TRANSACTIONS OP THE SECTIONS. IH 



So far the whole, or nearly the ■whole, of the new supplies of gold have been 

 absorbed as coinage in America, in this country and Australia, and in France. And 

 not only has there been a large increase of the gold coinage in these countries, but 

 the amount of the convertible paper circulation — probably in each of them, certainly 

 in three, viz. England, France and Australia — has been considerably increased within 

 the last twelve months ; and it appears that the increase in the circulation of coin 

 and paper has arisen almost wholly from a prior increase in transactions. It is a 

 question, however, for investigation, whether the absorption of the new gold as coin 

 can proceed to a much greater extent without affecting the value of gold as compared 

 with a larger or smaller number of commodities. 



In this country there has been, since the summer and autumn of last year, a 

 marked increase in the price of several descriptions of commodities ; and it does not 

 appear that that increase of price can in all cases be adequately explained as concerns 

 the commodities themselves by considerations of supply and demand ; nor, on the 

 other hand, does it appear that we are justified by the evidence in attributing to the 

 influence of the new supplies of gold any extensive or decided influence in raising 

 prices in this country. The facts, however, do justify us in believing that the new 

 supplies have certainly begun — indirectly and perhaps directly also — to operate in 

 this country in a manner which does, and will, lead to higher prices. 



As regards wages, the indirect and direct operation of the new gold in establishing 

 higher rates is manifest and unquestionable ; and since the autumn of 1852 the rise 

 in the wages of artisan and manual labour in this country is equal to between 12 and 

 20 per cent. 



It seems to be established by the evidence, that whatever efifects may have been 

 produced in the United Kingdom, in raising wages and prices and in extending and 

 increasing trade, have been accomplished by means of reductions in the rate of dis- 

 count and interest and by advances of capital, and not in any way through the 

 medium of the circulation. It appears also that the eff'ect of the new gold in de- 

 pressing the rate of discount was essentially of a temporary character, and was con- 

 fined to the period during which the new gold was lodged, chiefly in the Bank of 

 England, in its progress from the mines to the general markets of the world. 



Since those temporary efl'ects have disappeared, the increased demands for capital, 

 excited by the low rates of discount and arising out of an extending trade, have 

 raised those rates to fully their previous height. 



In the Australian colonies the eff'ect of the new gold has been to add the stimulus 

 of a very low rate of interest, and of an abundance of capital, to the other great and 

 manifold causes of rapid development which they previously possessed. 



And, generally, we are justified in describing the efifects of the new gold as almost 

 wholly beneficial. It has led to the development of new branches of enterprise, to 

 new discoveries, and to the establishment in remote regions of populations carrying 

 with them energy, intelligence, and the rudiments of a great society. In our own 

 country it has already elevated the condition of the working and poorer classes ; it 

 has quickened and extended trade ; and exerted an influence which thus far is bene- 

 ficial wherever it has been felt. 



Such are the conclusions justified by evidence and facts. 



There still remain the conclusions which seem to be justified by speculation, and 

 these may be compressed within a smaller compass. 



Apparently there is good reason for believing that the future results of the new 

 supplies of gold will be, on the whole, not less devoid of evil than they have been 

 hitherto. There seems to be no authority for expecting that, under contracts now 

 existing, creditors will be sacrificed to debtors ; that the recipients of fixed incomes 

 will be hopelessly impoverished ; or that capital will cease to command a reasonable 

 rate of interest. On the contrary, the great revolution pursues its course so gradu- 

 ally ; it is moderated and checked in modes so infinite and subtle, and moulded by 

 influences too delicate to be laid bare by any appliance of statistics ; — that, so far as 

 we can judge of the future by that which now occurs around us, we may contem- 

 plate without fear a change in the economical condition of the world, — new and 

 startling, doubtless, — but already adjusting itself, without shocks or convulsions, to 

 the expanding intelligence and resources of mankind. 



