LIBRARY 
 
 OF THE 
 
 UNIVERSITY OF CALIFORNIA. 
 Class 
 
REMARKS 
 
 ON THE PRODUCTION OF THE 
 
 PEECIOUS METALS, 
 
 AND 'ON THE 
 
 DEMONETIZATION OF GOLD 
 
 IN SEVERAL COUNTRIES IN EUROPE. 
 
 MONS" LEON FAUCHER, 
 
 TRANSLATED BY 
 
 THOMSON HANKEY, JUN. 
 
 LONDON: 
 
 SMITH, ELDER, & CO., 65, CORNHILL 
 
TO MONS R LEON FAUCHER. 
 
 MY DEAR SIR, 
 
 I have fulfilled the promise I made yoir a few 
 weeks since, by translating, I hope intelligibly, 
 your remarks on the subject of the Production, &c., 
 of the Precious Metals, which I read first in the 
 August number of the "Revue des Deux Mondes" 
 and which have been subsequently published, some- 
 what amplified, in the reports of the a Academic des 
 Sciences Morales et Politiques." Since the date of 
 your remarks, the production of gold in Australia 
 has been greater than you anticipated; recent 
 reports estimate the amount shipped, or ready for 
 shipment, from thence, at not less than 8,000,000 
 sterling; at which figure, I think, we may safely 
 place the produce of 1852. 
 
 120584 
 
IV 
 
 A gentleman who was with me a few days since, 
 just arrived from Victoria, told me that the gold 
 diggings at Bathurst were nearly at an end, and that 
 he did not believe that any more gold would be 
 shipped from Sydney. Although Sydney is only 
 one of the ports of Australia from which gold has 
 been shipped, this would appear to confirm your 
 views, that the first gatherings cannot fairly be 
 assumed as data on which to found estimates of 
 future production: at the same time when we hear 
 of so great an increase of production in other parts 
 of Australia, I can hardly agree with you, that there 
 is so little ground for alarm as to a depreciation in 
 the value of gold, in consequence of these late dis- 
 coveries. The effects of the production in Australia 
 can hardly be felt at present, considering that the 
 export of English gold coin has been, up to this 
 date, I think, equal to the amount of gold we have 
 received thence; but when the sovereigns lately 
 shipped are found to be in excess of the wants 
 of the community in Australia, and are re-shipped 
 to this country, together with the produce of the 
 gold workings between this and next summer, I 
 cannot but believe that the supply in the market 
 
of the world will be found in excess of the demand, 
 and that ultimately a considerable and general 
 alteration in prices will ensue. 
 
 I shall be very glad if I find that by this trans- 
 lation I have in any way contributed to increase 
 the circulation of your remarks in this country. 
 The subject is one of considerable interest, and 
 I hope that you will, at no very distant period, 
 give us some further observations, and let us know 
 how far your first impressions have been then 
 influenced by events which may have occurred 
 subsequently to the present time. 
 
 I am, my dear Sir, 
 
 Yours very faithfully, 
 
 THOMSON HANKEY, JUNB. 
 
 ., 30th November, 1852. 
 
The Foreign Weights and Monies have been converted into English, 
 at the following rates. 
 
 Dollars and Piastres, at 4s. 
 
 Thalers . . 3s. 
 
 Florins . . Is. 8d. 
 
 Francs . . . 25 to l sterling. 
 
 Ibs. oz. dwt. grs. grs. 
 
 A kilogramme weighs nearly 2. 8. 3. 2. or nearly 15,434 Troy. 
 Do. of gold at the standard value, viz. 77s. 9d. per oz. is 
 
 worth about 125. 
 
 Do. of silver at 5s. per oz. is worth about . . 8 Os. 9 *d. 
 Do. of quicksilver weighs . . . 2-2055 Ibs. avoirdupois. 
 Do. Do. is worth about . . 5s. l-|d. or 2s. 4d. per Ib. 
 
 oz. dwts. grs. 
 
 A Spanish marc weighs 77 22^. 
 
 Do. of gold at 77s. 9d. per oz. is worth . . . 28 15s. 
 
 1 Ib. of gold is equivalent to 46-f$ sovereigns. 
 
 A poud is equivalent to 36 Ibs. English, and worth about 1679. 
 
 The weights and measures not enumerated here are explained 
 at the foot of the page in which they occur. 
 
RE-MARKS S 
 
 ', OF 
 ON THE PRODUCTION OF 
 
 THE PRECIOUS METALS, 
 
 &c. 
 
 FROM the commencement of the 19th century, gold 
 appears to have been always esteemed in Europe 
 above the price at which it has been legally fixed 
 in relation to silver ; the commercial value of the 
 metal has remained on an average about 1 per 
 cent, above its legal value. In England alone gold 
 circulates as money : in those countries which have 
 maintained a double standard, gold, rarely coined, 
 became immediately an article of merchandize, and 
 disappeared from circulation. Gold regions were 
 discovered without restoring the equilibrium of 
 value between the two metals. Civilization, in its 
 development from historical times, has but realized 
 the legends of ancient fables. Gold, from its im- 
 portance and constancy of value, appeared likely to 
 remain for ever the symbol and the essential agent 
 of wealth. 
 
 B 
 
In this regular course of the progress of the pre- 
 cious metals, a pause, or rather a deviation, appears 
 to have occurred. Gold seems to be tottering in its 
 monetary supremacy; the fortress appears to have 
 succumbed in a paroxysm of alarm. Ten years 
 ago, every one was frightened at the prospect of the 
 depreciation of silver; during the last eighteen 
 months, it is the diminution in the price of gold 
 that has been alarming the public, Some countries, 
 which, but a short time since, were but too anxious 
 to attract and retain gold in circulation, even at 
 great sacrifices, have already shown a feverish 
 anxiety to banish it altogether. 
 
 Holland took the lead in this movement, and 
 in July, 1850, demonetized the gold 10-florin piece 
 and the Guillaume. Portugal has partially followed 
 this example, by prohibiting any gold to have a 
 current value, except English sovereigns. Belgium, 
 which in order to increase its gold circulation, had 
 given a legal value to our 20 and 40-franc pieces, 
 and had struck, in 1847, a mixed coinage of gold 
 and base alloy, has demonetized its gold circulation, 
 both home and foreign. Eussia, by a ukase of 29th 
 December, 1850, wishing to maintain the former 
 equilibrium, has prohibited the export of silver. The 
 French Government itself, struck with the novelty, 
 and the sudden change, issued a commission for the 
 purpose, as the Minister of Finance stated in his 
 minute of the 14th December, 1850, of examining 
 
3 
 
 the questions connected with the simultaneous use 
 of the precious metals, gold and silver, as a cir- 
 culating medium of value. 
 
 From public authorities, alarm has spread to 
 private interests, and the price of the precious 
 metals has experienced in European markets a 
 very sensible disturbance in value. In the space 
 of only a few months, the premium of gold has 
 given way to a reaction, only checked by the tariff. 
 From 1st July to the 25th December, 1850, the 
 price of English sovereigns in Paris has fallen about 
 2 per cent. On the Amsterdam Exchange, the fall 
 in the price of gold, in the same year, amounted to 
 4 per cent. ; at the same time silver rose in London 
 almost as much (from 4s. Hid. the ounce, to 
 5s. l|d.); the relative value of gold to silver, which 
 our laws had fixed at 15 ounces of fine silver to 
 one of pure gold, and which the constant premium 
 on gold in Europe had raised in the Spanish tariff 
 to 151, fell to 15i in Holland, Belgium, and Ham- 
 burg; in all places where gold, from having been 
 demonetized, had become a mere article of mer- 
 chandize ; almost realizing, in fact, the tariff of 
 Russia, a country where the abundance of gold 
 and the scarcity of silver had induced a legal re- 
 lative value of 15 to 1. 
 
 However great the present depreciation of gold, 
 the depression appeared likely to increase still fur- 
 ther, and the gloomy forebodings of the press have 
 
 B 2 
 
added to public alarm. Newspapers of all parties, and 
 of all countries, prophesied that, under the combined 
 influence of California and Siberia, the value of gold 
 would soon fall to nine times that of silver. Whilst 
 crowds of emigrants were forcing their perilous way 
 across the Eocky Mountains, or doubling, for eco- 
 nomy, Cape Horn, or, in their impatience, taking 
 the shorter but dearer passage by Panama, hurrying 
 on to the capture of the golden fleece, this very 
 treasure which they were unduly appreciating, was 
 becoming as unduly depreciated in Europe; the 
 article, which but six months before bore the greatest 
 fixity of value, seemed rapidly undergoing an impor- 
 tant change, and to the Auromania of ages, an Auro- 
 phobia appeared to be succeeding. England alone has 
 shown no sign of fear. During the period of con- 
 tinental alarm, the Bank of England was not afraid 
 even to check the export of its gold; as in the be- 
 ginning of 1851, the directors raised the rate of dis- 
 count from 2i to 3 per cent., and almost immediately 
 the exchange turned. The pound sterling, which fell 
 for a short time to 24 fr. 70 cents., equal to a fall of 
 2 per cent., rose in a few days to 24 fr. 95 cents. ; it 
 oscillates now between 25 fr. 35 cents., and 25 fr. 45 
 cents., which is equal to a premium of to f per cent, 
 upon gold. Again, the mint of Paris, which received 
 gold by millions in December, 1850, and January, 
 1851, has seen this influx slacken until its weekly 
 receipt now scarcely equals its former daily supply. 
 
At the present moment, the oscillations of the 
 market seem to have terminated; a calm has suc- 
 ceeded the storm, and the value of the precious 
 metals seems to be in almost a normal state. The 
 present moment, then, appears to be a fitting one 
 to examine if the late disturbing causes were of an 
 ephemeral nature, or whether they are likely to be 
 permanent in their effect. 
 
 On this important subject, the French Govern- 
 ment, which at first appeared ready to attempt an 
 immediate solution of the question, did not hesitate 
 to recognize the necessity of more profound 
 examination. In the Moniteur of the 15th January, 
 1851, it is stated, " that the commission of 14th 
 December, presided over by Mr. Fould, Minister of 
 Finance, for the examination of the subject of money, 
 is of opinion, that the late depreciation in the value 
 of gold has been produced by causes of an acci- 
 dental nature, which are beginning to be less sensi- 
 bly felt; that influences of a permanent character 
 bearing upon this depreciation cannot at present 
 be sufficiently ascertained; and in such a state of 
 affairs it is necessary to have precise information as 
 to the production of the precious metals in California 
 and in Russia; and that with its present knowledge 
 of facts, the Commission is of opinion, that there is no 
 ground for a modification in our monetary system." 
 
 This determination was a wise one, and subse- 
 quent events have justified it; while on the one hand 
 
gold has again risen to nearly its former value, and 
 on the other, the discovery made in 1851 of rich 
 deposits of gold in Australia, renders the subject 
 worthy of further investigation ; the present seems a 
 suitable opportunity for the renewal of a controversy 
 by no means exhausted. 
 
 In default of official documents, we have the 
 stories of the adventurer, and the statistics of com- 
 merce. Sufficient light appears to come from the 
 north, the south, and the west, to enable us to form 
 some opinion of the results of the general move- 
 ment regarding the precious metals. I would add, 
 that we can approach the subject now, freed from 
 some of the questions which appeared to encumber 
 it; the trade in the precious metals appears to be 
 again in its natural channels. The phantom of rise 
 or fall does not appear to be materially affecting 
 trade : quite lately, to prevent the export of gold, the 
 Bank of France raised the premium for purchase. 
 In London and in Paris, the metallic reserves are full. 
 The Bank of England has above * 500,000,000 francs, 
 and the Bank of France above 2 600,000,000 in their 
 vaults. The import of the precious metals goes on 
 but slowly. Nothing opposes, then, such a patient 
 and careful examination of the subject as can alone 
 satisfy the inductions of science. 
 
 20,000,000 2 24,000,000 
 
I. 
 
 The value attached to the precious metals in 
 their character of money, is not of an arbitrary 
 nature. Neither governments nor councils can 
 change it at their will and pleasure. The power 
 publicly possessed in this respect is but the organ 
 of facts, which it submits to and proclaims as law. 
 The head of the Government stamped on the coin 
 creates a value only by the declaration of its 
 intrinsic weight and fineness ; but the price of 
 the gold and the silver is exactly that of their 
 commercial value in exchange. In this consists the 
 stability and the regularity of the circulation of 
 money. 
 
 The cause which determines the value of the 
 precious metals is the same as that which affects 
 the price of every other article of merchandize ; the 
 supply and the demand the comparative abundance 
 or scarcity of gold or silver in the market. The 
 larger the metallic supply, the smaller value will it 
 bear; its commercial value will vary in exact pro- 
 portion to the increase in quantity. On the other 
 hand, the smaller the quantity of money in circu- 
 lation, the larger will be the value attaching to 
 each separate piece; a smaller quantity of such 
 money will then suffice to buy a larger amount of 
 goods, and goods are said to be cheap or what if 
 
8 
 
 in effect the same, money, may be called dear. 
 This money, in the time of Charlemagne, possessed 
 a power eleven times greater than at presentthat 
 is to say, it was eleven times more scarce. It is 
 well-known that the discovery of America, in over- 
 powering with a fresh supply of the precious metals 
 the metallic circulation of Europe, brought about a 
 sudden and large depreciation of their value, which, 
 notwithstanding a variety of oscillations, has been 
 generally maintained to the present time. Not only 
 does the state of the market mark the value of gold 
 and silver with reference to other articles ; but 
 there is positively no other base on which the 
 comparative value between the two metals can 
 be determined, but the abundance or scarcity of 
 either. 
 
 The relation between gold and silver is variable 
 in its nature. In vain has Gamier, the com- 
 mentator on Adam Smith, attempted to establish 
 his position, that the value of gold in ancient times 
 differed little from its value in our days; and that 
 it then represented, according to Herodotus, and 
 tinder Darius in Persia ; and again, during the 
 time of Plato, in Greece, weight for weight and 
 purity for purity, about fifteen times the value 
 of silver; Criticism has not failed to demolish 
 entirely this ingenious but frail hypothesis. It has 
 been Clearly demonstrated that silver did not hold 
 in ancient days, the important place it has obtained 
 
in ours, and which has subsequently rendered it 
 the all-powerful agent of circulation. 
 
 When we seek to examine minutely the various 
 monetary changes which have occurred, and to 
 lay hold upon some principle to guide our inquiry, 
 we quickly recognize the fact, that the difference 
 in value between gold and silver increases in pro- 
 portion to the development of civilization and 
 industry. It is not without some show of reason, 
 that mythology, transporting the analogy of the 
 physical into the moral world, made the age of 
 silver succeed that of gold. Historically, in fact, 
 the discovery of and the working of gold preceded 
 that of silver. Gold is almost always found 
 either pure or mixed with silver. In searching 
 the beds of rivers and streams, it has been ob- 
 tained by the mere process of washing. This 
 work is within the reach of the rudest state of 
 society. It appears like a treasure spread over the 
 surface of the earth, under the very feet of the 
 first occupier of the soil. Silver, on the contrary, is 
 embedded in rocks of primitive formation, and is 
 seldom found near the surface of the earth; its 
 extraction requires a combination of science, ma- 
 chinery, and capital. It is the work of a state of 
 civilization already far advanced and firmly estab- 
 lished. 
 
 In almost every age, whatever its social position, 
 the use and the value of gold has been known. From 
 
10 
 
 India to Iberia, and from Ethiopia to the Poles, 
 there is not a race which has not attempted to 
 discover this source of wealth on its surface. What 
 country has not had its Pactolus ! What Prince or 
 Satrap has not been a gold collector, like Midas or 
 Croesus! The luxuries of ancient monarchs appear 
 to prove an abundance of metallic treasure, which 
 has been subsequently unequalled, but the sources of 
 the supply have faded away in their turn. Bureau de 
 la Malle observes, that from the death of Alexander, 
 the golden sands of Asia and Greece appear to have 
 been exhausted ; those of Gaul and Spain seem 
 to have been abandoned after the fall of the Roman 
 Empire. Gold has long since disappeared from the 
 surface of the older inhabited countries; there is 
 only now to come, in quantities of appreciable 
 amount, or capable of affecting the circulation, the 
 produce of those countries which have been unknown 
 to European commerce, or which have been dis- 
 covered in modern times. 
 
 Referring to history, we find that the employment 
 of silver as money is of no very ancient date, and 
 that it was introduced as a medium of exchange, 
 not by conquerors, but by people of industry and 
 of commerce. It would be sufficient to cite 
 the Phoenicians, those planters of colonies, the 
 Athenians, and the Carthagenians. On the first 
 discovery of America, silver money was found in 
 use amongst only two nations holding any political 
 
11 
 
 position Peru and Mexico. And again, if silver at 
 a later period has taken the place of gold in circu- 
 lation, it has been maintained with more regularity 
 and permanence. The mines from wherever it has 
 been extracted, penetrating into and ramifying 
 throughout the bowels of the earth, are almost 
 inexhaustible. It is thus shewn that the production 
 of silver is found to continue where that of gold is 
 at an end, and hence the variations which past ex- 
 perience has shown to exist in the relative position 
 of the precious metals. 
 
 The learned researches of Boeckh, Letronne, 
 Humboldt, Jacob, and Dureau de la Malle have 
 thrown much light on the causes, and on the im- 
 portance of these monetary oscillations. They 
 agree in the admission, that originally the value of 
 silver in some countries has equalled, if not ex- 
 ceeded, that of gold. The laws of Manon state 
 a value of gold as 21 times that of silver. M. 
 Dureau de la Malle considers that between the fifth 
 and sixth century before our era, everywhere, 
 excepting in India, the relative value of gold to 
 silver, had been 6 or 8 to 1, as it was in China and 
 in Japan at the end of the last century. It has 
 been found to have been as 10 to 1 in Greece, in 
 the time of Xenophon, 350 years before the 
 Christian era ; and even 100 years later, the treaty 
 between Rome and Etolia proves a similar ratio. 
 In the present day, the discovery and the working 
 
12 
 
 these new metallic stratifications are the only causes 
 which can materially change the relative value of 
 the precious metals. Formerly, conquest, by which 
 one nation became rich at the expense of another, 
 or the pillage of those great reservoirs of money 
 called public treasures, throwing suddenly vast sums 
 of money into circulation, could not fail to depre- 
 ciate either one or other, if not both, of the precious 
 metals. It was thus that the conquests of Alexander, 
 opening the gates of the East, inundated the Greek 
 world with the precious metals, which were lowered 
 in value by their abundance, and dissipated from 
 their very excess. After the capture of Syra- 
 cuse by the Romans, silver, the foundation of the 
 treasure they had seized, fell suddenly in price, so 
 that seventeen pounds of silver were valued at one 
 of gold. A little later the relative price was as 
 12 to 1, when Caesar, having plundered the two 
 milliards contained in the public chest, so reduced 
 the value of gold, which then predominated, that 
 the proportion fell to 9 to 1. Under the Roman 
 Emperors, the production of gold began to slacken, 
 the progress of mechanical science, on the other 
 hand, gave a constant impetus to the working of 
 the silver mines of Asia, Thrace, and Spain. The 
 comparative value of the two metals again changed ; 
 it was as 18 to 1 in the time of Theodosius the 
 Younger, 412 years after the birth of Christ. 
 
