some going much farther in commanding foreign productions than that of others. According, however, to the conditions on which foreign productions generally are obtainable, will be those on which gold may be obtained. If a country possess special facilities for supplying markets where gold can be given in exchange, it will obtain its gold more cheaply—at a less sacrifice of labor and capital · - than countries which do not share these facilities, and amongst such countries it will therefore occupy precisely the same position as an auriferous country whose mines are of more than the usual richness among the countries which yield gold. It is thus possible for a non-auriferous, no less than for an auriferous country to possess exceptional facilities in the means of procuring gold, and therefore to fulfil the second of the conditions by which a divergence of local prices from the ordinary level of the world may be effected. Now, it appears to me there are two countries which possess in an eminent degree the qualifications requisite for attaining this result I mean Great Britain and the United States: the former, as being par excellence the great manufacturer among civilized nations, the manufacturer more particularly of descriptions of goods, as cotton, woollen, linen, and iron, which enter largely into the consumption of the classes by whom chiefly the gold countries are peopled; and the latter, as the principal producer of raw material, as well as of certain commodities as grain, tobacco, sugar, and rice — which are also largely consumed by the same classes. In these circumstances, Great Britain and the United States enjoy peculiar advantages in the markets of the goldcountries, and these advantages are extended and confirmed by other important incidents of their position. Thus they possess the greatest mercantile marine in the world, by which they are enabled to give the fullest scope to their manufacturing and agricultural superiority, while by race, language, and religion they are intimately connected with the producers of the new gold, — a connection from which spring ties, moral, social, and political, to strengthen and secure those which commerce creates. Great Britain and the United States thus possess in their foreign trade a rich mine,1 worked by their manufacturers, planters, and farmers, tended by their mercantile marine, and protected by their naval 1" The mine worked by England is the general market of the world; the miners are those who produce those commodities by the exportation of which the precious metals are obtained-"- SENIOR'S Essay "On the Cost of Obtaining Money," p. 15. power, a mine by means of which they are enabled to obtain their gold on terms more favorable than other nations. The effect of this, in ordinary times, is shown by a scale of money rates, wages, salaries, and incomes, permanently higher than that which elsewhere prevails; but in times of monetary disturbance like the present, when the cost of gold having been reduced its value is falling, these advantages, it seems to me, must tell, as analogous advantages have told in the gold countries, in a more rapid realization of the results which are in store,— in a quicker ascent towards that higher level of prices and incomes which the cheapened cost of gold is destined ultimately to produce. There is reason, therefore, on considerations of theory, to expect a repetition in England and America of that phenomenon which has been already exhibited in Australia and California, a divergence of local money-rates from the average level of surrounding countries. On a future occasion I shall endeavor to ascertain how far, in the case of Great Britain, these à priori conclusions are supported by facts, how far prices and incomes have here, under the influence of the gold discoveries, outstripped the corresponding movement in other countries. Having settled this point, we shall be in a position to form a general estimate of the benefit which may thence accrue to us. Meanwhile, however, I may, in conclusion, point out the mode in which the advantages incident to the monetary position we shall occupy are likely to be realized. And here it may be well to call the reader's attention to the distinction, sometimes overlooked, between a fall in the value of gold and a rise in the price of commodities. A rise in the price of commodities, if general, implies commonly a fall in the value of money; but, according to the ordinary use of language, alike by economists and common speech, money would, I apprehend, in certain circumstances, be said to have fallen in value, even though the prices of large classes of commodities remain unaffected. For example, supposing improvements to have been effected in some branch of production resulting in a diminished cost of the commodity, the value of money remaining the same, prices would fall; if under such circum 1 [Some evidence on the point will be found in the Appendix; but the inquiry here contemplated was never carried into effect. A very interesting and carefully prepared paper on the subject, however, was read some years later by my friend Professor Jevons, before the London Statistical Society, when I had the satisfaction to find that the results of his entirely independent investigations to a very large extent corroborated the conclusions at which I had arrived, mainly by way of deduction from the general principles of the science.] stances prices did not fall, that could only be because money had not remained the same, but had fallen in value. The continuance of prices unaltered would, therefore, under such circumstances, amount to proof of a fall in the value of gold. Now, when, in connection with this consideration, we take account of the fact that over the greater portion of the field of British industry improvement