TRANSACTIONS OP THE SECTIONS. 207 



pounds were imported in each of the years 1854, 1855. The plodding industry of 

 the Chinese enables them to supply this increased tea and silk ; but surrounded with 

 all the prejudices which have resulted from an isolation of 2000 years, we can 

 induce them to take no useful commodities in return. They will he paid in silver, 

 and we are thus obliged, in order to adjust the balance of trade, annually to export 

 to the East £14,000,000 of silver. The silver coinage of France has to a great extent 

 supplied this silver. £45,000,000 have been thus abstracted from her silver coinage 

 in six years, from 1852-58. Gold has supplied its place. The absorption of so much 

 gold in this way, has induced M. Chevalier, in his work on money, so admirably 

 translated by Mr. Cobden, to describe France as a parachute, which has retarded 

 the fall in the value of gold. France has supplied so much silver — 



1st. Because of the large amoimt of silver coinage she formerly possessed ; and 



2ndly. Because, unlike us, she has a double standard. 



Any slight variation in the fixed relative values of these two metals, will induce all 

 payments to be made in one of these metals alone. Every extension of credit enables 

 a certain amount of the circulating medium to be dispensed with; and it is probable 

 that our vastly increased commerce aud trade has required little, if any greater 

 quantity of the circulating medium for all those transactions which may be de- 

 scribed as wholesale ; but, as I have before observed, a great increase of the national 

 capital must have accompanied this commercial progress. The wage-fimd is a 

 component part of this capital. Wages are almost always paid in coin. This 

 points to another way in which much of the new gold has been absorbed. The 

 possibility of accounting for the absorption of the new supplies of gold, confirms the 

 opinion that its value has not declined. But the fact that there has been no re- 

 duction, proves that gold would have greatly risen in value had not these supplies 

 been forthcoming. The rise, too, would have been sudden, and therefore most 

 serious. The conditions of every monied contract woidd be altered, the National 

 Debt would be a more severe burden, and the extension of our commerce with the 

 East would meet with the most difficult obstacle. 



When feudal Europe ripened into commercial Europe, the gold of America was 

 discovered ; and now that free trade has inaugurated a new social and commercial 

 era, the gold of Australia and California is ready at hand to aid the progress. 



M. Chevalier asserts that henceforth the value of gold will rapidly decline at 

 least 50 per cent. I regard this as a much too confident prophecy. The wage-fund 

 of most countries is increasing, in some cases most rapidly. This will absorb a 

 great deal of gold. Our commerce with the East is so anomalous, that prophecies 

 seem to me to be useless. Every year there is a constantly greater quantity of 

 Eastern produce required, and therefore this increased commerce will very soon 

 absorb, instead of £14,000,000 of specie, £20,000,000, unless some great change in 

 the habits of the Chinese induces them to consume more European commodities. 

 On such a point who will hazard a prediction ? Thus in a few years the East 

 will absorb all the silver of the West. Shall we then be able to induce the Chinese 

 to take gold as readily as they do now silver ? There is another consideration 

 which seems to me to be not sufficiently noticed. A change in the value of gold 

 always generates a counteracting force, whose tendency is to restore the metal to 

 its former value. Thus, suppose the supplies of gold continue to be the same as 

 they are now, and that after a certain time gold declines in value. Gold-digging 

 is not, I may say cannot be, more profitable than other employments. Directly a 

 decline in the value of gold takes place, gold-digging will to many become less 

 profitable than other labour. They will therefore cease to dig ; this will diminish 

 the aggregate supply of gold, and this diminution will tend to restore its value. I 

 will now proceed to explain in what way the gold discoveries have assisted the 

 advance of Australia. Production has three requisites : — 



1st. Appropriate natural agents. 



2ndly. Labour to develope the resources of nature. 



3rdly. This labour must be sustained by the results of previous labour, in other 

 words, by capital. 



Long previous to 1848 the great natural resources of Australia were known, her 

 vast tracts of fertile land had been explored, and her climate had been pronounced 

 healthy. There was an overplus of labour in this country, and there was also much 

 capital which would have been at once accumulated had an eligible investment pre- 



