sible if it had not been that, owing to the great gold discoveries in Australia and California (in 1848—52), the annual yield of gold was suddenly increased from about 8,000,000l. to 27,000,000l.; and in one year (1856) it even rose to more than 32,000,000l. If the development of trade had taken place without any increase in the supply of gold, prices must very materially have declined; on the other hand, if trade had been stationary during this sudden multiplication of the annual production of gold, there must have been a very rapid rise in general prices. In Isle Pleasant, as we have seen, the supply of money was absolutely limited, and therefore each increase in the number of trading transactions caused the value of money to rise and prices to fall. Six months after the money was discovered, the islanders transacted a certain amount of buying and selling, a certain number of people were receiving wages, and for these purposes they used their 7,450l. Ten years afterwards twice as many people were receiving wages, three times as many commodities were produced and bought and sold.
