152 production in each place and with respect to The general principle determining the dis- June, metallic, in which each region excels, to seat it, and to apply the skill and capital of old every industry in the places best adapted for countries more productively in remote places with great natural resources. nomenon," Mr. Patterson observes, "attend"The first pheant upon the gold discoveries, has been the great emigration-the transfer of large masses of population from the old seats to new ones, the vast and sudden spread of civilized mankind over the earth. The countries where these gold-beds have been found are in the utmost ends of the earth, regions the most isolated from the seats of civilisation. Of all spots on the globe, California was the farthest removed from the highways of enterprise. Not a road to it was to be found on the map of the traveller; not a route to it was laid down in the charts of the mariner. Australia was, if possible, a still more isolated quarter of the globe." This migration to the remote regions of the new gold is not, however, a singular and isolated movement of industry. We shall find, on the contrary, that the key to the principal permanent changes in prices which have followed the path of the new gold. through the world, is to be found in the fact that remoteness is no longer the obstacle it was to the best territorial division of labour, and that buried natural riches, and neglected local capabilities, are obtaining, in a thousand directions at once, a value proportionate rather market, and attracting capital and skill by high to their actual quality than to their nearness to profits to their development. For the same t reason, and by the same aids to industrial enThe great gold movement itself-that is to chants to cheaper places for gold, cheaper terprise which have brought miners and mersay, the production and distribution of the places for the production and purchase of many new gold-is only a part of a much larger other things have been contemporaneously movement, resulting from the new facilities found, and the distribution of the new gold and of producing many things, gold among the its effects upon prices have been very different number, in cheaper places than formerly, from what they would have been, had the and disposing of them more readily in the fertility of the new mines been the only places where their value is highest, and the altered condition of international trade. The enterprise with which such facilities are be- general principle which regulates the distriing turned to account. The mines of Califor-bution of money through the world is, as we nia and Australia, for which older mines were forsaken,* are only a particular class of new sources of production from which the markets of this world are being supplied, and their rapid development is only a particular instance of the energy with which cheaper and better sources of supply are sought and developed. The bent of the industrial and commercial movement of our times is, above all things, to discover and put to profitable use the special resources, metallic and non * "The product of gold in the Atlantic States has fallen off since the discoveries of gold in California."-Preliminary Report on the Eighth Census of the United States, p. 63. The have said, that those who receive it naturally spend it on the things they want most, and in the places where such things can be had cheapest; but they bave of late years obtained access to markets not formerly within reach, and much of the new money has been absorbed in new regions, and in circulation of produce not before in the market. world may at present be divided into three classes of regions: first, those in which prices were formerly highest; in the second place, have already raised prices towards the level those in which the new movements of trade prevailing in the former regions; and, thirdly, the places not yet within the influence of the new means of commercial intercommunication. The first and second class of regions may be said to be fast merging into one, with pecuniary rates approaching to equality, while the third class is also, in numerous directions, on the point of assimilation. A permanent change is thus taking place in the conditions which govern comparative prices in different markets, and one the more worthy of notice, since in the earlier years after the discovery of the new mines, there was, both in the gold countries themselves, and in the chief markets of Europe, an abnormal, and, in a great measure, temporary elevation of prices, which, although not in reality principally due to the increase of gold, led to mistaken conclusions respecting its real effects. countries was not only partial, but only partially caused by the new gold. In the face of a rapidly increasing population, there was an actual decrease in the supply of labour and many of the necessaries of life. Farms and pastoral settlements were forsaken; the crops in many places were lost for want of hands; all building ceased in Melbourne at the very time that crowds were arriving; and the vessels coming from Europe were too full of emigrants to have room for considerable cargoes. So far too as the rise of prices was really caused by the increase of gold, and not by the scarcity of commoditics, it should be taken into account that a great part of the gold current at first came not from the new but from the old mines of the world, brought by The first rise of prices in California and immigrants who did not come empty-handed, Australia, from which M. Chevalier and other and who were driven to spend a good deal eminent writers were led to apprehend a pro- of old money before they could make any portionate fall in the value of money through- new, or even get to the mines. Hence the out Europe, was, in fact, as Mr. Newmarch first fall in the value of money in the gold has shown, both temporary in degree and countries was in a great measure due to a partial in extent; those things alone rising in temporary and abnormal condition of things, price which were in demand with the classes and not to the fertility of the mines. In 1854, whose pecuniary incomes were increased. prices in Victoria were already much lower While, for instance, the coarser sorts of cloth- than during the two years before, and the foling adapted to life at the diggings were fetch-lowing table of prices, published by the ing extraordinary prices, the best quality of Registrar-General of the colony, shows their cloth was for a time altogether unsaleable. continuous descent in subsequent years :Moreover, the early rise in prices in the gold * ESTIMATED WEekly ExpenditURE OF AN ARTISAN, HIS WIFE, and Three CHILDREN. prise of our times, as well as by its better It is evident, from a comparison of the two | world, created by the knowledge and