 At the commencement of the fall of the Roman 
 Empire, in the 4th century, the value of the pre- 
 
13 
 
 clous metals approached that of our own days. The 
 invasion of the barbarians, in dispersing and dissi- 
 pating the accumulated treasures of the West, 
 destroyed for a time the industry required for their 
 renewal. Money, on account of its scarceness, 
 acquired an extraordinary power ; the price of 
 every article fell, or, in other words, the value of 
 silver rose to a most extraordinary degree. Not 
 only did the value of money and of the precious 
 metals increase in that long dark night of the 
 middle ages, but the relative value between silver 
 and gold, which had been established by the 
 progress of industry, again changed. The value 
 of gold, in relation to other commodities, was pre- 
 served longer than that of silver, owing to its 
 greater general value, and to its being the less de- 
 structible metal ; and also because its supply was fed 
 by the washings of the golden sands ; a fit occupa- 
 tion for the knowledge and tastes of an ignorant 
 people. The working of the silver mines, on the 
 other hand, being a work befitting a civilized and 
 scientific people, was naturally interrupted, and 
 languished during a period of spoliation and endless 
 warfare. Hence, as we may suppose, arose the 
 scarcity, both relative and absolute, of silver; the 
 comparison with gold remained at 11 and 12 to 1 
 from the 9th to the middle of the 16th century. It 
 required the excessive and sudden abundance, 
 springing from the working of the mines of Potosi, 
 
14 
 
 and in Peru, and of Zacatecas in Mexico, to reduce 
 the proportion to 14 and 15, the average rate at 
 which it remained in Europe until the end of the 
 last century. 
 
 II. 
 
 A change in the relative production of the precious 
 metals does not necessarily alter their monetary 
 value. In order to create an alteration in the rela- 
 tive values of gold and silver with the quantities 
 annually produced, the disturbing cause must be of 
 a somewhat permanent nature. Moreover, it is 
 necessary to examine, in connection, either with a 
 greater or less production, the causes which might 
 add to or diminish these results ; such as expenses 
 in working, the varied wants of consumption, and 
 the greater or less destruction of coin by wear and 
 tear, &c. 
 
 Monsieur de Humboldt remarks, that during the 
 ten years, from 1817 to 1827, there was coined in 
 Great Britain, above 1 1,2 94,000 marcs of gold; that 
 is nearly one milliard of francs, and more than 
 2 100,000,000 francs per annum, without any influ- 
 ence having been produced by such extensive pur- 
 chases on the relation of gold to silver: the pro- 
 
 Ibs. 797,629=f 37,209,423 2 4,000,000 
 
15 
 
 portion, which was as 1 to 14'97, never exceeded 
 1 to 15-60; or shewing a rise of not more than 4-^- 
 per cent. Such was the case when England, which 
 for above twenty years had had only a paper 
 circulation, re-established a metallic currency, and 
 attracted the coin and the bars of gold dispersed 
 throughout Europe. During these ten years she 
 absorbed, or nearly absorbed, an amount of gold 
 which perhaps equalled the production of the whole 
 world, and certainly exceeded the import of gold, 
 daring that period, into all the great commercial 
 depots in the civilized world. It would not enter 
 into our subject to examine at what sacrifices 
 England made this monetary revival ; but the 
 equilibrium once restored, and the empire of Britain 
 having placed herself in harmony with the rest 
 of Europe, it does appear wonderful that it did 
 not cost more than a premium of 4 per cent, 
 to have attracted a quantity of gold, probably 
 equal to the half or one-third of that possessed 
 by the whole of Europe. And the wonder increases 
 when we remember, that the Mint of London, which 
 in 1814, 1815, and 1816, had not coined a single 
 sovereign, issued at once, in 1825, 9,520,758 sterling 
 (about 240,000,000 of francs), which must have 
 been consequently abstracted from trade in the 
 course of a few months. Political commotions 
 brought about other variations in the price of the 
 precious metals. It is well known, that on the news 
 
16 
 
 of the landing of Napoleon in 1815, gold rose 10 
 per cent, in London. 
 
 To explain how this sudden collection of gold, 
 effected by Great Britain with as much persever- 
 ance as vigour, did not bring about a general crisis ; 
 it has been said, and not without reason, that the 
 quantity of the precious metals now existing in 
 the shape of money, rendered the oscillations in its 
 production and supply as money, less sensibly felt. 
 It should be recollected, that if the metallic values 
 were so greatly depreciated by the discoveries of 
 America, this state referred to the existing condition 
 of Europe, exhausted both of silver and gold. The 
 difference thus exhibited between the two periods is 
 very evident ; but it does not appear to be sufficient 
 to account for the facility with which the circulation 
 may increase in the present day, without affecting the 
 price of silver or gold. It may be as well to add, that 
 this movement, which appears to convey life through- 
 out every artery of commerce, is not fed now solely, 
 as in olden times, and during the middle ages, by the 
 precious metals. Metallic money now forms but a 
 small portion of the total circulation, if we take into 
 account the mass of bank notes, bills of exchange, 
 drafts and bankers' cheques, which complete the 
 amount of a circulating medium of exchange; this, 
 at the present day, taken as a whole, is something 
 almost indefinite: it appears to defy all calculation; 
 and we might almost say that the excess in the pro- 
 
17 
 
 duction of gold and silver now need not necessarily 
 produce more influence than the waves of the sea 
 on the permanent level of the ocean. 
 
 At the same time that the depreciation of gold 
 and silver under any general form becomes less 
 probable, the increasing facility of communication, 
 and the greater mutual dependence of nations in 
 matters of credit, renders any great local difference 
 in the value of money more improbable. When- 
 ever the precious metals become in excess in one 
 country, the surplus quickly reaches its neighbour. 
 Let a sudden scarcity of food, or any other cause, 
 create a drain of specie, the consequently increased 
 value of money will soon draw back that which 
 has been exported. The cost of transport, and 
 the premium of insurance of gold, are the limits 
 of the variations in the rates of exchange; and 
 the charges are being diminished every day, thanks 
 to railroads and steam communications. Before 
 the wonderful progress in the development of 
 industry from the commencement of the nine- 
 teenth century, we have seen the changes occurring 
 at different periods, in the relative production of 
 the precious metals, without any corresponding 
 alteration in their relative values. At the close 
 of the fifteenth century, it is true, that America, 
 furnishing nothing but gold, and this metal having 
 accumulated in Spain, Queen Isabella of Castile 
 was forced to alter the relative standard of gold 
 
 c 
 
18 
 
 and silver. After the first half of the 16th 
 century, the production of gold having ceased to 
 preponderate, and silver being imported in great 
 abundance, the value of the inferior metal under- 
 went such a depreciation, that the governments of 
 Europe, yielding to the force of circumstances, 
 changed its relative legal value ; but with these two 
 exceptions in the monetary laws, one purely local, 
 and the other European, we observe the production 
 of each metal extend and diminish alternately, 
 without any relative alteration in value of sufficient 
 importance to attract public attention. 
 
 " From the year 1645 to the commencement 
 of the 18th century," says M. Michel Chevalier, 
 " silver took the lead in a most remarkable manner. 
 Then occurred the bright days of the mines in 
 Potosi, and the production of silver exceeded that 
 of gold, weight for weight, in the proportion of 60 
 to 1 ; after that, and without any diminution in the 
 produce of silver, came the glorious time for the 
 Brazilian gold mines. Simultaneously appeared 
 the auriferous regions of Chico, Antioguia, and 
 Pepayou. The commercial world received from 
 America 1 kilogramme 1 of gold for every 30 kilo- 
 
 1 A kilogramme is equal to about 2 Ibs. 8 oz. 3 dwts. 2 grs. r 
 and is worth about 125; 30 kilogrammes would therefore 
 weigh about 80 Ibs. 3oz. 20 dwts. 12 grs., and would be worth 
 about 3750. 
 
19 
 
 grammes of silver. Thus passed the middle of the 
 the 17th century. Then the silver mines of Mexico 
 put forth all their splendour, and the proportion 
 increased to 40 to 1. The Brazilian mines began 
 to diminish, whilst those of Mexico continued to 
 increase in production; and, at the beginning of 
 the next century, silver exceeded gold in the pro- 
 portion of 57 to 1. In 1846 the production of silver 
 still continued to predominate, and we are now at 
 the proportion again of about 40 to 1." 
 
 Humboldt's calculations differ but little from 
 those of M. Michel Chevalier. This great authority 
 considers that the import of gold until the first years 
 in the 18th century, bore the proportion to silver 
 of 1 to 65. Let either of these suppositions be 
 true, there can be little doubt, that the relative 
 weight of supply of the two metals varied by one 
 half, without any serious alteration in their relative 
 price; which surely proves that gold was essen- 
 tially required, and that the increase of production 
 did but fill up the gap, which, as far as the 18th 
 century, the progress of civilization and of luxury 
 had created, without an adequate means of supply. 
 
 In ancient times, the relative value of the two 
 metals appears to have been almost entirely 
 governed by the quantities produced and brought 
 to market. A pound of gold was worth eight or 
 ten pounds of silver, according as the quantity 
 brought to market varied in the like proportion. 
 
 c2 
 
20 
 
 The simplicity of commercial interests, in a state 
 of society when neither luxurious arts or industry 
 were thought of, offered no inducements for the col- 
 lection of gold or silver for their use as money, 
 excepting on account of their relative scarcity; 
 but when fighting ceased to be the principal occu- 
 pation of mankind, and labour began to be held in 
 some estimation, an end was put to this patriarchal 
 state: if the people lost their primitive simplicity, 
 the relation of supply and demand no longer de- 
 pended exclusively on the proportionate production 
 of the two metals ; other causes affecting a rise and 
 fall began to operate on prices. 
 
 When the precious metals were nearly absorbed 
 in the supply of money, their commercial value had 
 no other element to influence an alteration than 
 the requirements of circulation ; the monetary value 
 governed the commercial price. But, at the present 
 time the contrary is the case : the greater the degree 
 of civilization, and the greater the increase of a 
 taste for luxuries, the more does the demand for 
 the precious metals for other objects exceed the 
 want of them for coin. Mr. Jacob, whose work 
 on the precious metals appeared in 1831, places 
 a value of 1 149,000,000 francs on the gold and silver 
 annually used for articles of jewellery and plate in 
 Europe and America. 
 
 5,960,000 
 
21 
 
 During the last twenty years the progress of 
 luxury amongst the industrious and commercial 
 nations of the world has been enormous. The 
 moveable wealth of France and England has made 
 prodigious accumulations. What family is there so 
 poor as not to have some article of plate ? Gilding 
 is no longer confined to the decorations of temples 
 and palaces ; it is found in the most humble cottage. 
 To what a length may it not reach if the taste 
 should increase for gilding the dresses of ladies, and 
 for covering the uniforms of our men with gold or 
 silver lace? 
 
 On the whole, then, it appears that the demand 
 for gold and silver, as articles of commerce, is likely 
 to exceed the demand for the precious metals solely 
 for use as money. This is a new point; and 
 we must not lose sight of it in endeavouring to 
 appreciate the effect which an increase or diminu- 
 tion in the production of the precious metals may 
 have, both on their price and on their relative 
 value. 
 
 Without noting the variations which have oc- 
 curred from one century to another, in the produc- 
 tion and in the importation of gold and silver, in 
 order to recapitulate the quantities of the precious 
 metals which America has poured into the Euro- 
 pean markets in 318 years, from the discovery of 
 Hispaniola to the revolution in Mexico, M. de 
 Humboldt considers the production of gold to have 
 
22 
 
 been a 2, 38 1,600 kilogrammes, and that of silver 
 2 110,362, 222 kilogrammes: making a total value of 
 about 3 32 "milliards" of francs: the weight of gold 
 imported represents about l-47th of that of silver. 
 It does not appear probable, that the produce of 
 gold in other parts during these three centuries has 
 materially altered these proportions. Admitting that 
 when first the Mexican revolution retarded the 
 working of their silver mines, the amount of coined 
 money throughout Europe represented a value of 4 8 
 "milliards" of francs, of which 5 6 "milliards" were 
 in silver, and 6 2 "milliards" in gold, the relative 
 quantity in weight would still have been as 47 to 1 ; 
 and yet the relative monied value, thirty years since, 
 varied in Europe between 1 to 14^, and 1 to 15-f-. 
 Thus, in the value of the precious metals, the differ- 
 ence was three times less than in their weight. 
 
 Nothing is more difficult in matters relating to 
 money than to present statistics which may be 
 considered as an approximation to truth. It would 
 appear that as gold and silver are used as the deno- 
 minators of value, generally, throughout the world, 
 all the phenomena connected with their production 
 and circulation ought to be noted with the greatest 
 precision : they ought to be the points to which the 
 
 1 lbs.6,381,530=297,700,000 4 320,000,000 
 
 * lbs.295,717,106=887,151,318 5 240,000,000 
 
 3 1,280,000,000 6 80,000,000 
 
23 
 
 attention of statisticians should be "par excellence" 
 directed. "What can be more important, in an eco- 
 nomical point of view, than to establish a regular 
 scale, indicating the rapidity of every movement 
 connected with the subject, and acting as a guage 
 of its extent? 
 
 Divers causes appear, however, hitherto to have 
 prevented such a desideratum. In the first place, 
 gold and silver producing countries have generally 
 been in a rude state of civilization; and as unable 
 to apply rules for the public weal, as to employ 
 machinery to aid their industry. Thus, even in the 
 registry in Mexico under the Spanish rule, of all 
 the money coined at their mint, and for ascertain- 
 ing the amount produced in the mines by the pro- 
 portion of the tax due to government, which ought 
 to be levied thereon by the hundred- weight, it is 
 absolutely necessary to take into account all that 
 quantity which escapes the vigilance of the tax- 
 collector, and which is either sent into the interior, 
 or exported clandestinely. 
 
 "What is the sum of the precious metals really 
 produced at any given time ? What is the pro- 
 portion of such production which, when exported, 
 acts as a regulator of the prices in Europe ? How 
 are the channels formed which sometimes direct 
 the stream of commerce towards the east, and 
 sometimes towards the west, in the distribution 
 of the metallic wealth of the world ? All such 
 
24 
 
 problems, as regards the past, must probably remain 
 unsolved. The enquiry becomes more easy when 
 referring to our own times; but even then large 
 allowances for incorrectness of data must necessarily 
 be made. 
 
 At the beginning of this century, according to 
 M. de Humboldt, gold and silver were imported 
 annually into Europe in the relative proportions of 
 about 1 to 55; that is, 1 15, 800 kilogrammes of gold 
 to 2 869,960 kilogrammes of silver. M. Michel Che- 
 valier, stating, not the import but the production, 
 calculates it at 3 23,700 kilogrammes of gold against 
 4 900,000 kilogrammes of silver, or in the proportion 
 of 1 to 38 ; but the gold of Africa and Asia, com- 
 prised in this statement, never really found its way 
 into European markets except in the smallest quan- 
 tities, and in such amounts as could have no appre- 
 ciable influence on the commercial prices of the 
 metals. From 1810 to 1830, according to Mr. 
 Jacob, the produce of America diminished by one 
 half. As the reduction refers principally to silver, 
 that is to say, to those mines which required both 
 capital and labor, it is fair to assume that, at least 
 during the first part of this period, the relative 
 proportion of gold to silver would have increased ; 
 but we have no means of verifying figures which 
 
 1 Ibs. 42,336=1,975,000 3 Ibs. 63,504=2,962,500 
 
 2 lbs.2,331,070=6,923,210 4 Ibs.2,411,562=7,234,686 
 
25 
 
 appear to justify what would otherwise rest solely 
 on the analogy of the case. 
 
 In 1847, when the general working of the 
 auriferous region of the Oural Mountains was at 
 its meridian, M. Chevalier considers the annual 
 production of gold throughout the world to have 
 been '63,250 kilogrammes, and that of silver 
 2 875,000 kilogrammes. This would be 3 25,000 
 kilogrammes less of silver, and 4 30,000 kilogrammes 
 more of gold, than at the beginning of the century. 
 At these figures gold stands in reference to silver 
 as 1 to 14. The return from these gold regions 
 appears to have been greatly over-estimated. I find 
 in a table, published in the " Times" of May, 1852, 
 statements which appear to be founded on correct 
 data, and which bring the production of gold up to 
 42,800 kilogrammes that is, to 5 147,400,000 francs. 
 
 This result, then, is remarkable. The 17th cen- 
 tury produced 1 Ib. of gold to 60 Ib. of silver. In the 
 18th century the production was as 1 Ib. to 301bs. 
 At the beginning of the 19th century silver was 
 again abundant, and appeared in quantity as 1 to 50. 
 Towards the year 1847 the production of gold again 
 increased, and the relative proportions were as 1 to 
 20. The development of the Siberian mines, which 
 
 1 Ibs. 169,479=7,906,250 Ibs. 66,989=200,967 
 
 2 Ibs. 2,344,574=7,033,792 4 Ibs. 80,386=3,750,000 
 
 5 5,896,000 
 
26 
 
 has so materially changed the relative production of 
 the two metals, has produced no sensible alteration 
 in price. Will it be the same with the wonderful 
 discoveries in California and Australia? To solve 
 this question, it will be desirable to examine accu- 
 rately the actual state of the production of gold and 
 silver throughout the world. 
 
 III. 
 
 Before entering into this inquiry, it may be 
 worth while to examine a circumstance of late 
 occurrence, relating to monetary statistics, which 
 has given rise to some discussion, but which has 
 not yet been explained; I allude to the fall in the 
 price of gold, and the corresponding rise in that of 
 silver, throughout Europe, towards the end of 1850 
 and the beginning of 1851. 
 
