major 
 premiss, that it was necessary to return to 
 the old standard. The only unfortunate 
 thing was, (we must charitably suppose 
 it was a mistake) that Peel's system was 
 not the old system. It is almost incredible 
 that Peel should have been unconscious 
 of the vital difference between the old sys- 
 tem and his own : but we must believe 
 his own word. It is true, that his system 
 enhanced enormously the value of all cred- 
 itors' and fundholders' property : it is true 
 that it raised at a blow the value of gold ; 
 but that was no doubt a legislative accidenty 
 Meg. 
 
 years before, he declared that 'to that standard the 
 country must return ! ' 
 
 Now, what are we to say to assertions like this ? Is it 
 conceivable that Peel could be ignorant to this monstrous 
 extent ? But if not — by what name are we to call him ? 
 Charity forces us to the conclusion, that he had not the 
 dimmest notion of what he was talking about. 
 
92 The Corner in Go/d. 
 
 In spite of the earnest remonstrances of 
 the Directors of the Bank, Peel's own father, 
 a large number of merchants and traders, 
 and even financial authorities like Mr. Roths- 
 child, the Bill became law ; principally 
 because Peel succeeded in persuading the 
 House, that it was a return to the old system. 
 Its immediate effect was, of course, an 
 enormous and sudden contraction of the 
 currency. Trade and Commerce had ex- 
 panded up to the limits of a plentiful cur- 
 rency a : this new measure shrank round 
 
 • The theory of the Bullion Committee, that the price 
 of gold in Bank Notes proved that the notes were depre- 
 ciated owing to excessive issue, stands in flat contradiction to 
 notorious facts. 
 
 1. On that theory, the price of gold in Bank Notes 
 should have risen and fallen with the issue of notes. But it 
 did not. 
 
 2. The price of gold rose or fell — varied exactly, with the 
 demand for gold for the war. 
 
 3. Everyone who took Notes had to pay for them : how 
 then could they be in excess, more than were wanted ? 
 
 4. The theory assumes that gold has an absolute value 
 
The Corner in Gold, 93 
 
 them like an Iron, nay, a Golden Shroud, 
 crushing out relentlessly the life, draining 
 like a vampire the blood, the circulating 
 medium, the demand for products, and 
 thereby causing infinite misery and deso- 
 lation. Some idea of the scale of the evil 
 may be formed from the fact, that the 
 Bank had immediately to reduce the vol- 
 ume of its note circulation from £25,000,000 
 to £18,000,000,— more than a fourth. The 
 Bill was the immediate occasion of Peter- 
 loo, three months later. It inflicted a blow 
 upon Ireland, by ruining her Banks b , which 
 
 Gold was worth more, when the Bank Note could buy less 
 of it. A greater demand had raised its value. £i remained 
 £\ ; but the gold in it had appreciated. 
 
 b ' I recollect,' said Peel, in 1847, 'in the year 1820, the 
 failure on almost the same day, at least within the same 
 week, of 11 Banks in Ireland ; and I think a little later the 
 failure amounted to 21 or 22.' But what he did not find it 
 convenient to recollect was the fact, that his oivn Bill was 
 the cause of their failure. '.He appears to have described 
 these calamities with so much sarcastic humour as to have 
 
94 The Co?-ner in Gold. 
 
 plunged that unfortunate country into fresh 
 destitution, and the ultimate consequences 
 of which took away her very possibilities 
 of rising in prosperity. All this was but the 
 verification of those disasters prophecied 
 by the experts who strove to dissuade 
 Peel from forcing through his fatal cur- 
 rency measure ; whose testimony was all 
 the more valuable in that it came in many 
 cases from men who saw that they would 
 personally gain by the change, as they 
 did. 
 
 But a wilful man will have his way, Meg ; 
 and there is no man so wilful as a theory- 
 ridden politician who has got the bit be- 
 tween his teeth. The disasters produced 
 
 elicited the cheers and laughter of the House.' It was no 
 laughing matter for the poor wretches who died of starva- 
 tion in the year of grace 1820. Money was so scarce, that 
 the Irish farmers had to sell even the food that would have 
 fed them and their dependents to raise money for their rents 
 and taxes. 
 
The Corner in Gold. 95 
 
 by the Bill were ascribed by its authors to 
 every cause but the right one. The general 
 distress was traced by Ricardo to the ab- 
 normal abundance of wheat; an analysis 
 adopted by the minister, Lord Liverpool : 
 who yet, to his honour, did not adopt also 
 the ■ illustrious ' economist's remedy c . Mark 
 the cruel irony of the thing, Meg. In Febru- 
 ary, Lord Liverpool stated that the distress 
 among English farmers was due to the over- 
 production of Ireland : in June, the Irish are 
 found dying of famine in the midst of 
 plenty : not because there was not enough 
 food, but because they had been deprived 
 
 c Ricardo's Ricardian remedy for the distress was — only 
 just think of it ! — that • all mean and poor soils which had 
 been made productive at too great a cost of capital should be 
 suffered to go back into barrenness ; ' i. e. that with hungry 
 mouths crying for it, the wealth should be obliterated to 
 save his contemptible theory of value. And this prepos- 
 terous pedant is one of Mr. Giffen's great 'authorities.' 
 Lord Liverpool, to do him justice, saw and said that the 
 evil lay in the deficiency of money. 
 
