Page:Encyclopædia Britannica, Ninth Edition, v. 16.djvu/757

teract the loss by wear and exportation,^[1] and accordingly regard the metallic supply as fixed in amount until the next change in the conditions of production, which was the result of the discovery of America. Though 1492 is the date of the first landing, yet for some time no important additions were made to the supply of money. The conquest of Mexico (1519) gave opportunities of working the silver mines of that country, while the first mines of Chili and Peru were almost simultaneously

discovered, and in 1545 those of Potosi were laid open.

Table I.—Estimated production of gold and silver from 1493.

Period.	No. of Years.	Amount in Kilos.	Value in Millions of Francs.	Ratio of Value of Gold to Silver.
Gold.	Silver.	Gold.	Silver.
1493–1520	28	162,400	1,316,000	560		292		11·3
1521–1544	24	171,800	2,165,000	592		481		11·2
1545–1580	36	273,000	10,976,000	940		2,439		11·5
1581–1600	20	147,600	8,378,000	508		1,862		11·9
1601–1620	20	170,400	8,458,000	587		1,880		13·0
1621–1640	20	166,000	7,872,000	572		1,749		13·4
1641–1600	20	175,400	7,326,000	604		1,628		13·8
1661–1680	20	185,200	6,740,000	638		1,498		14·7
1681–1700	20	215,300	6,838,000	742		1,520		15·0
1701–1720	20	256,400	7,112,000	883		1,580		15·2
1721–1740	20	381,600	8,624,000	1,314		1,916		15·1
1741–1760	20	492,200	10,663,000	1,695		2,370		14·8
1761–1780	20	414,100	13,055,000	1,426		2,900		14·8
1781–1800	20	355,800	17,581,000	1,226		3,906		15·1
1801–1810	10	177,800	8,942,000	612		1,987		15·6
1811–1820	10	114,400	5,408,000	394		1,202		15·5
1821–1830	10	142,200	4,606,000	490		1,023		15·8
1831–1840	10	202,900	5,964,000	699		1,325		15·7
1841–1850	10	547,600	7,804,000	1,886		1,734		15·8
1851–1855	5	987,600	4,431,000	3,402		985		15·4
1856–1860	5	1,030,000	4,525,000	3,549		1,006		15·3
1861–1865	5	925,600	5,506,000	3,188		1,223		15·4
1866–1870	5	959,500	6,695,000	3,305		1,488		15·6
1871–1875	5	853,400	9,847,000	2,940		2,188		16·0
1876	1	171,700	2,365,000	591	·5	525	·5	17·8
1877	1	182,800	2,428,000	629	·8	539	·5	17·19
1878	1	183,700	2,603,000	632	·6	578	·3	17·96
1879	1	156,900	2,557,000	540	·3	568	·2	18·39
1876–1879	4	695,100	9,953,000	2,394		2,211		17·40
1493–1850	358	4,752,100	149,828,000	16,368		33,292		14·05
1851–1879	29	5,451,200	40,957,000	18,778		9,101		15·85
1493–1879	387	10,203,300	190,785,000	35,146		42,393		· ·

