Remarks on the production of the precious metals

During the last twenty years the progress of luxury amongst the industrious and commercial nations of the world has been enormous. The moveable wealth of France and England has made prodigious accumulations. What family is there so poor as not to have some article of plate? Gilding is no longer confined to the decorations of temples and palaces; it is found in the most humble cottage. To what a length may it not reach if the taste should increase for gilding the dresses of ladies, and for covering the uniforms of our men with gold or silver lace?

On the whole, then, it appears that the demand for gold and silver, as articles of commerce, is likely to exceed the demand for the precious metals solely for use as money. This is a new point; and we must not lose sight of it in endeavouring to appreciate the effect which an increase or diminution in the production of the precious metals may have, both on their price and on their relative value.

Without noting the variations which have occurred from one century to another, in the production and in the importation of gold and silver, in order to recapitulate the quantities of the precious metals which America has poured into the European markets in 318 years, from the discovery of Hispaniola to the revolution in Mexico, M. de Humboldt considers the production of gold to have been [7 - lbs. 6,381,530=£297,700,000]2,381,600 kilogrammes, and that of silver [8 - lbs. 295,717,106=£887,151,318]110,362,222 kilogrammes: making a total value of about [9 - £1,280,000,000]32 “milliards” of francs: the weight of gold imported represents about ¹⁄₄₇th of that of silver. It does not appear probable, that the produce of gold in other parts during these three centuries has materially altered these proportions. Admitting that when first the Mexican revolution retarded the working of their silver mines, the amount of coined money throughout Europe represented a value of [10 - £320,000,000]8 “milliards” of francs, of which [11 - £240,000,000]6 “milliards” were in silver, and [12 - £80,000,000]2 “milliards” in gold, the relative quantity in weight would still have been as 47 to 1; and yet the relative monied value, thirty years since, varied in Europe between 1 to 14½, and 1 to 15¾. Thus, in the value of the precious metals, the difference was three times less than in their weight.

Nothing is more difficult in matters relating to money than to present statistics which may be considered as an approximation to truth. It would appear that as gold and silver are used as the denominators of value, generally, throughout the world, all the phenomena connected with their production and circulation ought to be noted with the greatest precision: they ought to be the points to which the attention of statisticians should be “par excellence” directed. What can be more important, in an economical point of view, than to establish a regular scale, indicating the rapidity of every movement connected with the subject, and acting as a gauge of its extent?

Divers causes appear, however, hitherto to have prevented such a desideratum. In the first place, gold and silver producing countries have generally been in a rude state of civilization; and as unable to apply rules for the public weal, as to employ machinery to aid their industry. Thus, even in the registry in Mexico under the Spanish rule, of all the money coined at their mint, and for ascertaining the amount produced in the mines by the proportion of the tax due to government, which ought to be levied thereon by the hundred-weight, – it is absolutely necessary to take into account all that quantity which escapes the vigilance of the tax-collector, and which is either sent into the interior, or exported clandestinely.

What is the sum of the precious metals really produced at any given time? What is the proportion of such production which, when exported, acts as a regulator of the prices in Europe? How are the channels formed which sometimes direct the stream of commerce towards the east, and sometimes towards the west, in the distribution of the metallic wealth of the world? All such problems, as regards the past, must probably remain unsolved. The enquiry becomes more easy when referring to our own times; but even then large allowances for incorrectness of data must necessarily be made.

