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TRANSACTIONS OF THE SECTIONS. 157 
the influence which they would exercise on the dispersion of: mankind, and the ques- 
tion was thus narrowed to the effects of the new gold, in its capacity as a portion of 
the general circulating medium of commercial nations. 
Viewed in this light, it was contended that the new gold had no direct tendency to 
stimulate industry or increase real wealth (understanding by this latter term com- 
modities which contribute to human enjoyment as distinguished from “ money,”’ or 
the instrument for exchanging such commodities). The gold discoveries had not 
added to the fertility of natural agents, nor to the intelligence of capitalists, nor to the 
health or strength of labourers; nor, therefore, except so far as gold was desired on 
its own account (that is to say, so far as it was noé used as money), to the motives to 
exertion of the human race. A given sacrifice would now produce more gold than 
formerly, but not more of any other thing. So far, therefore, as ‘ other things” were 
the inducement to exertion, the new gold could not stimulate industry or increase 
real wealth ; unless it did so in one or other of the following ways ;—viz. first, by 
practising some illusion on the understanding, so as to induce men to undergo a 
greater sacrifice for a given reward than formerly; or secondly, by causing such a 
change in the distribution of wealth, as might, at the expense of the idle or less 
actively producing classes and nations, operate as a premium on its production. 
_. In both these ways it was contended that the new gold would lead to an augmen- 
_ tation of the real wealth of society. 
With regard to the first, it was shown, that after gold through the increase in its 
_ quantity had become depreciated in value, the recognition of the change in its whole 
extent would not be immediate. £100 would cease to represent the same quantity 
of commodities as before, but its influence upon the mind as a stimulus to exertion 
would not at once decline in the same proportion. ‘Chose who gained by the monetary 
revolution would appear to gain more, and those who lost would appear to lose less; 
and both, measuring their reward rather by its nominal than by its real standard, 
would, for a time and until the rise in prices had been very decidedly established, be, 
as it were, cheated into increased exertions. All would more or less feel the influ- 
ence of the new gold in this respect, but those who would be most infinitely affected 
__ by it would be those in the determination of whose remuneration competition was 
modified by custom—such as the recipients of fixed salaries, fees, &c. 
_ But secondly, the new gold tended to augment real wealth through its effects on 
distribution. : 
_ The effect of the new gold was not, according to the popular idea, to increase the 
demand for commodities in general, but to cause a redistribution of purchasing power, 
and thus to cause a disturbance in the demand for commodities. It was the same in 
_ effect as if a tax were levied over the world, and the proceeds deposited in the sands 
- of Australia and California. ‘Those who gained by the new monetary changes did not 
_ gain simply because their money incomes were increased, but because they were 
_ raised relatively to those of others: they could therefore appropriate a larger share of 
the general wealth ; and, for the contrary reason, those whose money incomes were 
not similarly affected, could appropriate a smaller share than before. The gain 
_ depended on the rise in money income as compared with the rise in the price of the 
articles on which it was expended. It followed theretore, that, for a given amount of 
gold, those who gained most were the original finders, and, the earlier it was found, 
the greater the gain. ‘ 
__ Applying these principles to the case in hand, the gold-finders were the greatest 
gainers, the merchants and manufacturers who were best able to supply their most 
peereing needs were gainers in the next degree, and afterwards those who could supply 
the wants of such merchants and manufacturers ; or, turning from classes to nations, 
_ the gold countries were the greatest gainers by the new gold; the United States and 
England the next; while the countries who would suffer most by the new movement 
_ would be such countries as India and China, who would not receive their share till it 
had first operated on prices in most of the markets of the world. England during the 
_ Russian war could, in consequence of the gold discoveries, command with a given 
outlay of labour and capital a greater amount of gold than before. With this gold she 
me into the markets of Turkey, which had not yet felt the effects of the Australian 
scoveries, and carried off an increased amount of such things as she required, to 
e injury, of course, of all her competitors in the same market. ‘The pressure of 
he war-strain was thus lightened in proportion to her cheapened cost of obtaining gold, 
