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• Translator's Preface
• Section I.: Preliminary Observations.
• Chapter I.: The Question Stated
• Chapter II.: Preliminary Observations On the Rise of Prices Which Has Characterised the Last Few Years.
• Section II.: An Appeal to Some of the Fundamental Notions Upon the Nature and Characteristics of Money.
• Chapter I.: What We Ought to Understand By Value and Price.—twofold Definition of Money.—the Standard Or Fineness of Money.
• Chapter II.: Of the Meaning of the Word Standard.— the Metal-standard Is That From Which Is Derived the Monetary Unit.—the Two Ideas Standard and Monetary Unit Imply Each the Other.
• Chapter III.: Of the Character of Exchanges As Affected By the Invention of Money —how the Rise and Fall of the Precious Metals Are Manifested In the Course of Trade.—phenomena of the Rise and Fall In Commodities.
• Chapter IV.: On the Possibility of Conferring the Quality of Standard Upon Two Metals At Once.
• Chapter V: Of the Meaning of Certain Words Specially Applicable to Money and the Precious Metals.—price, Value, Premium, Dearness, Cheapness
• Section III.: Of the Present Production of Gold and Its Outlet.
• Chapter I.: Of the Increase In the Present Production of Gold As Compared With the Past —the Extended Coinage of Gold Which Has Followed.
• Chapter II.: Diminished Coinage of Silver In France—gold Is Already At a Discount In Comparison With Silver.
• Chapter III.: Extraordinary Exportation of Silver From the Civilised Countries of the Western World Towards India and China —to What Extent It Is Likely to Continue.
• Chapter IV.: France Serves Temporarily As a Parachute to Retard the Fall of Gold.
• Chapter V.: Whether the Extraordinary Production of Gold Ought to Be Considered As an Ephemeral Accident.—the Crushing of the Quartz Veins —mines In Siberia and Elsewhere.
• Section IV.: On the New Outlet That May Be Expected For the Production of the New Gold Mines, and Whether It Will Be In Proportion to the Extent of This Production.
• Chapter I.: Of the Outlet Afforded By Those Countries Which At Present Have Evidently an Insufficient Proportion of Metal In Their Currencies.
• Chapter II.: Of the Increase of Gold Money Which May Arise From the Development of Business, and the Increase of Population.—of Wear and Tear.—of Hoarding.—of Shipwrecks.
• Chapter III.: On the Employment Which Habits of Luxury May Offer to the Gold of the New Mines.
• Chapter IV.: Conclusion of the Preceding Chapters.—the Fall of Gold Very Probable, If Not Inevitable, In Relation to All Other Commodities.
• Section V.
• Chapters I. to V.: On the Part Assigned to Gold In the Monetary Legislation of France.
• Section VI.: Consequences of the Fall In the Value of Gold.
• Chapter I.: A General Distinction Between Those Private Incomes Which Will, and Those Which Will Not Be Affected. of a Certain Collective Loss Which the People of France Will Suffer.
• Chapter II.: Of the Sufferings and Difficulties Which Will Accompany the Transition.
• Chapter III.: On the Gain Which Would Result to Certain Classes of Persons, and to Society, From the Fall In Gold. the Saving to the State From the Payment of the Dividends On the Public Debt.
• Section VII.: Of the Measures to Be Taken to Avert the Evil Effects of the Fall of Gold.
• Chapter I.: Case of a State Like England, Where Gold Is the Standard, and Where There Is No Other Money But Gold.
• Chapter II.: Case of a State Such As France, Where There Is a Silver Standard, But Also a Gold Currency.
• Chapter III.: The Measure Here Recommended Is a Necessary Complement of the Law of Germinal, Year XI.
• Chapter IV.: On Some Inconveniences Inherent In the Combination, Respecting a Gold Currency, Recommended In This Work.
• Chapter V.: Of a Plan Recommended For Maintaining the Parallel Circulation of Silver and Gold.
• Chapter VI.: Of the Resolutions of a Commission Appointed By the Minister of Finance In Mdccclvii.
• Chapter VII.: Of Various Acts Which the Legislation of the Ancient Regime Upon Money Treated As Crimes, and With Regard to Which Some Persons of Our Day Propose to Establish Penalties. —selecting, and Melting; Trade In Coins; Exportation.
• Chapter VIII.: Of a Different Solution Which Has Been Recommended, and Which Would Consist In the Adoption of a Gold Standard.
• Chapter IX.: Appreciation of the System Which Consists In Adjourning Indefinitely the Legislative Solution.

