THE GREAT GOLD QUESTION.

Lyttelton Times, Volume XXI, Issue 1190, 30 January 1864, Page 5

THE GREAT GOLD QUESTION.

A few of our readers may possibly remember that we asserted, some ten years ago, that no depreciation of the precious metals had then taken place, in consequence of the gold of California and Australia; while we predicted that, as none had taken place iu the narrow market into which it was then poured, it was very improbable that depreciation should take place in the wider market which the future was sure to open to them. The quantity of new gold produced has not since increased; for, although some fresh deposits have been discovered, the produce of one, at least, of the old mines, that of Victoria, has materially decreased. Fov fifteen years the quantity of the new gold has been yearly at the rate of £20,000,000; and as the relative value of gold and silver is almost the same as before the new discoveries of the former, it is certain that in some way or other a value of silver equal to that of gold must have come into the market, The value of the precious metals (supposing this estimate to lie tolerably correct) thrown into the market of the world, in addition to what already existed will amount to the vast sum of six hundred millions sterling. As we are wholly unable to discover any rise in the price of the commodities which would imply a fall in the value of gold, we come to the conclusion that the new gold has been absorbed in the additional wealth which it has itself stimulated into existence; or, in other words, that the world is richer than it was fifteen years ago by the whole amount of the new gold and silver, and of the commodities which they represent. When the new gold was discovered it was a general belief that its effects would be equal to that which was supposed to follow the influx of the gold and silver of America in the sixteenth and seventeenth centuries. Some eminent men, even great bankers, were satisfied that in no long time the purchasing power of the sovereign would be reduced to that of 10s., while others believed that it would fall in the proportion which it was imagined gold had fallen after the American influx, that is, that the sovereign would be intrinsically worth no more than 55., the creditor to be put oif with £25 for every £100 that the debtor owed him. These extravagant notions of depreciation are no longer entertained, but a milder theory has been adopted. This was propounded at the recent meeting of the British Association by a most ingenious and able gentleman, Mr. Fawcett, the late candidate for Southwark, and he founded his theory chiefly on the calculations of a work by Mr. Stanley Jevons, a gentleman brought up at the Royal Mint, and fresh from the Mint of Australia. The conclusion to which Mr. Fawcett comes is, that gold has been already depreciated to to the extent of 10 per cent., and that within the next ten years it will be depreciated by fifteen per cent more, making a total depreciation in a quarter of a century, dating from the new gold discoveries, of twenty-five per cent. The meaning of all this is, that we shall be robbed of one-fourth part of our property, but that the robbery is to be so gently and skilfully perpetrated that we shall feel as if we were not robbed at all. We believe in the ingenuity of Mr. Fawcett, but by 110 means iu his logic; but let us turn to the calculations of Mr. Jevons, on which they are professedly and avowedly founded. Mr. Jevon's method of showing a depreciation is this: he compares the prices of many commodities, and seeing there has been a rise iu some and a fall in others, and finding that there has been a rise in more commodities than there has been a fall, he strikes a balance, and makes this balance the rate of the depreciation oi gold, which he estimates, by this strange process, at nine and a third per cent in fifteen years. Notwithstanding his own figures, however, he fancies that the real depreciation has been as much as fifteen per cent, a sufficient condemnation, one would think, ot I his own calculation. His facts are obviously vitiated for a fair conclusion by the simple fact that the two periods of prices compared by him are unequal, tiie period since the gold discoveries being ot no more than three years, while that which preceded them is of double that length. Then he divides articles into groups, in which the most incongruous commodities are intermixed. Thus his twelfth group includes leather, calf-skins, Stockholm tar, spin si of turpentine, and nitrate of soda. His twenty-third group classes together Russian hemp, the produce o. the cannabis sativa, with Manilla hemp, the produce of a banana, and jute and sunn, the products of two Indian plants—the one what botanists call a chorus, and the other a Crotollaria. In truth, there is really little in common between these commodities, save a name arbitrarily bestowed upon them. There has been a rise in some important commodities, and a fall in others, equally important on a comparison of the two periods, however palpii > y unfair from their flagrant inequality m length. Every ease of rise or fall of price quoted bj Mi. Jevons seems to us readily accounted for on the common principle of supply and demand. I bus there has been a rise in the price of tallow and hides, of meat and butter, of grain, hay, clover, and straw more or leas the produce of our own soil, of which

its owners have a natural and legitinnte monopoly They have risen in proportion to our increase in wealth and population, and such a rise was inevitable. For the same reason there has been a rise in the value of land. There has been a rise in the wages of labour, which Mr. Tooke, within ten years of the gold discoveries, estimated at twenty per cent. Thereason in this case is obvious, —the laborers had not increased in the same proportion as had the capital distributed in the payment of wages. Mr. Jevons makes the increase in fibrous materials to be no less than twenty seven per cent; but among fibrous materials he himself makes the rise in American cotton, the chief among them, little better than nominal-, while in raw silk, anothertibrous material, the rise of price has been owing to a disease in the European caterpillar that produces it, and the necessity of bringing the article from the distant countries of China and Japan. The rise in the metals is made by Mr. Jevons no more than six per cent, but this result is brought about by classing together metals in which there has been a great rise with iron, in which there has been a great fall, owing to the discovery of new veins of mineral and the introduction of improved processes of manufacture, the value of the British iron being far greater than that of all the other metals put together. For copper, tin, lead and spelter we depend on foreign countries and our colonies; but the iron is our own, and its production directly amenable to our skill and science. Mr. Jevons makes the rise in the price of wine forty-one per cent., notoriously caused, not by the depreciation of gold, but by the o'idium. There has been a great fall in the price of all sorts of ardent spirits, of far more value than ail the wines, but they are among Mr. Jevons's minor articles, to be overbalanced by his principal ones, in which there has been a rise. He makes a fall in the price of sugar to be no more than five per cent,, but this is brought about by classing two articles of a wholly different character with it. which then has been a. rise, namely, tea and coffee, which have no other relation with it than that they are to be seen together on the same table.

If a depreciation of gold had really taken place, it ought, except in such special cases as the rise in wine and raw silk, to have been equally spread over every commodity. Far from this being the case, there is a rise in some staples and a fall in other staples equally important. The rise in the price of silver, by Mr. Jevons's own showing, is but 2 per cent, m fifteen years, and none at all in the last nine years. Why has the rise, instead of this trifling fraction, not been 28 percent,, as in meat and butter, or 58 per cent., as in tallow and hides? If the fall in the value of the precious metals had been to onefourth of their original value, as is alleged to have followed their influx in the sixteenth and seventeenth centuries, why do we now limit their depreciation to a poor ten per cent., or even to Mr. Fawcett's imaginary twenty-five per cent., since for facility and expedition in disseminating gold and siver these fifteen are more effectual than the century which is alleged to have intervened between the opening of the mines of Potosi and the time that the depreciation was completed?— London Examiner, Oct. 10.