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CHAPTER I.: of the outlet afforded by those countries which at present have evidently an insufficient proportion of metal in their currencies. - Michel Chevalier, On the Probable Fall in the Value of Gold: The Commercial and Social Consequences which may ensue, and the Measures which it invites 
On the Probable Fall in the Value of Gold: The Commercial and Social Consequences which may ensue, and the Measures which it invites. Translated from the French, with preface, by Richard Cobden, Esq. (New York: D. Appleton and Co., 1859).
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of the outlet afforded by those countries which at present have evidently an insufficient proportion of metal in their currencies.
It is true that the United States, after having adopted gold as their monetary standard, have more recently proposed to employ a considerable quantity of that metal, and which they have indeed coined; but how much of it have they retained, and how much do they really require? Gold, which in France is found extremely portable, because there the people had been accustomed to a silver currency, appears somewhat inconvenient to the inhabitants of the United States, in consequence of their having adopted the use of bank notes for the money required to be carried about their persons; in that country the bank note supplies all the daily and current wants, it being issued for very small sums. In those States, where they are the most restricted, bank notes are in use for as small sums as five dollars (26 francs 20s. lOd.) In other States, and particularly in New York, they have dollar notes (4s. 2d.), and the notes of one State, when they are in good repute, circulate freely in others. It must also be remembered that, in the United States, private individuals have generally an account current at a bank, through which they make all kinds of payments, even down to the expenses of their households, which renders it unnecessary to retain at home any considerable sum, even in bank notes. Under these circumstances we may fairly assume that the currency of the United States would be sufficiently supplied with specie, if the circulation contained a milliard of francs (£40,000,000), independently of the silver coins which are to a certain extent in use. I should say much less, but for the exigencies of the federal government, which, for several years, has adopted the absolute law of receiving nothing but specie in its treasuries, and which thus compels foreign merchants, as well as the purchasers of the public lands, to keep by them a considerable amount of gold currency.
As respects this estimate of a milliard (£40,000,000), as the amount of gold which would suffice for the United States, it must be borne in mind that for along time this sum has been considered sufficient for England, whose population is equal to that of the United States, but where they have no bank notes of a lower denomination, excepting in Scotland,* than 124 francs (£5). In our day, it is not likely that the United Kingdom will require, under ordinary circumstances, much more than a milliard and a half of gold currency (£60,000,000). Moreover, where, as in England, in all payments below 125 francs (£5), specie is required, it is natural that gold should form a large part of the currency. But there can be very little occasion for gold, on the contrary, where, as in the United States, every payment of 26 francs (20s. 10d.), and frequently those of 5 francs (4s. 2d.) can be made in paper. It is silver that is required in countries where bank notes of so small a denomination are in use. Besides, at this very time, the United States ought to have been in possession of a milliard (£40,000,000), or more, of gold currency, if such a sum had been felt to be necessary. Since the discovery of California their mints have been in an almost unnatural state of activity, in comparison with past times. In the fifty years, from 1793 to the end of 1848, the year in which the Californian mines were discovered, their gold coinage amounted to only 81 millions of dollars (£16,200,000), or an annual average of 1,470,000 dollars (£294,000). In the seven years, from the 1st January, 1850, to the 1st January, 1857,† their mints have coined 369 millions of dollars, or upwards of 1 milliard, 900 millions of francs (£76,000,000). It is at the rate of 53 millions of dollars, or 274 millions of francs (£10,960,000) per annum, for the average of the seven years, and of 56 millions of dollars, or 290 millions of francs (£11,600,000), for the average of the last six years. Since the 1st January, 1857, this rate of production will have certainly continued. Thus, to the present time, the emission of gold coins in the United States, since the discovery of the mines of California, must have reached nearly two milliards and a half (£100,000,000); and although that country may have exported a large portion of its gold, it probably retains at this moment all that it requires, and therefore it is not to North America that we must look for an outlet for the gold of the new mines. It may not, on this point, be superfluous to add that, probably, that country may-have kept a part of the gold which it had coined prior to 1850, and which had attained, relatively, increased proportions during the later years. In 1847, the gold coined in the United States amounted to more than 20 millions of dollars, or 104 millions of francs (£4,160,000).
