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uniform over Europe. Mr. Jacob, for example, came to the
conclusion that ' in England and the other kingdoms of Europe,
within the first century after the discovery of America, the
quantity of the precious metals had increased nearly fivefold,
and the prices of commodities had advanced nearly in the same
proportion.' Most subsequent writers have followed in Mr.
Jacob's steps. It generally happens that, when a man gains
the position of an authority on a question, all that he says is
accepted in a lump, and his errors and oversights take rank with
his best-established conclusions. One recent inquirer, however,
has pertinently asked whether prices were really trebled or
quadrupled (some economists have said more than decupled),
even in all the chief cities of Europe. ' And what was the
extent in Muscovy and Poland, or in the Highlands of Scotland
and the West of Ireland ?'t

The inquiry is important apart from the bare question of
depreciation to which it refers, for the answer goes far to give a
measure of the progress and civilization of the different districts
of Europe. Two centuries and a quarter after the mine of
Potosi had begun to affect the value of money, Arthur Young
compiled a Table of the comparative prices of provisions at
different distances north of London. Within fifty miles of the



* Macpherson's Annals of Commerce, a.d. 1582.

t Letter in the Times, by W. M. J., September 3, 1863.



In the Sixteenth and Nineteenth Centuries. 275

capital he found the price of a pound of meat in several places
fourpence— at greater distances, in several, only twopence. ' The
variations in the prices of butcher's meat,' he observed, ' are so
regular, the fall so unbroken, that one cannot but attribute it to
the distance, nor can any other satisfactory account be given
of it.' It was not, however, the mere difference of distance
from London which made prices so unequal ; for in the southern
counties Arthur Young himself found them more uniform.
Distance, both north and south, operated on prices through the
cost of carriage ; and, when the distance was short, the result
was the same as if it were great, where access to good markets
was hindered by the badness of the roads. There were, both
north and south of London, lower prices than any tabled by
Arthur Young. About the time of his tours the price of mut-
ton at Horsham, in Sussex, was only five farthings a pound,* or,
allowing for the difference in the standards, little higher than
what seems to have been a common price in England before the
conquest of Peru.f In Scotland, again, down to the Union,
there were, as Adam Smith relates, places where meat, if sold
at all, was cheaper than bread made of oatmeal ; and he speaks
of a village in his own time in which money was so scarce that
nails were carried to the alehouse. At a later period, indeed,
in many parts of the Highlands, men were their own butchers
and brewers, and no money passed from the right hand to the
left. In Ireland, in like manner, until the famine of 1846,
there were districts in which not a coin from the American mines
was in circulation ; the labourer was hired with land or potatoes,
and paid his rent in turn, and bought his clothes, with labour.
Neither in the British Isles, nor in any continental country,

* See Porter's Progress of the Nation. Ed. 1851, p, 296. ' The only means,'
says Mr. Porter, ' of reaching the metropolis from Horsham was either by going on
foot, or by riding on horseback. The roads were not at any time in such a state as
to admit of sheep or cattle being driven to the London market, and for this reason
the farmers were prevented from sending thither the produce of their land, the
immediate neighbourhood being, in fact, their only market.'

t In 1527 the pound weight of silver was coined into £2 ; and about that time
the price of mutton seems to have been generally three-farthings a pound. At the
period referred to above the pound weight of silver was coined into £3.

