There is a difficulty in deciding the question whether, or to what extent, the price of gold fell on the influx of gold at the end of the 16th century or on the Ca'ifornian and Australian discoveries in the middle of the 19th. By the Windsor tables, the price of wheat in England averaged about 34s. per quarter, from 1606 to 1625, sometimes how ever reaching as high as 58s. per quarter and sometimes sinking as low as 30s. It subsequently ranged, under Charles I., from 40a. to 44s. per quarter ; a sum not widely different from the present prices. Wheat, taken in decennial averages from 1660 to 1860, has averaged only 49s. per quarter. But the rate of labour has permanently increased nearly cent. per cent., while at the same time many articles of luxury and convenience have become cheaper through the improve ments in the means of production. These variations, like all of similar character, evidently depended on the abundance or the scarcity of harvests, unrelieved by an extended foreign commerce. Except in long averages, the prices of articles of consumption afford no proof of any alteration in the value of money. Potatoes or meal—oat, rye, or wheat meal—in Ireland, during the time of the potato-rot, or boots at the Australian diggings, may have fetched fabulous prices ; but it is at once seen in these cases, that it is the exceptional circumstances, and not any real alteration in value, that has produced the difference. The general effect of an influx of the precious metals appears to have been to stimu late industry; this industry, represented largely by manual labour, had to be paid for ; this, in its turn, enabled a much larger proportion of the population to consume more food, and of a better quality than previously, and rye-, oat-, and barley-bread, disappeared in England from the consumption even of the paupers.
Gold, after all, only represents labour. On the discovery of the riches of Peru and Mexico, they were found already accumulated, and were merely transferred to new possessors, without labour and with little risk. In the more recent discoveries. the produce has been the result of labour. This labour has been looked at as wonderfully pro fitable. In a few lucky instances it may have been so, but on the average it is doubtful whether the labour has not been sufficient to maintain the value of the gold ; for if the labourer received high pay, he had to pay exorbitantly for the necessary means of his mainte nance; and those who supplied him with those means, though they charged high, had to convey them to him at an immense expense, and under great difficulties, so that no great excess of profit was made by any one beyond what is gained by the early possession of a good market.
Chevalier predicts that the labourer will be a great ultimate sufferer from the continued influx of gold, and its consequent deprecia tion ; because, he says, the price of labour, though it follows the price of articles of consumption, does so very slowly ; and therefore, as the value of gold descends, and the comparative value of all other articles rises, he will never be able to maintaiu his relative position. This is
in some degree to appear to overlook a truth which so experienced an economist as M. Chevalier cannot really have overlooked, that there is no absolute relation between the wages of labour and the price of commodities. If the influx of gold gives a stimulus to home industry —if the gold-digger of Australia becomes a new and profitable customer to the manufacturer of Britain—the increase in the demand foi labourers causes a rise in wages which may be equal to, or even exceed, a rise in the price of commodities. But further—we must take into account the difference between the precious metals and articles of consumption. If a favourable season renders corn and cattle abundant, the increase of so much capital gives means for enlarged expenditure, promotes industry, tends to raise the rate of wages by tho extended demand for labour, and su far resembles the effect pro duced by an increased supply of gold. But a falling off in the supply of articles of consumption has no similarity with that of gold. A dearth not only suddenly raises the price, in a proportion far exceeding the actual deficiency, but by concentrating expenditure upon articles of necessity, checks or almost entirely stops industry. It is then the labourer suffers. What he needs has attained an exorbitant value, while what he has to offer in exchange, his labour, has lost its value from the want of means of employing it profitably. But no such effect could possibly follow from the total suspension for years of any supply of gold. There might be less stimulus to industry, but the gold which was sufficient before the supply stopped, would remaiu to be still employed in exchange ; and this would continue unaltered for years. It is this property which renders gold so peculiarly the best standard of value.
Contemplating the ultimate depreciation of gold, the writer of the article in the ' Edinburgh Review' recommends the adoption of a system of corn averages. He proves very satisfactorily that any con siderable depreciation in the value of gold, as money, would press with great and undue severity on all persons with fixed incomes, and on the labourer. The adoption of his suggestion, we believe, would rather increase than mitigate the evil ; for depending on the seasons, there are few things necessarily subject, from the variation in both quantity and quality in successive years, to such large and sudden alterations as the price of corn. In the year ending Michaelmas, 1853, after the supply of gold had been much increased, the average price of wheat was 45s. 8d. per quarter ; in the following year it was 73s. ld. ; and it con tinued as high, or somewhat higher, for the following two years ; but in 1858, with all the fresh importations of gold, the average was only 46s. per quarter, and in 1859 only 43s.