At the beginning of this century, according to M. de Humboldt, gold and silver were imported annually into Europe in the relative proportions of about 1 to 55; that is, [13 - lbs. 42,336=£1,975,000]15,800 kilogrammes of gold to [14 - lbs. 2,331,070=£6,923,210]869,960 kilogrammes of silver. M. Michel Chevalier, stating, not the import but the production, calculates it at [15 - lbs. 63,504=£2,962,500]23,700 kilogrammes of gold against [16 - lbs. 2,411,562=£7,234,686]900,000 kilogrammes of silver, or in the proportion of 1 to 38; but the gold of Africa and Asia, comprised in this statement, never really found its way into European markets except in the smallest quantities, and in such amounts as could have no appreciable influence on the commercial prices of the metals. From 1810 to 1830, according to Mr. Jacob, the produce of America diminished by one half. As the reduction refers principally to silver, that is to say, to those mines which required both capital and labor, it is fair to assume that, at least during the first part of this period, the relative proportion of gold to silver would have increased; but we have no means of verifying figures which appear to justify what would otherwise rest solely on the analogy of the case.

In 1847, when the general working of the auriferous region of the Oural Mountains was at its meridian, M. Chevalier considers the annual production of gold throughout the world to have been [17 - lbs. 169,479=£7,906,250]63,250 kilogrammes, and that of silver [18 - lbs. 2,344,574=£7,033,792]875,000 kilogrammes. This would be [19 - lbs. 66,989=£200,967]25,000 kilogrammes less of silver, and [20 - lbs. 80,386=£3,750,000]30,000 kilogrammes more of gold, than at the beginning of the century. At these figures gold stands in reference to silver as 1 to 14. The return from these gold regions appears to have been greatly over-estimated. I find in a table, published in the “Times” of May, 1852, statements which appear to be founded on correct data, and which bring the production of gold up to 42,800 kilogrammes – that is, to [21 - £5,896,000]147,400,000 francs.

This result, then, is remarkable. The 17th century produced 1 lb. of gold to 60 lb. of silver. In the 18th century the production was as 1 lb. to 30 lbs. At the beginning of the 19th century silver was again abundant, and appeared in quantity as 1 to 50. Towards the year 1847 the production of gold again increased, and the relative proportions were as 1 to 20. The development of the Siberian mines, which has so materially changed the relative production of the two metals, has produced no sensible alteration in price. Will it be the same with the wonderful discoveries in California and Australia? To solve this question, it will be desirable to examine accurately the actual state of the production of gold and silver throughout the world.

III

Before entering into this inquiry, it may be worth while to examine a circumstance of late occurrence, relating to monetary statistics, which has given rise to some discussion, but which has not yet been explained; I allude to the fall in the price of gold, and the corresponding rise in that of silver, throughout Europe, towards the end of 1850 and the beginning of 1851.

At that period Russia had rather less gold than usual to exchange against the produce of the West; and since 1847 the working of the Altai mines had been on the decline: at all events, the government did not appear inclined to allow gold to be exchanged; for in 1848 and 1849 its export had been forbidden. In 1850 the state of the exchanges did not admit of an export of gold, and a part of the 4½ per cent. loan, contracted at that period by the Cabinet of St. Petersburg, was remitted to Russia, both in gold and silver, from England. Doubtless, in spite of the prohibition, Russian gold found its way into other parts of Europe; it was calculated that between 1849 and the first few months of 1850, the great commercial towns in Western Europe must have received from [22 - £2,400,000]60,000,000 to [23 - £2,800,000]70,000,000 francs from Russia; but this was not equivalent to the large sums paid for grain imported from Odessa and Riga during the famine of 1846-1847. There could have been no real increase in the metallic reserves of Western Europe during that period.

