130 Transactions. — Miscellaneous. 



provements in and cheapening of the process of gold-extrac- 

 tion. Thus we have every reason to anticipate a still further 

 greatly increased yield, and that the increase will be more 

 permanent than it was in the middle of the last century be- 

 cause of the difference in the character of the mining. 



Increased Prices to be expected. 



But, taking the annual output of the immediate future at 

 £80,000,000, what effect ought this to have on prices ? Let 

 us consider what can become of this £80,000,000 a year. 

 It will partly be (1) used in industry and the arts ; and 

 (2) hoarded. The rest must be used as money, either as coin 

 or bullion. 



Now, the amount of gold used in industry and the arts 

 can scarcely be estimated with accuracy ; but very careful 

 estimates have been made, and Dr. Soetbeer estimated 

 11-20 millions for the year 1885. Since the amount of gold 

 used in this way is not likely to increase with great rapidity, 

 we may take £15,000,000 as being a fairly liberal estimate for 

 the present time. 



Let us also deal liberally with hoarding, and allow another 

 £5,000,000 for this source of consumption ; we should then 

 still have £60,000,000 per annum to be added to the currency 

 of the world. This is at least 4 per cent, of the stock of gold 

 in the world, and would of itself tend to increase average 

 prices at the rate of about 4 per cent, per annum. 



Now, a comparison with what happened in the last cen- 

 tury may be made. The output then rose to as much as 

 £28,000,000 a year, while £3,500,000 only was used annually 

 in industry and arts ; so that, allowing liberally again for 

 hoarding, at least £20,000,000 per annum must have gone for 

 a time to the increase of the currency, and this represents 

 about 5 per cent, on the amount of coin then in existence. 

 But we know that the increase in prices that took place was 

 not proportional to this, amounting perhaps only to about 

 20 per cent, altogether before prices began to fall again. 

 Jevons, after a very careful investigation, foretold a rise in 

 prices of about double this, while others ventured to predict 

 that prices might ultimately rise to as much as threefold ; but 

 all these estimates were falsified. Evidently, then, there must 

 be some great difference in the circumstances then and now if 

 we are to venture on any similar prediction. I am of opinion 

 these necessary differences do exist. 



To begin with, the annual gold output did not continue to 

 increase, or even to maintain itself, as was expected. This 

 was due to the nature of the fields and the mining, and we 

 have already seen that now much greater permanence is to 

 be expected. 



