taneously to any extent, and consequently all payments are made in silver, because from its overvaluation in the coin as compared with gold, gold coins are sold at their market prices, and constantly obtain a premium. No advantage would result from sending back to Holland any of the Dutch silver coin, even if it could be found in other countries, as is the case with British silver coin returned to this country; for the Dutch silver coin will in Holland purchase no more gold than in any other bullion market, the gold coin there being sold like gold bullion, and having no determinate value. It is before shewn that the British silver coin exchanges for more gold in this country, than it will purchase in any other, owing to the state of the law. When found in foreign places it will therefore be always sent back to Great Britain.

206

ESSAY VII.

ON VARIATIONS IN THE VALUE OF GOLD AND SILVER.

THE supply of gold and silver is regulated by the same principles as that of all other commodities; namely, the self-love and self-interest of individuals. So long as a price is paid adequate to defray the necessary expenses and to yield the common rate of profit, the supply will be continued. Upon any

increase of the value of gold and silver, additional exertions will be made to furnish larger supplies, not only from the mines which were previously wrought, but likewise from new sources. On the other hand, according as the value of gold and silver diminishes, more and more of the least fertile mines will be abandoned as unprofitable. The working of most of those in Europe, which furnished at one period some supplies of gold and silver, was given up after the discovery of the far more fertile mines of America. In the island of Saint Domingo, and likewise in the mining districts on the American continent, mines, which were formerly of much importance, are no longer wrought. The reason for abandoning all such

mines voluntarily, was in every case the same; the value of the produce did not prove to be sufficient for defraying the necessary expenses incurred to obtain it.

If, by the discovery of new mines of lead or of tin far more abundant than any at present known, the supply of these metals was greatly increased 1; and were the increased quantity to cause a diminution in the price previously obtained for them to the extent of a half or even of a fourth part; it is obvious that many old mines must necessarily be closed. A similar result would follow in regard to gold and silver mines, were a quantity of these metals brought to market far greater than usual, and were the increased supply continued, so as to reduce the price permanently. Until the revolutionary movements commenced in that part of America which was formerly subject to Spain, the supplies of silver from the American mines appeared to have been for many preceding years greatly on the increase, and hence it may well be inferred, that the price obtained for that metal was an adequate remuneration for bringing augmented supplies to market. On the contrary, although the price of gold continued high as compared with silver, yet until the recent introduction of a better system of mining in Brazil by European companies, and until the important reduction in the rate of duty payable to government, the gold washers in some of the mining districts considered their busi

ness to be less profitable than agriculture. It is said that the old Brazilian miners have in several places changed their occupations altogether, and become agriculturists. In Minas Novas, Espirito Santo, and other districts, this change has been complete.

Varying as are the accounts of the quantities of the precious metals brought annually to market, it is difficult to ascertain the amount with any tolerable degree of accuracy. From some accounts annexed to the bullion report of 1810 it is inferred, that the annual supply of gold from the American mines had diminished a sixth part after the middle of the last century; and that the annual supply of silver from the mines of the same continent was augmented about three fourths subsequent to the same epoch. These statements, even if accurate as regards the supplies from America, would not afford a proper criterion to judge of the total quantities brought to market. From Africa the supply of gold is in some years rather considerable, chiefly in dust brought to this country, but moderate quantities were also received from thence in Brazil, which, as they paid no duty, have not been entered in public

accounts.

Those commotions which preceded the revolutions in Spanish America began in the end of 1808, and in two years afterwards almost all these countries were more or less engaged in civil warfare. The working of the mines was in many districts sus

pended, and it is generally supposed that after 1810 the supplies of silver were very greatly diminished. In the second edition of Mr. Tooke's able work on High and Low Prices, there is a supplementary section on the variation in the produce of gold and silver from the American mines. A statement is given on the authority of Mr. Jacob, where the annual supplies are estimated on an average as

To this it is added that the produce of the years from 1817 to 1821 was much below the average of the last eleven years, and that Mr. Jacob believes the falling off in the supply for the twelve years ending 1822, as compared with the preceding period of the same length, to have amounted at the rate of four shillings the dollar to seventy-two millions of pounds sterling. There is good reason for thinking, that as the estimate for the first period exceeds most others, it is calculated too high, so is that for the last series of years somewhat underrated. The cause

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