T 2



276 The Distribution and Value of the Precious Metals

was the money from the mines of the West spread over all
localities and commodities alike. Much that was grown and
manufactured in every State was both produced and consumed
at home, gave money no occupation, and absorbed nothing of its
power. Had every Englishman in the reign of Elizabeth
bought and sold as he does now, the money which the Queen
coined could not have raised prices through the kingdom, as it
actually did in the chief towns. Nor did the new streams of
silver penetrate into the remoter and more backward districts of
the Continent. The trade of the Low Countries, then the
distributors of the precious metals, with Denmark, Sweden,
Norway, Russia, and Poland, was almost entirely a barter of
Oriental luxuries and Western manufactures for the raw produce
of those countries. The price of the bulky merchandize of the
north and east of Europe in Western markets was principally
freight, which the Western merchant got ; what balance there
was for the remote producer was usually paid in kind. In
Guicciardini's Tables of the exports of the Netherlands to the
countries named above the precious metals are not named ; and
Ealeigh, in the 17th century, lamented the small English trade
with Russia, because ' it was a cheap country, and the trade very
gainful.' Less than a hundred years ago, an English traveller
found the price of a pound of meat at Novgorod three-half j)ence ;
but it was much cheaper, or without a price, in the forest and the
steppe, and is so in some such places still. Adam Smith, it is
true, has asserted that, although Poland was, in his time, ' as
beggarly a country as before the discovery of America, yet the
money price of corn had risen, and the value of money had
fallen, there as in other parts of Europe.' But this opinion
must have been founded on the price of a small part of the
produce of Poland, in foreign markets, for the chief part of the
produce of the country was not sold for money at all. Down
to our own time, the bulk of the people of Eastern Europe have
lived for the most part on their own productions, or on a
common stock ; their few exchanges have commonly been
performed in kind ; what little money they have gotten from
time to time has been hoarded and not circulated ; and prices



Ill the Sixteenth and Nineteenth Centuries. 277

liave not risen where there have been no prices at all. Nor did
prices rise in all the secluded inland towns and villages of
France, as they did in Paris, and near the ports of commerce
with the Netherlands, England, and Spain. From the prices of
corn in Paris, a French economist concludes that prices generally
in France were twelve times higher in 1590 than in 1515,
owing to the American mines. But the true history of tlie
Paris market itself cannot be learned from naked figures of the
prices of a single commodity. The movements of the city and
surrounding population, the harvests in the neighbourhood, and
the means of carriage from a distance, political and military
events, and many other circumstances, besides the bare fact of
the increase of silver in Europe, must be taken into account.
Prices are the abstract and brief chronicles of the times, but
they are often too concise for clear interpretation, and many
leaves are missing. And the Paris prices of corn are so far
from giving the average of prices generally throughout France,
that, as we shall presently see, a great inequality of prices in
different parts of the country continued down to the era of
railways, and the contemporary influx of gold from the new
mines; and the market of the capital exercised, until recent
years, little or no influence upon the produce of the remoter
rural districts.

Although, then, there is evidence of a great fall in the pur-
chasing power of money in Europe in the 16th century, it was
unequal in point of time and place ; it was a partial and irregular
depreciation, and one which cannot be measured with any ap-
proach to arithmetical precision. There were still, when it had
reached its lowest point, millions of men, and the cattle on a
thousand hills, fetching no more money than before ; and the
change would have been much less than it actually was at the
centres of commerce, had the sums collected there been spread
over all the people and produce of this quarter of the globe.
The most of the money was expended in a few particular
places — those most commercial and advanced — in which other
causes besides the fertility of the new mines contributed to
raise the price of the very commodity, corn, which has been



