to check them, by balancing the amount of gain against the amount of
labour applied, he cannot know but that the reports themselves would
show on examination a series of unusual successes set against a series
of entire failures, so as to leave a _facit_, after all corrections and
allowances, of moderately good wages upon an equal distribution of the
whole. I would remind him to propose this question: has it been
asserted, even by these wild reports, with respect to any thousand men
(taken as an aggregate), I do not mean to say that all have succeeded,
or even that a majority have not failed decisively--that is more than I
demand--but has it been asserted that they have realized so much in any
week or any month as would, if divided equally amongst losers and
winners, have allowed to each man anything conspicuously above the rate
of ordinary wages? Of lotteries in general it has been often remarked,
that if you buy a single ticket you have but a poor chance of winning,
if you buy twenty tickets your chance is very much worse, and if you buy
all the tickets your chance is none at all, but is exchanged for a
certainty of loss. So as to the gold lottery of Australia, I suspect
(and, observe, not assuming the current reports to be false, but, on the
contrary, to be strictly correct for each separate case, only needing to
be combined and collated as a whole) that if each separate century[43]
of men emigrating to the goldfield of Mount Alexander were to make a
faithful return of their aggregate winnings, that return would not prove
seductive at all to our people at home, supposing these winnings to be
distributed equally as amongst an incorporation of adventurers; though
it _has_ proved seductive in the case of the extraordinary success being
kept apart so as to fix and fascinate the gaze into an oblivion of the
counterbalancing failures.
There is, however, notoriously, a natural propensity amongst men to
confide in their luck; and, as this is a wholesome propensity in the
main, it may seem too harsh to describe by the name of _mania_ even a
morbid excess of it, though it ought to strike the most sanguine man,
that in order to account for the possibility of any failures at all, we
must suppose the main harvest of favourable chances to decay with the
first month or so of occupation by any commensurate body of settlers; so
that in proportion to the strength and reality of the promises to the
earliest settlers, will have been the rapid exhaustion of such promises.
Exactly _because_ the district was really a choice one for those who
came first, it must often be ruined for _him_ who succeeds him.
Here, then, is a world of disappointments prepared and preparing for
future emigrants. The favourite sports and chief lands of promise will
by the very excess of their attractiveness have converged upon
themselves the great strength of the reapers; and in very many cases the
main harvest will have been housed before the new race of adventurers
from Great Britain can have reached the ground. In most cases,
therefore, ruin would be the instant solution of the disappointment. But
in a country so teeming with promise as Australia, ruin is hardly a
possible event. A hope lost is but a hope transfigured. And one is
reminded of a short colloquy that took place on the field of Marengo.
'Is this battle lost?' demanded Napoleon of Desaix. 'It is,' replied
Desaix; 'but, before the sun sets, there is plenty of time to win it
back.' In like manner the new comers, on reaching the appointed grounds,
will often have cause to say, 'Are we ruined this morning?' To which the
answer will not unfrequently be, 'Yes; but this is the best place for
being ruined that has yet been discovered. You have trusted to the
guidance of a _will-of-the-wisp_; but a _will-of-the-wisp_ has been
known to lead a man by accident to a better path than that which he had
lost.' There is no use, therefore, in wasting our pity upon those who
may happen to suffer by the first of the two delusions which I noticed,
viz., the conceit that either Australia or California offers a lottery
without blanks. Blanks too probably they will draw; but what matters it,
when this disappointment cannot reach them until they find themselves
amidst a wilderness of supplementary hopes? One prize has been lost, but
twenty others have been laid open that had never been anticipated.
Far different, on the other hand, is the second delusion--the delusion
of those who mistake a transitional for a permanent prosperity, and many
of whom go so far in their frenzy as to see only matter of
congratulation in the very extremity of changes, which (if realized)
would carry desperate ruin into our social economy. For these people
there is no indemnification. I begin with this proposition--that no
material extension can be given to the use of gold after great national
wants are provided for, without an enormous lowering of its price: which
lowering, if once effected, and exactly in proportion as it is effected,
takes away from the gold-diggers all motive for producing it. The
dilemma is this, and seems to me inevitable: Given a certain
depreciation of gold, as, for instance, by 80 per cent., then the
profits of the miners falling in that same proportion[44] (viz., by
four-fifths) will leave no temptation whatever to pursue the trade of
digging. But, on the other hand, such a depreciation _not_ being
given--gold being supposed to range at anything approaching to its old
price--in that case no considerable extension as to the uses of gold is
possible. In either case alike the motive for producing gold rapidly
decays. To keep up any steady encouragement to the miners, the market
for gold must be prodigiously extended. That the market may be extended,
new applications of gold must be devised: the old applications would not
absorb more than a very limited increase. That new applications may be
devised, a prodigious lowering of the price is required. But precisely
as that result is approached the _extra_ encouragement to the miners
vanishes. _That_ drooping, the production will droop, even if nature
should continue the extra supplies; and the old state of prices must
restore itself.