 At that period Russia had rather less gold than 
 usual to exchange against the produce of the West ; 
 and since 1847 the working of the Altai mines had 
 been on the decline : at all events, the government did 
 not appear inclined to allow gold to be exchanged ; 
 for in 1848 and 1849 its export had been forbidden. 
 In 1850 the state of the exchanges did not admit 
 of an export of gold, and a part of the 4 k per cent, 
 loan, contracted at that period by the Cabinet of St. 
 Petersburg, was remitted to Russia, both in gold 
 
27 
 
 and silver, from England. Doubtless, in spite of 
 the prohibition, Russian gold found its way into 
 other parts of Europe; it was calculated that 
 between 1849 and the first few months of 1850, 
 the great commercial towns in Western Europe 
 must have received from x 60,000,000 to 2 70,000,000 
 francs from Russia; but this was not equivalent to 
 the large sums paid for grain imported from Odessa 
 and Riga during the famine of 1846-1847. There 
 could have been no real increase in the metallic 
 reserves of Western Europe during that period. 
 
 The same remark will hold good towards America. 
 The import of gold thence in 1849 and 1850 could 
 not have done more than replace the gold coin 
 exported to the United States two years earlier, in 
 payment of bread stuffs and salt provisions. A 
 proof of this will be found by examining the official 
 reports of the mints of the United States. These 
 mints, which from the year 1834 that is, since the 
 working of the gold fields of Carolina, had coined 
 gold at the average rate of 2,500,000 dollars 
 ( 3 13,500,000 francs) per annum, in 1847 put into 
 circulation about 20,000,000 dollars ( 4 104,000,000 
 francs ) . At that time Californian gold was unknown : 
 the rich "placers" of that country did not begin 
 to kindle the gold fever, first in America, and 
 
 1 2,400,000 3 540,000 
 
 2 2,800,000 * 4,160,000 
 
28 
 
 subsequently in Europe, until 1848. Californian 
 gold, before it found its way to the Old World, 
 had to supply the wants of the New. It is 
 exported thence in the shape of eagles and double 
 eagles, bearing the stamp of the Eepublic. In 
 1848 the coined gold in the United States did 
 not amount to J 4,000,000 dollars, and it did not 
 exceed 2 9,000,000 in 1849. With this small supply 
 an export could not be expected. In 1850 the 
 Californian stream began to flow, and the mint 
 of the United States, having received gold dust 
 and bars to the extent of 3 40,000,000 dollars, coined 
 4 32,000,000 (about 171,000,000 francs.) Supposing 
 that the bulk of this coin had been exported to 
 Europe, such a supply would but have restored 
 the loss in the circulating medium which had oc- 
 occurred in 1846. We had exchanged our gold 
 against grain; it was returned to us against the 
 silks, wines, and other articles from France. The 
 monetary disturbance of 1850 must not therefore 
 be set down to the score of an excess of im- 
 ports : the rich supplies from Siberia and Cali- 
 fornia could then only have acted prospectively. 
 The real cause is to be found in the measures 
 hastily and somewhat rashly adopted by various 
 European governments. To prevent future evil 
 
 1 800,000 3 8,000,000 
 
 2 1,800,000 4 6,400,000 
 
they created immediate mischief; and, in order to 
 shelter themselves from the risk of a future depre- 
 ciation of gold, they directly produced it. 
 
 The crisis of 1850, thus examined, explains 
 itself. On the one hand, silver, being annually 
 taken out of the market by circulation, was not 
 to be met with for other demands; on the other 
 hand, gold, excluded by some governments from 
 their circulation, flowed to those countries where it 
 was still used as legal coin, and produced there, at 
 least, a temporary superabundance. Then occurred 
 the fall in the price of gold, and the rise in the price 
 of silver; which together shewed a divergence of 
 8 per cent, between their former relative prices. 
 
 The explanation we have endeavoured to give 
 appears to become clearer as we investigate 
 further into the subject. Let us first examine the 
 facts relating to the scarcity of silver. England, 
 the principal market of Europe for the precious 
 metals, witnessed, in 1850, a reduction of about 
 1 27,000,000 francs in the ordinary import. This 
 applied principally to silver. Remittances from 
 India, generally about 2 20,000,000 fr., were almost 
 completely stopped; those from Turkey and Spain 
 were materially diminished. At the same time about 
 1,000,000 sterling was required to be shipped to 
 India, and remittances were made by Messrs. Baring 
 
 1 1,080,000 2 800,000 
 
30 
 
 to St. Petersburg of 1 8,000,000 to 2 10,000,000 
 francs more, in silver. Germany and Holland re- 
 quired more than their usual supply. The 
 Societe Maritime of Berlin had imported silver to 
 the extent of 3 3,000,000 or 4 4,000,000 thalers; so 
 that, altogether, the import into England, having 
 diminished in 1850 to the extent of about 1,000,000 
 sterling, the export had been in excess by about 
 double that amount; reducing the metallic reserve 
 by about 5 75,000,000 francs. In addition to which, 
 Spain and Eussia, having prohibited the export 
 of silver, the exchanges with those countries could 
 hardly be operated upon effectively by the trans- 
 mission of this kind of specie. It is easy, then, 
 to conceive, that where no modification of the 
 monetary laws had taken place, the premium on 
 gold passed to a premium on silver. 
 
 This will explain the reason for at least a 
 temporary abundance and depression in the price 
 of gold, especially on the gold market of Paris. 
 There is no ground for imputing the change to 
 California, from whence the supplies were of little 
 moment, until the end of December, 1850. England 
 so far had only received silver from the United 
 States, and the Californian gold, which had found 
 
 1 320,000 3 450,000 
 
 2 400,000 * 600,000 
 
 5 3,000,000 
 
31 
 
 its way by Panama, during the year, did not 
 exceed, according to official returns, 682,000, 
 or 17,050,000 francs. The Mint in London did 
 not coin gold to a greater extent in 1850 than 
 1,492,000, or 37,300,000 francs, which is con- 
 clusive against any very large importation. 
 
 The market of Paris might have experienced 
 a superabundance of gold, in consequence of the 
 demonetization of gold coin in Spain and Portugal, 
 and by the influx of Belgian and other foreign gold 
 coin which had been circulating in Belgium; and 
 it should be added, that England imported into 
 France, for the payment of railway shares, pro- 
 bably to the extent of 1,000,000 sterling; but 
 the predominating cause of the depreciation was 
 undoubtedly the demonetization of gold in Holland, 
 for that step had the immediate effect of cancelling 
 at once the value of the gold coin there in circu- 
 lation, and of throwing simultaneously an amount 
 of gold on the commercial market, almost equal 
 to the whole of the annual quantity of gold pro- 
 duced in California. 
 
 From 1816 to 1847 Holland had followed the 
 example of France in admitting a double monetary 
 standard. Gold and silver were both received in 
 legal payment. The law of November 26th, 1847, 
 altered this state of things; one standard only was 
 allowed, and the silver florin of 3 grammes 450 
 milligrammes fineness, became the monetary unit: 
 
32 
 
 this simplification of the national coin, however, 
 was adopted in theory only; the application of 
 the system was postponed. 
 
 The article 23 of the law decreed, that " before 
 December 31st, 1850, other legislative arrangements 
 should be enacted concerning the gold coins of five 
 and ten florins, but that till these new arrangements 
 were carried out, the gold coin should continue in 
 legal circulation. The Dutch government might, 
 therefore, retain the legal circulation of the gold 
 coin, by applying to the States-General to prolong 
 the period of the law of November 26th, 1847; but 
 it preferred to carry out the system to its fullest 
 extent. On August 6th, 1849, the government 
 laid before the Assembly, the scheme of a law 
 to " demonetize " the pieces of five and ten florins, 
 and leaving to the administration the moment for 
 its execution. At the same time the government 
 demanded authority for the issue of notes to the 
 amount of J 30,000,000 florins, to buy in the gold 
 coin, which although not in legal circulation, might 
 yet continue to serve as payment at its conventional 
 value. 
 
 In the "Expose des Motifs "the Minister of Finance, 
 M. Van Hall, acknowledged that the depreciation 
 of gold would not be immediate. " We must ex- 
 amine the question," he said, " in order to know 
 
 2,500,000 
 
33 
 
 whether the proportionate value of gold ajid silver 
 has undergone much variation in consequence of- 
 the discovery of the California!! mines. The govern- 
 ment is of opinion that as yet this is not the case. 
 In fact, a document communicated to the Assembly 
 proves that the proportion between gold and silver 
 of 1 to 15*60 has been found to exist but once. 
 Sixty-eight quotations of the Exchange of Paris 
 mark the price of gold higher, and only four lower 
 than this proportion ; at the Exchange at Amsterdam, 
 we find fifty-five quotations above, and fifteen only 
 below. For the present there is no fear of too much 
 gold being imported for the purpose of exporting 
 silver. It should also be observed, that the high 
 price of gold in France has latterly been occasioned 
 by political events. 
 
 " It is well known that the price of gold in 
 Holland is regulated by the exchange on London. 
 If England sends more gold to the Continent than 
 she receives from it, then the rate of exchange 
 on London rises, and gold is obtainable only at an 
 agio. On the contrary, if England receives from 
 the Continent more gold than she exports, the ex- 
 change on London is low in Holland, and gold is 
 plentiful. Peculiar circumstances may of course 
 modify these general rules ; for instance, it is possible 
 that England may have payments to make in Hol- 
 land greater than Holland has in England, while 
 the case is the reverse between England and the 
 
 D 
 
34 
 
 other countries of Europe ; then the state- of exchange 
 in those countries would naturally react upon 
 ours. 
 
 " It often happens that other circumstances occur 
 seeming to contradict these principles. Thus in 
 August last (1849), pieces of ten florins were in 
 demand in Holland for foreign remittances, although 
 the price of bar gold was only at 1-J per cent. agio. 
 Again, the influence of the state of exchange on 
 the importation of gold may recently have been 
 observed; not long ago, gold was exported from 
 England to the United States at the very moment 
 that gold was supposed to be arriving from America 
 in great quantities." I have repeated at full length 
 these remarkable admissions, to prove that the Dutch 
 government was not arming itself against a press- 
 ing or even nearly approaching danger, and that 
 their precautions were not even taken with fore- 
 sight. To theoretical errors were added practical 
 faults; the Minister of Finance had not measured 
 the importance of the operation with sufficient 
 accuracy; he estimated the amount of gold coin 
 in Holland at 1 96,500,000 florins; it proved to be 
 '172,000,000 florins. 
 
 The law was voted on September 17th, 1849, and 
 the government received the full power they had 
 demanded. A royal command appeared on June 
 
 1 8,041,666 2 14,333,633 
 
35 
 
 9th, for the execution of the measure. The follow- 
 ing are the principal articles: "1st. The pieces of 
 ten and five florins shall cease to be in circulation 
 as legal payment from Sunday, June 23rd, 1850, 
 but they may continue to be employed in commerce : 
 that is to say, that these coins may be accepted 
 in payment at a conventional value. 2nd. These 
 coins shall be received in payment by govern- 
 ment, and by the collectors of the revenues of 
 the kingdom, at their nominal value, till July 31st, 
 1850, inclusive." 
 
 At the time this notice was published, it ap- 
 peared that the exchange of gold for bank-notes 
 would take place under the most favourable auspices. 
 Gold was at a tolerably high premium in the market 
 of Amsterdam, bills of exchange on foreign countries 
 were scarce, and consequently the payments of 
 international commerce could very advantageously 
 be made in the precious metals. Moreover, the 
 government treasury was full, and the Netherlands 
 bank declared itself ready to assist efficiently in the 
 operation. But all these chances of success were 
 destroyed by the precipitancy of the government. 
 A complete panic was occasioned by the short 
 period granted to the holders of gold coin: the 
 people hastened to pour their gold into the state 
 treasury, (which could not receive it all) or else to 
 send it abroad. The government had imagined 
 that the sum likely to be exchanged, would no 
 
 D 2 
 
36 
 
 exceed 1 30,000,000 florins : they had miscalculated 
 by two-fifths; for the sum amounted to 2 50,000,000 
 florins. The 30,000,000 of paper money that they 
 had been authorized to issue, together with the 
 money in the treasury at their disposal, not being 
 sufficient to pay for the amount of gold presented, 
 they were obliged to have recourse to the bank of 
 the Netherlands, and to borrow a sum of 3 6,500,000 
 florins, at an interest, moderate it must be admitted, 
 of 2^ per cent, per annum. 
 
 The exchange being effected, it was necessary for 
 the government to find a means of disposing of the 
 gold withdrawn from circulation. It could be sold 
 only in foreign markets ; and there, private industry 
 had forestalled the government, and the price of 
 gold had fallen in consequence of the number of 
 Guillaumes brought for sale. At first the Dutch 
 government suffered only a small loss, owing to 
 a momentary reaction in favour of gold coin ; but 
 the first sales having increased the depreciation, they 
 were obliged, for fear of greatly adding to their loss, 
 to stop after having disposed of 4 21,836,000 florins: 
 the loss then amounted to 5 244,446 florins, being 
 about I-Y^O per cent. By the middle of October, 
 gold had fallen in value 2 per cent, below the legal 
 
 2,500,000 s 514,583 
 
 4,166,666 4 l,819,66G 
 
 5 20,370 
 
37 
 
 price, and by the middle of December, 4 per cent. 
 At this period, the pieces of five and ten florins, 
 banished from Holland, were scattered about in 
 the different markets of Europe: London had re- 
 ceived them to the amount of 600,000; Paris to 
 the amount of 1 63,000,000 francs; Germany had 
 absorbed the rest: excepting from ~ 28,000,000 to 
 3 2 9,000,000 florins, still lying unsold in the treasury 
 of the Netherlands. 
 
 The Guillaumes have continued to be melted 
 and coined, in Paris, into 20 and 40 franc pieces; 
 for I find in an official record furnished me by the 
 President of the Mint, that Dutch coin was ex- 
 changed at Paris in the last six months of 1850, to 
 the amount of 4 40,934,053 francs; and in the first 
 six months of 1851, to the amount of 5 70,901,597 
 francs, altogether 6 111,835,650 francs. 
 
 The gold coinage of Holland, from 1816 to 1847, 
 was 172,583,955 florins, equal to 7 362,000,000 
 francs. Supposing that of this only two-thirds 
 was in existence in this shape of coin in 1850, 
 there would be 115,000,000 florins, or 8 236,000,000 
 francs, all at once withdrawn from circulation, 
 and thrown upon the gold market: is it possible 
 
 1 2,520,000 5 2,836,064 
 
 2 2,333,333 6 4,473,426 
 
 2,416,666 7 14,480,000 
 
 4 1,637,362 9,440,000 
 
38 
 
 that the price of gold could be otherwise than 
 affected ? The gold thus suddenly demonetized 
 equalled at least twice the annual produce of the 
 world, previous to the discovery of California. 
 The Mint of Paris alone, which had not struck 
 above 1 2 7,000,000 francs in gold during the year 
 1849, coined 2 85,000,000 in .1850, and 3 269,000 
 in 1851. 
 
 Fortunately, the crisis was of short duration ; the 
 gold coined in Paris rapidly flowed either towards 
 Piedmont, to pay the first instalment of their loan, or 
 to Milan to pay for silks bought by Lyons and St. 
 Etienne. Credit is at a low ebb in Italy, there is 
 little paper circulation, tending to simplify accounts, 
 and taking the place of specie in the adjustment of 
 debts ; gold is therefore always in demand, and the 
 supply was speedily absorbed. Certainly, the appre- 
 hensions of the Dutch Government have proved 
 hitherto groundless, and the desired object has been 
 but partially attained: silver, having become the 
 sole standard, has found its way (somewhat in ex- 
 cess) throughout the country, but the loss of gold 
 coin has given rise to a small note paper-circulation: 
 there is now a paper money of 10 and 5 florins 
 (21 francs and 10^-), which, although at first but 
 provisionally issued, will probably become per- 
 
 1,080,000 * 3,400,000 
 
 * 10,760,000 
 
39 
 
 inanent circulation. Holland is following the steps 
 of Prussia and Austria. The Dutch Government 
 supposed that, notwithstanding the demonetization 
 of gold, the coinage might remain in circulation, and 
 be voluntarily accepted for its intrinsic value. This 
 was a misconception of the nature of money, which 
 is accepted as a circulating medium only on account 
 of its positive value. As might have been antici- 
 pated, gold has ceased to circulate in Holland, and 
 paper has taken its place. It is doubtful whether 
 the nation has gained by the change. 
 
 We think we have sufficiently considered the 
 subject of the fall in price of gold in 1850. During 
 the last eighteen months the production of this 
 metal has made immense progress. The crisis, 
 which was then imaginary, may have taken a more 
 serious turn, and may become hereafter a reality. 
 This we will now examine. 
 
 IV. 
 
 The three great gold districts, which have lately 
 grown into importance, are, the chain of the Oural 
 and Altai Mountains, California, and its exten- 
 sions to Sonora and Oregon, and the eastern and 
 southern districts of Australia; let us consider each 
 in its order. 
 
40 
 
 The washings of the Russian streams first aroused 
 public attention from the languor into which the 
 question of gold- working had fallen. The deposits 
 of the Oural, where the first discoveries were made, 
 never gave any extraordinary results ; the workings 
 appeared almost impracticable above the 60th de- 
 gree of latitude, and although begun on a great 
 scale above half a century ago, they have remained 
 almost stationary for the last fifteen years; the 
 annual returns, divided about equally between the 
 government and private individuals, scarcely ex- 
 ceeded *5,000 kilogrammes. 
 
 The Altai gold district was in a very different 
 position; in spite of the rigour of an inhospitable 
 climate, and the difficulties experienced from any 
 work of labour with a scanty population, the deve- 
 lopment of produce was extremely rapid. Begun 
 in 1828, the result, after the first eight years, was 
 2 1,7 2 2 kilogrammes, but from that time it increased 
 in a geometrical proportion ; it rose to 3 4,000 kilo- 
 grammes in 1840, to 4 10,000 in 1842, and exceeded 
 5 20,000 in 1847. 
 