278 TJie Value and Distribution of the Precious Iletals

commonly referred to as an accurate measure of the force of the
metallic cause alone. Such rise of prices as really took place
was almost confined to the neighbourhood of the chief seats of
wealth and trafiic ; but there, certainly within a few years from
the first arrival of silver from Potosi, it was rapid, evident, and
in respect of nearly all commodities, raw and manufactured,
domestic and foreign. Is any such phenomenon discernible
now in Europe, and in the chief towns of Eiu-ope in particular,
after the lapse of a similar interval from the first discovery of
mines of extraordinary fertility ? The same economic laws still
govern prices. Different countries, now as then, share unequally
in the new treasure, according to their produce, situation, and
the balance of their trade ; and its expenditure must have
different effects in different markets and on different articles,
according to the local supply of goods as well as money. Now,
as then, it is a question, not as to the total increase of the stock
of gold and silver in the world at large, but as to the addition
to, and the local distribution of, the currency of each country,
compared with the quantity forthcoming of each sort of com-
modity on which more money is spent than formerly. According
as the supply of each sort of thing has increased as fast as, or
not so fast as, or, on the contrary, faster than, the increase of
money expenditure upon it in each place, its price should
evidently have remained stationary, risen, or, on the contrary,
fallen there. In the 16th century the things on which the
new money was poured out were not only comparatively few,
but comparatively cheap, even in the dearest markets ; so that
a small sum made a large addition to their price. Sixpence
more doubled the price of a pair of shoes in an English town at
the beginning of Elizabeth's reign ; another penny doubled the
price of a chicken, and a shilling trebled that of a goose or a
pig. In the four and forty years of her reign, Elizabeth coined
little more than five millions of money, but that was nearly five
times as much as was current before ; and the things on which
the additional money was laid out were, after all, but a scanty
assortment. The modes of manufacture were little improved,
and the greater supplies of raw produce required in the principal



In the Sixteenth and Nineteenth Centuries. 279

towns were carried to market at increasing expense. The new
money of this age, on the contrary, while very much greater in
amount, has been spread over a far wider area, and a much
larger stock of goods ; and it found on its arrival a much higher
level of prices in the principal markets than that which the
silver from Potosi disturbed. The period of the new gold mines,
moreover, is one in which several other new agencies have been
at work, tending on the one hand to counteract to a great extent
the effect of the circulation of more money in the markets pre-
viously dearest, and tending on the other (by contrast to what
happened at the earlier epoch) to raise most considerably the
price of the produce of some of the more remote and recently
backward countries and districts. The bare question of the rise
of prices is in itself, and so far as merely relates to the change
in the value of money, of comparatively little importance. Its
chief interest lies in the test the inquiry may elicit of the pace
and direction of industrial and commercial advancement. For,
in proportion to improvement in the processes of production and
the means of importation, the monetary power of the mines is
counteracted at the chief seats of industry and commerce by the
contemporary increase of commodities ; while again, in pro-
portion to the improvement of the methods of locomotion and
the extension of trade, prices are brought nearer to equality
over the world, and the more distant and undeveloped regions
gain access, at diminished expense, to the markets where prices
have been hitherto highest. Hence, by a seeming contradiction,
it is a sign of great progress in commerce and the arts, in the
places farthest advanced in civilization, if the prices of com-
modities are found slowly advancing in the face of an uncommon
abundance of money ; while it is, on the contrary, usually a sign
of the growing importance and economic elevation of the poorer
and cheaper, and hitherto backward localities, if prices are rising
in them. By reason of their previous poverty and remoteness
from good markets, and consequent cheapness, the pecuniary
value of the produce of the latter sort of places suddenly rises
when they are brought into easy communication with the



280 The Distribution and Value of the Precious Metals

former ; and tlie rise is a mark of improvement in their com-
mercial position and command over distant markets and foreign
commodities. The sort of produce in which undeveloped regions
are naturally richest — the produce of nature — is the sort for
which the population, capital, and skill of the wealthiest and
most industrious communities have created the most urgent
demand ; and it is the sort which, in many cases, derives the
greatest additional value from cheap and rapid modes of con-
veyance. The cheapest land- carriage, less than ninety years
ago, of two hundred tons of goods from Edinburgh to London,
would, we are told by Adam Smith, have required 100 men,
50 waggons, and 400 horses, for three weeks. A single engine,
twenty trucks, and three men, would do it now in a day. All
the ships of England, again, would not have sufficed, in Adam
Smith's time, he tells us, to carry grain, to the value of
£5,000,000, from Portugal to England. In 1862, we imported
grain to the value of nearly £38,000,000 — most of it from a
much greater distance. And the extension in the last fifteen
years (the very period of the new gold) of the best means of
land and water carriage to many distant and formerly neglected
and valueless districts has brought about, both in international
trade, to a great extent, and in the home trade of many countries,
the sort of change which Adam Smith perceived in the last
century, to some extent, in the home trade of the United
Kingdom — a change, however, which, even in the United
Kingdom, has only very lately become anything like general
and complete. ' Grood roads, canals, and navigable rivers,' said
the philosopher, * by diminishing the expense of carriage, put
the more remote parts of the country more nearly on a level
with the neighbourhood of the towns.' Railways and steam
navigation have done more to equalize the conditions of sale
through the world, since the new mines were discovered, than
all preceding improvements in the means of communication
since the fall of the Roman Empire and the ruin of its roads.

