•3C: 



116 TWELFTH REPORT. 



.3Ki,yWfyt.^. world's annual PRODUCTION OF GOLD. 



Ml-1810 13,287,000 



1811-1830 8,527,000 



1831-1810 13,481,000 



1841-1850 30,303,000 



1851-1860 133,000,000 



1861-1870 126,000,000 



1871-1880 115,000,00 



1881-1885 90,000,000 



1886-1890 . 112,000,000 



1891-1895 . 163,000.000 



1896-1900 257.000,000 



■ 1901 .. 260,000,000 



1902 29«i,000,000 



1903 327,000,000 



1904 347,000,000 



1905 380,000,000 



1906 402,000,000 



1907 412,000,000 



1908 441,000,000 



1909 (estimated) 457,000.000 



You will notice that we are considering the world's output and not 

 the output of this country alone. We do this because of the freedom 

 with which gold Hows where it may be needed for the world's work. 

 The British Isles, the world's greatest market, produced less than 

 $30,000 in 1908, and yet there was no scarcity of gold in England. 

 France produced less than a million (.f835,000) in the same year, but 

 she imported 196 million. Africa produced 166 million in 1908 but 

 exported 160 million. Gold is not perceptibly more valuable in the 

 country that produces none than in tliie country that produces hundreds 

 of millions annually. A large output in the United States would not 

 make gold more plentiful here than elsewhere. So we must consider the 

 world's output if we are to reach any satisfactory conclusion as to the 

 effect of its increased production on prices. 



Again, we consider the world's output rather than that part of it 

 which is coined, made into money. The value of gold, like any com- 

 modity, depends on its marginal utility and is governed by the demand 

 made upon it for its use in the arts as well as coin. Of the world's 

 product in 1908, 327 million was coined and 113 million used in the arts. 



Now, it does not follow that, because of the large and increasing pro- 

 duction of gold in the last fourteen years, prices must of necessity have 

 advanced. If the world's commodities increase in amount faster than the 

 means of exchanging them — other things remaining the same — prices 

 will fall. 



It could easily be shown, if time permitted, that this has not taken 

 place in the United States since 1896 ; indeed in the case of some food- 

 stuffs there has been an actual decrease in amount. And a decrease in 

 the amount of any commodity, attended by a large increase of the force 

 available for money-work, must result in a great inci'ease in the price 

 of that commoditv. 



