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Coin and Currency in [No. 9, new series. 



though not of frequent occurrence, (the relation between supply 

 and demand remaining generally constant), involves, when it does 

 occur to any considerable extent, great commercial disturbance? 

 and much distress both to individuals and to nations. Any consi- 

 derable rise or fall in the value of the precious metals must exer- 

 cise most important influence upon the relation between debtor 

 and creditor — whether the latter be fundholder or mortgagee, or 

 simply a retail trader. If a man owes 100 rupees, and the disco- 

 very of new mines reduces silver in value one-half, he can pay the 

 debt with half the money : that is, he can obtain the amount of 

 silver necessary for the discharge of his debt with one-half the 

 amount of labour which would have been requisite before the fall 

 I have supposed. A rise in value (somewhat less likely to occur) 

 would of course be attended by opposite results. 



As examples I may mention that, after the great influx of the 

 precious metals into Europe, consequent on the discovery of Ame- 

 rica, in the 16th century, their value in the European markets fell 

 to one-third of what it had been previously. Again : when the 

 revolutionary disturbances commenced in Mexico and South Ame- 

 rica, mining operations being interrupted, the supply of the pre- 

 cious metals from those countries was greatly diminished. For 

 many years the annual importation was only one-fifth of what it 

 had been ; sometimes as little as one-tenth, and for several years 

 no gold or silver whatever came from the Mexican mines. On 

 the whole, between 1810 and 1830, the average annual supply was 

 not more than one-third of what it had been in the twenty years 

 preceding. But during the same time, while supply was dimi- 

 nishing, demand was increasing ; the requirements of commerce 

 and of luxury — the one for coin, the other for plate and ornaments 



were becoming more imperious. An attempt made to work 



the mines with British capital failed. The value of the precious 

 metals rose considerably all over Europe, and very great distress 

 ensued. How dreadful the consequences of this fluctuation in 

 the value of the precious metals appeared to Sir A. Alison's pecu- 

 liar mind is evident from his tracing the Reform Bill ; what he 

 calls the ' Revolution of 1832' to the events I have detailed. 



When, at a more recent period, the supply of gold became enor- 



