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the other. The owner of United States bonds to the amount of ten thousand dollars, may say he can no longer obtain for them ten thousand silver dollars, which he gave for the bonds; but he can obtain a thousand gold eagles, which are worth as much as the ten thousand silver dollars were worth when he loaned them to the United States. His loss is simply a privation of the gain which he would have made had he retained the silver; and it is a loss which may be predicated equally of a rise in the price of leather, that he failed to purchase before its appreciation.
A country in which silver is the only legal tender will be differently affected from what we are by the appreciation of silver. The debtors who borrowed before silver appreciated in value, will be injured by being compelled to pay in appreciated silver, without receiving any compensation for the appreciation. What the debtors thus lose the cred. itors will gain. All persons will gain whose property consists of silver; as, for instance, creditors generally, fixed annuitants, bank-stock holders, the owners of other stocks whose basis is money, (in contra-distinction from railroads and kindred stocks, whose basis is not money); while all property, except money, will be neither benefited nor injured by the change. A bushel of wheat, which could be sold for a dollar while silver was unappreciated, may now sell for as much less than a dollar as the silver has increased in value; hence the change will neither enrich nor impoverish the seller. These consequences, however, will not ex
• hibit themselves in practice with the regularity and distinctness of the operation in theory, but the practice will approximate towards the theory, and eventually harmonize with it.
HOW A DEPRECIATION OF GOLD WOULD AFFECT US. The converse of all the foregoing would result from a depreciation in the permanent value of gold. All persons whose property consists of gold : namely, all the holders of government stocks, all creditors of every other description, bank-stock owners, insurance company stockholders, recipients of fixed rents and annuities, will lose to the extent of the depreciation of gold; which, being a legal tender, they must receive at the mint valuation ; namely, at the rate of ten dollars for every 10 dwt. 18 gr. of standard gold. The effect on all other persons will be neither beneficial nor injurious. Land will rise in price, and railroad stock, ships, and all other property, except money; but the rise will be only equivalent to the depreciation in the money.
GOVERNMENT MIGHT PALLIATE THE EVIL. That the legal coins of a country should thus be subject to a fluctuation of value is a great practical evil, from which the world has heretofore been measurably exempted, by the long-continued sameness of value that has accompanied gold and silver. The man who lends a thousand dollars to-day, on a ten-year loan, may not know but the depreciation of gold during the loan will absorb a share of the income which he is to receive for the money ; hence a new element will arise in loans, a price for the use, and a com. pensation for the contingent depreciation of the loaned capi. tal; but for the latter no means of indemnity exist. Gov. ernment might measurably shield creditors from such a a danger, by statedly increasing the quantity of gold which composes an eagle; so as to compensate in quantity, from time to time, as depreciation of value should become certain and permanent; as the British Government, some years since, called in the guineas which had lost weight by
abrasion. Such a process would prevent the currency from sustaining any great loss of value at any one time; and would also confine the loss to the holders of the coin for the time being, without entailing it, and accumulating it, on remote debts. But governments are usually debtors themselves, and will not be likely to enhance their own burdens. This consideration will assuredly keep the present standard unchanged in Great Britain, also in our own country, where the debtor interest is always more sympathized with than the creditor interest. The same consideration will probably withhold France from abolishing the regulation by which 8 dwt. 7 gr. of standard gold are equivalent to 40 francs of silver—notwithstanding the change is under deliberation by a governmental committee. We know from history, that almost every country has, in its progress, deteriorated its coins, diminishing their weight or quality, and thereby paying its debts cheaply; and no reason exists for supposing that, should nature interpose an equivalent remedy, it would be rejected now.
During the suspension of specie payments by the Bank of England (from February 26, 1797, to May 1, 1821– twenty-three years), all the government fundholders, and other government creditors, were paid in bank-notes, though the difference between them and gold increased in 1814 to 25 per cent. in favor of gold. The apparent in. justice was, however, greater than the real; by reason that the suspension operated on gold like a monopoly. Gold became a scarce article; hence persons who needed it for exportation, for manufacture, or for any purposes that bank.notes, the domestic money, would not subserve, had to purchase gold as merchandise, at the price it had attained by the well-known laws of scarcity.
SILVER AND GOLD ARE CONTROLLED IN VALUE BY THE PRINCI.
PLES WHICH CONTROL THE VALUE OF OTHER ARTICLES.
Such being the dangers which some persons apprehend in our monetary system, a brief consideration may not be untimely, of the principles which regulate the inherent as well as the temporary value of gold and silver. Their inherent value depends on the cost of their production. If gold shall be procurable in California at less cost than heretofore, its inherent value will be less than heretofore, provided the quantity thus procurable shall be sufficient to supply the accustomed demand therefor. This proviso is an essential condition, because the facility with which gold is procurable in California will only enrich the procurers, without diminishing the intrinsic value of gold, should the amount procurable exist in too small a quantity to oversupply the quantity of gold which the world is accustomed to use. In Russia, gold has been for some years procurable at less cost than it had been; but the quantity thus procured was not sufficient to create a surplus, hence not sufficient to reduce the value. The cheapness with which the Russian gold was procured, inured therefore only to the private gain of the procurers. That gold is obtainable in California with unusual facility, and consequent cheapness, cannot be doubted (sixty millions of dollars worth having been shipped from San Francisco in fifteen and a half months); but whether the quantity shall be sufficient to over-supply the accustomed uses to which gold is applied, remains to be ascertained by experience. Gold, as heretofore discovered, possesses the aristocratic peculiarities of gems, rather than the character of metals; being always found uncompounded with other minerals ; though it is occasionally surrounded by inferiors. The gold which is found in California possesses the accustomed virgin purity, and occupies the position in which gold has generally been found in all other places; thus evincing, that nature has not in California departed from her accustomed analogies. May we not, then, fairly presume that all other incidents attendant heretofore on gold will also occur in California ; that gold exists there only superficially, to any great extent; that the superficial supply will eventually become exhausted, as it has been in other localities, and the procurement of gold revert to its former costliness?
AS GOLD BECOMES LESS VALUABLE ITS SOURCES OF SUPPLY
Many gold mines exist whose product will barely com. pensate for the cost of working them, while some are abandoned, by reason that the gold they yield will not pay for the cost of its procurement; should, therefore, the gold facilities of California diminish the value of gold, the diminution will cause the abandonment of many mines which are scarcely profitable at the present value of gold. The discontinued mines will augment in number, with every advance in the progress of depreciation that gold shall experience; a process which will operate as a sort of counterpoise, or resisting force, in any depreciation of gold that may arise from its over-production. Another resisting force exists in the rapid enlargement of the area of commerce, the increasing population of many great countries, and the steadily increasing uses of gold occasioned by these and kindred causes :-“ The United States, with their population of 25,000,000, doubling every twenty-five yearsRussia, with its population of 66,000,000, doubling every forty years—and Great Britain, with its population of 29,000,000, doubling in about the same time, and its exports and imports doubling in thirty years.”