2GG ANNUAL OF SOJfiKTUflC DISCOVERY. 



value from gold to silver, and fundholders and others who were in 

 receipt of a fixed money income were greatly alarmed at the prospect 

 of a general rise in prices. All were ready to admit that these confi- 

 dent predictions have not been realized, for the depreciation in the 

 value of gold cannot as yet have been very marked, since the highest 

 financial authorities still dispute whether the new supplies of gold 

 have produced even a small alteration in its value. Mr. Fawcett 

 then stated that in the year 1848 the aggregate value of the gold ex- 

 isting throughout the world was 560,000,000, and so great had been 

 the yield of gold from Australia and California that, if this present 

 yield continued, these two countries would, in thirty-five years, pro- 

 duce gold equal in value to the entire quantity which previously 

 existed. Previous to 1848 the entire annual production of gold did 

 not exceed 6,000,000; the amount yielded by Australia and Califor- 

 nia had been in many years four times as great as this, and therefore 

 it was very naturally supposed that gold must be depreciated in value. 

 A large portion of these new supplies of gold were sent to England ; 

 and here it was necessary to employ it in one of the three following 

 ways: 1. In arts or manufactures. 2. In increasing gold currency. 

 3. In reexporting the gold to foreign countries. The amount of gold 

 employed in arts or manufactures is so small that this source of absorp- 

 tion may be neglected in comparison with the remaining two. It was 

 stated that the gold coinage of Great Britain was increased from 

 1848-56 by 20^000,000. Mr. Fawcett then proceeded to explain 

 with great care the connection between general prices and the quan- 

 tity of money in circulation, and he affirmed that, if the population and 

 wealth of a country increased, the value of gold must rise, or, in other 

 words, general prices must decline, unless an increased amount of 

 money is brought into circulation. A great portion of the buying 

 and selling of the country is, however, carried on by checks, bills of 

 exchange, and various other instruments of credit, which serve as 

 substitutes for money. The extended use of these substitutes for 

 money of course supplies the place of a metallic currency, and there- 

 fore it is almost impossible to arrive at a conclusion whether or not 

 the 20,000,000 added to the British gold coinage in 1856 was suffi- 

 cient to preserve a uniformity in the value of gold, while the popula- 

 tion and wealth of the country was increasing so rapidly as it did 

 during those years. In the first place, the amount of this increase of 

 wealth cannot be ascertained ; and, secondly, some of the substitutes 

 for money may be more largely used. For instance, many trading 

 trunsactions, in which money was formerly used, are now carried on 

 by checks. Mr. Fawcett next inquired whether a comparison of gen- 

 eral prices now with what they were previous to 1848 would more 

 accurately ascertain than the method just alluded to whether or not 

 the value of gold has been depreciated. When this comparison was 

 mule, they were at once perplexed by observing that the price of 

 mimy commodities had declined, whereas the price of others had 

 risen. But these changes in price could be accounted for indepen- 

 dently of any change in the value of gold. For instance, many manu- 

 factured articles had become cheaper because improved methods of 

 production had been introduced, and, on the other hand, meat and 

 dairy produce had become dearer in consequence of the increased 



