On the Fluctuations in the Production of Gold, considered with reference to the Problems of State Economy

On the Fluctuations in the Production of Gold,considered with reference to the Problems ofState Economy. By Alex. von Humboldt.

In this little tract, obligingly forwarded to us,(and intended, we presume, for some of the lite-rary periodicals of Germany,) we find a curioustheme, handled with great neatness and inge-nuity. There is not, indeed, disclosed in it muchpositive novelty, either of fact or speculation;but comprehensive views, variety of topics, con-siderable sprightliness, and an habitual clearnessof expression, capable of making philosophictruth intelligible to the multitude, without sacri-ficing, in any degree, its dignity or essentialstrictness—these, the common recommendationsof all M. von Humboldt’s works, are conspicuousin this; and throw attractions over a subjectapparently exhausted in dry reports on bullionand cash payments.

A few centuries ago, it was thought thatgold was a production only of the hottest coun-tries. Columbus, when sailing along the coastof Cuba, wrote in his journal,— “to judge bythe great heat, this country must be rich ingold.” A similar groundless belief, we mayremark, respecting the climate prolific of dia-monds is maintained in some publications ofour own day. Nevertheless, diamonds, and stillmore abundantly, gold, are now found in theUralian Mountains, under the 65th degree ofnorth latitude: and the Siberian gold mines,situated on the slopes of the northern ramifica-tions of the Altai Mountains, are daily disclosingnew treasures. The increased productiveness ofthe Siberian gold mines, within the last quarterof a century, stimulates M. von Humboldt tovindicate the statements of Herodotus andCtesias, the former of whom places, in the heartof Asia, in the country of the Aramasps, minesof gold guarded by griffons; the latter setssomewhere between Persia and India, the auri-ferous soil which was excavated and exposed toview by ants nearly as large as foxes. But what-ever may have been the veritable groundwork ofthese stories, it appears to us to be out of thepower of ingenious erudition to strip them oftheir vagueness and fabulous character. M. vonHumboldt, whose imagination is as active as hisreasoning faculty, struggles in vain to give themprecision and authenticity. He might, however,have corroborated his conjecture that the goldmines of Central Asia, and the Ural, werewrought in very ancient times, by stating that inall those mines, at the present day, are foundrelics of antiquity belonging to a people differentfrom those who now possess the soil. The fol-lowing observations have greater value:—

We learn from the acute researches of Boekh,how, on the opening of the East by the Persian wars,and by the expedition of the great Macedonian toIndia, gold gradually accumulated in EuropeanGreece, so that in the time of Demosthenes, for ex-ample, the precious metals had sunk to a fifth of thevalue which they had in the days of Solon. Thestream then ran from east to west, and so copiouswas the influx of gold, that its relative value to silver,which, in the time of Herodotus, was as 13 to 1, was, at the death of Alexander, only as 10 to 1. Theless universal were the communications of trade inthe ancient world, the greater and more sudden musthave been the alterations in the relative value ofgold and silver. Thus, in consequence of local ac-cumulations of the precious metals, we find that inRome, just after the conquest of Syracuse, gold wasto silver as 17\frac{1}{7} to 1; whereas, under Julius Cæsar,its relative value was, for some time, but as 8\frac{13}{14}to 1. The less the quantity of the precious metalsactually existing in a country, the more easily can asudden influx of them occasion these excessive vari-ations of their value. The civilized world is at pre-sent assured of stability in the value of the preciousmetals, by the extent and rapidity of the commercewhich establishes their equilibrium, and by the greatquantities of gold and silver already collected. Afterthe revolution in Spanish America, the annual pro-duction of the precious metals fell, for some years,to one-third of its former amount, yet the oscillationsof their relative value, during that period, wereslight, and hardly ascribable to the decreased pro-duction.