CHAPTER III.

on the employment which habits of luxury may offer to the gold of the new mines.

What are the outlets which may be created by the constantly increasing developments of luxury? On this subject we must avoid falling into a delusion: the age is less pompous than it is supposed to be, or rather it does not exhibit its pomp by a display of gold ornaments. It loves gilding, and judging from what is seen in Paris, this species of display is extending in rooms, on furniture, wainscots, and ceilings; but, as respects jewellery, what is now made is very light. Many gold rings are manufactured, as well as gold watch-cases, but very few articles are now made which consume a considerable weight of that metal. This may be verified by referring to the returns of those establishments which, in France, are called bureaux de garantie.

Who would not suppose that in Great Britain, where a wealthy aristocracy spends its riches freely, and where, since the peace of 1815, commercial fortunes have increased and multiplied to a surprising extent, the manufacture of articles of gold must have undergone a considerable augmentation? The contrary, however, is the fact. I have before me the return of the duty paid on gold plate in England, from the commencement of the century to” 1850 inclusive, which appears in Mr. Porter's excellent work, the Progress of the Nation. According to this table, the progress of the manufacture of articles of gold remains, incredible as it may appear, behind that of the population. From the first quinquennial period of the century to that which closed in 1850, the increase in the quantity of gold which paid duty was 50 per cent.; during the same time the increase of population was much greater; it doubled. Then, if we take into account the quantity of gold required for this manufacture, we are amazed at its smallness. It is an atom in comparison with the total production. During the last quinquennial period of the half-century, the annual average has only been 7,636 ounces. Independently of these statistics of Mr. Porter, I have been enabled to procure the returns for two recent years (1855 and 1856). The average is 10,420 ounces, including that which is destined for exportation. It must be stated that many articles, such as watch-cases, are excluded from this return; but let the amount be doubled or trebled, let it be quadrupled, quintupled, or even more, and still how little will it amount to in comparison with the present production of gold?

From England let us pass to France. Here also may be observed a movement slower than the progress of the population; if we embrace also an interval of half a century, in which, it is true, is comprised all the period of the revolution. Necker, who must have been well-informed, estimated in 1789, the jewellery manufactured in France, both gold and silver, at 20 millions (£800,000); in 1821, it was only 21,750,000 francs, (£870,000), which drew from Baron Humboldt the remark that,—'” The tables published by the Count de Chabrol would prove, if the estimates of M. Necker are correct, that the state of the manufacture of jewellery has not greatly altered,”* Baron Humboldt might have added that, since for the two metals together the alteration had been insignificant, whilst there had been a considerable increase in the use of silver plate, it necessarily followed that there must have been a diminished employment of gold. Since 1821 a certain progress is observable in France. According to the bureaux de garantie, the average of the years 1822-3-4 gives 3,059 kilogrammes (108,065 oz.) for gold; and the average of the two years ending 1st Jan., 1857, is 8,185 (289,205 oz.); but from these quantities a portion must be deducted, as will be seen, on account of the old metal and jewellery returned to the crucible. There are, then, grounds for saying, both of France and England, that an outlet so limited, and augmenting so gradually, could not tend seriously to raise the consumption of gold to the level of its greatly increased production.