Immediately after the Californian discoveries, a Russian
economist predicted that, if a fall in the value of gold should



In the Sixteenth and Nineteenth Centuries. 281

■ensue, England must be the first country to feel it ;* and an
English economist more recently argued that a greater rise of
prices had, in fact, taken place in England than anywhere else,
save in the gold countries themselves and the States of America.f
Looking back, however, at the situation of England since the
opening of the new mines, it is easy to see several agencies
tending to counteract the effect upon prices here, some of which
tended, on the contrary, to turn their chief effects upon prices
abroad. Our vast importations of food and materials, through
recent legislation, aided by steam, have, thanks to the gold
mines, been easily paid for, but they have made foreigners the
recipients of the bulk of the new treasure ;J and, while tending
to lower the price of the produce of our own soil, they have
added to the price of the foreigners' produce sent to our market
a,t diminished expense, owing both to the reduction of duties,
and to cheaper and faster means of transportation. Corn was,

* M. De Tegoborski : Commentaries on the Productive Forces of Russia (Eiig.
trans.), vol. i., p. 208.

t J. E. Cairnes, Esq. : Dublin Statistical Journal, 1859 ; Fraser^s Magazine,
1859 and 1860 ; and letters to the Fco>iomist and Times, 1863.

J Mr. Cairnes reasons that England, in consequence of the greater amount of
its trade with the gold countries, must receive much more gold than other countries,
and that the gold it receives must act more powerfully upon prices because of the
activity of credit in the English system of circulation. But the comparative in-
crease of the precious metals in England, or any other country, depends, as ]\[r.
Mill has pointed out, not on the comparative amount of its trade with the mining
regions alone, but on the comparative balance of its whole foreign trade and ex-
penditure. The general course of international demand and transactions may be
such that a country may even part with all, or more than all, the bullion it imports.
Such, in fact, has been the situation of England in several years past. In the foiu"
years, 1859—1862, the exports of specie exceeded the imports according to the
returns, and there is reason to think the balance was more against England than
appears by the official accounts. What bullion we got in those years went from us
at once into foreigners' hands ; and much of the money we get for our manufac-
tures abroad is always in reality partly the price of the foreign materials of wliich
they are made, and the articles of foreign production which the makers consume.
Again, although speculative credit often raises prices for the moment above their
natural level, representative credit, which merely saves the expense of coin, is
only a substitute for it, and not an augmentation of the currency, and the prices
it fixes are not higher than would prevail under a metallic system. Moreover, a
given addition to prices hire would make less change than in previously cheaper
countries. And there have been, lastly, peculiar circumstances, pointed out in the
text, tending to cheapen prices in the English market.