The same remark will hold good towards America. The import of gold thence in 1849 and 1850 could not have done more than replace the gold coin exported to the United States two years earlier, in payment of bread stuffs and salt provisions. A proof of this will be found by examining the official reports of the mints of the United States. These mints, which from the year 1834 – that is, since the working of the gold fields of Carolina, had coined gold at the average rate of 2,500,000 dollars ([24 - £540,000]13,500,000 francs) per annum, in 1847 put into circulation about 20,000,000 dollars ([25 - £4,160,000]104,000,000 francs). At that time Californian gold was unknown: the rich “placers” of that country did not begin to kindle the gold fever, first in America, and subsequently in Europe, until 1848. Californian gold, before it found its way to the Old World, had to supply the wants of the New. It is exported thence in the shape of eagles and double eagles, bearing the stamp of the Republic. In 1848 the coined gold in the United States did not amount to [26 - £800,000]4,000,000 dollars, and it did not exceed [27 - £1,800,000]9,000,000 in 1849. With this small supply an export could not be expected. In 1850 the Californian stream began to flow, and the mint of the United States, having received gold dust and bars to the extent of [28 - £8,000,000]40,000,000 dollars, coined [29 - £6,400,000]32,000,000 (about 171,000,000 francs.) Supposing that the bulk of this coin had been exported to Europe, such a supply would but have restored the loss in the circulating medium which had occurred in 1846. We had exchanged our gold against grain; it was returned to us against the silks, wines, and other articles from France. The monetary disturbance of 1850 must not therefore be set down to the score of an excess of imports: the rich supplies from Siberia and California could then only have acted prospectively. The real cause is to be found in the measures hastily and somewhat rashly adopted by various European governments. To prevent future evil they created immediate mischief; and, in order to shelter themselves from the risk of a future depreciation of gold, they directly produced it.

The crisis of 1850, thus examined, explains itself. On the one hand, silver, being annually taken out of the market by circulation, was not to be met with for other demands; on the other hand, gold, excluded by some governments from their circulation, flowed to those countries where it was still used as legal coin, and produced there, at least, a temporary superabundance. Then occurred the fall in the price of gold, and the rise in the price of silver; which together shewed a divergence of 8 per cent. between their former relative prices.

The explanation we have endeavoured to give appears to become clearer as we investigate further into the subject. Let us first examine the facts relating to the scarcity of silver. England, the principal market of Europe for the precious metals, witnessed, in 1850, a reduction of about [30 - £1,080,000]27,000,000 francs in the ordinary import. This applied principally to silver. Remittances from India, generally about [31 - £800,000]20,000,000 fr., were almost completely stopped; those from Turkey and Spain were materially diminished. At the same time about £1,000,000 sterling was required to be shipped to India, and remittances were made by Messrs. Baring to St. Petersburg of [32 - £320,000]8,000,000 to [33 - £400,000]10,000,000 francs more, in silver. Germany and Holland required more than their usual supply. The Société Maritime of Berlin had imported silver to the extent of [34 - £450,000]3,000,000 or [35 - £600,000]4,000,000 thalers; so that, altogether, the import into England, having diminished in 1850 to the extent of about £1,000,000 sterling, the export had been in excess by about double that amount; reducing the metallic reserve by about [36 - £3,000,000]75,000,000 francs. In addition to which, Spain and Russia, having prohibited the export of silver, the exchanges with those countries could hardly be operated upon effectively by the transmission of this kind of specie. It is easy, then, to conceive, that where no modification of the monetary laws had taken place, the premium on gold passed to a premium on silver.

This will explain the reason for at least a temporary abundance and depression in the price of gold, especially on the gold market of Paris. There is no ground for imputing the change to California, from whence the supplies were of little moment, until the end of December, 1850. England so far had only received silver from the United States, and the Californian gold, which had found its way by Panama, during the year, did not exceed, according to official returns, £682,000, or 17,050,000 francs. The Mint in London did not coin gold to a greater extent in 1850 than £1,492,000, or 37,300,000 francs, which is conclusive against any very large importation.

The market of Paris might have experienced a superabundance of gold, in consequence of the demonetization of gold coin in Spain and Portugal, and by the influx of Belgian and other foreign gold coin which had been circulating in Belgium; and it should be added, that England imported into France, for the payment of railway shares, probably to the extent of £1,000,000 sterling; but the predominating cause of the depreciation was undoubtedly the demonetization of gold in Holland, for that step had the immediate effect of cancelling at once the value of the gold coin there in circulation, and of throwing simultaneously an amount of gold on the commercial market, almost equal to the whole of the annual quantity of gold produced in California.