entertables, that persons intending to trade with or settle at either Melbourne or Bilbao, would make a serious mistake in averaging prices one year with another. The average would give a range more than three times too high at one of the places, and nearly three times too low at the other. Prices in Australia in the first years after the derangement of industry by the mines, and prices in Spain before the new gold had found entrance, are so far from affording a basis for calculations respecting the future probable value of money, that they ought rather to be excluded from the estimate. The contrast, however, between the descending movement of prices at one place, and their ascending movement at the other, indicates an important practical distinction. The causes which raised prices so high in Australia from 1852 to 1854 were in a great measure transitory and local; but those which have raised them in Spain are fundamental and permanent in their character, and extend in their operations over the whole area of commercial intercommunication. Windham has left the following note of Dr. Johnson's conversation on the effect of turnpike-roads in England :-"Every place communicating with every other. Before, there were cheap places and dear places; now, all refuges are destroyed for elegant and genteel poverty. Disunion of families by furnishing a market for each man's ability, and destroying the dependence of one man upon another." The train of consequences described in these sentences has with extraordinary rapidity followed the recent increase in the communication between distant parts of the *Prices in 1854 were the average prices of a long period anterior. The very high price of wine in 1860 was in part occasioned by scarcity; not so with the other articles. The harvests have been good, and although bread was at the same price at Bilbao in 1864 as in 1860, in consequence of railway communication with the interior, its price rose in the interior between those years. Mr. The rising prices in such places indicate, it should be particularly observed, not a mere fall in the local value of money, but a rise in the general as well as in the pecuniary value of their produce. If all the cattle in the pastures of South America could be carried rapidly and cheaply to Europe, their value in money might be more than decupled; but the change would not be a depreciation of money; for, on the contrary, money would have found an additional demand. Less than a generation ago, the Landes of the Gironde were a pestilential waste, covering 300,000 hectares, and valued at 900,000 francs on the whole, or three francs a hectare on the average. Partly by being brought nearer to markets by railways, partly by the mere fact of their capabilities becoming known, partly by drainage and cultivation, and partly, no doubt, through the general increase of money in France, the price of the Landes has risen in the extraordinary manner described in the British Consul's report, and more in detail by M. About, who relates that the tobacco crop of a single hectare was lately sold for more than a thousand francs, and that the wood alone, on a plot of 500 hectares only partly in plantation, will in less than twenty years be worth a million francs, being more than the worth of the whole territory of the Landes about the time that the mines of California were discovered. M. About adds:"This enormous territory, which did not figure for a million francs when I was at college, will be worth six hundred millions in 1894." In the same work from which these figures are taken,* M. About graphically describes some of the causes of the enormous advance in prices in Paris. It denotes, he observes, that Paris has become the metropolis of the business as well as of the fashion of the Continent; and rents are trebled because shops and hotels are crowded, and Paris is a city frequented by the rich. So far as it goes, this description is true, though it fails to allow both for the immense influx of gold shown in the official accounts of the foreign commerce of France, and for the expenditure in the metropolis of vast sums lent to the Government from the old hoards of the people. But we must differ entirely from M. About where he says that while Paris has become a place only for the rich, there remains, and will always remain, a refuge for poverty in the country. "If the rise of prices in Paris terrifies you, there is the railway; it not only brings people to Paris, but takes them away. Live in the country." We affirm, on the contrary, that just because the railway brings people and things from the metropolis as well as to it, it brings metropolitan riches and prices into the country, and far more effectively than the old turnpike-road realizes Dr. Johnson's opinion of the results of easy communication between place and place: "Before, there were cheap places and dear places; now, all refuges are destroyed for elegant and genteel poverty." The price of eggs a few years ago at Bayonne was six or seven sous a dozen; now you will not get as good a dozen for fourteen; and the price of boarding in a pension at the same place has exactly doubled in the same period. In formerly less accessible places than Bayonne, the change in the cost of subsistence has been greater; and one cause of the concentration of the population of Europe in large towns *Le Progrès, 1854. which is a fact of immense political significance in our times-is not only that access to them is easier, and employment in them is greater, but that railways are making the country as dear as the town. M. About recommends the country to the poor for its healthfulness and beauty as well as for economy; but modern means of locomotion, and the movement of which they are both cause and effect, tend to give all the advantages of each place a pecuniary value in proportion to their real utility and rarity, and to turn them to the utmost commercial account, thus finding new markets for the produce of the mines in the Pyrenees and the Alps. The same general tendency towards the commercial development of the natural wealth of such regions, which led to the production of the new gold, governs its distribution and effect upon prices. Buyers on the one hand, and sellers on the other, have gained, and are constantly gaining, access to new markets. The necessary consequence is to bring money in unusual abundance to places where prices were formerly low, and on the other hand, to bring the cheap produce of such places to the markets previously dearest, and to counteract more or less in the latter the fall in the value of gold which the increase in its quantity would otherwise have produced. And thus it is that stationary prices of commodities in general are the best marks of prosperity in one class of localities, namely, those in which money has always abounded, and