THE WORLD'S STOCK OF THE PRECIOUS METALS. [Freely translated and condensed from the Économiste Français, Sept. 14 and 21, 1878.]

In two notable articles recently published in the Revue des Deux Mondes, two publicists of opposite schools have discussed the question of the precious metals, their relative abundance in the past, present, and future, and the effect of an increase or decline in the production of gold and silver upon prices. In one of these articles, by M. Emile de Laveleye, who is an advocate of bi-metallic money, it is attempted to show that the world's stock of the precious metals, so far from increasing, is constantly decreasing. M. de Laveleye estimates the entire annual production of gold and silver at 850,000,000 francs ($170,000,000), and he maintains that a decline in the production of gold and silver mines has set in which must soon result in a deficiency of metallic money for the wants of the world's commerce, resulting in a great and general fall in the prices of merchandise, to take place before the close of the nineteenth century.

M. de Laveleye sets out by accepting the general conjecture (rather than estimate) that at the close of the fifteenth century there was in the world about 700,000,000 of francs in silver ($140,000,000), and only 300,000,000 gold ($60,000,000). From the year 1500 to the year 1848, the production of the precious metals, it is further estimated, was 30 milliards of silver ($6,000,000,000) and 14 milliards of gold ($2,800,000,000). During all this time, silver constituted the principal money of account among the vast majority of the world's population. It is a curious fact that up to the discoveries of gold in Australia and California, the relation was almost exactly maintained between the values of the aggregate quantity of the two metals. But from 1848 the production of the precious metals, and especially of gold, began to be largely increased. It is estimated that from 1848 to 1870, 20 milliards of gold and silver ($4,000,000,000) were added to the circulation, causing an increase in the money metals of not less than 45 per cent. If we add 6 milliards ($1,500,000,000) for the production of the last seven years (1870-77), we have a total of 70 milliards ($14,000,000,000) of the precious metals put in circulation.

According to M. de Laveleye, with 70 milliards ($14,000,000,000) of metallic money, and 1,200,000,000 of inhabitants in the world, we should have about 60 francs in specic for each person ($12 per capita), which seems a sufficiently handsome sum to answer all human wants, if we take into account the fact that all civilized people have paper-money in addition. But, according to M. de Laveleye, this view is wholly deceptive, and we are on the very brink of a great scarcity of the circulating medium. He arrives at this conclusion from the following considerations: The total of $14,000,000,000 of the precious metals represents the gross products of the mines since A.D. 1500, which must be diminished by deducting all the gold and silver employed in the arts and manufactures, and the amount that is lost by circulation, abrasion, etc. Statisticians are absolutely unable to solve the problem how much these various causes diminish the product of the precious metals which is put in circulation. According to M. Ernest Seyd, a London financial writer, there is in the western world 18 milliards ($3,600,000,000) in gold coin and bullion, and in silver coin and bullion 6 milliards ($1,200,000,000). In the eastern world he estimates the circulation of the precious metals at 6 milliards ($1,200,000,000), which would give, in all, 30 milliards ($6,000,000,000) of money in circulation in the whole world. According to another specialist, M. Xeller, there was in 1868, in the western world, 20 milliards ($4,000,000,000) of the precious metals in cir

culation. It is hardly possible to harmonize these estimates, or to believe that while 70 milliards ($14,000,000,000) have been produced since the year 1500, there yet remains in circulation only 30 milliards ($6,000,000,000). Forty milliards ($8,000,000,000), according to this, are lost, or have disappeared in industrial uses, such as jewelry, etc.

But M. de Laveleye claims that the production of the two inetals has diminished for some years past. In 1852 the gold product alone reached 900,000,000 francs; now, according to M. de Laveleye, it amounts to between 400,000,000 and 500,000,000 francs ($100,000,000) per annum. The production of silver, on the contrary, has increased from 250,000,000 to 350,000,000 of francs, making the annual product of both metals about 850,000,000 ($170,000,000), while but a few years ago it exceeded 1,000,000,000 ($200,000,000) annually. This amount, he claims, is wholly insufficient for the wants of civilization. The results of this deficit will become manifest in a very few years; we shall see a great augmentation in the purchasing power of money, and consequently a fall of prices in all that is purchased by money. This fall M. de Laveleye finds to be full of evil, overlooking entirely the troubles which the great rise in prices caused by the influx of Californian and Australian gold have occasioned, an expansion of circulation, an increase of expenditure, and an undue rise of prices to all consumers. He devotes himself to show the results of an insufficient circulation as depressing manufacturing and commercial enterprise, greatly lowering the wages of labor, and stifling the development of mankind. He further draws from his statistics an argument in favor of the bi-metallic system, and against the policy which prevails in Great Britain, Germany, and some other nations, rejecting silver as money of account of full value.