g6 The Corner in Gold. 
 
 of the money, the means of obtaining it, 
 by the criminally idiotic Bill of a finan- 
 cial tyro. And what remedy was at- 
 tempted ? Why, people instantly started 
 subscriptions in MONEY to send over to 
 Ireland. Yet what need, according to the 
 Economists, of money? are not commodities 
 purchased with commodities ? Truly, if a 
 man does not despise his species, it is not 
 the fault of the Political Economists. Pri- 
 vate benevolence had to step forward to 
 return the money, and repair the injuries, 
 respectively withdrawn and inflicted by this 
 orthodox Economical Bill. 
 
 In vain did Lord Althorpe exclaim, 
 that though it was too late to repeal it, 
 yet if he had known what he was doing, 
 he would rather have lost his right arm 
 than carried that Bill : in vain were at- 
 tempts made to repeal it : to all who 
 abused it, or endeavoured to make amends 
 
The Corner in Gold, ' 97 
 
 for their error, — who like Mr. Baring d , or 
 Mr. Attwood, tried to open the eyes of the 
 nation to the delusion to which they had 
 been subjected in supposing the Bill to be 
 a return to the old system — Peel constantly 
 replied with the acerbity of a man who 
 has prickings of conscience within, but 
 has gone too far to draw back. We are 
 the slaves of the Frankensteins we ourselves 
 have created. Further, to do hirn justice 
 Peel really did not know what he had done. 
 The whole thing was above the level of 
 his mind. Yet mark, Meg, his fatal posi- 
 tion. Before gold was enthroned, in place 
 of the original double standard, no creditor 
 could have dared to claim as a right that 
 
 d At the time the Bill passed, great weight was laid by 
 its partisans on the authority of Mr. Baring, who was in its 
 favour. Nine years afterwards, Mr. Baring confessed that 
 he had been completely mistaken. Nobody paid any 
 attention to his authority, then. 
 
 H 
 
98 The Corner in Gold. 
 
 it should be ; could have ventured to de- 
 mand that his debt should be repaid in 
 a metal artificially raised by the law to 
 a position and value it did not hold when 
 the debt was contracted : that the law 
 should enable him to reap where he had 
 not sown, by an artful juggle with the 
 currency. But after the deed had been 
 done ; after that the single gold standard 
 had been established, then there was ipso 
 facto created a powerful class to stand 
 shoulder to shoulder in defence of their 
 newly won privileges and the New System. 
 Viresque acquirit eundo. To have instantly 
 repealed his own Bill could hardly be ex- 
 pected of Peel : on the other hand, to wait 
 was fatal. And here you may see, my dear 
 Meg, how one legislative faux pas inevitably 
 leads on to another. As the evils intro- 
 duced by Peel's Bill were not prevented, 
 they had to be cured by remedial measures. 
 
The Corner in Gold. 99 
 
 Instead of the simple ellipse, the legislative 
 Copernican cycles were strung one on an- 
 other. The one thing essential was for the 
 Goldmongers never to admit that they 
 had been wrong. It now became the 
 policy of government strenuously to cry 
 down and oppose all attempts to alter the 
 law. The Currency Question, they said, 
 like the Reform Bill, was settled for ever : 
 it must not be re-opened : ' no tampering with 
 the currency : ' ' no currency maniacs ; ' ' no 
 fads.' (You see, my dear Meg, there were 
 Giffens in the land even in those days.) 
 The promoters of revolutionary theoretical 
 change now suddenly became sticklers for 
 fixity of tenure. The Bill was made its 
 own vindication. The new system had 
 been passed under the cloak of the asser- 
 tion, that it actually was the old system. 
 Now, when, their eyes being opened, people 
 called out for the real old system, the govern- 
 
I oo . The Corner hi Gold. 
 
 ment pointed to the Bill. * Nolumus leges 
 Anglice mutari* No hasty meddling with 
 old established laws. Spartam nactus es : 
 hanc exorna. Theory, entrenched in posi- 
 tion, like the dog in the fable, turned round 
 and abused the old dog who sought to re- 
 cover her own as a vile theorist. Our prin- 
 ciples, said these New-Old-System-mongers, 
 are strictly Conservative and historical. 
 Conservative ! if these are Conservative prin- 
 ciples, why, how do they differ from 
 Radical ? All men are Tories, Meg, if a 
 Tory is only a Radical who has got what he 
 wanted. Anyhow, the fact that the Bill 
 was in force was held, now, to be the best 
 of all reasons why it should never be re- 
 pealed. Each year added force to the ar- 
 gument, value to the gold, and weight to 
 the general misery and distress. The Bill 
 and the New-Old System were even as the 
 laws of the Medes and Persians. 
 