is constantly taking place, it is obvious that the mere movements of prices here, taken without reference to the conditions of production, are no sure criterion of changes in the value of gold. The truth is, in a large class of commodities, in all those to which mechanical or chemical inventions are extensively applicable, even on the supposition of a very great depreciation of gold, no considerable advance in price is probable. Gold, for example, might have fallen since the beginning of the present century to the extent of 75 per cent., that is to say, four sovereigns now might be equal to no more than one sovereign at the commencement of the period, — and yet in a large class of manufactured goods no advance in price would be apparent, the reduction in the cost of production being in more than an equal proportion. In ordinary times, agricultural operations escape in a great degree the influence of industrial progress; but within the last ten years that is to say, since the repeal of the Corn Laws, which nearly synchronized with the gold discoveries — the spirit of improvement has been as busy in agriculture as in any other department of industry, and, in conjunction with importations from foreign countries, has acted, and must for some time at least continue to act, powerfully upon the price of raw products in this country. The depreciation of gold, therefore, may be realized either in a corresponding advance of prices, or in the neutralization of a fall which, in the absence of depreciation, would have occurred; but in whatever form it may come to us, our gain or loss as a nation will be the same, and will depend upon the condition I have stated, the more or less rapid depreciation of our currency as compared with the currencies (convertible, like ours, into gold) of other countries. Whether, the conditions of production remaining unaltered, the depreciation be indicated by a corresponding advance of prices, or, those conditions undergoing improvement, the fall in the value of gold merely operates in neutralizing, as regards price, the effects of the cheapened cost of commodities, - in either case the gold price of the products of English labor and abstinence will rise. A given exertion of English industry will reap a larger gold reward than before; and foreign commodities not rising in price in the same degree, the larger gold reward will indicate, over so much of our expenditure as is directed to foreign productions, a real augmentation of well-being. As regards that portion of our expenditure which falls upon the products of our own industry, individuals and classes will, according to circumstances,1 be benefited or injured by the change; but as a nation, we shall neither gain nor lose, since here the increased cheapness of gold will be exactly neutralized, either by a corresponding advance in price, or by the prevention in the same degree of a fall which would otherwise have taken place. It is in this way, by the increased command which she obtains over foreign markets by her cheap gold,—and not, as is commonly supposed, by finding an outlet for her wares in California and Australia, that England will benefit by the gold discoveries. That outlet for her productions, were the movement to stop here, however it might benefit individuals, would for the country at large be an injury and not a boon; it would deprive her of that which might conduce to her comfort and happiness, and would give her a "breed of barren metal" in exchange. But the movement does not stop here. The money which she obtains from the gold countries, instead of absorbing, like India or China, she employs in purchasing the goods of other nations. It is in the enlarged command which she acquires over such goods that her gain consists, and it is thus that she indemnifies herself, though at the expense of the nations who ultimately retain the new gold, for the loss the indubitable loss - which she is called on in the first instance to sustain. 1 On this point see Cairnes, p. 147, et seq. DEPUIS quinze ans, trois grand faits économiques ont exercé en France une influence considérable sur la production manufacturière; le développement du crédit, la multiplication des chemins de fer et la réforme douanière. Il entrait dans les vues du gouvernement de provoquer l'esprit d'entreprise. L'année 1852 vit se former deux établissements d'une nature très-diverse, mais qui tous deux devaient concourir au même but, celui de fournir des capitaux au travail, le Crédit foncier et le Crédit mobilier. Le premier, depuis longtemps réclamé par M. Wolowski, se proposait de venir en aide à l'agriculture en avançant sur première hypothèque à la propriété foncière des sommes remboursables par annuités; en réalité, les prêts agricoles, qui augmentent aujourd'hui, ont été les plus lents à se développer, et la nature de sa clientèle l'a fait servir plus à la construction des maisons et aux travaux publics dans les communes qu'à la culture proprement dite à ce titre, il appartient à l'histoire de l'industrie. Le second, créé et dirigé par M. E. Péreire, est une puissante banque de commandite et de spéculation, non sans analogie avec celles que recommendait le saint-simonisme. Il était destiné par ses statuts à fonder ou à soutenir de grandes entreprises, et il a, en effet, donné naissance aux chemins de fer du Midi, à la compagnie immobilière de Paris, au gaz de Marseille, aux paquebots transatlantiques; il devait être, en raison même de son caractère, trèsvivement affecté par toutes les influences de hausse et de baisse, et sa fortune dépendait entièrement de l'habileté de ses directeurs. La Banque de France, dont le gouvernement avait le droit de suspendre le privilége en 1855, fut affranchie de cette crainte et autorisée à faire des avances sur dépôt d'actions et d'obligations |