History Of Prices.—Californian And Australian Discoveries.
Tengoborski is of opinion, that the flow of gold from Siberia alone would
have been absorbed by the ever-increasing want of civilized nations of
money; but that the coincident discoveries in California and Australia, in
September 1847, and February 1851, must sooner or later produce a
revolution in prices. And, indeed, the fecundity of these countries is
unparalleled. North America, which in 1846 produced only 3,600 pounds of
gold, according to Sœtbeer, produced in the years from 1849 to 1863,
respectively, 118,000, 148,000, 178,000, 195,000, 180,000, 165,000,
165,000, 165,000, 160,000, 145,000, 125,000, 120,000, 115,000 and 110,000.
Austria produced in the years from 1851 to 1863 respectively, 27,000,
196,000, 250,000, 160,000, 170,000, 195,000, 180,000, 175,000, 160,000,
150,000, 160,000, 160,000, 170,000, pounds of gold.
From 1864 to 1867, the aggregate production of gold in the world was,
according to the last mentioned authority, a yearly average of 188.4
millions of thalers, and of silver, 94.8 millions. In Europe, Russia not
included, the production was, in 1863, 3,960 pounds of gold and 405,000
pounds of silver; in the Russian Empire, 46,500 pounds of gold and 40,000
of silver; in Mexico 12,000 pounds of gold and 1,250,000 pounds of silver;
in South and Central America, 12,500 pounds of gold and 520,000 pounds of
silver; in Africa, India and Lesser Asia, 30,000 pounds of gold and 40,000
pounds of silver—a total of 384,000 pounds of gold, and 2,905,000 pounds
of silver. F.X. Neumann(861)(862) estimates that the whole world produced,
in the years 1868-1870, annually, 192.8 million thalers of gold, and 94
million thalers of silver; and in 1873, of both metals, 291 million
thalers.
The question, whether in this second half of the nineteenth century, we
are to have a revolution in prices similar to that which took place in the
sixteenth century can be answered only hypothetically. The gold diggings
now most productive will, probably, as we may judge from analogous cases
in the past, be soon exhausted.(863) But it is entirely possible that, for
a long series of years, other diggings will be found equally rich. It is
almost certain that the restless activity of the English and of North
Americans will not cease until they have exhausted the favors of
nature.(864) Every improvement in agriculture, in the means of
communication, and in the public security of the gold lands, makes the
cost of production smaller. There are doubtless in other countries a great
many _placers_ which need only to be touched with the finger of European
civilization to produce gold in abundance.(865) It would, indeed, be
necessary that this same civilization should make these same countries
better markets for the precious metals by increasing their demand.
So far as silver is concerned, there can be no question that America
possesses mines unlimited in extent, and, as yet, almost untouched. “The
time will come,” says Duport,(866) “a century sooner or later, when the
production of silver will have no other limits than those put to it by the
continual decline in the price of silver.” There seems, also, to be no
lack of quicksilver, especially in California; and the cost of its
production hitherto may be lessened very much by the labor of better
workmen, machines and means of transportation.(867) All this supposes
great progress of the mining countries in civilization in general; and
yet, thus far, Mexico’s republican independence etc., as compared with the
later years of the Spanish colonial system there, is a great
retrogression. The conquest of Spanish America by the United States would
give a vast impetus to economic improvement; and here, again, the increase
of production would be attended by an increased demand.
But especially must the demand for the precious metals, which naturally
increases with the wealth, commerce and luxury of nations, constitute a
decisive element in answering our question. Nothing, for instance, were a
reduction in prices impending, would promote it so much as a series of
devastating wars or revolutions in Europe. Moreover, it should not be
forgotten, that the money market is now almost commensurable with the
world, and will soon embrace it within its limits; and that market
embraces not only the precious metals but the numberless representatives
of money and media of credit. The basin, therefore, to which the gold and
silver streams of the world are tributary is immeasurably greater than it
was in the sixteenth century; its level cannot be changed as readily, and
an equal addition made every year to its previous contents can increase it
only by a small amount.(868) Nor could a considerable decline of the value
of the precious metals be readily produced without making the circulation
of money slower, and the employment of means of credit relatively less
frequent, in consequence of which, the further decline would, to a certain
extent, be arrested.(869) In the case of other commodities a decline of
prices leads only probably to an absolutely greater demand; in the case of
money, it leads to a demand necessarily greater. That the money market in
our days can stand pretty rude shocks is evident from the fact, among
others, that the price of gold is so high as compared with that of
silver.(870)(871)