The Corner in Gold. 101 
 
 But if he would allow no one else to touch 
 his Bill, or lay a finger on the Currency 
 Question as by law established, Peel did 
 not extend this prohibition to himself- 
 The Complete Financier, in 1844, st ^ fa- 
 ther completed his finance. Here, as usual, 
 he leant for support upon friendly theorists. 
 Using as his crutches one great economical 
 authority who had made all his money by 
 a process that directly contradicted all his 
 theories, and another great Banking author- 
 ity who had made all his money by a pro- 
 cess he now wished to abolish, he intro- 
 duced and carried his Bank Charter Act 
 of 1844 e . He described this new Bill of 
 
 e The Bank Charter Act was based on the farcical as- 
 sumption that there is only one cause for the export, or drain, 
 of gold, — a redundancy of currency. Ricardo had laid down 
 the law : ' we should not import more goods than we export ', 
 unless we had a redundancy of currency* This is of course, 
 utter nonsense, but ipse dixit Ricardo. It followed, that, as 
 we were doing the first, our currency must be redundant— 
 ergo, it was. The other crutch, Lord Overstone, being 
 
1 02 The Corner in Gold, 
 
 1844 as the 'complement' of that of 1819. 
 His descriptions, like other men's dreams, 
 must unfortunately always be interpreted 
 by contraries. 
 
 *A quarter of a century,' he announced 
 with pride to the obsequious House, ' has 
 passed away, since I first brought forward 
 that great measure? — the Bill of 18 19. But 
 after speaking at some length on the evils 
 now existing in the monetary system of 
 England, he asked : ' Have I not shown 
 that it is impossible with any regard to 
 the safety of the State, to permit the present 
 system to go on without control ? ' Grant 
 
 asked, whether the drain of gold to America in April was 
 not sufficiently explained by the immense and unusual im- 
 port of corn from America in that month, said : ' I do not 
 know, I do not knmv at all, where the gold goes to. If it goes, 
 that is all I ever attend to? Yet it was just this very point, 
 where the gold went to, and why it went, on which the whole 
 question depended. There are, of course, ever so many 
 causes for a drain of gold. 
 
 These illustrious men are Mr. Giflen's 'authorities,' and 
 the pillars of the English monetary system. 
 
The Corner in Gold. 103 
 
 that he had, yet who, then, was responsible 
 for the present system with its evils ? No 
 other than Sir Robert PeeL 
 
 He utterly failed to understand what were 
 the evils of the present system. He knew no 
 more what he was doing now, than he did 
 in 1 8 19. He announced this new measure 
 of 1844 as the 'complement' of that of 18 19. 
 In fact, the Bill of 1844 was based upon 
 a principle which in 18 19 he had stated ' had 
 always appeared to him extremely unwise V 
 'A quarter of a century* since his l great 
 measure* had left him as incompetent as 
 ever. His language was ever sonorous, his 
 
 f See an extremely able, but unfortunately anonymous work 
 entitled ' The Mystery of Money Explained ',' by some one 
 who describes himself as a banker of sixty years' standing, 
 and whose acumen and experience do not belie him. But 
 people ought to have the courage of their opinions : a man 
 should sign his name : no fighting behind walls. 
 
 1 Woe to the coward, that ever he was born, 
 Who did not draw the sword, before he blew the horn ! 
 
104 The Corner in Gold. 
 
 motives always sublime, but still when Time 
 lifted the dish-cover, there was the dish as 
 empty as before. The aims of this new Bill 
 of 1844 were specially magnificent. The 
 menu was most imposing. The Bill was 
 ' to give steadiness to the character of our 
 resources, inspire confidence in the circulat- 
 ing medium, diminish all inducements to 
 fraudulent speculation and gambling, and 
 ensure its just reward to commercial enter- 
 prise conducted with honesty and secured 
 by prudence.' That was in truth a noble 
 Bill of Fare. What a banquet for the sup- 
 porters of the Act ! But the proof of the 
 pudding ? — ah ! there he was unfortunate. 
 None of these prodigious achievements came 
 off. The political Trimalcio turned out to 
 be only Tartuffe. The banquet was only 
 a Barmecide banquet, a Pickwickian or even 
 a Pecksniffian affair. The promises were 
 pic-crust, and the Bill a bubble : all r Chaos 
 
The Corner in Gold. 105 
 
 and Clouds and the Tongue.' The simple 
 fact is that its author had not the dimmest 
 conception, not only of the cure for the 
 evils, but even of the evils to be cured. The 
 convertibility of the note, the goal of all 
 Peel's efforts, had never been in any sort 
 of danger. No human being had ever lost 
 1 confidence in the circulating medium.' On 
 the other hand the dangers that did need 
 removing were not only not removed, but 
 actually increased, nay, rendered compulsory 
 and inevitable, by this wonderful Bill *. By 
 providing, that whenever gold went, the notes 
 
 * The Bank Charter Act was such a monumental mass of 
 blunder and bungling, that it almost makes one cry to pull 
 it to pieces, — miseranda vel hosti. But among the many 
 strokes of genius it embodied, it is worth noting, that it 
 never occurred to Peel that gold could be drawn from the 
 Bank by cheques as well as, and better than, by notes. To 
 be consistent, Peel ought to have abolished Banking 
 altogether. His notion of Banking was the old deposit 
 Bank, where the notes were not Credit, but tickets for the 
 gold held in the Bank. 
 
io6 The Corner in Gold. 
 
 should go too, which was the heart of the 
 Bill, Peel ■ ensured ' not * the just reward of 
 commercial enterprise, &c. &c.,' but certain 
 ruin to sound commercial houses. 
 
