PROBABLE EFFECTS OF THE INFLUX OF GOLD FROM CALIFORNIA & AUSTRALIA.

Otago Witness, Issue 87, 15 January 1853, Page 1

PROBABLE EFFECTS OF THE INFLUX OF GOLD FROM CALIFORNIA & AUSTRALIA.

(From Bell's Weekly Messenger.) " What is A Pound ?" — This is a question more easily asked than answered. Nor does the cheapening of the precious metal from the California!! and Australian supply seem at all to simplify the subject ; rather it " makes that darker which was dark enough" before. A pound, says one, is a given weight of the precious metals of a certain fineness. A pound, says another, is the measure of value. A pound, says a third, is the emblem of taxation. A pound used to be a pound weight of sterling silver, now worth 60s. A pound has been a pound of flesh cut nearest from the heart, and wrung from the vitals of the state. But let us take it for granted that a pound is a pound, the value of which is known well enough, especially by those who have to borrow it. We all know that at present a pound will buy four bushels, or thereabouts, of fair wheat ; and in consequence four bushels of wheat will purchase a pound. We know also, that a few years ago a pound would only have bought two and twothirds of a bushel of wheat; or that two and and two-thirds of a bushel of wheat only were required to purchase a pound. Consequently, in respect of wheat, gold is dearer now than

then ; and in respect of gold, wheat is now cheaper than it was then. We see then, that if gold be cheap corn is dear, and if gold be dear corn is cheap. Now, by those legislative measures which have rendered corn cheap, gold has been rendered dear. But if gold be rendered cheap by a fresh discovery, or by our legislators making the currency free, which is now fettered by the acts of 1819 and 1844, the corn will be rendered dear in the same manner as it has been rendered too cheap. Let us suppose that, from the influx of gold from California, Australia, or elsewhere, it becomes so plentiful as to be as cheap as silver, or, to take an extreme case, as cheap as copper — say, that the sovereign will only exchange for its weight in | copper. There is no question that it will still 1 be a pound, if a pound be a given weight of I the precious metals of a certain fineness ; and a ! sovereign will still discharge a pound of debt, or a pound of taxes. We agreed to pay our debts in pounds containing a given quantity of gold ; and upon this plea the country which, in the war time, borrowed money in paper pounds, which were depreciated so as not to be worth I more than 155., if as much — for wheat was 80.-^ a quarter — has been saddled with paying in pounds worth 205.; and the greater part of it I fell on the unfortunate agricultural interest, on whose broad back all taxes are usually packed. This same pound has been still further increasI ed by admitting foreign untaxed corn to comi pete with our home-grown taxed com — by admitting the produce of serf and slave labour to , compete with the labour of freemen and Eng- ! lishmen. The consequence is, that agricultural wages have fallen at the rate of from ss. to 3s. 1 a week over a great part of the country, and the agricultural population are emigrating to the United States in shoals. "~But supposing* pounds to become as cheap as farthings — in other words, suppose corn to cost as many I pounds a quarter as it now does farthings — the 1 questions are, who will gain, and who will lose 1 by the change ? It is clear the labourer will j not lose; he must always get as much as will keep him, or he would cease to exist. But will he gain ? Yes, he will, and for reasons to be seen presently. What will happen to the farmer ? Why, all his fixed charges — his debts, his taxes — will be paid in farthings, instead of sovereigns; while all he sells will fetch sovereigns instead of farthings. He will consequently be so much better off, that he will venture to employ more labour, and the law of supply and demand will raise the wages of labour more than in proportion to the cost of living. But who will lose by it? Why, the mortgagee, the fundholder, and ! the man with a fixed salary, who have hitherto been the only real gainers by the Free-trade system, so miscalled, and who since 1819 have reaped such an enormous advantage from the | rise of the pound sterling, and the fall of prices. If such be the case, " we shall have sackfuls of i sovereigns to take home," and the agriculturists, i as such, will have nothing to fear from the i change. But this will not happen. We have 1 put an extreme case to show that it will no way ■ hurt the farmer. Gold can never become as j cheap as this ; it is not as plentiful as copper, and can never become as cheap. It is not even as plentiful as silver, and will not therefore be- ! come as cheap ; and even silver is worth os. an ounce. Moreover, gold will, of course, be more plentiful in the countries where it is found, which will keep the wages higher there than here ; and for a long period the scarcity of labour there will also assist in keeping up wages. Besides, gold is an intrinsically valuable metal, not liable to corrode ; and however easy it is to get — " Still gold will always be a useful metal, Appropriate for a warming-p.ui or kettle." Then there is a great void of gold to be filled up all over the world. This will make the cheapening of it a slow and gradual process; nevertheless it will go on gradually but slowly, and this gradual cheapening Mill be a gradual relief from the unjust system of legislation under which the agriculturists are oppressed, even supposing the}' are not able to obtain some measure of justice from the wisdom of Parliament, in the shape of relief from taxation, or otherwise. But the country may with safety rely on a superior wisdom, in relieving it from a system of money as unjust as it is impolitic — one of the legacies left by that great but slippery minister, to whom now be peace, and of which the wisdom of Parliament is scarce able to furnish a requisite remc-dy, from the very simple reason of their not understanding tho nature of the disease. To conclude, then, we fear nothing', and we hope all things^feom the influx of gold from the Californian an'd^A'ffstraHan mines. " * ; " '