Segar.— The Flood of Gold. 137 



benefited in other ways. The cheaper money and greater 

 credit which usually accompany an inflation of the currency 

 enable him to obtain a greater profit, and perhaps to extend 

 his business ; and the profit is still further swollen in the case 

 of the manufacturer of those commodities which are chieflv in 

 demand by the fact that he gets prices for his products in- 

 creased in a greater ratio than the wages he has to pay. This 

 encourages enterprise and gives a fillip to general trade and 

 industry. Thus, as David Hume wrote, "In every kingdom 

 into which money begins to flow in greater abundance than 

 formerly everything takes on a new face; labour and industry 

 gain life, the merchant becomes more enterprising, the manu- 

 facturer more diligent and skilful, and even the farmer follows 

 his plough with greater alacrity and attention." It is true 

 goods have to be exported to pay for the imported gold, or part 

 of the national supply of labour has to be diverted to gold- 

 mining ; but this economic loss is more than made good by the 

 encouragement given by the rising prices to general industry. 



According to Professor Walker the increase of the money- 

 supply after the discovery of America, in spite of the distress 

 produced mainly by the extraordinary rapidity of the increase, 

 contributed greatly to the rise and growth of the maritime 

 power of Great Britain ; and, in the language of an economist 

 so careful as Professor Cairnes, it supplied and rendered pos- 

 sible the remarkable expansion of oriental trade which forms 

 the most striking commercial fact of the age that followed. 

 " Among the more strictly political results of this great move- 

 ment can be traced, in clear lines, the hastening decay of the 

 feudal power, the increasing dependence of the sovereign upon 

 his people for the supplies which his hereditary domains no 

 longer furnished in sufficiency, and the rising spirit of self-asser- 

 tion on the part of the commercial and mechanical classes." 



At the present time the increase of money might con- 

 ceivably be so rapid as to bewilder the trader and producer 

 and exalt the ordinary courage and enterprise of business to 

 rashness, and in such a case the effects would be mostly pre- 

 judicial ; but it is scarcely likely that we are on the eve of 

 such a momentous discovery as would be required to effect 

 this. It is more likely, though it is scarcely safe to prophesy, 

 that the increase in prices, while necessarily injuring certain 

 classes, will proceed at such a pace as will produce the better 

 effects which a depreciation in the currency can cause, and 

 promote the prosperity of the community as a whole. 



It remains only to consider how the depreciation of gold 

 will affect the Government, and the citizen in his relation to 

 the same. Will the taxation of the average citizen increase? 

 As most of our taxes are of the nature of ad valorem, and are 

 determined by our expenditure, the majority of taxes will not 