 And now, as a matter of fact, what did 
 the Bill do ? Utterly out as Peel was, when 
 he announced his Bill of 1844 as the * com- 
 plement ' of that of 1 8 19, yet curiously 
 enough, the tendency of both Bills was, in 
 one respect, the same. They both immensely 
 enhanced the value of gold. They both 
 tended to give to gold a MONOPOLY OF 
 MONEY. The first Bill expelled silver, the 
 second restricted the notes and tied them 
 up strictly to gold. Both Bills threw more 
 work, and conferred immense privilege, upon 
 gold. But that also was doubtless a legislative 
 accident, Meg. 
 
 Few people know how near that Bill came 
 to ruining English trade altogether. It came 
 within an ace of it. In direct antagonism to 
 
The Corner in Gold. \oy 
 
 that desirable condition of which Mr. Gififen 
 has told us, that money should increase with 
 the increase of population and trade, Peel 
 had done all that lay in his power to make 
 money decrease with the increase of necessity 
 for the use of it h . It was of course a pure 
 accident that the constant tendency of all 
 this otherwise various legislation was to put 
 a premium upon gold : quite accidental, that 
 while in obedience to the cry of the hour 
 and the hustling of theorists and an interested 
 faction he ruined England's Colonial Empire 
 by adopting a one-sided short-sighted Free 
 Trade, the converted Free Trade apostle at 
 the same moment set up Protection in its 
 
 h ' He delighted to speak of his Bank Act as one of the 
 roost important achievements of his public life. Perhaps 
 because it was one of those in which he most fully suc- 
 ceeded in obtaining the object which was ever present to his 
 mind, — the union of scientific truth with practical efficiency. 
 Guizofs Memoir of Peel. 
 
 Pasques-dieu ! this is too magnificent. Scientific truth, 
 practical efficiency ', and the Bank Charter Act I 
 
1 08 The Corner in Gold. 
 
 very worst form in the shape of the Bank 
 Charter Act. These accidents, like Mr. Sam 
 Weller's knowledge of London, are \ extensive 
 and peculiar.' But Nemesis limps after 
 legislators whose career is constructed of 
 accidents like these ; she may take her time, 
 but still she arrives. Posterity will require 
 something more in a candidate for the much 
 profaned epithet of statesman than a mind 
 always sufficiently ' open to cofiviction ' to 
 render its unlucky owner the catspaw of 
 persons who knew what he was doing much 
 better than he did himself. If a ' quarter 
 of a century ' leaves the mind still the same 
 political shuttlecock that it found it, destitute 
 of, because incapable of forming, an original 
 principle founded on the comprehension of 
 the economical tendencies and needs of the 
 age, but open and ready at all times to 
 adopt ' by conviction ' specious and plausible 
 theories that run counter to your whole 
 
The Corner in Gold. 109 
 
 career and the ties and pledges of party, 
 simply from the general motive of benevo- 
 lence to your kind — if this it is to be a states- 
 man, there is never an old lady in England 
 who is not a statesman and party leader of 
 the highest order. The pilot 1 who shapes 
 his course, not by navigation and the 
 compass, but the casual advice or bullying 
 of amateur passengers, may be a most 
 estimable man, no doubt ; the pride of his 
 family and the ornament of the domestic 
 circle ; but the Company that insured his 
 ships would soon go bankrupt. 
 
 But suddenly came a bolt from the blue, 
 a real accident : the discovery of gold in 
 Australia and California. That gold saved 
 England's commercial prosperity from the 
 
 1 People who want to know what a statesman is should 
 read the life of Mr. Horace Bixby, in Mark Twain's wonder- 
 ful book ' Life on the Mississippi? It is the finest portrait of 
 a master in politics to be found in literature. 
 
1 1 o The Corner in Gold. 
 
 consequences of Peel's restrictive legislation ; 
 partly by its positive supply (it acted instead 
 of the silver, and served as a basis for notes), 
 and partly by frightening other nations, and 
 preventing them, for the time, from copying 
 England and adopting the single gold stand- 
 ard. The two laws of Peel had narrowed 
 the currency to its lowest possible minimum : 
 and the condition of England was more than 
 deplorable : she was dying of inanition. The 
 copious gold that poured in from the mines 
 came just in time to avert a social catastrophe 
 that would have ruined her k . The flood 
 of prosperity that followed has drowned the 
 recollection of the miserable state which 
 preceded it. And yet there is a farcical 
 side to the event. To those who had made 
 it the goal of all their efforts to screw up the 
 
 k See, for a fuller analysis of this period, R. H. Patter- 
 son's New Golden Age: or my own Principle of Wealth- 
 Creation. 
 