In 1827, Baron Humboldt estimated the quantity of gold employed in all Europe, by the goldsmiths and jewellers, at 9,200 kilogrammes (325,100 ounces); but from this must be deducted the old gold which Necker estimated at the half, but which others, with no better opportunities of being well-informed, put down at much less. Let us carry to double this amount the gold at present worked up by these industries, and make no deduction for the metal derived from the remelting of old jewellery and ornaments; this will, if we admit Necker's hypothesis of the proportion of old gold entering into the composition of the new, quadruple the effective consumption of gold in 1827. Here, then, is an outlet for 18,400 kilogrammes (650,200 ounces) of the production of the mines. To take a liberal view, let us put down 25,000 kilogrammes (875,000 ounces) for the ensuing ten years, as the consumption for the same purposes in the civilised States of North and South America. It is a very high estimate, for this amount, set apart for the goldsmiths and jewellers, is exclusive of the gold required for lace and gilding, with which I shall have to deal in the present chapter, and for which an ample allowance will be made. It may thus be seen how far the demand for jewellery and ornaments can counterbalance the excessive supply of this metal in the market; it is very far from being sufficient for the purpose.

But, it will be said, the world has absorbed the mass of nearly 40 milliards (1,600 millions sterling) of gold and silver which has been supplied by America since the time of Columbus. True enough, but on what condition? On condition that the value of silver fell in the proportion of 6 to 1, and that of gold in the proportion of 4 to 1. and it is only by a similar process (though I do not pretend to assign the proportion) that the large supplies which are now being produced by the new mines will find an outlet. The present essay is written to prove, not that this extraordinary production of the precious metal cannot be employed on any terms, which would be absurd, but simply that it cannot be absorbed and maintain its present value in relation to other commodities: mankind is not rich enough, nor will it soon be, to pay so dearly for so large a mass. To find an outlet, it is absolutely requisite that so vast a production should be accompanied with a great reduction in value.

But not to anticipate the conclusion, let us pursue the enumeration of the extraordinary channels which may be opened to absorb the extraordinary supply from Australia and California; and, first, let us, by way of finishing the account with luxury, allude to gold lace and gilding. Paris gilds itself not a little, and is surprisingly addicted to gold lace. Is there not in these two employments a consumption large enough to enable the producers of gold to dispose of their precious commodity, almost indefinitely, without any reduction in value? In order to reply to this question, let us calculate the quantity of metal which is required to gild a given surface. Gold, as is known, is the most malleable of metals; it is so to a degree of which it it would be difficult without ocular illustration to form an idea. The goldbeater makes it into leaves, which, thanks to the progress of his art, are now so thin that fourteen thousand form only the thickness of a millimetre, and, consequently, 14 millions of leaves laid one upon another would make a thickness of only a metre (about 39 inches). A cubic metre of solid gold, which in truth would not weigh less than 19,258 kilogrammes (680,440 ounces), would suffice to gild a surface of 1,400 hectares (about 3,450 acres), and 1,000 kilogrammes (35,300 ounces) would cover 720,000 square metres, or 72 hectares with gold (about 179 acres.) It is a result which quite confounds the imagination. and yet the metal used in the manufacture of gold lace is spread over a much larger surface. The substance of the threads of which this lace is made consists of silver, the surface alone being of gold, and one gramme of gold, worth 3 francs 44 centimes (2s. lOd.) suffices to gild a thread 200 kilometres in length (120 miles). In a piece of 20 francs (16s. 8d.), there is gold enough to cover a thread which would extend from Calais to Marseilles.

I might also remark that in the calculation of the quantity of gold leaf to be made from a cubic metre, or 1,000 kilogrammes of gold, I have spoken as though the gold employed was of an absolute fineness, which is not quite correct. Experience shows that the malleability of gold is increased by a slight mixture of alloy, and which diminishes proportionably the consumption of the precious metal. It is true that this proportion is not great, it is about 4 per cent., and we must make a corresponding abatement from our estimate.