282 The Distribution and Value of the Precious Metals

therefore, less likely to rise in Great Britain than in many-
other regions ; and the improvement in our manufactures
generally surpassed the production of gold until the failure of
cotton from America. About six- sevenths of the exports of
Great Britain are manufactured commodities, and accordingly
the productions of this country, which first felt the influence of
the new money, generally fell instead of rising in price. Nine-
tenths of our imports, on the contrary, are unmanufactured
commodities, and the things which have really risen most in
our markets are, consequently, to a large extent, foreign com-
modities ; as to which it is important to notice that comparative
Tables of past and present prices in England do not measure the
change in prices abroad. Even a low price of wheat, for example,
to the buyer in London may be a high price to tlie grower in
Poland or Spain ; and the French peasant may be trebling the
price of his eggs and his butter, when the Londoner pays little
more for those articles than he did before French railways and
free trade. In fact, the chief monetary phenomenon of this
epoch is the rise of prices in remote places, put suddenly more
nearly on a level with the neighbourhood of the great centres
of commerce as regards the market for their produce. And the
Tables by which Mr. Jevons has attempted to measure the change
in the value of money fail on this very account to exhibit the
real extent of the change even in the United Kingdom itself, to
which his researches have been confined. They give compara-
tive prices in England of several sorts of country produce for
some years before and since the opening of the gold mines ; but
they are the prices of the capital and chief towns, not of the
remote places of the kingdom. Beef, mutton, veal, butter, eggSj
and poultry, for example, have risen about twenty-five per cent.
in the London market ; but they have risen a hundred per cent,
above their rates a few years ago in the inland parts of Ireland
and Scotland on the new lines of railway. The common price
of meat in the towns in the interior of Ireland before they were
connected with the ports and the English market by railways,
was from 3|f/. to M. a pound, and now is from 7d. to M. The
rise of wages, again, in the agricultural districts of England



In the Sixteenth and Nineteenth Centuries. 283

falls far short of the rise from a much lower level in tlie rural
districts of Ireland, suddenly brought into easy and cheap com-
munication with both England and America. The complete
revolution which has thus taken place in the scale of local prices
in the United Kingdom itself renders all arithmetical measures
of the change in the value of money, founded on the rates in
a few particular markets, altogether fallacious. The truth
is, that the change has been unequal in different years and
different places, and in respect to different commodities.
Measured in corn, the value of money in these islands is much
greater now than it was during the Crimean War ; measured in
cotton, the value of money is much less than before the war in
America. Speaking generally, however, the monetary movement
of the sixteenth century has been reversed, and the rise of prices
has been much greater in Ireland and the north of Scotland than
in England, and greater in the remote parts of the country than
in the capital. This contrast illustrates the general distinction
already pointed out between the commercial and monetary
phenomena of the former and the present metallic epochs. At
the former period the change in the worth of money was greatest
in the country receiving its supplies directly from the mines,
and next at or around the chief centres of commerce, such as
Antwerp and London, and moreover, in what had been the dear-
est markets before, or the towns as compared with the country.
Now, it will be found most conspicuous in many of the ruder
and remoter localities, where prices were previously lowest.

Not one-tenth of the general produce of the mines of the
world, since the new gold was discovered, has been finally
allotted by the balance of trade to Grreat Britain, and some signs
of the presence of the remainder might naturally be looked for
in places having little or no direct dealings with the mining
countries themselves. The new gold regions have, for example,
added a much larger amount to the treasure of France than of
England. From the returns of the French Custom-house, it
would appear that bullion to the value of nearly £100,000,000
had been added, by the end of 1862, to the metallic stock of
France ; but the issues of gold coin from the French Mint since



284 The Distribution and Value of the Precious Metals

1848 greatly exceed the declared imports of tliat metal. And
we are not without evidence of perceptible effects of so vast an
addition to the French currency upon the market of the country.
lu 1848, the French Government revised the official scale of
prices, based upon a scale of 1827, and found that prices gene-
rally (inclusive of raw produce) had fallen in the interval. Since
then the current and the ancient money values of all commodi-
ties, imported and exported, have been set down year by year ;
and it appears from their comparison that, in 1852, a change
took place. Prices, instead of falling, began to rise, and, down
to the end of 1861, ranged generally much above the old
valuation, in spite of an enormous increase of importation and
production. But these statistics, like those of Mr. Jevons for
Great Britain, afford no real measure of the actual changes
which the purchasing power of money has undergone through-
out France ; for, wherever railways have intersected the country,
they have carried up prices towards the metropolitan level ; and
the advance upon former rates has been much greater in France
than in England, because of the previous inferiority of the



Online LibraryT. E. Cliffe (Thomas Edward Cliffe) LeslieEssays in political economy → online text (page 26 of 41)