I come next to Austria. Let us suppose that she coins gold to the amount of half a milliard (£20,000,000); it is more than there is reason to expect from her, and for many reasons. In the first place, it is not possible to see how the Austrian Empire could suddenly have need of such an extensive gold coinage. The country has hitherto had a silver rather than a gold currency. The pieces of silver, 20 kreutzers, or 87 centimes (9d.), were the money most generally met with there, before the Empire fell under the regime of paper money, which, as is known, dates from 1848, and the greater part of those pieces, though withdrawn from circulation, are doubtless in the country. The metallic currency of this Empire presented these two characteristics; it was scarce; and it consisted principally of silver coins of a small denomination, because the Austrian public has been accustomed to the notes of the Bank of Vienna, which were issued for very small sums, even before they had a forced circulation. Notes of 10 florins or 26 francs (20s. 10d.), and of 5 florins or 13 francs (10s. 5d.) were in abundance. To this day, we have no reason to believe that the Austrian government, in its efforts to return to specie payments, which, unhappily, it has not yet accomplished (Spring, 1858), contentplates any change'of system by which notes of a small denomination will be abolished. Now, when a people have bank notes of 13 francs (10s. 5d.), what occasion can they have for gold coins? Besides, there is another decisive fact: in consequence of the new monetary system, recently adopted by Germany, Austria, in common with the rest of the Germanic Confederation, has placed herself in circumstances which will henceforth make gold play a secondary part in her circulation, even if, contrary to all probability, she were to renounce her bank notes of 26 francs (20s. 10d.), and 13 francs (10s. 5d.) In this system of currency, it is silver and not gold which serves for the pivot, and is the standard. The monetary unit is in silver; and although it is true that, consistent with this fact, it might be possible, by means of certain contrivances, to secure for gold a considerable circulation, we do not see that any such contrivances have been adopted by the Germanic Confederation in general, or by Austria in particular, or that they have great chance of being adopted; the tendencies seem rather in an opposite direction.
I am, therefore, going beyond the bounds of probability in admitting that the monetary system of Austria will, in the course of a few years, offer to the new production of gold an outlet of half a milliard of francs, or 145,000 kilogrammes of gold (£20,000,000); but I desire to make the most liberal concessions to those who insist that it will be easy to find a market for the gold of the new mines.
As to Turkey, I find it impossible, however well disposed, to make her play a serious part in my calculations. Turkey has neither commerce nor credit; the gold bullion which she can attract or keep is insignificant in comparison with the quantity of this metal produced, and we cannot assign the slightest weight to her in the present argument.
And, since we are taking into account those States which may absorb large quantities of gold, why not also include in our calculation those which may be induced to demonetise this metal? This may not be a chimerical precaution, for the Dutch, who possess in the highest degree a practical sense, have almost taken this great step; in Belgium, a country where business is understood, the same policy has been adopted.* The East India Company has pursued the same course throughout its vast dominions. Spain has so far made a beginning, that she has withdrawn the attribute of money from foreign gold coins; it is certainly possible that she may go further.
We must not lose sight of the fact that one of the reasons why the precious metals have, simultaneously, or separately, been invested with the functions of money, consists in the fact that they are generally more fixed in value than other commodities. The relative fixedness of value is one of the essential conditions for qualifying an object to serve as money, for if this fixedness did not exist, how could the money of which it was made serve as the measure of values? From the moment that either of the two precious metals loses this attribute, or that it remains in suspense for a certain length of time, it is neither more nor less than the loss of the condition which qualifies it for the purposes of money. This is so well understood by persons versed in these matters, that, in England, -where the fall in the value of gold is imminent, and even already in course of realisation, able men have advised the abandonment of the gold standard, and the adoption of a standard of silver. According to these writers, gold ought henceforth to be demonetised in England. I shall have, by and bye, to cite a remarkable publication, where this opinion is sustained with much force. With much more reason, for a country like Spain, where the two metals, gold and silver, circulate simultaneously, without either being qualified positively as a standard in relation to the other, may such a measure be anticipated, or at least ranked among the number of possibilities?
I think I may pass over in silence the outlets afforded by Asia and Africa. Everybody knows that in the Bar-bary Eegencies, in the Levant, in China, and in the East generally, silver is the metal preferred. Silver, and not gold, is almost exclusively the metal exported from Europe to those countries. It is not that in some of the regions of distant Asia, in India, for example, gold is not appreciated and sought after; but the local mines, and those of the islands of Sunda, particularly of the island of Borneo, which are important, are sufficient to supply their wants.
In fine, according to the preceding statement, if we seek to estimate the quantity of gold which may be in request for the next ten years to complete, or re-establish on a sound basis, the currency of States which notoriously require a metallic currency, or which, subjected to the regime of paper money, are prepared to make great sacrifices to escape from it, we arrive at no very considerable result. Austria, alone, seems likely to receive a certain portion of the precious metal; and it is on a very generous hypothesis that I have carried to 145,000 kilogrammes of gold (£20,000,000), the amount which may be absorbed, by the process indicated in the previous chapter, in that Empire. However, to remove all pretext for opposition, I will put at more than double, at 300,000 kilogrammes (£41,380,000), the total mass of gold which may during the next decennial period find a market in the Empire of Austria, and in the other States where a similar want prevails.
Here, then, is the first outlet of an extraordinary kind, which offers itself to the gold of California and Australia, as well as to that which we have reason to expect will he extracted from the mines of Northern Russia.
[*]In population, Scotland is only the tenth of the United Kingdom.
[†]American Almanac for 1858, p. 215.
[*]In Holland and Belgium, a gold currency continues to circulate, but purely and simply as merchandise, the daily value of which is regulated by commerce, and, consequently, it is very little used.