The whole turns upon the possibility of extending the market for gold. A
child must see that, if the demand for gold cannot be materially
increased, it is altogether nugatory that nature should indefinitely
enlarge the supply. In articles that adapt themselves to a variable
scale of uses, so as to be capable of substitution for others, according
to the relations of price, it is often possible enough that, in the
event of any change which may lower their price, the increased demand
may go on without assignable limits. For instance, when iron rises
immoderately in price, timber is substituted to an indefinite extent.
But, on the other hand, where the application is severely circumscribed,
no fall of price will avail to extend the demand. Certain herbs, for
instance, or minerals, employed for medicinal purposes, and for those
only, have their supply regulated by the demand of hospitals and of
private medical practitioners. That demand being once exhausted, no
cheapness whatever will extend the market. Suppose the European market
for leeches to be saturated; every man, suppose, is supplied; in that
case, even an _extra_ thousand cannot be sold. The purpose which leeches
answer has been met. And after _that_ nobody will take them as a gift.
But in the case of gold, it is imagined that, although the market is
pretty stationary whilst the price is stationary, let that price
materially lower itself, and immediately the substitutions of gold for
other metals, or for other decorative materials (as ivory, etc.), would
begin to extend; and commensurately with such extensions the regular
gold market would widen. This is the prevailing conceit. Now let us
consider it.
What are the known applications of gold in the old state of
circumstances, which may be supposed capable of furnishing a basis for
extension in the altered circumstances? I will rapidly review them.
First, a very large amount of gold more than people would imagine is
annually wasted in gilding. Much of what has been applied to other
purposes is continually reverting to the market; but the gold used in
gilding is absolutely lost. This already makes a drain upon the gold
market; but will that drain be materially larger in the event of gold
falling by 50 _per cent._? Apparently not. Amongst ourselves the chief
subjects of gilding are books, picture-frames, and some varieties of
porcelain. But none of these would be bought more extensively in
consequence of gold being cheap: a man does not buy a book, for
instance, simply with a view to its being gilt; the gilding follows as a
contingency depending upon a previous act not modified in any degree by
the price of gold. In the decoration of houses it is true that hitherto
our English expenditure of gilding has been very trifling compared with
that of France and Italy, and to a great extent therefore would allow of
an increased use. Cornices, for instance, in rooms, and sections of
panels, are rarely gilt with us; and apart from any reference to the
depreciation of gold, I believe that this particular application of it
is sensibly increasing at present. Of course an improvement, which has
already begun, would extend itself further under a reduced price of
gold; yet still, as the class of houses so decorated is somewhat
aristocratic, the effect could not be very important. On the Continent
it is probable that at any rate gilding will be more extensively applied
to out-of-doors decoration, as for example, of domes, cupolas,
balustrades, etc. But all architectural innovations are slow in
travelling! And I am of opinion that five to seven thousand pounds'
worth of gold would cover all the augmented expenditure of this class.
It is doubtful, indeed, whether all the increase of gilding will do more
than balance the total abolition of it on the panels of carriages. In
the time of Louis XIV. an immense expenditure occurred in this way, and
the disuse of it is owing to the superior chastity of taste amongst our
English carriage-builders, who, in this particular art, have shot far
ahead of continental Europe. But the main consumption of gold occurs,
first, I should imagine, in watches and watch chains; secondly, in
personal ornaments; and thirdly, in gold plate. Now we must remember, at
starting, that what is called jewellers' gold, even when manufactured by
honourable tradesmen, avowedly contains a very much smaller proportion
of the pure metal than our gold coinage. Consequently an increase in the
use of watches and personal ornaments, or of such trinkets as
snuff-boxes, supposing it in the first year of cheapened gold to go the
length of 20 per cent., would not even in that department of the gold
demand enhance it by one-fifth, but perhaps by one-fourth the part of
one-fifth--that is to say, by one-twentieth. The reader, I hope,
understands me, for upon _that_ depends a pretty strong presumption of
the small real change that would be worked in the effective demand for
gold by a great apparent change in our chief demand for gold
manufactures. There can be no doubt that in watches and personal
ornaments is involved our main demand upon the gold market; through
these it is that we chiefly act upon the market. Now three corrections
are applicable to the _primâ facie_ view of this subject.
The first of these is--that gold chains, etc., and a pompous display of
rings have long ago been degraded in public estimation by the practice
and opinions prevailing in aristocratic quarters. This tendency of
public feeling at once amounts to a large deduction from what would
otherwise be our demand.