The Corner in Gold 1 1 1 
 
 value of gold, this apparently infinite deluge 
 of gold came like a dish of cold water from 
 the ironical power who sits up aloft and 
 scoffs at the vanity of human endeavour. 
 They started back in dismay, as men leap 
 back from a precipice suddenly yawning at 
 their feet out of the dark, or a hobgoblin 
 grinning in their face in the gloom. The 
 Political Economists who were to the fore 
 at that time poured their terrified abuse in 
 full stream on that gold which saved us from 
 ruin. They published elaborate books to 
 warn an unconscious world of the hideous 
 calamities coming upon it — nay, which ac- 
 cording to their theories must have been 
 even then in full operation, from the ' pro- 
 bable fall in the value of gold : ' books in 
 which the theories advanced were flatly 
 contradicted even by the very facts adduced 
 to support them. No doubt, had Peel still 
 been living, his ' open mind ' would have 
 
1 1 2 The Corner in Gold. 
 
 abolished his gold standard in obedience to 
 the new theories of Cobden and Chevalier \ 
 
 Their prophecy turned out to be pure 
 nonsense, utterly falsified by the event ; and 
 so it has been conveniently smothered away, 
 and nobody now pays any regard to it, 
 or seeks to draw attention that way. But 
 this is a very great error. It deserves all 
 the attention we can give it. Instead of 
 being hidden under a bushel, it ought, on 
 the contrary, to be bellowed from the house- 
 tops, that Political Economy deliber- 
 ately STAKED THE TRUTH OF ITS THEORY 
 
 1 Money being a commodity, and subject to the ordinary 
 laws of commodities, must, — so MM. Chevalier and Cobden 
 argued, — fall in value enormously owing to the immense new 
 supply : hence the disasters. But at the very time they 
 wrote more than two hundred and forty millions of gold had 
 flooded the world, — and yet where were the fatal consequences 
 that should have arrived ? Observe, this is crucial. The Eco- 
 nomists said : If A is, B is. But B was not. Therefore A 
 was not : money was not a commodity, according to their 
 own proof. 
 
The Corner in Gold. 1 1 3 
 
 OF MONEY ON PREDICTIONS THAT WERE 
 PROVED FALSE BY THE EVENT. The fact 
 is, that under the influence of its erroneous 
 theory, the authorities then were terrified by 
 the prospect of gold, just as now they have 
 been terrified by the prospect of silver. And 
 yet what is this silver in comparison with 
 that gold ? Nevertheless, from a fear of this 
 bugbear, as unreal as the nightmare, silver 
 must be demonetised, and all the world 
 suffer, except those who have an interest in 
 ' cornering gold ; ' except the dark oligar- 
 chical cabal who work under the cover of 
 economical orthodoxy. 
 
 Anyhow, in 185 1, the gold came: in- 
 dustry and population, trade and commerce, 
 swelled up to gigantic proportions under its 
 genial influence and up to its margin m ; — 
 
 m It is a total delusion to ascribe the prosperity dating 
 from 1 85 1 to Free Trade. I have explained this elsewhere : 
 here it is only necessary to point out that other nations de- 
 
1 14 The Corner in Gold 
 
 and then in 1872 came the great Currency 
 Epidemic, the Anti-Silver Mania. As if 
 bitten by a gold-bug, nation after nation 
 boycotted silver, and in spite of the enormous 
 development of trade and population and 
 all their corollaries, we see the world actually 
 reducing its money wholesale. The metallic 
 basis on which all the credit rests is cut 
 down to a minimum. And yet people gabble 
 about the insufficiency of the metallic reserve, 
 and play with contemptible nostrums, ' pills 
 against the earthquake : ' looking for salva- 
 tion, and with an air of great intelligence 
 dealing out blame, in every direction but 
 
 veloped, under Protection, as well, and more, than England, 
 under Free Trade. The cause was not special, but general, 
 —the new gold. 
 
 Peel unhappily blurted out the truth one day about Free 
 Trade in the House. Its real aim, he said, was to cheapen 
 Production. That was true. But it is not cheapening pro- 
 duction that will create demand for the product. The gold 
 did that. Better is an increase in demand, than a decrease in 
 cost : high prices than low ones. 
 
The Corner i?i Gold. 1 1 5 
 
 the right one. Good Queen Bess, my dear 
 Meg, might have taught us that it is not 
 the short ends of wit nor starting holes of 
 devices that can sustain the expense of 
 monarchy, but sound and solid courses. 
 A Bank Charter Act and a policy of Cur- 
 rency Restriction are only to be expected 
 when financial ' authorities ' understand 
 neither the nature and function of Money 
 and Credit, nor even the difference between 
 a Bank, and a Bank of Deposit. People 
 who base their currency institutions on the 
 theory that money is a commodity are likely 
 to find some difficulty in extricating them- 
 selves from the consequences of their own 
 misconceptions. You might as well base 
 navigation on the theory that ships will sail 
 best with their sails under water and their 
 keel in the air, with their centre of gravity 
 raised as high as possible, and their ballast 
 slung up near the flag. 
 