From 1816 to 1847 Holland had followed the example of France in admitting a double monetary standard. Gold and silver were both received in legal payment. The law of November 26th, 1847, altered this state of things; one standard only was allowed, and the silver florin of 3 grammes 450 milligrammes fineness, became the monetary unit: this simplification of the national coin, however, was adopted in theory only; the application of the system was postponed.

The article 23 of the law decreed, that before December 31st, 1850, other legislative arrangements should be enacted concerning the gold coins of five and ten florins, but that till these new arrangements were carried out, the gold coin should continue in legal circulation. The Dutch government might, therefore, retain the legal circulation of the gold coin, by applying to the States-General to prolong the period of the law of November 26th, 1847; but it preferred to carry out the system to its fullest extent. On August 6th, 1849, the government laid before the Assembly, the scheme of a law to “demonetize” the pieces of five and ten florins, and leaving to the administration the moment for its execution. At the same time the government demanded authority for the issue of notes to the amount of [37 - £2,500,000]30,000,000 florins, to buy in the gold coin, which although not in legal circulation, might yet continue to serve as payment at its conventional value.

In the “Exposé des Motifs,” the Minister of Finance, M. Van Hall, acknowledged that the depreciation of gold would not be immediate. “We must examine the question,” he said, “in order to know whether the proportionate value of gold and silver has undergone much variation in consequence of the discovery of the Californian mines. The government is of opinion that as yet this is not the case. In fact, a document communicated to the Assembly proves that the proportion between gold and silver of 1 to 15·60 has been found to exist but once. Sixty-eight quotations of the Exchange of Paris mark the price of gold higher, and only four lower than this proportion; at the Exchange at Amsterdam, we find fifty-five quotations above, and fifteen only below. For the present there is no fear of too much gold being imported for the purpose of exporting silver. It should also be observed, that the high price of gold in France has latterly been occasioned by political events.

“It is well known that the price of gold in Holland is regulated by the exchange on London. If England sends more gold to the Continent than she receives from it, then the rate of exchange on London rises, and gold is obtainable only at an agio. On the contrary, if England receives from the Continent more gold than she exports, the exchange on London is low in Holland, and gold is plentiful. Peculiar circumstances may of course modify these general rules; for instance, it is possible that England may have payments to make in Holland greater than Holland has in England, while the case is the reverse between England and the other countries of Europe; then the state of exchange in those countries would naturally react upon ours.

“It often happens that other circumstances occur seeming to contradict these principles. Thus in August last (1849), pieces of ten florins were in demand in Holland for foreign remittances, although the price of bar gold was only at 1¾ per cent. agio. Again, the influence of the state of exchange on the importation of gold may recently have been observed; not long ago, gold was exported from England to the United States at the very moment that gold was supposed to be arriving from America in great quantities.” I have repeated at full length these remarkable admissions, to prove that the Dutch government was not arming itself against a pressing or even nearly approaching danger, and that their precautions were not even taken with foresight. To theoretical errors were added practical faults; the Minister of Finance had not measured the importance of the operation with sufficient accuracy; he estimated the amount of gold coin in Holland at [38 - £8,041,666]96,500,000 florins; it proved to be [39 - £14,333,333]172,000,000 florins.

The law was voted on September 17th, 1849, and the government received the full power they had demanded. A royal command appeared on June 9th, for the execution of the measure. The following are the principal articles: “1st. The pieces of ten and five florins shall cease to be in circulation as legal payment from Sunday, June 23rd, 1850, but they may continue to be employed in commerce: that is to say, that these coins may be accepted in payment at a conventional value. 2nd. These coins shall be received in payment by government, and by the collectors of the revenues of the kingdom, at their nominal value, till July 31st, 1850, inclusive.”

