Segar.— The Flood of Gold. 127 



America was discovered in 1492, but it was not until 

 the invasion of Mexico by Cortes in 1519 that the yield of 

 precious metals in America became greatly increased. Hum- 

 boldt estimates the annual production from 1521 to 1515 at 

 £630,000, and Mr. Jacob estimated that for the following 

 fifty-four years, 1546-99, at an average of £2,100,000, whilst 

 simultaneously the production of the mines of Europe was 

 greatly increased. Economic effects were not transmitted as 

 rapidly from country to country in those days as now, and 

 it was not until the latter portion of the sixteenth and the 

 earlier portion of the seventeenth centuries that the effects 

 of the greatly increased supply of the metals appear to have 

 been realised in the prices of commodities in Europe. But 

 when the effects were once noticeable they became very 

 marked — e.g., corn rose from about 2 oz. of silver the quarter 

 to 6 oz. or 8 oz., and generally money in Europe sank to about 

 one-fifth of its former value, prices rising to about five times 

 their former level. 



Take, again, the recent period, 1850-70. Through the dis- 

 covery of the Caiifornian and Australian goldfields the supply 

 of gold throughout this period was largely in excess of all 

 known previous epochs, and was largest in the decade 1851-60. 

 A study of the general prices of commodities by means of 

 index numbers establishes for the period 1850-70 a consider- 

 able rise. Comparing the depressed year 1850 with the de- 

 pressed year 1869 we get, by means of Mr. Sauerbeck's figures, 

 a rise in prices of about 27 per cent., whilst other estimates 

 (those of Dr. Giffen, Professor Soetbeer, Mr. Palgrave, and 

 the Economist) give very similar results, though the exact 

 proportion is differently estimated, and this in a period when 

 improvements in methods of production and transport and the 

 exploitation of new countries might have been expected to 

 cause a general fall in prices. Further, a general rise in 

 money wages between 1850 and 1870 has been clearly esta- 

 blished. Thus, the fact of a fall in the standard of value 

 between 1850 and 1870 seems proved, and 20 per cent, is the 

 most moderate estimate that is accepted. 



Between 1870 and 1893, on the other hand, although 

 the production of gold was. still very great, it was less than 

 in the previous twenty years. Great new demands on the 

 stock of gold for currency were made by Germany, the 

 United States, Italy, and Austria- Hungary. The consump- 

 tion of gold for the arts increased, and has been very 

 roughly estimated by Professor Soetbeer at £11,500,000 

 sterling, nearly one-half of the total annual production. 

 The hoards of gold for war treasure by the great Con- 

 tinental nations grew. The demand for gold in India (a 

 new demand, specially important in the decade 1860-70) con- 



