The history of all mining districts, and of all smelting and refining processes,[[27]] present us with similar facts; and the aspects of applied science, in our day, are rich in their promise of such improvements for the future. If, therefore, to all the considerations we have presented we add those from which writers like M’Culloch[[28]] had previously anticipated an increased supply of the precious metals—such as the pacification of Southern America, and the application of new energy to the mines of that country, and probably under the direction of a new race—the calmest and coolest of our readers will, we think, coincide with us in anticipating from old sources, as well as from new, an increased and prolonged production of the precious metals.
Of the social and political consequences of these discoveries, the most striking and attractive are those which are likely to be manifested in the immediate neighbourhood—using the word in a large sense—of the countries in which the new gold mines have been met with. The peopling of California and Australia—the development of the boundless traffic which Western America and the islands of the Australasian, Indian, and Chinese seas are fitted to support—the annexation of the Sandwich Islands(!)—the establishment of new and independent dominions on the great islands to the south and west—the throng of great ships and vessels of war we can in anticipation see dotting and over-awing the broad Pacific—the influence, political and social, of these new nations on the old dominions and civilisation of the fabled East, and of still mysterious China and hidden Japan;—we may almost speak of this forward vision, as Playfair has written of the effect upon his mind of Hutton’s expositions of the past—“The mind seemed to grow giddy by looking so far back into the abyss of time; and while we listened with earnestness and admiration to the philosopher, who was now unfolding to us the order and series of these wonderful events, we became sensible how much further reason may sometimes go than imagination can venture to follow.”
But its influence, though less dazzling, will be as deep and perceptible upon the social relations of the older monarchies of Europe. Our own richly commercial and famed agricultural country, and its dependencies, will be especially affected. Prices will nominally rise—commerce and general industry will be stimulated—and a gilding of apparent prosperity will overspread class interests, which would otherwise languish and decline. How far this is likely to be favourable to the country, on the whole—to interfere with, disguise, or modify the effect of party measures—we have recently discussed in previous articles, and shall for the present pass by.
Perhaps that portion of its influence which, in this country of great money fortunes, and in some of the Continental states, is attracting most attention, is the change likely to be produced by it in the bullion market, especially in the relative values of gold and silver, and even (should this not materially alter, in consequence of an enlarged produce from the silver mines) in the real value of annuities, stock, and bonds of every description. It has occasionally happened in ancient times, that by a sudden large influx of gold the comparative value of that metal has been lowered in an extraordinary degree. Thus Strabo, in his Geography, (book iv. chap. vi. sect. 9,) has the following passage:—
“Polybius relates that, in his time, mines of gold were found among the Taurisci Norici, in the neighbourhood of Aquilea, so rich that, in digging to the depth of two feet only, gold was met with, and that the ordinary sinkings did not exceed fifteen feet; that part of it was in the form of native gold, in pieces as large as a bean or a lupin, which lost only one-eighth in the fire; and that the rest, though requiring more purification, gave a considerable product; that some Italians, having associated themselves with the barbarians to work the mines, in the space of two months the price of gold fell one-third throughout the whole of Italy; and that the Taurisci, having seen this, expelled their foreign partners, and sold the metal themselves.”[[29]]
Were anything of this nature to happen—though very far less in degree—as a consequence of the recent discoveries, it could not fail to produce a serious monetary revolution, and much pecuniary distress, both individual and general, which the wisest legislation could neither wholly prevent nor remove. Such a sudden and extreme effect many have actually anticipated from them, and measures have, in consequence, been taken, even by Continental governments, such as are detailed in the following passage from Mr Wyld’s pamphlet:—
“Among the many extraordinary incidents connected with the Californian discoveries, was the alarm communicated to many classes, which was not confined to individuals, but invaded governments. The first announcement spread alarm; but, as the cargoes of gold rose from a hundred thousand dollars to a million, bankers and financiers began seriously to prepare for an expected crisis. In England and the United States the panic was confined to a few; but, on the Continent of Europe, every government, rich and poor, thought it needful to make provision against the threatened evils. The governments of France, Holland, and Russia, in particular, turned their attention to the monetary question; and, in 1850, the government of Holland availed itself of a law, which had not before been put in operation, to take immediate steps for selling off the gold in the banks of Amsterdam, at what they supposed to be the then highest prices, and to stock themselves with silver. This operation was carried on concurrently with a supply of bullion to Russia for a loan, a demand for silver in Austria, and for shipment to India; and it did really produce an effect on the silver market.
“The particular way in which the Netherlands operations were carried out was especially calculated to produce the greatest disturbance of prices. The ten-florin gold pieces were sent to Paris, coined there into napoleons, and silver five-franc pieces drawn out in their place. At Paris, the premium on gold, in a few months, fell from nearly two per cent to a discount, and at Hamburg a like fall took place. In London, the great silver market, silver rose between the autumn and the New Year, from 5s. per oz. to 5s. 1⅝d. per oz., and Mexican dollars from 4s. 10½d. to 4s. 11⅝d. per oz.; nor did prices recover until towards the end of the year 1851, when the fall was as sudden as the rise.”—(Wyld, pp. 20, 21.)
Now, without identifying ourselves with any unreasonable fears, or partaking of the alarms occasionally expressed, either at home or abroad, we cannot shut our eyes to the certainty of a serious amount of influence being exercised upon monetary and financial affairs, by a long continuance of the increased supplies of gold which are now pouring into the European and American markets. We concede all that can fairly be demanded, in the way of increased supply—to meet the wants of the new commerce springing up in the Pacific and adjacent seas—to allow of the increased coinage which the new States in North America, and the growing population of our own colonies require—to make up for the extending use of gold and silver in articles of luxury which increasing wealth and improving arts must occasion—to restore the losses from hoarding, from shipwreck, from wear and tear of coin, and the thousand other causes of waste—and to admit of the large yearly storing of coin for the purposes of emigration: all that can fairly be demanded to meet these and other exigencies we admit; and yet there will still, at the present rate of yield, be a large annual surplus, which must gradually cheapen gold in the market. There are no data upon which we can base any calculations as to the yearly consumption of gold alone for all these purposes; but estimates have been made by Humboldt, Jacob, and M’Culloch, of the probable consumption of gold and silver together, up to a very recent period. The latter author disposes of the annual supply of the metals—estimated at nine millions before the recent discoveries—in the following manner:—
| Consumption in the arts in Europe and America, | £4,840,000 |
| Exportation to Australia and India, | 2,600,000 |
| Waste of coin (at 1 per cent,) | 1,600,000 |
| Making together, | £9,040,000 |