At the time this notice was published, it appeared that the exchange of gold for bank-notes would take place under the most favourable auspices. Gold was at a tolerably high premium in the market of Amsterdam, bills of exchange on foreign countries were scarce, and consequently the payments of international commerce could very advantageously be made in the precious metals. Moreover, the government treasury was full, and the Netherlands bank declared itself ready to assist efficiently in the operation. But all these chances of success were destroyed by the precipitancy of the government. A complete panic was occasioned by the short period granted to the holders of gold coin: the people hastened to pour their gold into the state treasury, (which could not receive it all) or else to send it abroad. The government had imagined that the sum likely to be exchanged, would no exceed [40 - £2,500,000]30,000,000 florins: they had miscalculated by two-fifths; for the sum amounted to [41 - £4,166,666]50,000,000 florins. The 30,000,000 of paper money that they had been authorized to issue, together with the money in the treasury at their disposal, not being sufficient to pay for the amount of gold presented, they were obliged to have recourse to the bank of the Netherlands, and to borrow a sum of [42 - £514,583]6,500,000 florins, at an interest, moderate it must be admitted, of 2½ per cent. per annum.

The exchange being effected, it was necessary for the government to find a means of disposing of the gold withdrawn from circulation. It could be sold only in foreign markets; and there, private industry had forestalled the government, and the price of gold had fallen in consequence of the number of Guillaumes brought for sale. At first the Dutch government suffered only a small loss, owing to a momentary reaction in favour of gold coin; but the first sales having increased the depreciation, they were obliged, for fear of greatly adding to their loss, to stop after having disposed of [43 - £1,819,666]21,836,000 florins: the loss then amounted to [44 - £20,370]244,446 florins, being about 1¹²⁄₁₀₀ per cent. By the middle of October, gold had fallen in value 2½ per cent. below the legal price, and by the middle of December, 4 per cent. At this period, the pieces of five and ten florins, banished from Holland, were scattered about in the different markets of Europe: London had received them to the amount of £600,000; Paris to the amount of [45 - £2,520,000]63,000,000 francs; Germany had absorbed the rest: excepting from [46 - £2,333,333]28,000,000 to [47 - £2,416,666]29,000,000 florins, still lying unsold in the treasury of the Netherlands.

The Guillaumes have continued to be melted and coined, in Paris, into 20 and 40 franc pieces; for I find in an official record furnished me by the President of the Mint, that Dutch coin was exchanged at Paris in the last six months of 1850, to the amount of [48 - £1,637,362]40,934,053 francs; and in the first six months of 1851, to the amount of [49 - £2,836,064]70,901,597 francs, – altogether [50 - £4,473,426]111,835,650 francs.

The gold coinage of Holland, from 1816 to 1847, was 172,583,955 florins, equal to [51 - £14,480,000]362,000,000 francs. Supposing that of this only two-thirds was in existence in this shape of coin in 1850, there would be 115,000,000 florins, or [52 - £9,440,000]236,000,000 francs, all at once withdrawn from circulation, and thrown upon the gold market: is it possible that the price of gold could be otherwise than affected? The gold thus suddenly demonetized equalled at least twice the annual produce of the world, previous to the discovery of California. The Mint of Paris alone, which had not struck above [53 - £1,080,000]27,000,000 francs in gold during the year 1849, coined [54 - £3,400,000]85,000,000 in 1850, and [55 - £10,760,000]269,000,000 in 1851.