1 1 6 The Corner i7i Gold. 
 
 Now is the summer of our prosperity, Meg, 
 made glorious winter by the laws of Peel. 
 Now it is, that his legislation is beginning 
 to work. The new gold stopped it, for a 
 time : but at last, Mischief is afoot. Is it 
 hard to perceive what course she will take ? 
 A constantly increasing imperative demand 
 for gold as the nations jump one after 
 another like sheep into an error that will, 
 if not remedied, prove fatal to them all — 
 coupled with a constantly diminishing sup- 
 ply — one does not require, Meg, to be the 
 seventh son of a seventh son to see that 
 far into futurity. Even a Political Econo- 
 mist might make a true prophecy here. Let 
 me be your Mother Nicneven or your 
 Allan M c Aulay, then, just for the nonce. 
 
 Fixed sums in money will all be- 
 come imperceptibly but steadily larger and 
 larger : not numerically, but in power 
 of purchasing. Creditors will go on get- 
 
The Corner in Gold, 117 
 
 ting back — so long as there still remai?is 
 anyone to pay them, before general bank- 
 ruptcy sets in — ever more and more than 
 they lent : but this golden harvest will not 
 last as long as they think. It is better to 
 be owed less, by someone who will ulti- 
 mately pay, than more, by someone who 
 ultimately won't n . Credit and Banking will 
 grow ever more precarious, as the precious 
 metal that forms the reserve as well as the 
 indispensable instrument becomes even more 
 keenly disputed by rival establishments : in 
 which deadly struggle the strongest will win, 
 and the weakest will go to the wall. Taxa- 
 tion will rapidly and visibly grow heavier 
 and heavier, in a double degree : for each 
 producer will have to give more and more 
 produce for the same sum of money, and 
 
 n Of course, it is not really the interest of a creditor to be 
 repaid. His money only brings him a return, when it is 
 lent : he must part with it, to get advantage from it. 
 
1 1 8 The Corner in Gold. 
 
 hence life will grow harder and harder, and 
 producers be progressively ruined ; while 
 on the other hand taxation will have to 
 be raised, numerically, to meet the expend- 
 ture, upon those victims that remain. Trade, 
 Commerce, and Industry will gradually 
 dwindle away and decline, in those nations 
 less able to grab a share of the gold, for it 
 will become constantly more and more im- 
 possible to make and sell goods with a 
 profit. Mark, Meg, that all this follows 
 with logical certainty from even Mr. Giffen's 
 position. For us, who know that money 
 is not a commodity ', but the vehicle of demand, 
 the result is even more undeniable and ap- 
 palling. The prime cause of all Wealth Crea- 
 tion will shrink up to a minimum : like the 
 Peau de Chagrin, every wish formed by its 
 doomed owner will bring nearer the in- 
 evitable catastrophe. 
 
 I met, not long ago, a pillar of our Indian 
 
The Corner in Gold. 1 19 
 
 Empire. ' That is a very nice landau you've 
 got.' ' Yes,' he replied ; ' it is the last I 
 shall ever buy. It cost me £200 ; that 
 should be Rupees 2,000, if all had their own, 
 but as it is, it is upwards of 3,200. A few 
 years ago, everyone bought English carts, 
 harness, and what not : now, they must put 
 up with Lucknow carts, Cawnpore harness, 
 and Indian things generally : such is the 
 law of the Vanishing Rupee.' A pleasing 
 outlook : and yet, Meg, the future of British 
 Commercial prosperity lies Eastward ho ! 
 It must develop in the East, or go out 
 altogether. It cannot fight Protection in 
 the West. And yet the fall in Exchange 
 makes it impossible to compete in the 
 markets of the East with Eastern pro- 
 ductions. 
 
 Note, by the way, Meg, that is the great- 
 est mistake in the world to suppose, as is 
 commonly done, that Credit is, in ultimate 
 
1 20 The Corner in Gold, 
 
 analysis, any substitute for metallic money. 
 The retail buying and selling is the goal 
 and final aim of all commerce and trade 
 and production. The wholesale is all done 
 in Credit (except when financial disasters, 
 destructhe of Credit, intervene), but it all 
 issues in, and depends on, the ultimate retail: 
 and the retail depends on, and indeed mainly 
 takes place in, hard money, ringing coin, 
 cash, the poor man's purchasing instrument. 
 Goods must go where they can find the 
 best prices. Merchants will send their com- 
 modities to the country where money calls 
 for them loudest . High wages are the 
 real index of a national prosperity. 
 
 ° Qn. 4947. \ You think the best principle the Bank can 
 adopt is to issue largely and make the currency abundant ? 
 Yes ; if this country has money in abundance, it will have 
 all the trade from the whole world, and if you make money 
 very scarce trade will go to other countries.' Evidence of 
 Mr. N. M. Rothschild before the House of Commons Com- 
 mittee in 1830. 
 