But, in the first place, the figures of M. de Laveleye are not generally admitted. M. Victor Bonnet, in the Revue des Deux Mondes, maintaining the view that the single gold standard is the only possible or expedient monetary system, cites the opinion of M. Feer-Herzog, an eminent Swiss financial writer, to the effect that the annual production of the precious metals is even now 1,150,000,000 francs--710,000,000,000 of gold and 440,000,000 of silver. The difference between these figures and those of M. de Laveleye is very considerable, being 300,000,000 of francs ($60,000,000) annually. But if we accept his figures of production, it is impossible to admit other elements in his calculation. His estimate that 280,000,000 of francs in gold and silver are annually employed in the industrial arts may possibly be correct; for the English economist McCulloch fixed this consumption years ago at 375,000,000 francs. While it is evident that we can have nothing but conjecture on this point, civilized nations do employ much gold and silver in jewelry, plate, etc. But it should not be forgotten that the fabrication of this jewelry does not consume the metal newly furnished annually by the mines. On the contrary, many fabrics of gold and silver are annually melted and reappear in a new form. Even granting that 280,000,000 are annually consumed in commerce, M. de Laveleye's second calculation that 250,000,000 more must be deducted from the circulation for wear and tear is entirely too large. The estimates for abrasion vary very much, but are usually from one quarter to one half per cent on the whole amount of coin in circulation. It should be taken into account that modern nations make less and less use of coin passing from hand to hand, substituting checks and bills of exchange, while the coin sleeps in tho vaults of the banks or in strong-boxes.

But what is absolutely inadmissible in the calculations of M. de Laveleye is his third point. He deducts a sum of 250,000,000 francs

annually from the coin of which Europe stands in need, to regulate its exchanges with the east, and this he takes from the annual product of the mines. The amount flowing to the east may have averaged 250,000,000 francs for the last twenty-five years, but these are by no means average years. Thus, for the whole period of five years from 1861 to 1866, corresponding to the American war, the exports of India were enormously increased, notably in cotton, resulting in a great and unprecedented drain of silver from Europe. Since that time the normal state of things has returned, the imports and exports of India generally balance, and no such sum as 250,000,000 francs annually is required for the east.

Adding these three figures: 280,000,000 for the industrial arts, 250,000,000 for loss by abrasion, and 250,000,000 to represent the balance of trade between Europe and Asia-M. de Laveleye finds a total of 780,000,000 francs, which expresses, according to him, the annual wants of the civilized world to be added to the specie in circulation, supposing that the population and commerce remain stationary. But population continually increases, and commerce likewise; now as, according to M. de Laveleye, the production of the precious metals is only 850,000,000 francs a year, and we must deduct 780, 000,000 from this for the uses already described, there remains only 70,000,000 per annum to keep pace with the progress of population and commerce-a sum altogether insufficient, since in Europe and the two Americas the population increases at the rate of 5,000,000 souls per annum; estimating the want of coin at 30 francs per head, which is little enough, there would be required 150,000,000 ($30,000,000) annually; whereas, as we have seen, we have but 70,000,000, presenting thus a deficit of 80,000,000. Thus, according to M. de Laveleye, the insufficiency of the actual production of the precious metals is demonstrated. It is to be remarked that M. de Laveleye exaggerates strangely when he insists that the wants of each country for coin circulation increase in proportion to the increase of its population and its commerce. Further, he commits a great oversight in not taking into consideration the many substitutes for money of which custom avails itself more and more continually, as bank-notes, bills of exchange, checks, etc.

Nevertheless, there is some truth at the bottom of M. de Laveleye's observations. The great depreciation of the precious metals which has been seen for twenty years past, as a consequence of a sud den enlargement in their production, is perhaps approaching its term; but this would not be a misfortune.

The element of new discoveries of mines of precious metals has of course been wholly left out by M. de Laveleye. He writes as if civilization had already penetrated every corner of the globe, and revealed all the treasure of gold and silver that are buried in the bowels of the earth. Humboldt (repeating a remark of Herodotus) says that gold always comes from the extreme limits of civilization; this is borne out by the discovery of mines, both ancient and modern. in the new regions opened up to human occupation. That gold is no longer produced in countries long inhabited furnishes no argument against its probable discovery in regions not yet occupied. Civilization and colonization, as represented by the white race, have by no means reached their period. It is doubtful, as geographers tell us, whether half of the earth has been actually explored by men belonging to civilized nations, and we all know that hardly a third or a quarter is yet inhabited by them.

Who knows what undeveloped wealth may yet exist in Mexico, or in Central and South America? The Cordilleras may yet have

their secrets; the banks of the Amazon, the La Plata, and their great affluents are almost a terra incognita. It is only eight years since gold regions were discovered in French Guiana. Australia and New Zealand, so rich in the past, are by no means exhausted in the present. Africa, that land of marvel and mystery heretofore, is now being opened by continual fresh explorations. In Siberia the gold product is actually increasing, but that country, where the cold is as forbidding as the torrid heat is in Africa, is as yet very imperfectly known.