From this latter date we may regard the American supply as an influential factor in the matter,^[2] and look upon the stock of money as increasing. The annual addition to the store of money has been estimated as £2,100,000 for the period from 1545 to 1600. At this date the Brazilian supply began. The course of distribution of these fresh masses of the precious metals is an interesting point, which has been studied by Mr Cliffe Leslie.^[3] The flow of the new supplies was first towards Spain and Portugal, and from thence they passed to the larger commercial centres of the other European countries, the effect being that prices were raised in and about the chief towns, while the value of money in the country districts remained unaltered. The additions to the supply of both gold and silver during the two centuries 1600–1800 continued to be very considerable; but, if Adam Smith's view be correct, the full effect on prices was produced by 1640,^[4] and the increased amount of money was from that time counterbalanced by the wider extension of trade.^[5] At the commencement of this century, the annual production of gold has been estimated as being from £2,500,000 to £3,000,000. The year 1809 seems to mark an epoch in the production of these metals, since the outbreak of the revolts of the various Spanish dependencies in South America tended to check the usual supply from those countries, and a marked increase in the value of money was the consequence. During the period 1809–1849 the value of gold and silver rose to about two and a half times their former level, notwithstanding fresh discoveries in Asiatic Russia.^[6] The annual yield in 1849 was estimated at £8,000,000. The next important date for our present purpose is the year 1848, when the Californian mines were opened, while in 1851 the Australian discoveries took place. By these events an enormous mass of gold was added to the world's supply. The most careful estimates fix the addition during the years 1851–1871 at £500,000,000, or an amount nearly equal to the former stock in existence. The problems raised by this phenomenon have received the most careful study by several distinguished economists,^[7] to whose writings those desiring more extensive information may refer. The main features of interest may be briefly summed up. (1) The additional supply was almost entirely of gold, thus tending to produce a distinction between the two principal monetary metals and an alteration in the currency of bimetallic countries. Under this influence France, from being a silver-using, became a gold-using, country. (2) The contemporaneous development of the Continental railway systems, and the partial adoption of free trade, with the consequent facilities for freer circulation of commodities, led to the course of distribution being different from that of the 16th century. The more backward districts were the principal gainers, and a more general equalization of prices combined with a slight elevation in value was the outcome. (3) The increased supply of gold rendered a general currency reform possible, and made the use of a gold monometallic standard appear feasible. The movements for currency reform, as will be seen, all arose after these discoveries. (4) The change in the value of money, which may for the period 1849–1869 be fixed at 20 per cent., enabled a general increase of wages to be carried out, thus improving the condition of the classes living on manual labour. It may be added that the difficulty of tracing the effects of this great addition to the money stock is a most striking proof of the complexity of modern economic development. (5) The last point to be noticed is the very small influence exercised on the value of silver by the new gold.^[8] Hardly had the gold discoveries of 1848–1851 ceased to produce a decided effect when new silver mines of unusual fertility came into working. During the period immediately succeeding the gold discoveries the production of silver remained at an annual amount of from £8,000,000 to £9,000,000. This amount suddenly, about 1870, increased to £15,000,000,^[9] and remained at that amount for the next five years. More than half of the supply came from new mines opened in Nevada. This increased supply was accompanied by a marked depreciation in the gold price of silver, though the prices of commodities in countries having a silver standard did not rise. The result of the close investigations to which all aspects of the question were subjected was to show that the increased production of silver was only a minor element in causing its depreciation. The policy pursued by various states—viz., (1) Germany and the Scandinavian  

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1. Jacob, i. p. 311.
2. Adam Smith assumes 1570 as the date when prices were affected in England, Wealth of Nations, p. 88. Humboldt estimated the total production (1492–1545) as being about £17,000,000; but see Table I., which contains Dr Sötbeer's estimates, based on the best available data.
3. Essays in Pol. and Mor. Phil., Essay xx.
4. Wealth of Nations, p. 88.
5. The total production is roughly computed at over £1,200,000,000 for the two centuries 1600–1800; but see Table I. for more precise estimates.
6. The Russian supply became important after 1823.
7. The following maybe specially consulted:—Chevalier, Depreciation of Gold (trans. by Cobden); Tooke and Newmarch, Hist. of Prices, vol. vi., pp. 135–236 (Part vii.); article “Precious Metals,” Ency. Brit. (8th Ed.); J. E. Cairnes, Essays in Pol. Econ., pp. 1–165; T. E. C. Leslie, Essays, pp. 264–374; W. S. Jevons, Serious Fall in the Value of Gold.
8. The price of silver in London rose from 59$\scriptstyle {\frac {3}{4}}$d. per oz. to 62$\scriptstyle {\frac {1}{2}}$d. per oz., or 2$\scriptstyle {\frac {3}{4}}$d. per oz.—that is, only 3 to 4 per cent.
9. See Report of Select Committee on the Silver Question, 1876; and for another estimate see Table I.