The Corner in Gold. 121 
 
 And now for a little politics, Meg. The 
 British Empire stands in a critical posi- 
 tion. Ireland is perhaps not going after 
 all to break loose from the Union : yet 
 one never knows ; Mr. Gladstone is still 
 with us. Time, though it may write a 
 wrinkle on his brow, yet seems powerless 
 over his organisation, even when aided by 
 the gingerbread-snap of lawless enthusiasm 
 or the casual malignity of the unpolitical 
 heifer. The Colonies, which in 1846 Eng- 
 land might have welded to herself by the 
 adamantine bond of a common commercial 
 interest seem not unlikely, should Occasion 
 arise, to strike out for themselves. A wail 
 of distress arises from Lancashire. India 
 will certainly be ruined in her relation to 
 England if .she sticks to her vanishing ru- 
 pee, or closes her mints, in unreasoning 
 terror, to silver, or adopts an insane gold 
 currency which will vanish quicker than the 
 
t22 The Corner in Gold. 
 
 rupee. But this last measure, if taken, 
 would speedily bring the world to its senses. 
 And we, who go about the globe bragging 
 of our Empire, when our dependency comes 
 to us as a suppliant begging us to remedy an 
 evil our own financial legislation has caused, 
 we throw the solution on her own shoulders. 
 If this be imperial government, we may as 
 well abdicate, and, like the potentate re- 
 proved by the old woman, 'cease to reign.' 
 Methinks I can see the old Roman senators 
 tittering in their graves at this marvellous 
 specimen of ' masterly inactivity ; ' and the 
 pale ghosts of Chatham and his son redden- 
 ing with anger and shame at the ignomin- 
 ious and degenerate shuffling of their de- 
 scendants. They did not build up the Em- 
 pire by shifting the responsibility on to the 
 shoulders of the governed. 
 
 Bimetallism and the repeal of the Bank 
 Charter Act coupled with absolute free 
 
The Comer in Gold. 123 
 
 trade in Banking, are remedies which would 
 go far to cure the evils. These measures 
 would afford that security to Banks, that 
 nutriment to Commerce, that steadiness to 
 the standard, that check to the machina- 
 tions of dealers in bullion, that steadiness 
 in the rate of interest p, that increase of em- 
 ployment and impulse to production, lan- 
 guishing for markets, that bond of Imperial 
 Union, which every sane man should desire 
 to see. I know they do say, Bimetallism 
 is not within the sphere of practical politics. 
 Doubtless they do : the mere fact of estab- 
 lishing a monometallic gold standard makes 
 it all but impossible, and certainly pro- 
 gressively harder to change it. The cred- 
 itors and holders of fixed incomes shrink 
 from Bimetallism : because they are afraid 
 that it would decrease very largely their 
 
 p From 1704 to 1803 the Bank rate of interest never rose 
 above 5 or fell below 4 per cent. 
 
1 24 The Corner in Gold, 
 
 power of purchasing. They make a bug- 
 bear of silver, just as their forefathers in 
 the fifties made a bugbear of gold. 
 
 ' Who would believe what strange bugbears 
 Mankind creates itself, of fears, 
 That spring like fern, that insect weed, 
 Equivocally without seed, 
 And have no possible foundation, 
 But merely in th' imagination.' 
 
 The gold the world feared in the fifties 
 was in reality the greatest of blessings to 
 it, and just so the current fear of silver 
 is all a delusion, a phantom of the brain. 
 Silver has fallen in esteem because it has 
 been boycotted ; its function as money 
 has been destroyed. Restore it to its legi- 
 timate position beside gold, and it will be 
 just what it was before. No one would 
 lose a farthing if silver were restored : the 
 world would gain enormously. But even 
 if it were not so ; even if silver tended to 
 make money progressively cheaper, that 
 
The Corner in Gold. 125 
 
 would be better for the world than that it 
 should become, as it is now becoming, pro- 
 gressively dearer. Do creditors suppose 
 they can flourish, if trade, commerce, and 
 industry, on which they flourish, go to the 
 wall? Short-sighted monopolists, your in- 
 terests are in reality bound up together. 
 You stand or fall by the same conditions. 
 Remember the Sibyl and her books. She 
 offered you nine in 1846 : you refused them : 
 she now offers six : refuse them again : she 
 will come back later and demand, not the 
 same, but a heavier price for those that re- 
 main. For there is not the least doubt 
 about it : there is not enough gold in the 
 world for us all. The question is not, 
 whether silver shall ultimately come back : 
 that is certain : the question is, whether the 
 world will restore it in time to save itself 
 from an irreparable series of disasters, or 
 wait till it has to purchase its wisdom by 
 
126 The Corner in Gold. 
 
 bitter experience. It was the want of a 
 plentiful currency that sapped the original 
 vigour and drained away the life-blood of 
 ancient Rome, and so brought it to the 
 ground : shall it be allowed to count yet 
 another victim, cause yet another imperial 
 catastrophe, force a still mightier civilization 
 than even that of old Rome to wither and 
 fade, by robbing it stealthily and surely of 
 its vital juices ? 
 
