But as soon as the discoveries of gold were made in the alluvial deposits of California and Australia, or rather as soon as it was suspected that money would thereby become considerably increased in volume, the annuitants and income classes, the creditors everywhere, took steps to avert what they characterized as a great calamity. They openly declared their purpose, by every means in their power, to prevent a decline in the value of money, so that the purchasing power of their incomes might not be reduced. They determined to go to any length in order to prevent the rise of prices which their aggressive instincts led them to fear would follow the additions to the money volume of the world by the natural and much needed yield of the mines.
The fiat therefore went forth that one of the metals must be discarded.
THE PROPOSITION FIRST MADE TO DEMONETIZE GOLD.
If anything were needed to demonstrate that the reason for the demonetization of silver was the cupidity of the creditor classes—the money-lenders, annuitants, and those in receipt of fixed incomes—and that it was not any defect inhering in the metal silver, nor any change in its adaptability to subserve the purposes of money, it is to be found in the significant fact that the metal first selected for demonetization was not silver but gold—that metal which has since become the idol of the money-changers, and which is now declared to be the only "natural" money. The openly-avowed determination was to increase the value of money, and in order to accomplish that purpose the metal which promised the largest yield was to be condemned and stripped of its ancient monetary function. So strongly was this determination set forth, so earnestly was it presented, and so urgently pressed on the ground of duty that its achievement came to be regarded as the fulfillment of a high moral purpose.
It was with gold then as it came to be with silver afterward, and as it always is with whatever interferes with the interests of privileged classes, intrenched in power and prerogative,—the determination to destroy it being arrived at, measures were taken to prove that the public good required its destruction. While the purpose was to discard the metal, whether gold or silver, which threatened most immediately and seriously to reduce the purchasing power of money, the argument was that a decrease in the purchasing power of money was a calamity against the happening of which every energy should be directed.
The privileged classes found then, as they find now, able and ingenious advocates and defenders among the literary and educated guilds of the period. The celebrated De Quincy, in England, attempted to prove, and to his own satisfaction did prove upon figures drawn from his fears and a brilliant imagination, that the least yield of gold to be expected from the mines of California and Australia for an indefinite period in the future, was the yearly sum of $350,000,000.
M. Chevalier, in France, vehemently proclaimed the necessity of discarding one of the money metals, and that one not silver but gold. In his work upon the "Fall of Gold" M. Chevalier, in 1856, said:
The quantity of gold annually thrown on the general market approaches in round numbers a milliard of francs ($200,000,000). Those two countries (California and Australia) must yet for a long series of years produce gold in such quantities and on such conditions as to render a marked decline in its value inevitable.
It is absolutely certain that so vast a production should be accompanied with a great reduction in value.
In no direction can a new outlet be seen sufficiently large to absorb the extraordinary production of gold which we are now witnessing, so as to prevent a fall in its value.