 The year 1847 appears to have been the culmi- 
 nating point of the position of gold in Russia. The 
 ''Administration des Mines" report a produce of 
 
 1 Ibs. 13,397= 625,000 3 Ibs. 10,718=500,000 
 
 2 Ibs. 4,614= 215,250 4 Ibs. 26,795=l,250,000 
 
 5 Ibs. 53,590=2,500,000 
 
41 
 
 *1744 pouds, or 1 28,521 kilogrammes, as the com- 
 bined working of the Oural and Altai ; admitting that 
 one-fifth of the produce escaped the government tax, 
 the result of the gold produce of 1847, would be at 
 least 2 110,000,000 francs. From that time the de- 
 crease has been continuous. The official reports of 
 1848, give the figures at 1,726 pouds, or 3 28,252 
 kilogrammes ; 1592 pouds, or 4 26,077 kilogrammes in 
 1849; 1485 pouds, or 5 24,324 kilogrammes in 1850; 
 and 1,432 pouds, or 6 78,000,000 francs in 1 851. It 
 is to be observed that the reduction refers exclusively 
 to Siberia, east and west ; not only has the activity of 
 the workings in the Oural been undiminished, but it 
 has slightly increased: the produce of 1849 was 342 
 pouds, being 7 244 kilogrammes more than in 1845 
 The decrease of production appears to have been 
 principally caused by excessive taxation. The 
 working of the Siberian gold districts is divided 
 between the Government and private owners, and in 
 the division, the eastern side of the mountains has 
 been retained by the former, whilst the latter have 
 worked the western. The result has been an immense 
 loss to the public treasury, for whilst two-fifths of 
 
 1 Ibs. 76,422=3,565,125 4 Ibs. 69,873=3,259,625 
 
 * 4,400,00^0 5 Ibs. 65,176=3,040,500 
 8 Ibs. 75,705=3,531,500 . 3,120,000 
 
 7 Ibs. 653=30,500 
 
 * A poud is equal to about 36 Ibs. English ; and is worth about 
 
 1679. 
 
 E 
 
42 
 
 the washings of the Oural are from the government 
 reserves, the Altai districts do not yield above 5 
 to 6 per cent, of this produce. The Russian govern- 
 ment has endeavoured to collect by taxation what 
 is lost either by abstraction or the washings. The 
 tax was at first one-tenth of the net produce; it 
 was then raised to 15 per cent, and has since been 
 further increased. The new tax, however, only 
 applies to Siberia, east and west. It is a progres- 
 sive rate, divided amongst ten classes, the rate 
 varying from 5 per cent, on the raw produce, when 
 the working was from one to two pouds, up to 32 
 per cent, when the working amounted to 50 pouds 
 per annum. The whole tax, however, was, in 
 addition to another tax called "minier," also pro- 
 gressive, and varying, according to class, from four 
 to l ten roubles per pound of gold. 
 
 These exhorbitant taxes may have acted in two 
 ways, either as an encouragement to fraud, or as a 
 discouragement to production. At the distance at 
 which we live from Siberia, a country where the 
 light of public opinion has penetrated even less than 
 the rays of the sun, it is difficult to decide between 
 these two consequences, both perhaps equally proba- 
 ble. But the fact of the decrease remains undoubted, 
 and this decrease has been to the extent of one- 
 geventh in three years, or about 2 4,000 kilogrammes. 
 
 1 A Russian rouble is worth about 3s. 2d. 
 t Ihs 10,7 1 8= 500,000 
 
43 
 
 The working of the gold regions of Siberia has 
 not been of the democratic character which it has 
 assumed in California and Australia. There the 
 first comer, provided he were furnished with a 
 pickaxe, a bowl, a cradle, and a small store of pro- 
 visions, might, without further capital, pitch his tent 
 over some square yards of land, and dig until he 
 has made his fortune. With a license costing 60s. 
 in Australia, and with a tax of 20 dollars a year in 
 California, he may go where he pleases. It is not 
 the government which fixes his boundary, but the 
 regulations of the republic of miners, forming a com- 
 munity along the banks of a river, or at the foot of 
 a hill, forbidding one man to usurp a greater space 
 than he can work with his own hands; the miner 
 himself possessing nothing, and therefore, risking 
 nothing, may dispense with all calculations of 
 profit and loss. If the spot he has selected does not 
 answer his expectations, he shifts his ground, or his 
 occupation. Under any circumstances, the tax, not 
 bearing upon capital, and being moderate in amount, 
 is easily paid; a few days work is sufficient for it; 
 the remainder of his time during the year with his 
 bad or good luck, is at his own free disposal. Such 
 is not the case,in the Altai, where the aristocratic 
 forms attaching to all industry, either at the will of 
 the state, or from the force of circumstances, have 
 exerted their influence over the first commencement 
 of working the mineral districts. By the terms of 
 
44 
 
 the imperial decrees, concessions are only obtained 
 on special application, and for a term of twelve years, 
 and the portion assigned to each person never ex- 
 ceeds 100 sagenes (about 1 2 50 metres) by five wersts, 
 (about 5335 metres); the same person may, how- 
 ever, take several lots, provided they are separated 
 by a distance of five wersts. These contractors en- 
 gage a certain number of workmen, whom they pro- 
 vide with utensils and machinery, besides feeding 
 them and paying them high wages. Everything 
 connected with the arrangements entails consider- 
 able advance of capital, and when the chance of a 
 small return, or sometimes of no return at all, is 
 added to the heavy deduction to be paid to the state, 
 out of the raw material, is it surprizing that mem- 
 bers of this community are frequently unwilling to 
 extend their operations, and almost always anxious 
 to conceal the magnitude of their working? 
 
 It is said, that in keeping up the amount of the 
 tax, the Russian Government has had less in view 
 the advantage of a larger participation of interests 
 than a desire to check a kind of industry very 
 demoralizing in its nature. If such is really the 
 motive, it might be less critically censured. What- 
 ever the reason, so long as the Russian Government 
 
 1 A metre is equal to 39,371 English inches, a sagene is equal 
 to about 7 English feet, and a werst contains 1,166-jf- yards, or 
 3,500 feet, equal to about -|- of an English mile, 
 
45 
 
 considers it advisable to keep up the present taxa- 
 tion, it is not likely that the increase of production 
 of gold will be considerable ; it appears to be limited 
 for the present to an amount probably not exceed- 
 ing 1 90,000,000 ta 2 100,000,000 francs per annum. 
 
 The Spaniards those indefatigable treasure- 
 seekers who discovered the hidden riches of the 
 Cordilleras, had been in possession of California 
 for above two centuries. From the year 1602, 
 Sebastian Yiscaino, the founder of Monterey, had 
 learnt from the Indians, dispersed throughout that 
 country, that it abounded in gold and silver. 
 Nevertheless, instead of planting a colony of miners 
 to examine the soil, the Spaniards sent thither a 
 body of missionaries, who proclaimed the gospel, 
 and at the same time instructed the natives in the 
 rudiments of civilization and of agriculture. 
 
 In 1846 there was scarcely 10,000 of the original 
 Spanish Creoles, when a body of some hundreds of 
 adventurers from the United States, under General 
 Taylor, invaded and took possession of the country. 
 The Government of the Union, in demanding its 
 cession from Mexico, thought chiefly of an aggran- 
 disement of territory; they wanted ports on the 
 Pacific and a rival colony to Oregon. Little was it 
 expected that in the valleys which descended from 
 the Sierra Nevada would be found mines of gold 
 
 3,600,000 2 4,000,000 
 
46 
 
 likely to become the principal attractions to coloniza- 
 tion, and a district whose exuberant products would 
 be shortly disseminated throughout the markets of 
 Europe, as well as of America. 
 
 The extension of the population of California 
 which so speedily occurred, is greatly due to the 
 truly fabulous success of the first washings; the 
 miners naturally first planted themselves on the 
 richest " placers," they rather culled the produce, 
 than exhausted it; they frequently discovered 
 "pepites" weighing several ounces, if not pounds 
 of gold; a clever workman made his fortune in a 
 few days. 
 
 In June, 1848, Mr. Larkin, Consul of the United 
 States at Monterey, valued the day's work of a 
 gold seeker at an average of 25 to 15 dollars 
 ( l 133 to 267 francs.) Colonel Mason, in his report 
 of August, considered the produce of a day's work 
 of 4,000 European or Indian miners at 2 30,000 
 to 40.000 dollars, giving an average of about 10 
 dollars 3 (53 francs) to each workman. Captain 
 Folson writes about a month later, " I do not think 
 that there can exist richer deposits in the world. 
 I have myself ascertained that an active workman 
 can collect from 4 25 to 40 dollars per day, valuing 
 the gold at 16 dollars the ounce." Mr. Butler 
 
 1 5 to 10 3 2 2s. 6d. 
 
 2 6,000 to 8,000 4 5 to 8 
 
47 
 
 King, whose report is of still later date, places the 
 average day's work per man at about 16 dollars, or 
 one ounce of gold. 
 
 During the second period of working, when 
 the miners flocked to the " placers," and disputed 
 every inch of the golden soil, the yield began to 
 diminish in a very marked degree. A local mining 
 journal, the " Placer Times" of 26th October, 1850, 
 giving a resume of the proceedings af the season, 
 including the encampment from the Kiver de la 
 Plume to the River Consumnes, covering an extent 
 of about 100 miles, and occupied by 60,000 gold- 
 seekers, estimated the mean result of a day's work 
 at from six dollars on the River de la Plume, to four 
 dollars on the 1'Yuba and Ours, and five dollars on 
 the American Fork. The information collected by 
 our consuls at the beginning of 1850, gives a result 
 of one to two ounces per day in the Valley of the 
 Sacramento, and from one to four in the newer 
 regions of St. Joaquim. The diminishing produce, 
 comparing one year with the other, was not without 
 some compensation. If the miner gained less, he did 
 not spend as much. The extravagant rise on all sorts 
 of provisions, clothes, and tools, had been brought 
 down to a more reasonable limit : they no longer 
 paid J one dollar for a pound of bread; 2 eighty 
 dollars for an outer covering; 3 fifty dollars a-day 
 
 i 4s. * 16 a 10 
 
48 
 
 for the use of a cart with two oxen, or 1 5000 dol- 
 lars for a cask of brandy. An artizan could no longer 
 command sixteen dollars for a day's work. Europe, 
 the United States, and other nations, shipped to Cali- 
 fornia cargoes of provisions and of manufactured 
 goods ; competition soon lowered the prices. Roads 
 were made from the "placers" to San Francisco; 
 bridges were thrown over the rivers ; they established 
 stores of provisions and merchandize at every 
 canteen. Towns sprung up like mushrooms, and 
 in 1850 San Francisco numbered 50,000 inhabit- 
 ants. The production of gold in California appears 
 to have now arrived at its third period. The 
 miners have acquired a certain experience, their 
 modes of working are less primitive, and they are 
 more settled. The want of order is diminishing, and 
 the average produce is increasing. The accounts 
 from San Francisco in April, 1852, mentioned 
 " placers" in the valley of the Sacramento, where 
 a day's working yielded from 2 fifteen to twenty 
 dollars, and others on the frontier of Oregon, where 
 the average was from 3 fi ve to ten. On the frontier of 
 Sonora the washings of the auriferous clay yielded 
 4 seven to eight dollars a day with the roughest 
 description of work; all agreed that eight hours 
 hard work should produce everywhere from six 
 
 1 1000 3 l to 2. 
 
 2 3 to 4. * 28s. to 32; 
 
49 
 
 to 1 eight dollars, if the plain be rich ; and as the 
 miner could live on from - two to three dollars a 
 day, he might reckon on a gain of from 3 400 to 
 500 dollars during the season. However, by the 
 latest accounts, it would appear that the " placers" 
 are beginning to be exhausted. 100,000 miners 
 turning over continuously for three years the allu- 
 vial sands, (already successfully explored by the 
 first comers in 1848 and 1849,) could hardly fail 
 to extract everything of value. It remains now to 
 explore the auriferous quartz viens which may ex- 
 tend to the centre of the Sierra Nevada. This new 
 work, however, requires large capital, and exten- 
 sive combinations. The success of such operations 
 has hitherto been but moderate. 
 
 The auriferous richness of the quartz rocks in 
 California appears sufficient to remunerate the 
 speculator; and foreign capital is not deficient at 
 St. Francisco. Whence is it, then, that the quartz 
 mines have hitherto been but slightly attractive ? 
 It has arisen from the want of the requisite and 
 essential conditions for the progress of such 
 undertakings. 
 
 Property in "placers" or in mines is not yet suf- 
 ficiently secure ; it is neither yet placed fully 
 under the safeguard of law, nor is it protected by 
 
 1 24s. to 32s. 2 8s. to 12s. 
 
 3 80 to 100 
 
 F 
 
50 
 
 police regulations. Anarchy still reigns in this new 
 country ; not only have the miners to defend their 
 persons and their acquisitions against the incursions 
 from Indian tribes ; not only are crimes and offences 
 common (lynch law maintaining a permitted exis- 
 tence instead of laws and police); but every one 
 appears to hold his property by right of first comer : 
 a miner choses the spot he likes best; a strong arm 
 and a carbine, with a steady eye, are his title 
 deeds. To seize upon a rich "placer" from a miner 
 too weak to resist, is called in the slang of the 
 district, to " jump a claim." The President of the 
 United States himself, stated in his last message, 
 that " The mineral lands should remain free to 
 every citizen;" and the Secretary of State has 
 added, " that the right of occupancy should be sub- 
 mitted only to such laws as the miners themselves 
 thought fit to make." 
 
 The continuous flow of emigration, and the con- 
 tinuous working of the gold districts, appear to 
 indicate, that in spite of many reverses and suffer- 
 ings, the mass of emigrants consider the result as 
 likely to be profitable. "Without approaching to 
 the fabulous accounts of the early adventurers, these 
 results have certainly largely exceeded in magnifi- 
 cence those of any former period in history; let 
 us endeavour to particularize some of them. 
 
 Mr. Butler King, in his report to the Secretary 
 of State, in 1850, after a careful examination of 
 
51 
 
 California, values the washings and gold working 
 of the two years, 1848 and 1849, at * 40,000,000 
 dollars. The basis of this calculation, the first 
 officially presented, was a produce of 1000 dollars 
 ( 2 5350 francs) per miner, per annum. 
 
 According to Mr. Butler King, American emigra- 
 tion hardly began to flow towards California until 
 September, 1849; up to that period, foreigners, 
 principally from Mexico and Oregon, had reaped 
 all the profit of the washings. The San Francisco 
 Herald estimated, that at the end of 1850, the gold 
 produce of California, for the twenty-one months 
 between 1 April, 1849, and 31 December, 1850, at 
 the sum of 68,587,591 dollars (nearly 3 367,000,000 
 francs). According to the documents published in 
 France by the Minister of Commerce, which ap- 
 pear to have been derived from local statistics, the 
 produce was rather less than the above. ' From 
 1 April, 1849, to 31 March, 1851, in two years, it 
 was raised to 4 329,000,000 francs. 
 
 Monsieur Ernilie Chevalier, who has just returned 
 from a government mission to Panama, in a report 
 to the Minister for Foreign Affairs, considers the 
 result as having been much larger. The gold 
 brought as freight by steamers in 1850, he estimates 
 
 1 8,000,000 s 14,680,000 
 
 2 211 * 13,160,000 
 
52 
 
 at 1 50,306,525 dollars. The author of the report 
 adds, on the testimony of a person whom he 
 considers as competent to give a sound opinion, 
 that the sums carried by passengers are not less 
 than three fourths of the amounts brought as 
 merchandize; and thus he arrives at the extra- 
 ordinary figures of 88,000,000 dollars (more than 
 2 470,000,000 francs) for a single year. At St. Fran- 
 cisco, where they are able to form probably a 
 more correct estimate on a subject so difficult to 
 trace accurately, they do not value the amount of 
 gold carried by passengers at above one-fourth the 
 amount taken in freight. Even on this supposition 
 there will be a sum of 25,000,000 dollars, or 
 above 3 133,000,000 francs to be deducted; but it 
 appears to me very doubtful, if the produce of 
 1850 exceeded this figure of 4 329,000,000 francs, 
 according to the French documents already referred 
 to. We have more valuable documents of another 
 kind to rely upon, in the quantities of gold coined 
 at the United States' Mint; the following are the 
 official figures: 
 
 SENT TO THE MINT. COINED. 
 
 1849 - 12,243,175 dollars 2,448,635 9,007,761 dollars 1,801,552 
 
 1850 - 88,365,160 7,673,032 31,981,737 6,396,347 
 
 1851 - 56,867,220 11,373,444 62,812,478 12,562,496 
 
 Total, 107,475,555 21,495,111 103,801,976 20,760,895 
 
 1 10,061,305 3 5,320,000 
 
 2 18,800,000 4 13,160,000 
 
53 
 
 All the gold sent to the Mint did not, however, 
 come from California. A part consisted of specie 
 sent from Europe, in exchange for American stocks 
 or merchandize. The treasure found in 1848 in 
 the Valley of the Sacramento, belonged, as it has 
 been stated, principally to foreigners. Up to the 
 month of March, 1850, the United States' Mints had 
 not received above 11,000,000 or J 12,000,000 dollars 
 of California!! gold. At the end of August in that 
 year the amounts paid in did not exeeed 2 24,500,000 
 dollars. A year later, the mints had received in 
 gold from that source 3 80,000,000 dollars. 
 
 The United States have naturally sent the larger 
 number of the emigrants to California. It is with the 
 United States principally that the trade is carried 
 on. It would appear, then, to be natural that the 
 principal flow of gold from the Sierra Nevada should 
 take that direction. Doubtless a portion of the gold 
 found annually in California will remain there, 
 and form the circulating medium. Considerable 
 amounts also will have been spread throughout 
 South America, and amongst the various commer- 
 cial countries of Europe, either in payment of goods 
 shipped, or as the free capital arising from the 
 accumulations of labor. I shall not be exaggerating, 
 however, in supposing, that seven-tenths of the 
 
 2,400,000 . 2 4,900,000 
 
 3 16,000,000 
 
54 
 
 gold annually produced is coined in the United 
 States, and that one-tenth of the produce only is 
 shipped directly to Europe. Thus, then, the 
 United States having received from California 
 1 100,000,000 dollars up to the end of 1850, the 
 total produce of the four years, including 1848, 
 (during which year there did not appear to have 
 been any coinage from Californian gold), ought to 
 have been from 2 750,000,000 to 3 800,000,000 francs. 
 The gold exported from California in 1851 is 
 estimated by the Custom House returns at 
 4 56,000,000 dollars. According to the calculations of 
 the St. Francisco Herald, for the first three months 
 of 1852, the total produce amounted to 3 14,656,142 
 dollars; at this rate the produce of the year 1852 
 would not be less than 6 62,000,000 dollars. The 
 export of April is estimated at St. Francisco, at 
 7 3,422,000 doUars, rather more than 8 18,000,000 
 francs. The produce of the " placers," according to 
 the latest reports, although still abundant, is de- 
 creasing ; nevertheless, if Australi a does not attract 
 the most experienced and the most greedy of the 
 work-people, the mines of California appear likely 
 
 1 20,000,000 5 2,931,228 
 
 2 30,000,000 6 12,400,000 
 
 3 32,000,000 7 684,400 
 
 4 11,200,000 8 720,000 
 
55 
 
 to yield this year not less than about 
 of our money; that is six times the amount of the 
 production of gold at the beginning of the century, 
 throughout the civilized world. It is twice the 
 amount of the production of gold in 1847. It is 
 hardly needful to exaggerate these figures, as many 
 writers on both sides of the Atlantic have already 
 done, in order to prove that a change is occurring in 
 our monetary values, and that the status quo which 
 has lasted for above half a century, is not neces- 
 sarily to continue for ever. 
 