Fortunately, the crisis was of short duration; the gold coined in Paris rapidly flowed either towards Piedmont, to pay the first instalment of their loan, or to Milan to pay for silks bought by Lyons and St. Etienne. Credit is at a low ebb in Italy, there is little paper circulation, tending to simplify accounts, and taking the place of specie in the adjustment of debts; gold is therefore always in demand, and the supply was speedily absorbed. Certainly, the apprehensions of the Dutch Government have proved hitherto groundless, and the desired object has been but partially attained: silver, having become the sole standard, has found its way (somewhat in excess) throughout the country, but the loss of gold coin has given rise to a small note paper-circulation: there is now a paper money of 10 and 5 florins (21 francs and 10½), which, although at first but provisionally issued, will probably become permanent circulation. Holland is following the steps of Prussia and Austria. The Dutch Government supposed that, notwithstanding the demonetization of gold, the coinage might remain in circulation, and be voluntarily accepted for its intrinsic value. This was a misconception of the nature of money, which is accepted as a circulating medium only on account of its positive value. As might have been anticipated, gold has ceased to circulate in Holland, and paper has taken its place. It is doubtful whether the nation has gained by the change.

We think we have sufficiently considered the subject of the fall in price of gold in 1850. During the last eighteen months the production of this metal has made immense progress. The crisis, which was then imaginary, may have taken a more serious turn, and may become hereafter a reality. This we will now examine.

IV

The three great gold districts, which have lately grown into importance, are, the chain of the Oural and Altai Mountains, California, and its extensions to Sonora and Oregon, and the eastern and southern districts of Australia; let us consider each in its order.

The washings of the Russian streams first aroused public attention from the languor into which the question of gold-working had fallen. The deposits of the Oural, where the first discoveries were made, never gave any extraordinary results; the workings appeared almost impracticable above the 60th degree of latitude, and although begun on a great scale above half a century ago, they have remained almost stationary for the last fifteen years; the annual returns, divided about equally between the government and private individuals, scarcely exceeded [56 - lbs. 13,397=£625,000]5,000 kilogrammes.

The Altai gold district was in a very different position; in spite of the rigour of an inhospitable climate, and the difficulties experienced from any work of labour with a scanty population, the development of produce was extremely rapid. Begun in 1828, the result, after the first eight years, was [57 - lbs. 4,614=£215,250]1,722 kilogrammes, but from that time it increased in a geometrical proportion; it rose to [58 - lbs. 10,718=£500,000]4,000 kilogrammes in 1840, to [59 - lbs. 26,795=£1,250,000]10,000 in 1842, and exceeded [60 - lbs. 53,590=£2,500,000]20,000 in 1847.

The year 1847 appears to have been the culminating point of the position of gold in Russia. The “Administration des Mines” report a produce of [61 - A poud is equal to about 36 lbs. English; and is worth about £1679.]1744 pouds, or [62 - lbs. 76,422=£3,565,125]28,521 kilogrammes, as the combined working of the Oural and Altai; admitting that one-fifth of the produce escaped the government tax, the result of the gold produce of 1847, would be at least [63 - £4,400,000]110,000,000 francs. From that time the decrease has been continuous. The official reports of 1848, give the figures at 1,726 pouds, or [64 - lbs. 75,705=£3,531,500]28,252 kilogrammes; 1592 pouds, or [65 - lbs. 69,873=£3,259,625]26,077 kilogrammes in 1849; 1485 pouds, or [66 - lbs. 65,176=£3,040,500]124,324 kilogrammes in 1850; and 1,432 pouds, or [67 - £3,120,000]78,000,000 francs in 1851. It is to be observed that the reduction refers exclusively to Siberia, east and west; not only has the activity of the workings in the Oural been undiminished, but it has slightly increased: the produce of 1849 was 342 pouds, being [68 - lbs. 653=£30,500]244 kilogrammes more than in 1845.