The second of these corrections is--that, since our main action upon the
gold market lies through the jewellers, and, consequently, through
jewellers' gold, therefore, on allowing for the way in which jewellers
alloy their gold, our real means of operating upon the gold market may
be estimated perhaps at not more than one-fourth part of our apparent
means.
A third important correction is this--at first sight it might seem as
though the purchaser of gold articles would benefit by the whole
depreciation of gold, and that the depreciation might be taken to
represent exactly the amount of stimulation applied to the sale, for
instance, of gold plate. But this is not so. Taking the depreciation of
gold at one-half, then upon any gold article, as suppose a salver, each
ounce would have sunk from 77s. to 38s. 6d. Next, rate the workmanship
at 40s. the ounce, and then the total cost upon each ounce will not be
(77s. + 40)/2, or in other words 58s. 6d., as a hasty calculation might
have fancied, but (77s./2) + 40, that is to say, 78s. 6d. Paying
heretofore £5 17s., under the new price of gold you would pay £4 within
a trifle. Consequently, when those who argue for the vast extension of
the gold market, rely for its possibility upon a vast preliminary
depreciation of gold, they are deceiving themselves as to the nature and
compass of that depreciation. The main action of the public upon the
gold market must always lie through _wrought_ and not through unwrought
gold, and in this there must always be two elements of price, viz., X,
the metal, and Y, the workmanship; so that the depreciation will never
be = (_x_ + _y_)/2 but only _x_/2 + _y_; and _y_, which is a very costly
element, will never be bound at all, not by the smallest fraction,
through any possible change in the cost of _x_.
This is a most important consideration; for if the price of gold could
fall to nothing at all, not the less the high price of the
workmanship--this separately for itself--would for ever prevent the
great bulk of society from purchasing gold plate. Yet, through what
other channel than this of plate is it possible for any nation to reach
the gold market by any effectual action upon the price? M. Chevalier,
the most influential of French practical economists, supposes the case
that California might reduce the price of gold by one-half. Let us say,
by way of evading fractions, that gold may settle finally at the price
of forty shillings the ounce. But to what purpose would the diggers
raise enormous depôts of gold for which they can have no commensurate
demand? As yet the true difficulty has not reached them. The tendency
was frightful; but, within the short period through which the new power
has yet worked, there was not range enough to bring this tendency into
full play. Now, however, when new powers of the same quality, viz., in
Australia, in Queen Charlotte's Island, in Owhyhee, and, lastly, on Lord
Poltimore's estate in South Moulton, are in working, it seems sensibly
nearer. It is a literal fact that we have yet to ascertain whether this
vaunted gold will even pay for the costs of working it. Coals lying at
the very mouth of a pit will be thankfully carried off by the poor man,
but dig a little deeper, and it requires the capital of a rich man to
raise them; and after _that_ it requires a good deal of experience, and
the trial of much mechanic artifice, to ascertain whether after all it
will be worth while to raise them. To leap from the conclusion--that,
because a solitary prize of 25 lb. weight may largely remunerate an
emigrant to California, therefore a whole generation of emigrants will
find the average profits of gold-washing, golddigging, etc., beyond
those of Russia or of Borneo, is an insanity quite on a level with all
the other insanities of the case. But, says the writer in the _Times_,
the fact has justified the speculation; the result is equal to the
anticipation; in practice nobody has been disappointed; everybody has
succeeded; nobody complains of any delusion. We beg his pardon. There
have been very distinct complaints of that nature. These have proceeded
not from individuals merely, but from associations of ten or twelve,
who, after working for some time, have not reaped the ordinary profits
on their expenses; whereas, they were also entitled to expect high wages
for their labour, in addition to extravagant profits on their outlay.
Yet, suppose this to have been otherwise, what shadow of an argument can
be drawn from the case of those privileged few, who entered upon a
virgin harvest, applicable to the multitudes who will succeed to an
inheritance of ordinary labour, tried in all quarters of the globe, and
seldom indeed found to _terminate_ in any extra advantages?
FOOTNOTES:
[43] '_Century of Men_,'--It may be necessary to remind some readers
that this expression, to which I resort for want of any better or
briefer, is strictly correct. The original Latin word _centuria_ is a
collection of one hundred separate items, no matter what, whether men,
horses, ideas, etc. 'A Century of Sonnets' was properly taken as the
title of a book. 'A Century of Inventions' was adopted by Lord Worcester
as the title of _his_ book. And when we use the word century (as
generally we do) to indicate a certain duration of time, it is allowable
only on the understanding that it is an elliptical expression; the full
expression is _a century of years_.