 V. 
 
 Of the three great gold-producing countries of 
 modern times, New South Wales is the one now 
 most attracting public attention. This country en- 
 joys several advantages over the others. 
 
 The climate is mild and healthy, the land is 
 neither occupied by savage tribes nor infested with 
 wild beasts. In a country where drought is the princi- 
 pal obstacle to successful cultivation, the gold regions, 
 situated on the slopes of the highest mountains 
 and near the sources of the principal streams, are 
 naturally the best watered. They appear to extend 
 
 12,000,000 
 
56 
 
 from north-east to south-west, following the direc- 
 tion of the Murray, the largest river in Australia, 
 and over an extent of 1,400 miles, J (2,452 kilometres) 
 by 400 miles (643 kilometres). This surface is 
 larger, by four times, the extent of California, and 
 five times larger than Great Britain. 
 
 The effects of the California!! gold have been prin- 
 cipally felt at a distance from the producing country. 
 The valleys of San Joaquim and the Sacramento 
 were, before the extraordinary discoveries of 1847, 
 but a desert, with but an occasional " oasis " of culti- 
 vation; California had neither population, agricul- 
 ture, commerce, or industry. The " rancheros," 
 hah farmers, half hunters, raised cattle for no other 
 purpose than for the value of their hides ; the dis- 
 covery of gold could hardly disturb any existing 
 trade. The production itself was then the cause or 
 the motive power, creating a new state of society, 
 a new order of things. 
 
 . In Australia, on the contrary, and long before the 
 consequences of the discoveries could be appreciated 
 in Europe, the working of the mines was of itself a 
 revolution. The first washings occurred in May, 
 1851; at that time the English colonists in that 
 part of the world were in a flourishing position. 
 The population of European origin did not exceed 
 400,000 in the whole Australian group of islands. 
 
 The kilometre is about % of an English statute mile. 
 
57 
 
 New South Wales, in which division Victoria was 
 included, recently elevated into a separate colony, 
 numbered more than two-thirds of this total, and 
 formed the chief seat of its industry and wealth. 
 The inhabitants, principally the descendants of 
 convicts of the last century, obtained, in 1850, a 
 representative form of government, and now make 
 their own laws. They have upwards of fifty-one 
 newspapers, and they have also public schools and 
 banks. Their principal harbours are on a large 
 scale, and the inter-communication by steam-boats 
 and roads excellent. Their principal cities are 
 Sydney, with its 50,000 ; and Melbourne, with its 
 35,000 inhabitants, which are lighted with gas, and 
 have an organized police, as in London. 
 
 The luxury of living and of dress defies compari- 
 son, and aifords large profits to tradesmen; they 
 have already begun to make two railroads. Aus- 
 tralia has its commercial fleet, which entered into 
 competition for the supply of flour to California 
 in 1850. The trade with England is of twice the 
 magnitude to that which existed between England 
 and her American colonies at the time of their 
 separation. The colonial revenue, exclusive of the 
 sale of the Crown lands, which forms the founda- 
 tion of the emigration fund, nearly amounts to 
 1,000,000 sterling, per annum. 
 
 Australia produces wheat, Indian corn, and barley, 
 in abundance ; they have planted vines, from which 
 
 G 
 
58 
 
 they are making good wine ; tobacco is successfully 
 and extensively cultivate^; but the principal source 
 of wealth is derived from the growth of wool, for 
 the production of which the lands watered by the 
 tributaries of the Murray are as well adapted 
 as the valley of the Mississippi is for the production 
 of cotton. Australia takes a prominent position 
 with respect to civilization, in the midst of the pas- 
 toral employment of her population. It is a vast 
 arcadia, the poetical side being cast into shade by 
 the industrial occupation of its inhabitants, and per- 
 haps somewhat damaged by a very natural corrup- 
 tion of morals. It has been called a mine of wool 
 and tallow; 20,000,000 of sheep are .said to be 
 pastured on its plains. In England the use of 
 Australian wool has almost entirely superseded that 
 of Germany and Spain, and the Yorkshire manu- 
 facturers cannot now dispense with it. In 1850 
 Australia exported 137,000 bales, and in 1851, 
 130,000; 130,000 bales are worth about '65,000,000 
 francs. The mother country receives, then, from 
 Australia about 3,000,000 sterling of raw material 
 in exchange for 3,000,000 of English manufac- 
 tures; the result is most profitable for capital and 
 labor; it is to this beneficial and flourishing trade 
 that the sudden appearance of gold has threatened 
 a most unexpected and alarming interruption. 
 
 1 2,600,000 
 
59 
 
 Sir Roderick Murchison, whose opinions are con- 
 sidered as of high^ authority, commenting .on the 
 writings of Count Strelecki on the geology of New 
 South Wales, announced, in the year 1845, that gold 
 would be found in the sides of those great chains 
 of hills, which may be called their Alps or their 
 Pyrennees. At different times, fragments of the pre- 
 cious metal had been brought either to Sydney, or to 
 Melbourne, without having excited the belief in the 
 minds of the public that they were really the product 
 of their own soil. In the month of March, 1851, a 
 person, less incredulous than his neighbours, a Mr. 
 Hargraves, struck with the similarity of the geolo- 
 gical features of the country to California, whence 
 he had lately arrived, made up his mind that gold 
 must be to be found in New South Wales, and set 
 himself resolutely to work to hunt for it at the foot 
 of the mountains, and in the beds of the adjacent 
 rivers. Having found some small portions, he 
 followed the pursuit until he had satisfied himself 
 of the existence of gold in a great number of places. 
 He then went to Bathurst, an advanced post in the 
 country, called a public meeting, openly announced 
 his discovery ; and in order to give practical proof, 
 took many of his hearers to the seat of his own 
 exploits, in a little valley at the foot of Mount 
 Sumner, where he employed nine miners to dig 
 actively, and to wash the earth. Four ounces 
 of the purest gold were brought to light, as the 
 
60 
 
 produce of three days' labor; each man had gained 
 2 4s. 4d. (61 francs) per diem; but this was 
 not considered by Mr. Hargraves as above the 
 half of the probable gain to be obtained by an 
 experienced workman, and with proper implements. 
 
 This happened on the 8th May, 1851. The result 
 of the experiment was immediately blazoned forth : 
 three persons started for the washings, and returned 
 in a few days with several pounds of gold. At the 
 same time a geologist, ordered by the local govern- 
 ment to attest the statements of Mr. Hargraves, at 
 once stamped an official authority on the actual 
 existence of gold mines. This news created an im- 
 mense sensation, not only in Bathurst, but beyond, 
 and in the capital of the colony. On the 19th May, 
 there were 600 miners at the "placers;" an enor- 
 mous immigration to a district where the population 
 was but thinly scattered over an almost indefinite 
 extent of land. On the 24th, some of the people 
 wrote to their friends, that they were collecting 
 from 3 to 4 per day. One party of four miners 
 had in one day, obtained thirty ounces of gold, 
 and had found a " nugget" wighing one pound. 
 In three weeks time, one workman alone amassed 
 1,600 sterling. 
 
 We would remark, in running hastily over the 
 account of these early experiments, that from the 
 first, the inhabitants of Australia foresaw the serious 
 consequences of the revolution about to occur. The 
 
61 
 
 colonial journals were filled with lamentations and 
 direful forebodings, and cursed, both in prose and 
 in verse, the mania for gold. The solitude of the 
 towns, at the expense of which the deserts were 
 peopled, the abandonment of labour, the disrup- 
 tion of all social ties, flocks left without shep- 
 herds, and crops destroyed for lack of harvestmen: 
 in short, every kind of misfortune from which the 
 colonies are now suffering, were seen in perspec- 
 tive. The greediest seekers for gold might well take 
 alarm ; the epidemic, however, stopped not, and soon 
 spread in all directions. The Government took the 
 lead, by largely rewarding Mr. Hargraves, and ap- 
 pointing him the " explorer of the mineral districts." 
 A proclamation immediately appeared, claiming 
 the precious discoveries as Crown property, and 
 announcing a rate of license for working gold 
 mines at 30s. per miner per month. A wild spirit of 
 speculation soon sprang up in every direction. 
 The . municipal authorities everywhere followed the 
 example of the Government. From the Bay of 
 Newton to the Gulph of St. Vincent, over an extent 
 of 2,000 miles of shore, there was no town or vil- 
 lage without its sought-for neighbouring " placers." 
 In many districts, associations were immediately 
 formed, offering premiums for the earliest discovery 
 of gold. 
 
 The locality of the first operations was situated 
 at the junction of two little valleys, whose water- 
 
62 
 
 courses fell into the River Macquarie, a tributary of 
 the Murray, and which soon received the scriptural 
 name of Ophir. The early successful workings in 
 these " placers" were soon cast into shade by the 
 more brilliant result of the works on the Turon, 
 and its tributaries ; here gold was found not only in 
 scales, but in pepites or nuggets. Whilst the Ophir 
 digger was making his 15s. or 20s. on an average 
 day's work, the people at Turon were counting their 
 gains by ounces. The more primitive process of 
 washing had given way to the more philosophical 
 system by amalgamation. The operation was suffi- 
 ciently remunerative to repay a simple mechanic at 
 the rate of 20s. a day in addition to his keep; but 
 the miners no sooner obtained money enough to 
 buy a license, and some implements, but they set to 
 work in a more business-like manner. They formed 
 themselves into parties of three or six, the day's 
 work of each party sometimes producing several 
 ounces of gold. The weight of the pepites varied 
 from one-fifth of an ounce to many ounces. 
 
 Towards the middle of July, Doctor Ker found 
 in the valley of Meroo, a few miles from Welling- 
 ton, a lump of quartz weighing 3 cwt., containing 
 more than 100 pounds of gold. Later, again, they 
 found three " nuggets," each weighing from 26 to 
 28 pounds. In the month of August, the export to 
 England commenced; the first remittances of gold 
 dust amounted to 50,000 sterling. The washings 
 
63 
 
 at the Turon and Mount Ophir were then pro- 
 ducing 10,000 to 12,000 sterling per week. 
 
 The treasure of Doctor Ker, exhibited first at 
 Bathurst and then at Sydney, soon drove everybody 
 wild. The very newspapers which had first ma- 
 ligned the discovery, now sounded the trumpet in 
 praise of this wonderful piece of good fortune. 
 " The news," says the Morning Herald of Sydney, 
 " will astonish Australia, will astonish England, 
 Ireland, and Scotland, will astonish California, and 
 will astonish the whole world. On the arrival of 
 the packet in England, when every newspaper 
 throughout the United Kingdom shall have repeated 
 the news of the discovery as the wonder of our age y 
 the sensation will be profound, and will exceed 
 anything hitherto talked of, or thought of; from 
 the queen on the throne to the peasant in the 
 fields, there will be but one united exclamation of 
 surprise and astonishment; from the palace to the 
 cottage, from the drawing-room to the stable, from 
 the schoolboy to the philosopher and the states- 
 man, there will be one universal talk of this mass 
 of gold, and of the country whence it came ; from 
 all the ports in Great Britain and Ireland, ships 
 will be freighted with passengers and goods popu- 
 lation and wealth will rush to Australia like a tor- 
 rent. Port Jackson will be the best filled and the 
 most flourishing harbour in the world, and Sydney 
 will take its rank amongst the most opulent cities. 
 
64 
 
 New South Wales will be looked upon in England 
 as the queen of her colonies." 
 
 Waiting the impression to be produced in the 
 mother country by the news of the " golden land," 
 to use again the expression of the Morning Herald, 
 the population of Sydney flocked to the diggings; 
 the numbers who left were about 400 a day. Sailors 
 deserted their ships in the harbours. Government, 
 on account of the dearness of provisions, doubled 
 the salaries of their officials. In every direction 
 there was a general hunt in quest of new " placers;" 
 and the districts South and West of Sydney were 
 explored by miners to the extent of 200 miles. 
 Auriferous deposits were discovered in the coun- 
 ties of St. Vincent, Argyle, Dampier, Wallace, and 
 Wellesley, as well as in the basins of Murrumbedgee 
 Shoalhaven, the River Hume, the River Peel, and 
 the Snow River. At the extreme north of New 
 South Wales, in the district of Moreton Bay, the 
 diggings are in full work at the several branches of 
 the River Condamine. Nearer to the capital, in 
 New England, gold has been found in abundance in 
 the basin of the River Macdonald. 200 miles south 
 of Sydney, at Braid wood, one miner realized 30 
 sterling in five weeks ; another 42 sterling in fifteen 
 days; and a party of three 200 sterling in one 
 week. Nothing was more common than a produce 
 of two ounces per man per day; and not unfre- 
 quently it reached as much as one pound. Women 
 
65 
 
 also set to work. One widow and her two daughters 
 are said to have collected an average of two ounces 
 a-day. 
 
 The district of Turon did not lose its repute. 
 Such was the attraction for gold hunting, that a 
 labourer at Meroo would not undertake to work for 
 hire at a lower rate than 3 a-week, in addition to 
 his food. Up to October, 1851, the Government 
 had given out 8,637 licenses; 10,000 miners were 
 at work in the province of Sydney, and 215,866 
 sterling, (about 5,500,000 francs) had already been 
 shipped to England. 
 
 In December, the yield of the " placers" averaged 
 40,000 sterling per week, a sum equivalent, after 
 deducting the stoppages during extreme drought 
 and rain, to 2,000,000 sterling per annum. 
 
 These results, however brilliant they appeared, 
 were soon eclipsed by the accounts from the 
 province of Victoria, Gold was first discovered at 
 Ballarat, where it was found at some considerable 
 depth from the surface; then at Mount Alexander, 
 where it was dug up merely by the pickaxe, almost 
 on the ground; at Caliban, fifteen miles further, 
 at Albany, on the Murray, and on the east coast at 
 Gipp's Land. 
 
 It is asserted that the chain of hills which 
 separates the province of Victoria from Sydney, 
 and which are known by the name of the Snowy 
 Mountains, is one vast mine of gold. Every 
 
 H 
 
66 
 
 day announces some new discovery, and that of 
 yesterday is almost always surpassed by that of 
 to-day. The mines of Mount Alexander are in 
 extent about ten miles, and the earth is said to be 
 full of gold; they find the precions metal in a 
 gravelly clay, and in the interstices of a slatey 
 formation. It is sufficient to dig six inches of 
 soil; and already, in the month of December, 1851, 
 there were 15,000 miners at work, and the deposits 
 appeared inexhaustible. 
 
 Here occurred the most extraordinary events. 
 Amongst ordinary cases, seven workmen were 
 cited, who amassed 500 ounces of gold in three 
 weeks, which at 3 sterling per ounce, the then 
 current value of gold in the colony, was about *260 
 francs per day each; at another time, two miners? 
 in the same space of time, collected 400 ounces, or 
 2 735 francs per day each. One carman, who had 
 never even removed the earth, made up a bag of 
 1,500 sterling in five weeks. A convict, but just 
 freed, made 150 sterling in sixteen days. A work- 
 man, who had never exercised any trade but that 
 of shoeing horses, was somewhat less fortunate, but 
 brought home 100 sterling, clear, after paying 
 all expenses, and working five weeks. A boy of 
 fourteen, in less time, collected 400 sterling; arid 
 
 10 2 30 
 
67 
 
 another of the same age, 120 sterling; but the 
 ambition of the workmen knew no bounds; there 
 was scarcely a man who set to work digging a hole 
 who did not expect to come home at night with 
 40 or 50. These expectations were kept up 
 by some most wonderful instances of fortune, the 
 recital of which, repeated from group to group, 
 amongst the diggers, soon became matters of history. 
 One spot of a few feet square produced *45,000 fr. ; 
 four sailors, after six weeks' work, loaded their cart 
 with a case containing two hundred pounds of gold, 
 about - 2 60,000 francs; four other workmen, after 
 two months' labour, divided 3 1, 000,000 francs. One 
 workman was spoken of who gathered twenty-five 
 pounds in two or three weeks, and another was 
 known to have amassed eleven pounds in forty- 
 eight hours ; another, in less than one hour, made 
 up a package weighing thirty pounds, worth at 
 least 4 38,000 francs. It was said that the miners 
 would no longer pick up gold-dust, it was not 
 worth while; anything smaller than a pin's head 
 was thrown aside as too insignificant for notice. 
 There must have been fine gleanings from these 
 fastidious reapers. 
 
 In the " placers" of Mount Ophir, and of the 
 Turon, where the profits and the workings were on 
 
 1,800 3 40,000 
 
 10,400 4 1,520 
 
68 
 
 a more moderate scale, there was less difficulty in 
 preserving order and good behaviour. Captain 
 Erskine, of the Koyal Navy, who was there about 
 the end of July, 1851, reports most favourably in 
 this respect. The miners received him with the 
 most perfect civility; order and good feeling was 
 the general rule. Captain Erskine only saw one 
 man drunk on the placers. The sale of spirituous 
 liquors was forbidden, and the Sundays religiously 
 observed. There even appeared some traces of 
 regular industry. The neighbouring " placers " of 
 Port Philip presented a perfectly different scene. 
 There, mining appeared to be considered as a com- 
 plete lottery. The coolest heads soon grew as wild 
 as the steadiest passions and extravagance broke 
 loose in all directions. The consumption of wine, 
 beer, and spirituous liquors was enormous ; gambling 
 tables, quarrels, and prize fighting, desecrated the 
 Sundays. One man was quoted who placed a 5 
 note between two pieces of bread and butter, and 
 ate it as a sandwich. Another rolled up two 5 
 Bank notes, and swallowed them as a pill. A 
 third went into a pastry cook's shop to eat a cake, 
 threw down a Bank note, and refused to take up 
 the change. The miners appeared to have no idea 
 of the value of money; they bore their losses with 
 the most perfect philosophy. One man, who had 
 had a draft of 1 37 60 francs stolen from him, and on 
 
 150 
 
69 
 
 enquiring at the bank, finding it had been already 
 cashed, exclaimed, " Bah ! there is no want of 
 money now." 
 
