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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 IV.

conclusion of the preceding chapters.—the fall of gold very probable, if not inevitable, in relation to all other commodities.

It is not difficult to draw a conclusion from the preceding analysis. In no direction can a new outlet be seen sufficiently large to absorb the extraordinary production of gold, which we are now witnessing, so as to prevent a fall in its value. There is but one way of disposing of these masses of gold, it is by coining them and forcing them into the current of circulation into countries which are already sufficiently provided with a gold currency. This current will absorb them, for it is, so to speak, insatiable; it receives and carries off all that is thrown into it; but the process of absorption and assimilation is on one condition, namely, that gold diminishes in value, so that in those transactions where heretofore ten pieces of gold had for example sufficed, eleven, twelve, fifteen, or even more, will be henceforth required. In a word, if gold is to enter into the circulation in indefinite quantities, it is by being subjected to the rigorous law of a continually increasing depreciation.

And here is exhibited a disadvantage under which gold suffers in comparison with silver. The latter metal has, besides being used for money, other somewhat extensive employments. The requisites of the table, such as dishes, plates, spoons, forks, &c, silver kettle-drums, and church ornaments, consume a large quantity. Silver plating, so much on the increase for some years, will, doubtless, take off a considerable amount; we are probably only in the infancy of this interesting industry, and the consumption of metal to which it gives rise is small in comparison with what may be expected for the future. Gold has, doubtless, its employments in the arts, and perhaps, ere long, gilding may become as general as plating; but to gild properly a given surface requires much less gold than it would of silver to cover it with the latter metal; in this manner, the peculiar attribute of gold, of being infinitely malleable, or of holding together in layers infinitely thin, only tends to diminish its employment. Thus not less than 6 grammes of silver (92 grains, troy), are put upon a couvert, in the manufacture of the house of Cristofle; whereas the gilding needed for covering utensils, picture frames, or even ceilings, requires but the merest atoms of gold.

I have explained the consumption for gilding rooms, picture frames, and gold lace; I have also included articles of jewellery made in imitation of gold, by dipping them rapidly in a solution containing a portion of nitrate of gold. The strongest gilding given in M. Cristofle's establishment consumes 7 2/10 grammes (107 grains troy) on a dozen dessert converts; whilst for silver, with couverts, it is true, of a larger size, it is 72 grammes (1,104 grains troy); but there are summary processes of gilding which do not consume more than one-tenth of this proportion of metal. From the particulars obligingly communicated to me by M. Cristofle, it appears that his establishment for gilding and plating consumed, in 1856, 4,022 kilogrammes [142,110 ounces] of silver, and only 17 kilogrammes [601 ounces] of gold. In no one year has this house, whose business is considerable, consumed in gilding, more than 27 kilogrammes [954 ounces] of the latter metal. M. Cristofle estimates that the gilding of metals consumes, for all that is done in France, only 400 or 450 kilogrammes [14,130 or 15,900 ounces] of gold yearly. Now France is a producer of these articles, not only for her own use, but for exportation.

To fix these ideas, and give precision to our deductions, let us now recapitulate the various employments for gold which we have just designated, representing them in figures.

It has been seen that the currencies of those States which are short of gold are not likely to require for the next ten years more than 300,000 kilogrammes of this metal (£42,000,000). To arrive at this result, it has been necessary to resort to very forced anticipations. As for the increase of money rendered necessary by the additional population, and the extension of well-being among the people of Europe and America, I have made a large estimate in calculating it at 22,000 kilogrammes (£3,080,-000) a year, or 220,000 kilogrammes (£30,800,000) for the ten years.

In order to satisfy the most exacting, I have estimated at an equal amount, 220,000 kilogrammes (£30,800,000), the addition which, in ten years, ought to be made to the currency to keep pace with the extension of commercial operations, strictly so called.

For wear and tear, it has been shown that we run no risk of valuing it too low in putting it down at 3,500 kilogrammes (£490,000), or, in ten years, at 35,000 (£ 4,900,000). And, then, for hoarding, with the addition of accidental losses, there has been more than an ample allowance made in the estimate of 15,000 kilogrammes yearly (£ 2,100,000), or 150,000 in ten years (£ 21,000,000).

It is an exaggeration, beyond allowable bounds, to put down the quantity of new gold required by jewellers, also for the various modes of gilding, and for gold lace, at an average for the next ten years of 35,000 kilogrammes (£ 4,900,000), or, for the decennial period, at 350,000 kilogrammes (£ 49,000,000).

We thus arrive, exaggerating everything, at a total of 1,275,000 kilogrammes (£ 178,500,000), as the mass of the precious metal which may find a natural employment during the next ten years. By the words natural employment, I mean that it should be absorbed on the same conditions as heretofore, and consequently without being aided by a fall in the value of gold. In estimating the average annual production, for the period of ten years, now commencing, at 250,000 kilogrammes only (£ 35,000,000); and it may fairly be expected to reach 300,000 (£ 42,000,-000), the floating mass which would remain, and the weight of which would at the end of the decennial period operate to depress the value of gold, would amount to 1,225,000 kilogrammes (£ 171,500,000), that is to say, to nearly the half of all the gold that America has furnished from the first voyage of Columbus to the discovery of the mines of California in 1848, a period of three hundred and fifty-six years.