In confirmation of this remark, we may referto the recent experience of this country. In thecourse of ten years—from 1817 to 1827—theBank of England coined 1,294,000 marks ofgold, (in value 38,130,000l. sterling); and yetthis great demand for gold raised its relative valueonly four-and-a-half per cent. In the presentstate of the civilized world, so many circum-stances operate together on the price of the pre-cious metals, that considerable and partial fluc-tuations in their relative value are almost im-possible. Formerly, however, society felt manyshocks from this cause, without knowing whencethey came: Bishop Latimer preached his famoussermon before Edward VI., complaining indig-nantly of the great increase in the prices of allthe necessaries of life, in the year 1548, justthree years after the discovery of the mines ofPotosi.

The mass of the precious metals (says M. vonHumboldt) which was brought to Europe during theperiod that elapsed from the discovery of Americatill the outbreak of the Mexican revolution, was10,400,000 Castilian marks of gold, (worth aboutthree hundred millions sterling,) and 533,700,000marks of silver; together worth 5,940 millions ofpiastres. The due allowance being made for theloss of bulk sustained in the process of refinement,the silver taken from the American mines in theabove-mentioned period would be sufficient to forma ball, or solid globe, of pure silver, eighty-nine feetin diameter.

It is curious to compare the mass of silveryielded by Spanish America, during 318 years,with the mass of that useful metal, iron, annuallywrought by single European states. Accordingto M. von Dechen, a well-informed geologist,globes of pure iron, representing the quantitiesannually produced, would require, for Great Bri-tain 157, for France 118, and for Prussia 80feet in diameter.

M. von Humboldt, after calling attention tothe circumstance that the fountains of mineralwealth are not perennial; that the richest minesare, in time, exhausted; and that, owing to thesealterations in the springs, the stream of richeshas sometimes flowed from east to west, andsometimes in the contrary direction; proceedsto show that the world has no cause to dread alack of gold. From the earliest ages, as soon asone auriferous deposit has ceased to be produc-tive, another has replaced it; and the preciousmetals, wherever they are found, soon force theirway into universal circulation. Contemporane-ously with the decline in the productiveness ofthe Spanish American mines, (which, owing tothe energy of some English companies, however,have in some measure recovered their formerimportance), the gold of the Uralian Mountainsbegan to flow into the European markets. In1821 the produce of the Ural was about 1000lb. weight; it continued, however, to increase regu-larly till 1832, when it amounted to 15,200lb.(worth about 670,000l. sterling). From thattime it has slowly declined; but its diminishedvalue has been compensated, since 1834, by the dis-covery of new gold mines in the Altai, or AltaiinOola, (that is, in Mongolian, the gold mountain).These have gone on increasing in value; so thattheir produce is now nearly half of that of theUralian mines, and in 1837 the Russian goldproduced was worth 800,000l. sterling.

In the United States also, the production ofgold increased, in ten years—from 1824 to 1834—from the value of 5,000 to that of 898,000 dol-lars: from that time it has considerably declined.The gold was found chiefly in North Carolinaand Georgia. The amount of the precious metalsdrawn from the mines of Siberia and of the UnitedStates are inconsiderable indeed in comparisonwith that poured forth from the mines of Mexicoand Peru, yet they are sufficient to invalidatethe opinion which confines the great deposits ofthe noble metals to tropical countries. The mul-tiplication of sources also, however feeble theymay severally be, obviously lessens the impor-tance which might be attached to the drying upof the great streams of the precious metals, andmust tend to quiet the apprehensions of thosewho contemplate with anxiety a dearth of bullion.

It is impossible to read this little treatise ofM. von Humboldt, without feeling an earnestdesire to investigate closely the operation ofmoney as an element of national prosperity. Itwould appear, at first view, that the greater thequantity of money in circulation—the prices ofnecessaries, and the amount of population beingsupposed to remain unchanged—the greatermust be the prosperity of the community. Thevalue of the money in circulation indicates theactivity of the traffic which ministers to the com-forts of society. But this problem is, in reality,extremely complicated; inasmuch as all the ele-ments vary, from the operation of many circum-stances besides those which fall under immediateconsideration. We, therefore, recommend it tothe care of statists, to be carefully analyzed andfitted for application.