 A u placer" in the colony of Victoria presented 
 the appearance of an immense encampment, with 
 thousands of tents of all sizes, colours, and shapes; 
 the bivouac during the night was illuminated with 
 fires in all directions, and noisy with the discharge 
 of guns and pistols; every miner was armed to 
 the teeth, and could only trust to himself for the 
 protection of his booty and his life ; every one kept 
 himself on the qui vive, and took even the precau- 
 tion of daily discharging and reloading his firearms 
 every evening at sunset. Government offered a 
 weekly transport to Melbourne at a charge of 1 per 
 cent. ; but as, notwithstanding so exorbitant a charge, 
 this transport was without any guarantee against 
 robbery, the miners formed themselves into parties, 
 when tired with making their fortunes, and escorted 
 their own treasures. The bandits from Van Dieman's 
 Land came down like birds of prey, and fell upon 
 the miners, and in such numbers and with such 
 fury, that when a murder was committed the local 
 police were not unfrequently afraid to go amongst 
 them to seize the murderer. The authorities of 
 Melbourne were unable to give effectual aid under 
 such circumstances ; for their own city police, 
 with the exception of six, had all gone off to 
 the diggings. A cry of despair and indignation was 
 
70 
 
 universally raised. " The imbecility of our Govern- 
 ment," says the Argus, " has compelled us to take 
 the police into our own hands, and to make lynch 
 law the rule of action." The Morning Herald says, 
 " The Government must act with energy, and with- 
 out loss of time, or we shall become a second 
 California, with mutiny and lynch law established, 
 and crime in its naked deformity." The Governor, 
 Sir G. Fitzroy, responded to this appeal by sending 
 home for more troops, and by recruiting his police 
 by discharged soldiers. Will it be sufficient for the 
 preservation of this community, scarcely yet formed, 
 from the threatened danger of disorganization, to 
 send a vessel of war to the station of Port Jackson, 
 and to Port Philip, and to reinforce the garrisons of 
 Australia, as Sir John Packington proposes, with 
 some 400 or 500 soldiers ? 
 
 Fortunately, such a state of disorder is not likely 
 to become chronic; when public authority, which 
 ought to suppress it, is declared incompetent, society, 
 alarmed for its own existence, steps in and at all 
 hazard gets rid of turbulent characters. What is 
 to be as much feared, especially in a community of 
 such recent formation, is the attraction to a spirit 
 of gambling, from fortunes thus suddenly acquired. 
 Men, fascinated by such a magnet, abandon all pro- 
 ductive and useful employment. Neither their 
 ordinary vocations or their known duties will retain 
 them in their ordinary habits; no rates of pay can 
 
71 
 
 follow the progressive chances of the miner with his 
 pickaxe; the trade of gold-seeking supplants every 
 other occupation; a whole people are bowed 
 down to the earth, and absorbed in a work which 
 brutalizes them, and they abandon to others all the 
 cares of and attention to the cultivation of the soil. 
 From the beginning of November last, the towns 
 of Melbourne and Geelong were forsaken. Out 
 of this numerous population the women alone re- 
 mained stationary. The proximity of the "placers" 
 at two or three days' journey rendered the access 
 easy. It was not necessary, as at Sydney, to 
 equip for a long journey, or to lay in a stock of pro- 
 visions and money. Men deserted, in crowds, flocks, 
 farms, ships, workshops, counting-houses, and shops ; 
 no wages would induce them to remain. They 
 flocked in from Sydney, Van Dieman's Land, 
 South Australia, and even from California. Vessels 
 arriving could not discharge their cargoes for want 
 of hands; goods perished on the quays, where they 
 had been piled up. In many districts of the 
 colony business and cultivation were suspended; 
 hands were wanted everywhere. When shearers 
 were to be met with, they asked the enormous price 
 of 3s. 6d. for twenty fleeces. A month later, and 
 Adelaide, the capital of Australia, realized the 
 picture of the " Deserted Village." Traders, artizans, 
 proprietors, and capitalists, all were either ruined 
 or had emigrated to Port Philip, to escape from 
 
72 
 
 inevitable ruin. The shares in the celebrated 
 Burra Burra Copper Mine, which had been sold for 
 above 200, found no buyers at 60, and their 700 
 workmen had disappeared ; prices of all goods and 
 wages rose in a frightful degree. 
 
 We read, in a letter from Melbourne, of the 
 17th January, 1852: "In the Banks and at the 
 Post Offices, the clerks work double tides ; other 
 public services are at a stand for want of hands. 
 There are no male servants to be found, even at 
 exorbitant wages, and women will not remain, un- 
 less at considerable increase of pay. I requested 
 first the waiter, and then the maid, at the hotel 
 where I was stopping, to send a small parcel of 
 linen to be washed. They told me that they could 
 find no one who would wash. I was obliged to 
 go to a shop and buy some new things. If you 
 want a pair of boots, you must pay 2 10s. (63 
 francs). A pair of shoes cost 20s. (25 francs)." 
 
 Another letter, of the 1st January, adds again to 
 the picture : " In my opinion, this town is threat- 
 ened with complete ruin. Last night, two men 
 arrived, announcing a discovery of gold deposits 
 in the district of Gipp's Land; they had brought 
 10,000 sterling in gold, and said there was enough 
 there for all the world. What shall we do for want 
 of labor? Suppose that 100,000 immigrants were 
 to arrive here next year, would one of them remain 
 in the towns or at the farms, earning a few shillings 
 
73 
 
 per week, when they can go to the diggings and 
 gather 50 in one da} 7 ? At this very moment I 
 cannot find one man in Melbourne who can mend a 
 pair of boots at any price. I get bread from Col- 
 lingwood. as a great favor, and the baker will not 
 engage to supply me regularly. I pay 5s. for two 
 buckets of water, and 30s. for as much wood as 
 a horse can carry. One can hardly find a man 
 with a handbarrow to carry a portmanteau, even at 
 any price he chooses to ask. The servants of the 
 Judge have all left him, and he cannot use his car- 
 riage ; his sons clean the knives and shoes, and 
 drag their invalid father to the court in a wheel 
 chair." 
 
 An inhabitant of Melbourne, himself reduced to 
 the necessity of looking after his horse, whilst his 
 wife attended to cooking the dinner, writes : " One 
 of the members of our club, a large sheep-owner, 
 and who cannot obtain shearers, is gone to the 
 diggings to try and hire some men. He asked them 
 what wages he should pay them, they replied that 
 they must have all the wool ; and, as he was leaving 
 them, they called him. back to say. 'We are in want 
 of a cd ok; we will give you 1 a day if you like 
 to take the place yourself " 
 
 At the "placers," a mechanic is worth at least 1 
 a day. The people who return to the towns with 
 their little fortunes will no longer work, and con- 
 sider that they have a right to live on in idleness. 
 
74 
 
 All provisions are dear. At Mount Alexander, 
 flour was sold at 5d. a pound (which is equal to 
 ^0 centimes the demi-kilo.); oats at 18s. the 
 bushel, or 2 64 francs the 3 hectolitre. In August 
 last, wheat was not higher than 3d. a pound, and 
 oats 4s. the bushel, in the Sydney market, a higher 
 price than in any famine year in the European 
 markets. 
 
 Two causes have been acting simultaneously in 
 creating this great rise in the price of all the 
 necessaries of life, in those countries where the 
 gold finders have become suddenly enriched by the 
 discoveries of these " placers." In the first place, 
 population increasing more rapidly than the supply 
 of food, has necessarily caused a rise in price, and 
 this consequent increase in price, is out of all pro- 
 portion to the deficiency of supply. Who does not 
 know that a deficiency of one-sixth, or even of 
 one-tenth of the crop of grain, frequently doubles, 
 or even trebles, the price during the famine. Such 
 was the case in France and England in 1846; and 
 without facilities of communication, and the cheap- 
 ness of carriage, the result, even at that period, 
 would have been much more calamitous. Can we 
 be astonished, then, that in a country where civili- 
 zation is but just established, where roads, canals, 
 
 6d. " 2 8s. 
 
 3 22 Imperial Gallons. 
 
75 
 
 and railroads are wanting, the evils must be felt in 
 a greatly increased degree-? 
 
 Another cause is the very abundance of the pre- 
 cious metals. Gold, when amassed by handfuls 7 
 instead of being collected in very small quantities, 
 and with great labour, must necessarily lose a 
 large part of its value. The diminution of the 
 price of gold and silver is, generally, only shewn by 
 the increase in the price of every other article. 
 The nominal value of the monetary sign remains 
 the same, but its power diminishes in proportion to 
 its increase in quantity, unless some counteracting 
 cause, such as an excessive supply of provisions, 
 &c., should step in and re-establish the equili- 
 brium. 
 
 Up to the present time, every progress in mining in 
 Australia is retarding the proper care and attention 
 to the breeding of cattle. Van Dieman's Land, 
 which produced food for other districts of Australia, 
 is likely, it is said, to require an import of food for 
 her own people. It was true that the crops at 
 the end of 1851, presented every appearance of a 
 magnificent harvest, but how could a harvest be got 
 in on an island inadequately supplied with labour, 
 and where the people are deserting daily for other 
 places ? 
 
 The position is certainly critical; with any other 
 people than those of Anglo-Saxon race, it might 
 be desperate : a few months more delay, and the 
 
76 
 
 wool shearing will be lost ; for the flocks, no longer 
 watched, will have strayed away, and possibly will 
 have perished. It was the work of a quarter of a 
 century to have accumulated the capital employed 
 in Agriculture in Australia; without an immense 
 imnigration, not of gold seekers, but of shepherds, 
 and persons accustomed to a pastoral life, before the 
 end of 1852 all this capital will be inevitably de- 
 stroyed. England has awakened rather late to the 
 danger, but she has now to work in good earnest to 
 apply the remedy. The Governor of Australia wit- 
 nessed the daily arrivals of emigrants with alarm, so 
 long as they added only to the crowds of miners, and 
 who by their competition still further increased the 
 price of provisions; he even pressed the Colonial 
 Secretary to try and turn the stream of emigration 
 to other colonies. But independent of Government 
 emigration, voluntary associations for the same object 
 have not been inactive. Liverpool alone has been 
 shipping at the rate of 2,000 a month for Sydney 
 or Melbourne. Ships are wanting in all the ports of 
 Great Britain and Ireland, for the transport of emi- 
 grants. Shipbuilding yards are all in the greatest 
 state of active employment. 
 
 Nor has this want of an agricultural population 
 in Australia been overlooked. The islands to the 
 north and west and the Highlands of Scotland, con- 
 tain a population far too numerous for their means of 
 adequate support, so that in spite of hard and con- 
 
77 
 
 stant work, there is frequent mortality from famine 
 in this poor and barren country. Twenty or thirty 
 thousand of these labourers, engaged for agricultural 
 occupations in Van Dieman's Land, and for sheep 
 tending in New South Wales, would cease to be a 
 burthen on English charity, and would avert the 
 ruin of Australia. Subscription lists are opened 
 in England for this object, and the colony itself is 
 in a position to lend its aid, as Sir John Packington 
 informed Sir G. Fitzroy that the government would 
 place at the disposal of the local legislature the 
 revenues which might accrue from the workings 
 of these gold regions. At this time the port of 
 London contains a fleet of vessels ready to sail for 
 Australia, capable of conveying 23,000 persons and 
 30,000 tons of merchandize. It is clear, that by 
 abandoning all the rights of the Crown to the 
 treasures of the "placers," the British Government 
 has saved Australia. By this arrangement, the 
 Colonial revenues have been almost doubled; 30s. 
 u month levied on 60,000 miners, working eight 
 months in the year, would produce ^8,000,000 
 francs. A tax of 60s. which was attempted to be 
 established, but which the miners resisted, might 
 have produced ~ 36,000,000 francs. In default of 
 English labourers, the expenses of whose voyage 
 must necessarily be great, arid whose willingness to 
 
 720,000 - l,440,(H)i) 
 
78 
 
 work could not be depended on, there would be 
 funds enough to import a whole population of 
 Indians or Chinese. 
 
 The production of these gold regions in Australia 
 does not appear to have exceeded 1,500,000 ster- 
 ling in 1851, from all the "placers" then worked; 
 but we know that the working in the province 
 of Sydney did not begin until the middle of 
 May; and in Victoria, not until the end of Sep- 
 tember. In January, 1852, they reckoned 10,000 
 miners in the Sydney gold districts, the produce 
 of which oscillated between 12,000 and 15,000 
 ounces per week. For eight month's work this 
 would give about '31,000,000 francs at the Colo- 
 nial price, and 2 35,000, 000 at the English price 
 of gold; but the population will certainly have 
 increased in 1852, and it will be a moderate 
 calculation to estimate the produce of this pro- 
 vince at 3 40,000,000 to 50,000,000 francs during 
 this year. 
 
 In the province of Victoria, 30,000 miners were at 
 work at the " placers," at the end of December ; and 
 the number was daily increasing. They probably 
 would have received, by the spring of this year, a 
 reinforcement of 10,000. Mineral working is a lot- 
 tery, in which very few gain the great prizes. A 
 
 1 1,240,000 2 1,400,000 
 
 3 1,600,000 to 2,000,000 
 
79 
 
 letter from Sydney, dated 4th February, thus sums 
 up the result of the work, and of its uncertainty and 
 irregularity. " They calculate, that out of every 
 ten speculators who hire workmen for the gold- 
 washings, only one repays his expenses, and of those 
 who work on their own account, the proportion who 
 are successful is about one in five." It is not to be 
 expected, then, that the quantity of gold collected 
 by so many miners should equal the brilliant, the 
 extraordinary, profits made by many of the first 
 adventurers. It is a liberal calculation to suppose 
 that the 40^00^ miners of the province of Victoria 
 might obtain on an average 10s. or 12s. each for 
 their daily work. At 200 days' work this could 
 give about ^,000 francs each, or about 120,000,000 
 francs per annum. Thus, these two provinces 
 would yield a produce in 1852, of 40,000,000 for 
 Sydney, and 3 120,000,000 for Victoria, together 
 about 4 160,000,000 francs. 
 
 In following the scale of progress of California, 
 these results might be doubled the third year: but 
 it should be remarked, that up to March last, not- 
 withstanding the immense increase of the workings 
 carried on for nearly a year in Sydney, and for 
 six months in Australia-Felix, the colony had not 
 
 1 120 each, or about 4,800,000 per Annum. 1,000,000 
 3 4,800,000 4 6,400,000 
 
80 
 
 shipped, of all the gold it had collected, above 
 819,000 sterling (20,537,000 francs) to England. 
 
 Uniting the products of the three great gold 
 regions, we find that Siberia, California, and Aus- 
 tralia, are expected to supply in 1852, about 
 1 600,000,000 francs : a mass of gold equal to about 
 175 tons in weight. It should be borne in mind, 
 that China and Japan have also their mines of gold 
 and silver in full work ; the produce of which does 
 not appear, however, to leave those countries. The 
 Chain of the Himalaya possibly contains mineral 
 wealth equal to that of the Cordilleras, the dorsal 
 division of. South America, from Chili to Oregon. 
 It is also said, that the inhabitants of Thibet have 
 begun to work their golden alluvial deposits. All 
 the mines in the world, therefore, are not yet fully 
 worked ; and there will, probably, be an ample 
 supply for some generations to come. The gold sup- 
 plied by America, independently of California, can 
 hardly be estimated at above 2 8,000 kilogrammes 
 per annum. Hungary is the only country in Europe, 
 excepting Eussia, which is producing about 3 2,000 
 kilogrammes of gold. The quantity from Africa is 
 very small; and 4 3,000 or 4,000 kilogrammes is the 
 whole of the known produce of the washings in the 
 Straits of Sunda, and in the peninsula of Malacca. 
 
 1 24,000,000 
 
 2 Ibs. 21,436=1,000,000 3 Ibs. 5,359= 250,000. 
 
 4 Ibs. 8,038 to lbs.lO,718=375,000 to 500,000 
 
81 
 
 From all which sources united, an approximative 
 value may be fixed at from '40,000,000 to 50,000,000 
 francs. To sum up the whole, then, it would appear 
 that the gold production of 1852 may be estimated 
 
 at 
 
 For California. . . 300,000,000 francs=l2,000,000 
 
 Australia . . . 160,000,000 6,400,000 
 
 Oural and Altai . 90,000,000 3,600,000 
 
 rest of the world 50,000,000 2,000,000 
 
 Making a total of . . 600,000,000 francs=24,000,000 
 
 It has been already stated, that California produced 
 2 750,000,000 francs during the four years 1848 to 
 1851. Russia, during the same period, at the rate of 
 3 100,000,000 fr., will have produced 4 400,000,000, 
 and the other gold districts 5 200,000,000. Thus, in 
 the five years ending with 1852, the total production 
 including Australia, will probably amount to nearly 
 6 two milliards of francs: a result unexampled in 
 history; gold has never previously flowed from 
 such numerous channels, and from such abundant 
 sources. 
 
 1 1,600,000 to 2,000,000 4 16,000,000 
 
 2 30,000,000 5 8,000,000 
 
 3 4,000,000 fi 80,000,000 
 
82 
 
 VI. 
 
 What will be the effects produced by this 
 expansion of gold on those countries where the 
 discoveries and working have occurred, and on 
 the great centres of wealth and industry, where 
 competition is in active operation, and where 
 the gold may, when in the shape of coin, fix a 
 new value on commodities? First, as regards 
 the gold-producing countries themselves. It is 
 clear that the attraction to the " diggings " must 
 retard, if not put a temporary stop, to really pro- 
 ductive labour, that of the cultivation of the land : 
 but this demoralizing influence may not be of long 
 duration. The " placers" will become exhausted, 
 the gold of alluvial deposit, that which the rains 
 and other causes have spread over the surface of 
 the soil, has hitherto been the chief feeder of the 
 supply. The thousands of miners working at the 
 various sources, and turning over and over again 
 every part of the surface, will soon have picked out 
 every particle of the metal. The remainder of 
 the gold must then be sought for in the quartz ; 
 whence it can be obtained only by the aid of scien- 
 tific processes, and effectually extracted only by the 
 application of capital: which is hardly likely to be 
 supplied to an adequate extent, excepting by com- 
 
83 
 
 panies, in the same way as has been the case in 
 the working of silver mines. Then individual 
 enterprize will be again directed to the cultiva- 
 tion of the soil. Out of the crowds of emigrants 
 in Australia and California, now attracted to the 
 " diggings," the number required for agricultural 
 purposes will no longer be deficient. Amongst the 
 adventurers who are expatriating themselves to seek 
 fortunes in new countries, there will be numbers of 
 poor families who will consider themselves ade- 
 quately repaid by being able to obtain in a distant 
 land, a fair remuneration for their services, and the 
 ownership of land, with the means of a comfort- 
 able livelihood. 
 