Let 200,000 or 300,000 kilogrammes more (£ 28,000,-000 or £ 42,000,000) be subtracted, to provide in the most ample manner against all contingencies, even the most improbable, and still an enormous mass will remain to exert on the market a pressure beyond all precedent. To express in other words the same idea, in proportion as the gold shall be extracted from the new mines, all which shall not have been absorbed by the industrial arts, will enter into the currencies of all those countries which will admit it in that capacity, and in each of them it will diffuse itself, all other things being equal, in proportions measured by the facilities which legislation may offer it. But in these countries it will be in great excess, relatively, of all that could have been required for the medium of exchange, if the metal had preserved its full value; that is to say, gold will circulate there on precisely the conditions which would be indicated if we had to demonstrate the process necessary for determining infallibly its fall.

It may not be out of place to add that the new mines have already yielded a considerable quantity of new gold, hardly to be valued at less than 1,200,000 kilogrammes (£ 168,000,000); so that the circulation, in all those countries where this metal is admitted as an essential element of the monetary system, is already saturated. This is perceptible enough where business is in its normal state, and not under the influence of those crises which give rise to an extraordinary want of all the instruments of commercial liquidation, and when it seems as if it were impossible to have enough of the precious metals. As soon as affairs resume their natural course, we see, in those countries just mentioned, gold flowing into the banks, and into the great establishments of credit and deposits. It cannot, therefore, now be justly said that there are great voids to fill up in the monetary mechanism of the principal States, and that thus the production of new- gold is a welcome event. There are, on the contrary, grounds for preoccupying ourselves with the indications, already apparent, of a state of plethora.

Unless, then, we possess a very robust faith in the immobility of human affairs, we must regard the fall in the value of gold as an event for which we should prepare without loss of time. and who can he ignorant that the value of gold in relation to productions generally, and in relation to silver in particular, instead of being fixed, has experienced very numerous variations—that it has been undergoing modifications, sometimes in one sense, sometimes in another, from the beginning of the world, under the influence of forces far less energetic than those which are in action in our day? I refer those who desire information on this subject to a work, where an illustrious authority, Baron Humboldt, has treated it with the superiority which distinguishes him, shedding upon the question some of that vivid light which he carries everywhere with him. There will be seen, for example, that in throwing into the circulation of the Roman world a mass of gold very important, it is true, Julius Caesar occasioned for that metal a fall so great that some time after it had been worth seventeen times its weight in silver it fell to be only worth nine times.* If the value of gold has varied every time that new circumstances have modified the relation between the supply and demand, and if it has risen or fallen in proportion to the change which manifested itself in this relation, by what strange witchcraft are the natural causes of the fall of gold to be paralysed, now that they are displaying themselves in such unusual proportions?

Independently of all detailed calculation like the preceding, there is a general way of convincing oneself of the impending fall of gold, at least if some cause, at present impossible to foresee, should not suddenly put an end to its extraordinary production. The metal which is now being extracted in such abundance, in comparison with the past, must, if converted into money, affect its value by its mass. To prevent it from rushing into the currency, the demand for luxury must find it a sufficient outlet; but is this possible? There has been no scarcity of gold in the market since the working of the mines in Northern Russia. The chief part of that which has been yielded by Australia and California has, therefore, constituted a real surplus; now, how can the developments of luxury absorb it? A few of our newly enriched men, who, because existence is suddenly transformed for them, suppose that every thing on the face of the earth is changed for the better, may well imagine that pomp and luxury will offer to the metal which issues from the mines a limitless outlet: but any one who reflects, observes, and calculates, will form a different opinion. No, mankind is not in a condition to spare from the fruits of its labour the large portion which it would be necessary to hand over to the producers of gold, to avert a fall in the value of their metal, for mankind is still poor, even in the most civilised countries. To pretend that, to satisfy its taste for pomp and display, it will continue to take, at its old price, all the gold of the new mines, is as if one were to say that mankind is suddenly become sufficiently rich to devote 4 or 500 millions (£ 16 to £ 20,000,000), if not more, to the acquisition of a supplement of articles of luxury, and of that very kind, too, which most deserves the name of superfluities;—4 or 500 millions, seeing that at the price which gold has maintained, almost intact up to the present time, the quantity of this metal annually thrown upon the general market, approaches, in round numbers, a, milliard (£ 40,000,000), and that the employments which may be reasonably foreseen will not, perhaps, consume the half of it. The civilised world, far from being able to indulge in such caprices, has all sorts of pressing necessities to provide for, and with which it is more seriously preoccupied. People are still badly fed, badly clothed, badly lodged, and badly supplied with all those objects which minister to the intelligent wants and the purer satisfactions of an elevated humanity,—satisfactions which, whatever may be said, are every day more and more appreciated. Even among the easy classes, how many wants are there, to satisfy which will claim precedence of the taste for arraying themselves in the splendour of gold? The currency, then, offers the one sole channel by which the principal part of this enormous production of gold can find an outlet. Already, several nations have closed the door against it. How then can it fail to encumber the channels of circulation in those countries which remain faithful to a gold currency? In other words, how shall we escape a general dearness of commodities in France, if we maintain for gold, in our monetary system, the place which in faet it now occupies?

SECTION V.

[*]This work of the patriarch of the sciences of observation is anterior, by several years, to the discovery of the mines of California; it dates from 1838. The Journal des Economistes, numbers for April and May, 1848, give a good translation of it, by M. Michel Rempp. Upon the same subject of the numerous variations that the value of gold has undergone in relation to silver, I could cite a great number of other works: I will mention, for example, the treatise of Lord Liverpool, for England; the Traité des Monnaies, of Leblanc: the work of Mr. Jacob, of which I have here made frequent use; and also the memoirs of M. Charles Lenormant, my learned colleague of the Institute, and of his son M. Francois Lenormant. I have already referred above to the Traité d'Economic Politique of M. Roscher.