[44] 'In that same proportion,' but in reality the profits would fall in
a much greater proportion. To illustrate this, suppose the existing
price of gold in Australia to be sixty shillings an oz. I assume the
price at random, as being a matter of no importance; but, in fact, I
understand that at Melbourne, and other places in the province of
Victoria, this really _is_ the ruling price at present. For some little
time the price was steady at fifty-seven shillings; that is, assuming
the mint price in England to be seventy-seven shillings (neglecting the
fraction of 10-1/2d.), and the Australian price sank by twenty
shillings; which sinking, however, we are not to understand as any
depreciation that had the character of permanence; it arose out of local
circumstances. Subsequently the price fell as low even as forty-five
shillings, where it halted, and soon ascended again to sixty shillings.
Sixty shillings therefore let us postulate as the present price. Upon
this sum descended the expenses of the miner. Let these, including
tools, machinery, etc., be assumed at three half-crowns for each ounce
of gold. Then, at a price of sixty shillings, this discount descends
upon each sovereign to the amount of one half-crown, or one-eighth. But
at a reduced price of thirty shillings, this discount of three
half-crowns amounts to one-fourth. And, at a price of twelve shillings,
it amounts to five-eighths. So that, as the gross profits descend, the
_nett_ profits descend in a still heavier proportion.
_VII. DEFENCE OF THE ENGLISH PEERAGE._
It is by a continued _secretion_ (so to speak) of all which forces
itself to the surface of national importance in the way of patriotic
services that the English peerage keeps itself alive. Stop the laurelled
trophies of the noble sailor or soldier pouring out his heart's blood
for his country, stop the intellectual movement of the lawyer or the
senatorial counsellor, and immediately the sources are suffocated
through which _our_ peerage is self-restorative. The simple truth is,
how humiliating soever it may prove I care not, that whether positively
by cutting off the honourable sources of addition, or negatively by
cutting off the ordinary source of subtraction, the other peerages of
Europe are peerages of _Fainéans_. Pretend not to crucify for ignominy
the sensual and torpid princes of the Franks; in the same boat row all
the peerages that _can_ have preserved their regular hereditary descent
amongst civil feuds which _ought_ to have wrecked them. The Spanish, the
Scotch, the Walloon nobility are all of them nobilities from which their
several countries would do well to cut themselves loose, so far as
_that_ is possible. How came _you_, my lord, we justly say to this and
that man, proud of his ancient descent, to have brought down your
wretched carcase to this generation, except by having shrunk from all
your bloody duties, and from all the chances that beset a gallant
participation in the dreadful enmities of your country? Would you make
it a reproach to the Roman Fabii that 299 of that house perished in
fighting for their dear motherland? And that, if a solitary Fabius
survived for the rekindling of the house, it was because the restorer of
his house had been an infant at the æra of his household catastrophe.
And if, through such burning examples of patriotism, far remote
collateral descendants entered upon the succession, was this a reproach?
Was this held to vitiate or to impair the heraldic honours? A
disturbance, a convulsion, that shook the house back into its primitive
simplicities of standing, was that a shock to its hereditary grandeur?
If it _had_ been, there perished the efficient fountain of nobility as
any _national_ or _patriotic_ honour; that being extinguished, it became
a vile, _personal_ distinction. For instance, like the Roman Fabii, the
major part of the English nobility was destroyed in the contest (though
so short a contest) of the two Roses. To restore it at all, recourse was
had to every mode of healing family wounds through distant marriage
connections, etc. But in the meantime, to a Spanish or a Scottish
nobleman, who should have insisted upon the _directness_ of his descent,
the proper answer would have been: 'Dog! in what kennel were you lurking
when such and such civil feuds were being agitated? As an honest man, as
a gallant man, ten times over you ought to have died, had you felt,
which the English nobility of the fifteenth century _did_ feel, that
your peerage was your summons to the field of battle and the scaffold.'
For, again in later years than the fifteenth century, the English
nobility--those even who, like the Scotch, had gained their family
wealth by plundering the Church--in some measure washed out this
original taint by standing forward as champions of what they considered
(falsely or truly) national interests. The Russells, the Cavendishes,
the Sidneys, even in times of universal profligacy, have held aloft the
standard of their order; and no one can forget the many peers in Charles
I.'s time, such as Falkland, or the Spencers (Sunderland), or the
Comptons (Northampton), who felt and owned their paramount duty to lie
in public self-dedication, and died therefore, and oftentimes left their
inheritances a desolation. 'Thus far'--oh heavens! with what bitterness
I said this, knowing it a thing undeniable by W. W. or by Sir
George--you, the peerages that pretend to try conclusions with the
English, you--French, German, Walloon, Spanish, Scottish--are able to do
so simply because you are _fainéans_, because in time of public danger
you hid yourselves under your mammas' petticoats, whilst the glorious
work of reaping a bloody harvest was being done by others.