 The Spaniards, in the early days of conquest in 
 South America, began by abandoning all other 
 pursuits than the search of gold and silver ; they 
 ended however, by building cities, forming harbours, 
 constructing churches, planting the land, and rearing 
 flocks. After the soldiers came the miners, after the 
 miners came the colonists : swords were turned into 
 plough-shares. That which occurred in the 17th 
 century will recur in the 19th. Australia, Cali- 
 fornia, and the colder regions of the Altai, will 
 be covered with people. It may readily be believed 
 that Providence, in the accumulation of treasures 
 like loadstones in the hearts of the mountains and 
 in the depths of the valleys, has contemplated the 
 attraction of a superabundant population, and of 
 
84 
 
 the genius of colonization throughout the civilized 
 world. 
 
 Thus much for the producing country itself. 
 Let us now consider the effect of this superabun- 
 dance of gold on the importing countries. The first 
 and most important question is, whether the relative 
 proportions in value between gold and silver is 
 likely to be materially disturbed. We have been 
 considering the present production of gold, let us 
 now see how the case stands as regards silver. 
 
 Mons. de Humboldt estimates the amount of sil- 
 ver annually produced at the commencement of this 
 century at 870,000 kilogrammes (about 493,000,000 
 francs). In 1847, M. Michel Chevalier, considered 
 the annual production to be 775,000 kilogrammes, 
 (about 2 172,000,000 francs), but there is reason 
 to suppose that this writer under-estimated the 
 returns of the Mexican mines, which he placed at 
 3 1 8,500,000 piastres, and in a later work, the same 
 authority states the production at 4 900,000 kilo- 
 grammes. The English paper, The Economist, es- 
 timated the return of 1850 at 5 191,772,000 francs; 
 the actual production, however, appears to have 
 been much larger. It cannot be placed at a lower 
 figure than 1,000,000 of kilogrammes for 1851, or at 
 
 1 7,720,000 3 3,700,000 
 
 2 6,880,000 4 Ibs. 2,411,5G2=7,234,686 
 
 ' i'7,<;70,880 
 
85 
 
 about 1 230,000,000 francs. The following is the 
 table of details: 
 
 Mexico - 
 
 Chili 
 
 Peru 
 
 Bolivia and New Granada 
 
 Russia and Norway - 
 
 Saxony, Bohemia, 
 
 Hungary, &c., - 
 Spain 
 The rest of Europe - 
 
 Total - 230,000,000 9,200,000 
 
 133,000,000 
 
 francs=5,320,000 
 
 22,000,000 
 
 880,000 
 
 25,000,000 
 
 1,000,000 
 
 12,000,000 
 
 480,000 
 
 5,000,000 
 
 200,000 
 
 12,000,000 
 
 480,000 
 
 16,000,000 
 
 640,000 
 
 5,000,000 
 
 200,000 
 
 We do not think we shall be exaggerating in 
 supposing that the production will have reached 
 2 250,000,000 francs in 1852, and that it will conse- 
 quently have exceeded 3 1, 100,000 kilogrammes. At 
 this rate the accumulated value of the precious metals 
 produced in 1852 will have reached the figure of 
 4 850,000,000 fr., of which silver will represent the 
 proportion of about 30 per cent; the weight of gold 
 will then be in the proportion of 1 to 6 ^ to silver. 
 
 In estimating a gradual increase in the production 
 of silver, we have some data for our supposition. 
 In 1843, there was scarcely 5 16,000,000 piastres 
 
 1 9,200,000 
 
 2 10,000,000 
 
 Ibs. 2,947,465=8,842,395 
 34,000,000 
 
 5 3,200,000 
 
86 
 
 from Mexico; in 1849, the silver coined at the Mex- 
 ican Mint amounted to J 20,000,000 dollars, without 
 reckoning that portion which escaped duty, and 
 which probably amounted to 2 3,000,000 or 4,000,000 
 more ;* we are certainly quite within the mark, 
 it is even more probable that the production this 
 year may again reach the sum of 3 2 7, 000,000 dol- 
 lars, to which it had attained in 1805, under the 
 Spanish Government. In Chili the progress has 
 been still more rapid, the mines which in 1841 pro- 
 duced 4 82 1,000 piastres, and in 1845, 5 1,534,000, 
 having in 1849 given 6 3,343,000, and in 1850 
 T 4,070,000 piastres. 
 
 One cause of a purely local nature has contributed 
 to this result. It is known that the process of amal- 
 gamation is almost the only one employed by the 
 miners in extracting the ores of Chili, Peru, and 
 Mexico. To obtain 1 cwt. of silver it is necessary 
 to employ li cwt. of quicksilver; it is evident, 
 therefore, that the price of quicksilver must have 
 a great influence on the cost of extraction. When 
 it has become too dear, the working has been 
 
 1 4,000,000 4 164,200 
 
 2 600,000 to 8,000,000 5 306,800 
 
 3 5,400,000 6 668,600 
 
 7 814,000 
 
 * According to the information of M. Resales, the production of 
 Chili in 1850 should have been 4,070,000 piastres. 
 
87 
 
 confined to the richest mines ; when it has fallen 
 the increase in the working of the poorer ores has 
 soon followed. Before the war of independence, 
 the Crown of Spain, preserving the monopoly of 
 the sale of quicksilver, gave it out at all their 
 depots in Mexico at *35 to 40 piastres the cwt.; 
 thence arose the immense increase in the workings 
 of the silver mines, notwithstanding the coarseness 
 of the ores. Since the Spanish Government, 
 however, has, pressed by the miserable position 
 of its finances, farmed out the produce of the 
 Almaden mines, the lessees who had agreed to pay 
 a very heavy rent, and who had no competition to 
 fear for a long period of time, raised the price of 
 the quicksilver beyond all bounds. A few years 
 since the price at Guanaxuato rose to 2 150 piastres 
 the cwt. In 1850 the agent of Messrs. Rothschild 
 fixed the price at 3 103 piastres in Yera Cruz, and 
 at 4 105 at the depot in Mexico. At the same date 
 the price was 5 120 at Mazatlan. The cost price 
 of the quicksilver at Almaden is 6 18 dollars the 
 cwt., and it is sold at the rate of 7 45 dollars for 
 extraction of the ores in Spain. 
 
 The high price will cease with the monopoly. 
 
 1 7 to 8. * About 21 
 
 2 About 30 5 About 24 
 About 20 12s. 6 3 i 2s< 
 
 7 9 
 
88 
 
 Spain has no longer the exclusive privilege of 
 furnishing quicksilver for the mines in the New 
 World. California possesses mines of cinnabar in 
 abundance, and they are now in full work. Those 
 of New-Almaden, situated at some leagues from San 
 Francisco, are now producing *400 kilogrammes a 
 day. At 300 day's work this could give a pro- 
 vision of 2 120,000 kilogrammes, sufficient to work 
 at least 3 80,000 kilogrammes of silver. At the 
 mine itself this quicksilver is worth 4 25 piastres 
 the cwt. ; brought to Fresnillo, near the rich veins 
 of Sombrerete, and on the backs of mules from the 
 port of Mazatlan, it has been sold at 5 93 piastres 
 in 1850. The proprietors of New-Almaden under- 
 take to reduce the price whenever the price of 
 Spanish quicksilver shall be lowered. They have 
 sent some of it to Chili, where silver-mine work- 
 ing has taken a fresh start. They can sell it advan- 
 tageously in Peru, for the quicksilver of Huanca- 
 velica cost at Pasco in August, 1850, 6 104 piastres 
 the cwt. The mine of New Almaden is not the 
 only one being worked in California; cinnabar is 
 met with in several directions, and hereafter it is 
 probable that California may be looked to as a 
 country producing quicksilver as well as gold. 
 
 1 Ibs. 882=f 103 4 About 5 
 
 2 Ibs. 264,660=30,875 * About 18 12s. 
 
 3 Ibs. 214,361=643,08:} 6 About 20 1C*. 
 
89 
 
 The news of the discovery of quicksilver mines in 
 Mexico, in the neighbourhood of San Luis de Potosi, 
 was confirmed by accounts received in London in 
 March last. Are they old mines formerly abandoned 
 on account of their poverty, or have they really 
 discovered an ore which, as at New Almaden, yields 
 a produce of 50 per cent, of quicksilver? This is a 
 point yet to be cleared up. In the meantime the 
 price of silver has fallen in the district of Guanax- 
 uato to ^0 piastres the hundred weight, and it is 
 now varying between a price of 2 55 and 56 piastres. 
 In short, one of the conditions connected with silver 
 mining has materially changed. An economy of 
 3 60 or 70 piastres per hundred weight in the cost 
 of amalgamation can hardly fail to kindle a fresh 
 spirit of enterprize. 
 
 Another cause will necessarily act on the produc- 
 tion of silver, and that is the very abundance of gold. 
 When silver is found to be more in demand, fresh 
 activity will ensue, both in reopening old galleries, 
 which have 1 >een closed as not sufficiently remunera- 
 tive, and in pushing on the work in those actually 
 in operation. If the mines, feeding the present 
 supply, are becoming exhausted, and other sources 
 are not forthcoming, in a few years silver will reach 
 
 1 About 8 2 About 1.1 and 11 4s. 
 
 3 About 12 or 14 
 
 L 
 
the price of gold, or the value of gold will descend to 
 that of silver ; but as the limits of silver working are 
 but the price of labour, the power of machinery, 
 and the application of science, so, every increase in 
 the quantity of gold which is not caused by acci- 
 dental circumstances, or by an extraordinary demand, 
 must produce a corresponding increase in the pro- 
 duction of silver. Is not this a fact which we have 
 been witnessing since 1850? Who can venture to 
 affirm that Californian gold has had no influence in 
 stimulating the workings of silver in Mexico and 
 Chili? Besides this, the extraction of gold is gene- 
 rally accompanied with a production of silver. Silver 
 mines are not always auriferous, and the richest in 
 gold contain but a small quantity of it, but gold mines 
 are almost always argentiferous. The proportion of 
 silver in a "nugget" of gold is about l-8th in Cali- 
 fornia, l-10th in Siberia, and l-5th in New South 
 Wales. So that for every *four kilogrammes of gold 
 in Australia, there is about one of silver. This is 
 an important fact resulting from chemical analysis. 
 The production of silver is in the course of in- 
 crease, Will that of gold be kept up? It is 
 reasonable to entertain considerable doubt on this 
 point. In Siberia we have seen it retrograde since 
 
 1 4 kilogrammes of gold are equal to Ibs. 10'7212= 500. 
 1 kilogramme is equal to Ibs. 2'6803=8'0409. 
 
1847. The extraction appears stationary perhaps 
 rather on the decrease in California. Australia 
 alone, with gold fields yet unexplored, appears 
 likely to produce much more than heretofore. Auri- 
 ferous strata may be discovered elsewhere, and add 
 to the general stock. Combining these various 
 circumstances, we incline to the opinion that the 
 quantities now forming the annual production of 
 gold will not be diminished for a certain number 
 of years ; but when the miners have exhausted the 
 gatherings from the alluvial deposits, and it becomes 
 necessary to seek the golden ore in the rocks and 
 mountains, ' in which nature appears during the 
 various revolutions and convulsions of the world, 
 to have deposited it ; then the working of the mines 
 will depend upon the amount of capital and the 
 degree of science, which may hereafter be brought 
 to bear on that description of enterprize. 
 
 In a paper read in 1848, before the Royal Insti- 
 tution of London, Sir Roderick Murchison remarks 
 that the principal deposits of gold are found in 
 auriferous " detritus," and that the same degree of 
 success must not be expected to ensue from exploring 
 the veins, which are ramified through the quartz 
 rock. The result hitherto shown in California fully 
 confirms this theory, as is shown in the following 
 letter from an engineer at St. Francisco, dated 4th 
 April last, after an expedition amongst the localities 
 occupied by the gold diggers: 
 
92 
 
 "I send you the result of experiments made upon 
 fragments of rock. In each we have operated upon 
 three tons of quartz, reduced to powder, and care- 
 fully worked by amalgamation. We have made 
 five experiments upon as many veins in the county 
 of Bath, which is situated between 1'Yuba and the 
 River de la Plume. No. 1 has produced J 3 dollars 
 53 cents per ton; No. 2, 2 9 dollars 50 cents; Nos. 
 3 and 4, 3 11 dollars each; and No. 5, 4 17 dollars. 
 
 " In the county of Nevada, experiments have 
 been made on four different points. The first has 
 given 5 15 dollars per ton; the second, scarcely any 
 gold; the third, 6 1 4 dollars per ton this -mine, upon 
 which a company had established works, has been 
 abandoned; and the fourth has given 59 7 dollars, 
 the vein being of an extraordinary richness, and 
 having yielded large returns to the proprietors. 
 
 " In the county of Eldorado, three different veins 
 did not give a larger return than 8 17 dollars per ton; 
 a fourth equalled the richness of No. 4, in the 
 adjoining county. 
 
 " In the county of Mariposa, out of eight experi- 
 ments, three veins gave hardly 3 9 to 7 dollars per 
 
 1 About 14s. 5 3 
 
 2 About 1 18s. 6 2 16s. 
 
 3 About 2 4s. 7 n 16s. 
 
 4 About 3 8s. 8 3 8s. 
 
 9 12s. to 28s. 
 
93 
 
 ton; three more gave J 7 to 20 dollars; one gave 2 24 
 dollars; and one more, 3 38. The two last veins 
 have attracted miners, who are going to work 
 them. No enterprize requires a more careful and 
 a more expensive examination than an auriferous 
 quartz mine. A good vein, yielding 4 36 dollars per 
 ton, may be considered, by moderate people, as 
 worth working; sometimes they are found much 
 richer ; but out of all the quartz-crushing mills 
 which have been set up in California, I do not 
 think that one-third are used for mines which are 
 yielding, for any continued period, 5 30 dollars the 
 ton ; so that one-half of the works of this nature are 
 suspended." 
 
 From the above account, it would appear that 
 a vein of quartz, to be considered productive, should 
 give 36 dollars, or 6 192 francs per ton. This return 
 represents a weight of 55 grammes upon 1000 
 kilogrammes, or 51 parts of gold out of 100,000 
 parts of quartz. Mineral of iron stone will give 10 
 to 15 of metal per 100 ; and the production by 
 melting is infinitely less troublesome or expensive 
 than the extraction of gold. In Australia, it was 
 at first supposed, after an analysis of some ounces 
 of quartz, taken from Mount Ophir, that the ton 
 
 1 1 8s. to 4 4 7 4s. 
 
 2 4 16s. 5 6 
 
 3 7 12s. 6 7 5s. 
 
94 
 
 would yield more than 1100 sterling; but these 
 experiments, made on so small a scale, are of little 
 value. It is not likely that Australia, when the 
 miners find themselves reduced to the necessity of 
 working the quartz rocks, will show any consider- 
 able increase of yield over California. 
 
 The extraordinary abundance of gold, then, does 
 not appear to be of permanent duration. It is a 
 sudden outbreak which we, accordingly, have to 
 meet. It does not appear to be, as far as we can 
 now form any opinion, a reign of one metal, which 
 is likely to take the place of some other; neverthe- 
 less, there will most infallibly be a very marked fall 
 of gold in comparison with silver, unless met by a 
 most extraordinary activity in working the silver 
 mines ; other causes, however, although secondary 
 in themselves, appear, concurrently, likely to neu- 
 tralize part of the effect of this superabundance. 
 
 It is of little importance to ascertain the amount 
 of the annual production of the precious metals, 
 unless we investigate the proportions in which they 
 are distributed between the two hemispheres. Silver 
 gives rise to a regular trade, and, coming from 
 sources long open, it is sent almost exclusively to 
 Europe, as an article of exchange, against the 
 produce of her soil, or of her industry. Gold in 
 California, on the contrary, a source of unexpected 
 wealth, starting up in a new country, is first ab- 
 sorbed by the wants of a local circulation. A new 
 
95 
 
 society, formed in the midst of a desert country, 
 necessarily requires some medium of exchange : some 
 money. Next to the immediate necessities of Cali- 
 fornia come the wants of the United States. These 
 States have, for some years past, been endeavouring 
 to introduce a greater amount of the precious metals 
 into their monetary circulation. The gold of Cali- 
 fornia has powerfully contributed to effect this 
 object. Silver coin now circulates, but in small 
 amounts, throughout the Union. They have coined 
 gold pieces of 20, 10, 5, and even of one dollar. 
 Out of '400,000,000 to 500,000,000 francs, brought 
 in during the three first years, not more than 
 2 70,000,000 or 75,000,000 have found their way to 
 Europe. The import of 1851 has been more sensi- 
 bly felt. According to the returns of the American 
 newspapers, the quantity of gold shipped to Europe 
 from New York and New Orleans, was, during last 
 year, 3 200,000,000 francs. 
 
 The like result is obtained from other channels of 
 information. The Mint of London, which ordinarily 
 coins gold at the rate of about 2,000,000 sterling 
 per annum; and which, in 1850, had not coined 
 more than 1,492,000 sterling; in 1851, increased 
 their operations to the extent of a coinage of 
 4,200,000 sterling (above 105,000,000 of francs). 
 
 1 16,000,000 to 20,000,000 2 2,800,000 to 3,000,000 
 
 3 8,000,000 
 
96 
 
 The moiety of this gold must have come from Cali- 
 fornia. In the same year, the mint of Paris coined 
 in gold l 269,709,570 francs, of which about half 
 was supplied by the conversion of 100,000,000 of 
 Dutch Guillaumes into French money. In the 
 accounts of the German Mints, we find about 
 2 200,000,000 of Californian gold. If we are to judge 
 from the operations of our own mint, the import of 
 1852 will be smaller than that of 1851 ; for we have 
 coined but 14,000,000 pieces in gold during the first 
 three months of this year. 
 