where cheapness indicates improvement in production at home, and access to cheaper places of production abroad; while, in another class of localities, rising prices indicate improved means of exportation, better markets, and inducements for the ingress of capital and skill as well as money. For the rate of profit on capital and skill employed in the development of their resources, and bringing their produce cheaply to market, is in proportion to the increase of the quantity and price of the produce. If people can sell for £100 what cost them but £50, their profit in money is 100 cent.; and the high profits and interest latterly yielded on capital employed in foreign trade and investments has arisen mainly from. obtaining a share in the rising pecuniary value of the productions of regions whose commercial situation has been improved.. This movement certainly tends to destroy the refuges of poverty, but it tends on the other hand to destroy poverty itself by "furnishing a market for each man's ability." It brings with it hardship to those whose condition is stationary, but it makes the condition of many progressive. A few years before Dr. Johnson's remarks on the effect of roads, Goldsmith made those excursions through the to the well-being of the labouring classes. In the mining countries themselves, he observes that labouring men were the first to receive the gold, and the price of labour rose before that of commodities; the latter rising only in consequence of the increased expenditure of the labouring class. But in countries like England and France, the new treasure was first received in exchange for commodities; the price of which consequently, according to this able writer, rose before labour; high profits preceded increased wages; the manufacturer, the merchant, and the farmer were gainers, but the labouring classes were losers. This, he says, is a repetition of what happened in the sixteenth century after the influx of money from the mines of America, when the labourers incessantly complained of the insufficiency of their wages. Happily, however, the historical parallel fails, for wages in the sixteenth century were kept down by law; and the modern changes in production and trade, of which the new gold is only an instance, tend rather to lower than to raise the price of corn in England and the districts of France in which it was formerly dearest. "As commerce extends," says Mr. Mill, “and ignorant attempts to restrain it by tariffs become obsolete, commodities tend more and more to be produced in the places in which their production can be carried on at least expense of labour and capital to mankind.” We get corn from America and Russia for the same reason that we get gold from Cali country which resulted in the poem of the Deserted Village, in which the features of the landscape, and something of personal incident, were drawn from his native village in Ireland; but the picture of the intrusion of the wealth of towns and "trade's unfeeling train" into remote parts of the country, was taken from England. The poet saw only the privation to the parson, who "remote from towns" had been passing rich at forty pounds a year, and the sorrowful side of the migration of the peasantry; Dr. Johnson saw also the market opened for each man's capacity by the union of localities, and the liberation of individuals from hereditary restraints and family dependence. This is exactly the movement which a philosophical jurist has pronounced to be the chief characteristic of progressive societies. Their movement is uniform, says Mr. Maine, in the substitution of the commercial principle of contract for the ancient family bond as the principle which associates men, and the amalgamation of isolated original groups into larger communities connected by local proximity. This theory is equally true of the economic and of the legal and political framework of civilized society; the migration of labour to new fields of employment, and of capital and wealth into the inmost recesses of the country or remoter regions, and of both money and commodities to new markets, are incidents of the better division of labour in which it results, by which the majority of men must be gainers; and the working of the new gold mines is only a par-fornia and Australia, instead of from our own ticular instance of a rapid development of the natural resources of each place, which must result in a vast increase of the aggregate of human wealth, although involving loss to particular classes. Considerable misapprehension has arisen with respect to the effects of the new gold, by attributing to it changes in prices due mainly to different causes. M. Levasseur, for example, concluded in 1857 that the mines had caused a monetary revolution in Western Europe very unfavourable * *Maine's Ancient Law, pp. 168-70, and 182. The following passage furnishes an interesting illustration of the combined social and economic results of the closer contiguity of places: "Les chemins de fer ont trouvé en France une très-grande inégalité dans le salaire de la main d'oeuvre; ils le font progressivement disparaître. Les chemins de fer français ont en outre donné au territoire plus d'homogénéité. Les distances étaient grandes, les moyens de communication limités. Le marché voisin était le seul régulateur, et alors se produisaient des différences de prix considérables. On ne consommait dans la compagne que ce que l'on produisait sur place, de la une nourriture peu variée et insuffisante par cela même. On était donc Breton, Gascon, Normand, Picard, Lorrain, Alsacen, Provençal."- Les Chemins de Fer en 1862, et 1863. Par Eugène Flachat, pp. 77-8. rivers and mountains-although there is gold in every stream that flows and on the side of nearly every hill--namely, that we seek the cheapest places for everything, and have access to cheaper places than formerly for many things, corn and gold included. Bad harvests, the Russian war, and speculation, and not the cheapness of gold, were the chief causes of the dearness of corn, and of several other important commodities, in England and France from 1853 to 1857. We have here another example of the error of measuring permanent prices by averages of foregoing years, without regard to their ultimate range, and the permanent or temporary character of the causes of a rise. It is on the reasons for prices, and not on mere prices themselves, that producers should found calculations for the future; and a farmer would be greatly in error in taking the price of corn from 1853 to 1857 as a safe basis for calculating the future profit and loss of its growth. The harvést of 1853 was almost the worst for a century throughout Western Europe; that of 1855 was very deficient; that of 1856 was under an average, while the war with Russia still farther shortened supply and added to the |