But do we really need that enormous increase in the precious metals which from 1848 to 1878 has enlarged the world's stock more than one half? This sudden expansion, notwithstanding the great development of commerce and industry, has produced a great rise in prices; and was this rise an unmingled good? By no means. On the contrary, what is most sought for by all financiers, and what would actually be an economic ideal, is an absolute fixed standard of value, subject neither to sudden increase nor diminution, increasing moderately and regularly each year, so as to keep pace with business and population; so that those violent fluctuations of prices caused by sudden changes in the supply of currency should not take place. It is true that a recent great decline in prices has set in; but this decline is rather due to intrinsic or collateral causes than to any rise in the value of money. Coal, iron, grain, and some of the raw materials most used in manufactures have been very largely produced of late years. The reduction in the cost of transportation and the opening of new fields of production are largely accountable for the fall in prices. Add to this that there is an enormous and steadily growing substitution of bank credits, bills of exchange, and checks, for the actual transfer of the precious metals, and it will be found, we think, that there is yet, and will continue to be, plenty of gold and silver for the wants of commerce. The railroads and telegraphs to-day give us the means of economizing incalculably the use of coin and bullion, which, while it stays in the vaults of the banks of New York, is transferred by the touch of an electric wire to pay a debt in London or San Francisco. The great clearing-houses of London and New York, where every day sees millions upon millions of debts discharged without handling a single dollar, are other instances, purely modern, of the lessening need for a large quantity of gold and silver.

Finally, M. de Laveleye has overlooked the fact that the progress of cultivation and intelligence tends to bring the gold and silver already coined out of its hoards among the populations of the globe. That great dormant unknown quantity of the precious metals which slumbers in these private receptacles is continually emerging from its retirement, through the spirit of intelligence and of the modern methods which commerce has adopted, and takes part in the circulat ing medium. In France, where the English and American use of bank-checks has been comparatively unknown, there is an infinite number of little mines of gold and silver hidden away in almost every hut, and under almost every inansard. These will tend constantly to come to the light, and will add their store to the world's wealth in the precious metals. In fine, we by no means consider that the production of gold and silver is too small for the wants of the civilized world, nor that any violent fall in prices is to be feared, which would be a phenomenon the reverse of that which we have seen for fifty years past. Perhaps, on the contrary, we may find that the closing quarter of the nineteenth century will be, in regard to the stability of prices and the steadiness of value in the precious metals, a great improvement upon the last two quarters of the century in which we live.

THE COTTON PRODUCTION OF THE UNITED STATES.

THE first culture of cotton in the United States dates from the year 1621, when cotton-seed was planted in Virginia as an experiment, and its "plentiful coming up" was a subject of interest in America and in England. Cotton wool is named in the earliest books and pamphlets relating to Virginia as one of the products of that happy country "seated neare the midst of the world, between the extremities of heate and cold." Its cultivation was long limited to gardens or small patches for home use. Cotton culture appears first to have grown northward rather than southward. The traces of its culture are found in Maryland, Delaware, New Jersey, and Pennsylvania, down to 1776, when it was recorded that the home-grown cotton near Philadelphia was sufficient for domestic wants. It must be said, however, that very little cotton was then used, as linen and woollen fabrics formed the chief clothing of the people.

Cotton was first planted in Georgia and the Carolinas in 1733–4, and in Louisiana in 1742. Several bags of cotton were exported from Charleston in 1747. In 1770 there were shipped to Liverpool three bales from New York, four from Virginia and Maryland, and three barrels full from North Carolina. It was not until the close of the eighteenth century that the cotton export trade began, which in the past eighty years, has grown to proportions so large in quantity and value, and so important to the commerce of the world, as to affect the welfare of nations. The cotton crop of 1791 in the United States was set down at two million pounds. In 1795 the few American cotton factories were still importing foreign cotton, the imports of that year being 4,107,000 pounds, and the exports 6,276,300 pounds. The crop of 1801 was put down at 48,000,000 pounds, 21,000,000 of which were exported. In 1810 the exports rose to 94,000,000 pounds. In 1813, when the war with Great Britain was on foot, we exported only 19,400,000 pounds, the price here ruling at twelve cents, while in England it was nearly three times as much, or from 16d. to 26d. The United States cotton crop in 1821 was 180,000,000 pounds; 124,893,405 of which was exported. In 1825 the crop had grown to 255,000,000 pounds. The following table gives the annual production since, or for fifty years. It must be noted that the cotton year, as stated in the authorities upon that industry, begins with the year of production, and closes during the year in which the crop is marketed. Thus, though the seed may be planted in April, and the cotton picked in October, very few bales of cotton reach the market before December, while the heaviest marketing of the crop runs from January to March, and the whole product of cotton cannot usually be summed up before August, shipping being distributed over so long a period.