 Australia sends regularly large amounts of her 
 gold to England; but a part of the export of 
 gold dust, or "nuggets," is returned in gold coin. 
 Many vessels have lately cleared from London 
 with 200,000 sterling; and this at a time when 
 England had barely received 800,000 sterling, 
 from Sydney and Melbourne. Considerable amounts 
 will likewise be imported in plate and jewel- 
 lery. The more wealth increases in the colony, 
 the more gold will be employed both for circu- 
 lation and for luxuries. The producing country 
 will be most certainly, par excellence, the country 
 of consumption. Europe contains 200,000,000 in- 
 habitants, of whom not one-half are adequately 
 supplied with metallic money. It would require, 
 
 10,788,383 2 8,000,000 
 
97 
 
 certainly, an addition of many milliards of francs 
 to the quantity of the present metallic circula- 
 tion, to put many of these countries in an equally 
 favourable position in this respect with France, 
 Belgium, Switzerland, Holland, and Great Britain. 
 We know, that only nations of industrious habits 
 are in want of a larger supply of gold and silver 
 because they alone carry on trade to any extent 
 Abundance of production precedes and gives rise to 
 a demand for money. Wealth must exist in a 
 country before the sign of that wealth is required; 
 but, at the same time, it cannot be denied that the 
 circulation of the precious metals stimulates, to a 
 great degree, the creation of richness ; it acts like 
 roads, canals, or other modes of transport, which, 
 by opening the means of reaching markets, ex- 
 tend the radius of operations, and give additional 
 value to commodities. One half of Europe has 
 a trade of inconsiderable importance, and derives 
 but a small part of the benefit of the produce of 
 its own soil. It has neither industry nor credit. 
 In many countries now, gold and silver are re- 
 placed by tho use of paper-money, often discredited 
 in its own, and in all cases valueless out of its own 
 country, 
 
 Austria has just made, partly in London , and 
 partly in Frankfort, a loan of 3,500,000, intended 
 principally to restore the credit of her paper 
 money. This will be the first step towards the 
 
 M 
 
98 
 
 restoration of metallic money, which had disappeared 
 to such an extent, that the smaller notes were 
 often divided into four, to use for change. Prussia, 
 Poland, Russia, and Turkey, have experienced, in 
 different degrees, the like embarrassment. Before 
 these various markets are all superabundantly sup- 
 plied with gold and silver, the treasures of Siberia, 
 Australia, and the two Americas, may be diffused 
 for many years over the continent of Europe. 
 
 The scarcity of gold had restricted its use; in 
 France, for example, the smallest gold coin was 
 J 20 francs. Since it has become more common, the 
 Mint have coined pieces of 2 10 francs, which are 
 much liked, and are convenient for use. These 
 smaller coins appear likely to take the place of a 
 portion of our silver, which is needlessly cumber- 
 some. It is supposed that the use of Bank-notes of 
 3 200 and 100 francs has economised the use of 
 several hundreds of millions of the precious metals. 
 The 10-franc pieces, when more generally used in 
 circulation, will take the place of, and drive out a 
 portion of silver coin. The demand for silver then 
 will diminish, whilst that for gold is increasing. 
 Silver will be used as change for gold as gold is 
 for bank-notes. This is the case to such an extent 
 in England, where the silver circulation is small, 
 that the Mint in London, which coined 1,492,000 
 
 Say 16s. g s . 3 f 3 to 4 
 
99 
 
 sterling in gold, in 1850, only coined 130,000 ster- 
 ling in silver in the same year, whilst, in the same 
 year, '86,000,000 francs in silver were coined at the 
 Mint in Paris. It must not be forgotten that the 
 use of the precious metals is not confined to the 
 limits of Christian civilization. The Chinese im- 
 port Peruvian and Mexican dollars in exchange 
 for their silks and teas; they attract by their 
 trade the gold produced in the neighbouring 
 Islands, and in the Straits of Sunda. This in- 
 dustrious nation has sent its contingent of la- 
 bourers and traders both to California and Aus- 
 tralia. A portion of Californian gold has already 
 gone to China, but Australia appears better situated 
 for the purpose of supplying the eastern regions 
 and the southern portions of Asia with the precious 
 metals. The Australian gold, however, sent there 
 will be as so much lost treasure; for whilst the 
 precious metals which are thrown into circulation 
 in Europe continue in use as coin for a long time, 
 that which is sent to China, or India, or Africa, 
 altogether disappears; it is not required for circu- 
 lation, but seems to be consumed. 
 
 Nothing appears more likely to restore the con- 
 fidence of those who have taken alarm at the 
 abundance of gold than the consideration of the 
 almost unlimited extent of its market. What people, 
 
 1 3,410,000 
 
ioo 
 
 civilized or uncivilized, agricultural or manufactur- 
 ing r do not enter into competition for a supply! 
 What are the millions of francs extracted from the 
 Cordilleras when compared with the capital created 
 by the labour of the inhabitants of the whole 
 globe ? 
 
 The combined washings of the Altai, California, 
 and Australia, during a quarter of a century, would 
 be required to produce a sum equal to the annual 
 revenue of England alone. This unexpected har- 
 vest of the precious metals is but an addition to a 
 common fund of wealth; it cannot produce a deep 
 or a durable impression on the almost incalculable 
 mass of wealth already existing in the world. 
 
 After all, Europe herself does not preserve gold 
 and silver as relics. Money is used by wear and tear 
 ;o such an extent that it must from time to time be 
 recoined, and the consequent loss falls on the commu- 
 nity at large. The use of silver and gold plate, of 
 gold work and jewellery, is increasing every day, as a 
 distinguishing mark of the rise of the middle classes; 
 the manufacturers of France, England, and Switzer- 
 land are at work for all the world. English statis- 
 ticians have estimated the loss, from use, disasters 
 at sea, and export without return of the precious 
 metals, in the United States and Europe, at more 
 than 1 125,000,000 francs a-year. A more moderate 
 
 1 5,000,000 
 
101 
 
 estimate reduces this sum to '75,000,000 francs. As 
 to articles of luxury, the sums of gold and silver em- 
 ployed therein annually, have been estimated by Mr. 
 Jacob, at 2 1 48, 000,000 francs, without including the 
 consumption of the United States of America. Mr. 
 M'Culloch, who embraces the United States in his cal- 
 culations, puts the amount at 3 ! 50,000,000. France, 
 herself employing upwards of 4 30,000,000 francs, it 
 may be admitted, without fear of exaggeration, that 
 the sum of 5 125,000,000 of gold is used for domestic 
 purposes. Here, then, we have an annual consump- 
 tion of 6 200,000,000 francs; the proportion borne 
 by gold in this absorption of the precious metals 
 is every day becoming more important. What 
 remains, at the present time, of the enormous masses 
 of the precious metals which Mexico and Peru 
 have poured forth during the last three centuries ? 
 The amount of gold and silver now in the form 
 of circulation would scarcely equal the produce 
 of the mines during the last fifty years. The 
 30 milliards which America sent to Europe, from 
 the Spanish Conquest to the beginning of the 
 19th century, has almost entirely disappeared. It 
 would appear as if industry, in its contact with 
 gold and silver, must have volatilized it. France 
 
 1 3,000,000 4 1,200,000 
 
 2 5,920,000 3 5,000,000 
 
 3 6,000,000 6 8,000,000 
 
102 
 
 converted into coin a large amount of the precious 
 metals; but when coined, it did not remain 
 there. Exportation appears constantly to produce 
 the effect of banishing it from the country. 
 Thus, in twelve years, from 1840 to 1852, we have 
 imported 1 123,012 kilogrammes of gold, and we 
 hav eexported 2 71,217 kilogrammes; the difference 
 in favour of the import being 3 51,795 kilogrammes, 
 equal to 4 181, 138,000 francs, showing an average 
 of 5 1 5,000,000 francs per annum. Jewellery, gold- 
 smith's work and gilding, employ, annually, in 
 France, quantities of gold exceeding that sum in 
 amount. The excess, then, is taken from the coin- 
 age, which accounts for the ordinary premium on 
 gold in our market. The average would be con- 
 siderably reduced if we except the year 1851, 
 during which the import has exceeded the export 
 by 6 34,503 kilogrammes; but the results of 1851 
 may be considered as exceptional. Already, the 
 greater part has disappeared; gold finds its way 
 from France to London. The Bank of France, whose 
 metallic reserve in 1851 included an amount of 
 7 100,000,000 francs of gold, now does not hold above 
 8 15,000,000 to 20,000,000. French gold coin, com- 
 mon enough in Paris, is scarcely seen in the provinces. 
 
 1 Ibs. 329,612= 15,376,500 * 600,000 
 
 2 Ibs. 190,827=8,902,125 6 Ibs. 92,451=4,312,875 
 
 3 Ibs. 138,785=6,474,375 t 4,000,000 
 
 * 7,245,520 8 600,000 to 800,000 
 
103 
 
 From 1840 to 1852, French commerce imported 
 1 10;! 7 5 ,3 12 kilogrammes of silver, and exported 
 2 3,688,279 kilogrammes. The excess of import, 
 3 6,487,033 kilogrammes, represents a sum of 
 1,303,893,633 francs, or 108,657,802 francs a year. 
 Admitting that 4 15,000,000 are annually absorbed 
 in the demands for articles of luxury, and 
 5 10,000,000 or 12,000,000 for wear, our mone- 
 tary reserve of silver would have increased at 
 least 6 1,100,000,000 since 1840. This leaves a 
 large margin in the circulation of France for the 
 displacement of silver by gold coin. When the 
 import of gold shall have exceeded the export by 
 an amount equal annually to 7 200,000,000 francs, 
 with this accumulated reserve of 8 1,100,000,000 and 
 with an annual excess of y 80,000,000 to 90,000,000 
 francs over the import and consumption of silver, it 
 will require at least ten years to restore the equi- 
 librium between the two metals, to the state in 
 which it was in 1840. 
 
 No subject has given rise to more rash and specu- 
 lative opinions than that connected with the trade 
 in gold and silver. Amidst the great variety of con- 
 flicting phenomena, statistics appear almost value- 
 
 1 Ibs. 27,264,889= 81,794,667 5 400,000 to 480,000 
 
 2 Ibs. 9,882,794=29,648,382 6 44,000,000 
 
 3 Ibs. 17,382,095=52,146,285 7 8,000,000 
 
 or 4,346,312 per annum. 8 44,000,000 
 
 4 000,000 9 3,200,000 to 3,600,000 
 
104 
 
 less; but so long as gold continues to bear a pre- 
 mium, in spite of the apparent superabundance, and 
 notwithstanding its partial demonetization, it may 
 well be considered doubtful whether the relative 
 proportions, established by law between gold and 
 silver in so many countries, will be materially 
 affected for at least some years to come. 
 
 Various remedies have been proposed by alarm- 
 ists, to prevent the evils of the influx of Californian 
 and other gold. Some have desired that govern- 
 ment should limit the quantity of gold to be an- 
 nually coined. This expedient, in the event of a 
 depreciation in value, would be of little avail, for 
 the quantity imported and kept in the shape of bars, 
 would equally augment the general stock, and weigh 
 down the price. Others have thought of altering 
 the legal value, but this plan would be useless as 
 long as gold remained at a premium. If gold became 
 depreciated it would be injurious only until the fall 
 was ascertained, and considered durable; this once 
 determined, things would go on as before. 
 
 Then comes the question as to the demonetization 
 of gold ; doubtless no point is of greater importance 
 for a standard of circulation than a fixed value. It is 
 a fact that in all those countries where a double stan- 
 dard of gold and silver is established, one or other 
 has always obtained the ascendancy, and maintained 
 a premium, and has ceased to appear in the shape 
 of money ; logically, it would appear quite enough 
 
105 
 
 to regulate all prices by the value of one metal, 
 without exposing trade to the uncertainty of an 
 alteration in value of two. In the adoption of one 
 only, however, it is desirable to examine which of 
 the two has, over any given period of time, been 
 subject to the least variation. Before the discovery 
 of California, silver would certainly have had 
 little chance of being selected. Even now it appears 
 to me that the question has not so materially 
 changed as might at first sight be supposed. 
 
 It should be remembered also, that it is not so 
 easy for all countries who may have adopted the 
 double standard to exclude one from their monetary 
 code. The example of Holland has proved that 
 gold, having lost its character as legal money, will 
 no longer be used as a token. To demonetize gold 
 is to exclude it from the market. For a great 
 commercial country like Holland, living in the 
 greatest freedom, and carrying on its trade by 
 exchanging and carrying the products of all the 
 countries in the world, to exclude one of its 
 habitual means of exchange, may not be attended 
 with great risks. England, though little disposed 
 to imitate Holland at present, might perhaps do 
 so with less danger, from having the com- 
 merce of the whole world in its hands. France, 
 unless under pressing necessity, could not demo- 
 netize her gold without exposing herself to a 
 complete disturbance in all her relations, both at 
 
 N 
 
106 
 
 home and abroad. Our trade is tied up by a com- 
 pletely protective system, without alluding to those 
 direct prohibitions which disgrace our customs' 
 tariffs ; almost all the duties which affect articles of 
 primary consumption are, in short, disguised pro- 
 hibitions. In exchange for the products of our own 
 country, which we have to sell to the foreigner, we 
 can hardly purchase in return anything but raw 
 materials. Thus, bar and pig-iron, those articles 
 of primary importance, have been subjected to duties 
 at the rate of 100 per cent, on their value. In 
 those countries enjoying a legislation attentive to 
 the wants of trade, and where the custom-houses 
 are only for the objects of revenue, the imports and 
 the exports will show an even balance. In our 
 country, where we have been desirous of opposing 
 a barrier to the free course of exchange, goods 
 exported have always a preponderance in value 
 over those imported. In 1850, for example, the 
 imports represented a value of J 7 90,000,000 francs, 
 and the exports 2 1,068,000,000 francs, showing a 
 difference of 3 278,000,000. England and the United 
 States, together, receive of our products an ex- 
 cess of 4 236,000,000 above the exports we receive 
 from them ; and as those countries with which we 
 trade cannot pay us in goods, they must make 
 
 31,600,000 3 11,120,000 
 
 42,720,000 4 9,440,000 
 
107 
 
 their return in gold and silver. This was the 
 reason of the import of '220,000,000 francs in coin 
 in 1850, as shown in our official returns. So long 
 as the system of protection is the ruling policy of 
 France, so long will it be impossible to deprive gold 
 of its value as money; to attempt it would be to 
 withdraw from trade one of its most useful means 
 of exchange. It would check, if not stop, all inter- 
 course with those countries who can only pay 
 in gold, or who can only sell us those commo- 
 dities which we endeavour to exclude by our tariffs. 
 Gold flows naturally only to those countries where 
 it is marketable ; and it is only so where it is in use 
 as coin as well as in commerce. A profit of half per 
 thousand is sufficient in the present day to turn the 
 current of the precious metals. This circumstance 
 ought not to be lost sight of in the consideration of 
 monetary legislation. 
 
 In fact, the change in the relative value of gold and 
 silver, which was so strongly anticipated, appears 
 anything but imminent ; if any great change is now 
 taking place, it appears rather to be that of a simul- 
 taneous depreciation in the value of both metals. 
 Deep thinking persons are not content with express- 
 ing their fears; they are already providing them- 
 selves with the means of averting the evils which 
 they anticipate. This is one of the causes which 
 
 8,800,000 
 
108 
 
 have raised the value of railroad stocks, and of 
 landed property ; and this explains the comparative 
 abandonment, not of speculation, but of capital or- 
 dinarily seeking investment in government stocks. 
 Alarm is felt at placing money on security, of which 
 both the capital and the interest may remain at a 
 fixed value ; these may be the more sensibly affec- 
 ted, if the value of the precious metals is altered; 
 whereas the shareholder of a railroad would have 
 a chance of having his income increased; and the 
 landed proprietors that of having their capital aug- 
 mented in the same proportion in which the value 
 of money would be depreciated. 
 
 In dwelling on these facts, I have no idea of set- 
 ting myself up as a prophet. I would confine myself 
 to the wish to indicate some of the symptoms of the 
 present position of these matters ; the danger, if any 
 exists, is certainly not very near at hand. We have 
 already seen the use of bank notes in France in- 
 creased to an extent which, owing to the stability 
 of their value, has largely taken the place of specie. It 
 is but reasonable to suppose, that the present abun- 
 dance of gold and silver will make no greater dis- 
 turbance within a short time, than has the great 
 increase of paper money. 
 
 The influx of the precious metals has been, in a 
 certain sense, a providential occurrence during the 
 revolutionary state of Europe. Credit had either 
 'disappeared, or had at least become stagnant. Every- 
 
109 
 
 where, amidst the tempest of the times, both past 
 and prospective, business had been suspended, or 
 carried on only for ready money. Affairs had as- 
 sumed an aspect of a primitive state of exchange. 
 An increase of metallic circulation might again 
 restore confidence, and calm agitation. The average 
 excess of money imported over that exported, 
 which, before 1848, was not above '80,000,000 to 
 100,000,000 francs, amounted in 1848 and 1849 to 
 nearly 2 300,000,000 francs for each year. Specie in 
 these times supplied the wants of trade, and main- 
 tained prices; but, in more easy times, when used 
 not alone, but concurrently with paper money and 
 bills of exchange, for the purposes of circulation, 
 gold and silver would naturally be in use in pro- 
 portion to the movements of trade. The reason 
 why 3 600,000,000 of francs in coin now encumbers 
 the vaults of the Bank of France, is, because capital 
 is only employed in the stock markets, and that 
 the restoration of trade on a large scale is still con- 
 fined to a sort of anticipation ; but let the industry 
 of the country experience a complete restoration of 
 confidence in the future, and we shall soon see the 
 metallic reserve of the bank diminish; and, as a 
 natural consequence, our market will attract an 
 import of the precious metals from abroad. In 
 
 1 3,200,000 to 400,000,000 12,000,000 
 
 3 24,000,000 
 
110 
 
 short, gold and silver will then be wanted; the 
 state of trade will improve, and we shah 1 have to 
 seek for an increased supply. 
 
 Let us not then either despair or be too confident ; 
 the world is not entering on an Eldorado, nor is it 
 on the eve of a state of ruin. Those who consider 
 gold and silver as positive wealth, who confound 
 an abundant supply of the precious metals with an 
 abundance of capital, and who affirm that the gold 
 imported from California must lower the rate of 
 interest, should remember that the rate of interest 
 is determined by the state of confidence, as well 
 as by the general rule of the supply and demand 
 for loanable capital, and that confidence depends 
 upon the good order existing throughout the civi- 
 lized world. California itself shows the delusion 
 of such an idea for there, where gold is strew- 
 ing the land, interest has risen as high as from 
 eight to ten per cent, per month. Those on the 
 contrary, who, at the idea of the galleons seeking 
 freights in the western continent, dream only of ruin 
 and catastrophes who anticipate that the day will 
 arrive that the Bank of France will pay persons to 
 take away her gold should not forget that she sells 
 it now without difficulty even at a small premium, 
 and that this increased trade in gold has not 
 hitherto ruined anybody. 
 
 PARIS, August, 1852. 
 
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