Let us now suppose that a room, suitably gilded, consumes five “square metres (a metre is 39 inches) of gold leaf, which is, I believe, sufficient At this rate 1,000 kilogrammes (35,300 ounces) would gild one hundred and forty-four thousand saloons or apartments, that is to say, at least twenty times the number which are thus embellished in one year in all those cities where the houses are of a character to require their interiors to be gilded. With the remainder what a multitude of picture-frames, books, kettle-drums, cloths, epaulettes, and all kinds of objects might be clothed in a dazzling covering of gold! Let the number of gold leaves required for each apartment be multiplied, let the number of books and picture-frames be augmented, and still we shall arrive at no result which deserves a moment's consideration. At Paris, where nearly all the gold leaf is beaten which is consumed in France, and a part of Europe, the quantity of gold operated upon does not exceed 1,150 to 1,200 kilogrammes (40,650 to 42,400 ounces). I give this fact upon the authority of a man of high integrity who was at the head of this industry, and was well versed in its statistics.*

The fluid process of gilding, that is by means of a solution of a salt of gold in water, consumes but very little metal; so that a very moderate number of kilogrammes of gold are sufficient for the thread required by all the lace manufactories of Paris and Lyons.

In fine, for all descriptions of gilding, as well as for every kind of gold lace, we shall exceed the truth in putting down at 10,000 kilogrammes (353,330 ounces), the quantity of gold which may be required annually for the next ten years. I am always arguing on the assumption that the metal does not fall in value; for, let it be reiterated, if a considerable depreciation should occur, it will be followed in the case of gold, as it would be in that of any other article under similar circumstances, by its extended use, and its increased consumption. It is probable that, at the present moment, 5,000 kilogrammes (176,665 ounces) is more than the amount consumed. If we add to the quantity, hypothetically admitted, of 10,000 kilogrammes, the amount already computed, in the same spirit of liberality, for ornaments and jewellery, we shall reach an annual consumption of 35,000 kilogrammes (1,236,655 ounces), for the different arts which minister to the various forms of luxury. Here, then, is the limited employment, which luxury, in all its bearings, offers to the gold furnished by the new mines. It is a real deception to the statistician, who might have expected to find a limitless outlet. Let us not, however, omit to mention one rather insignificant mode of consumption. The display of gold in utensils, more or less massive, is the luxury of the less refined part of the community, whose eye is instinctively attracted by the glare of a dazzling metal, and whose desire is excited for an object to which there is vulgarly attached the idea of great riches. It is a species of magnificence which was reserved for the sovereigns of primitive nations; it constituted the splendour of the Incas, and that of Attila, and of Grenseric; it was the pride of the savage races whom the Europeans discovered in America: these poor natives carried lumps of gold suspended from their noses and ears. But our intelligent communities, with their cultivated minds, decorate their apartments with stuffs tastefully arranged, and which present to the eye patterns of elegant form, and brilliantly or delicately coloured. They adorn them with works of art, with sculpture of every kind, and pictures of the various schools, and exquisite engravings. This is a more enlightened luxury, and more suited to an advanced civilisation.

Not that I would here maintain the opinion that, in a fit of ideal refinement, civilised nations will henceforth despise the. glitter of gold; I merely mean to say that the observation of what is passing every day under our eyes, warrants the belief that luxury is seeking its gratification in other directions. In such an undertaking, as devoting a large sum to the purchase of an object for embellishing a residence, people generally prefer something which has other recommendations than the weight it contains of so valuable a commodity as gold. The man of little taste may be flattered by the possession of some grand vase of a material which is worth sixteen hundred times its weight in copper, ten or fifteen thousand times its weight in iron, thirteen thousand times its weight in' wheat; but this price is so excessively high, that persons with any taste for the beautiful, however rich they may be, pause and turn aside. Nevertheless, gold has lost none of its incomparable splendour, and if it were to fall considerably in price, it is probable that then, and only then, it would become, to some extent, the fashion, on condition that the merit of the form equalled the beauty of the material.

[*]Essay on New Spain, edition of 1827, Vol. III., p. 467.

[*]The late M. Favrel, one of the most eminent men of business in Paris.