 We all know the fable of the man who 
 worshipped an idol, to which he was ac- 
 customed to pray zealously that it would 
 send him riches ; but all to no purpose : till 
 at length, in his exasperation, he seized it 
 by the feet, and dashed it to pieces, when 
 out flew a treasure concealed in its body, 
 all over the floor. Thus he attained by the 
 breaking of his idol, that wealth which it 
 never bestowed upon him, while it was 
 whole. 
 
The Comer in Gold, 127 
 
 Shall we break our idol, do you think, 
 Meg ? I do not know : these things are on 
 the knees of the gods. Public Opinion, with 
 which we began, I find we must end with : 
 she is, after all, the final court of appeal, 
 the lord of the world : stronger than the 
 laws, stronger than party, stronger even 
 than Parliament with all its ' supremacy ; > 
 for Public Opinion has only to nod, and 
 all these must obey. 
 
 Wandering Willie. 
 
 P.S. I shall expect to be paid for all 
 this, Meg, next week, when I come to Fairy- 
 knowe : not in my coin, but yours : a 
 medium payable only to bearer on demand, 
 whenever the said bearer finds himself alone 
 with his Banker. At your peril, Meg, will 
 you refuse to honour my draft. Is not the 
 labourer worthy of his hire ; stop my 
 wages, and I will strike ? I will revolt from 
 
128 The Corner in Gold. 
 
 your allegiance : and yet — plague take it ! 
 I doubt whether, as the old song says, I can 
 find forces enough to rebel. Ah, Meg, thou 
 little witch, truly, thy spell is potent, more 
 potent even than gold. 
 
 So basely, after all our braves, 
 We have to own ourselves your slaves ; 
 We break our clog, but all in vain ; 
 We still drag after us our chain. 
 
APPENDIX. 
 
 I cannot refrain from calling the reader's attention to 
 the following remarkable passage descriptive of the 
 auri sacra fames, from R. H. Patterson's Economy of 
 Capital. 
 
 " In the spring of 1854 there was discovered in Austra- 
 lia one of the richest * placers ' or gold beds, even of that 
 most auriferous country. The spot was a deep ravine, 
 formed by the Buckland river, enclosed by steep mountain 
 sides which excluded every breath of wind. It was autumn 
 in Australia, though spring here. The air in the ravine 
 was stagnant, and the scorching sun made it intensely hot 
 during the day, while at night the temperature fell to 
 a piercing cold, so that the sojourners in the ravine were 
 alternately in an oven and an ice house. Moreover, as the 
 gold beds lay in the channel of the river, the miners worked 
 up to their waists in water. To this gold field of surpassing 
 richness hundreds of adventurers flocked in feverish haste : 
 but disease, like the fabled dragons and griffins of old, kept 
 horrid sentry over the buried treasures. A peculiar fever, 
 of the typhoid character, was the natural denizen of the 
 spot : besides which the gold seekers suffered severely from 
 eye-blight, owing to the concentrated blaze of the sunshine 
 reflected from the steep sides of the ravine, and they were at 
 all times grievously tormented by clouds of flies. Bad diet 
 and want of vegetables aggravated the diseases natural to 
 the place and to the kind of work. In the strangely inter- 
 
 K 
 
1 30 Appendix. 
 
 esting accounts which then reached us, we read of onions sel- 
 ling at six shillings a pound : and cabbages which we buy here 
 for a penny were so precious that they were eat up and sold by 
 weight — from half a crown to four shillings the pound being 
 readily paid for them. Physic, or what passed for it, rose in 
 price in a still more startling manner — Holloway's pills selling 
 at one shilling each, or a guinea per box ! It was a Valley of 
 Death. ' Constitutions that had borne the hardships of 
 other fields broke down here,' wrote an eye-witness of the 
 scene ; ' and hundreds have perished, dying unattended and 
 unknown. The little levels between the stream and the 
 base of the mountain wall, for ten miles along the valley, 
 are so thickly studded with graves that the river appears to 
 run through a churchyard.' One new-comer, wiser than the 
 rest, having counted eleven corpses carried past his tent 
 during the dinner hour of his first working day, and thinking 
 that even gold may be purchased too dearly, left the place 
 instantly. Many abandoned it after a somewhat longer trial. 
 But the greater number, fascinated by the unusual richness 
 of the gold beds, remained in defiance of disease, and ' took 
 their chance'— with what result the numerous graves of 
 the valley testify to this day. 
 
 It was a scene * to point a moral or adorn a tale.' " 
 
 Why has Gold this magic attraction that conquers even the 
 fear of death ? Because it is not a mere commodity, but the 
 vehicle of demand for all commodities, and hence itself in 
 inexhaustible demand. 
 
BY THE SAME AUTHOR. 
 
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 THE PRINCIPLE OF WEALTH CREATION : 
 ITS NATURE, ORIGIN, EVOLUTION, AND 
 COROLLARIES : BEING A CRITICAL RE- 
 CONSTRUCTION OF SCIENTIFIC POLITICAL 
 ECONOMY. 
 
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