The decrease of production appears to have been principally caused by excessive taxation. The working of the Siberian gold districts is divided between the Government and private owners, and in the division, the eastern side of the mountains has been retained by the former, whilst the latter have worked the western. The result has been an immense loss to the public treasury, for whilst two-fifths of the washings of the Oural are from the government reserves, the Altai districts do not yield above 5 to 6 per cent. of this produce. The Russian government has endeavoured to collect by taxation what is lost either by abstraction or the washings. The tax was at first one-tenth of the net produce; it was then raised to 15 per cent., and has since been further increased. The new tax, however, only applies to Siberia, east and west. It is a progressive rate, divided amongst ten classes, the rate varying from 5 per cent. on the raw produce, when the working was from one to two pouds, up to 32 per cent. when the working amounted to 50 pouds per annum. The whole tax, however, was, in addition to another tax called “minier,” also progressive, and varying, according to class, from four to [69 - A Russian rouble is worth about 3s. 2d.]ten roubles per pound of gold.

These exorbitant taxes may have acted in two ways, either as an encouragement to fraud, or as a discouragement to production. At the distance at which we live from Siberia, a country where the light of public opinion has penetrated even less than the rays of the sun, it is difficult to decide between these two consequences, both perhaps equally probable. But the fact of the decrease remains undoubted, and this decrease has been to the extent of one-seventh in three years, or about [70 - lbs. 10,718=£500,000]4,000 kilogrammes.

The working of the gold regions of Siberia has not been of the democratic character which it has assumed in California and Australia. There the first comer, provided he were furnished with a pickaxe, a bowl, a cradle, and a small store of provisions, might, without further capital, pitch his tent over some square yards of land, and dig until he has made his fortune. With a license costing 60s. in Australia, and with a tax of 20 dollars a year in California, he may go where he pleases. It is not the government which fixes his boundary, but the regulations of the republic of miners, forming a community along the banks of a river, or at the foot of a hill, forbidding one man to usurp a greater space than he can work with his own hands; the miner himself possessing nothing, and therefore, risking nothing, may dispense with all calculations of profit and loss. If the spot he has selected does not answer his expectations, he shifts his ground, or his occupation. Under any circumstances, the tax, not bearing upon capital, and being moderate in amount, is easily paid; a few days work is sufficient for it; the remainder of his time during the year with his bad or good luck, is at his own free disposal. Such is not the case, in the Altai, where the aristocratic forms attaching to all industry, either at the will of the state, or from the force of circumstances, have exerted their influence over the first commencement of working the mineral districts. By the terms of the imperial decrees, concessions are only obtained on special application, and for a term of twelve years, and the portion assigned to each person never exceeds 100 sagenes (about [71 - A metre is equal to 39.371 English inches, a sagene is equal to about 7 English feet, and a werst contains 1,166⅔ yards, or 3,500 feet, equal to about ¾ of an English mile.]250 metres) by five wersts, (about 5335 metres); the same person may, however, take several lots, provided they are separated by a distance of five wersts. These contractors engage a certain number of workmen, whom they provide with utensils and machinery, besides feeding them and paying them high wages. Everything connected with the arrangements entails considerable advance of capital, and when the chance of a small return, or sometimes of no return at all, is added to the heavy deduction to be paid to the state, out of the raw material, is it surprizing that members of this community are frequently unwilling to extend their operations, and almost always anxious to conceal the magnitude of their working?

It is said, that in keeping up the amount of the tax, the Russian Government has had less in view the advantage of a larger participation of interests than a desire to check a kind of industry very demoralizing in its nature. If such is really the motive, it might be less critically censured. Whatever the reason, so long as the Russian Government considers it advisable to keep up the present taxation, it is not likely that the increase of production of gold will be considerable; it appears to be limited for the present to an amount probably not exceeding [72 - £3,600,000]90,000,000 to [73 - £4,000,000]100,000,000 francs per annum.

The Spaniards – those indefatigable treasure-seekers – who discovered the hidden riches of the Cordilleras, had been in possession of California for above two centuries. From the year 1602, Sebastian Viscaino, the founder of Monterey, had learnt from the Indians, dispersed throughout that country, that it abounded in gold and silver. Nevertheless, instead of planting a colony of miners to examine the soil, the Spaniards sent thither a body of missionaries, who proclaimed the gospel, and at the same time instructed the natives in the rudiments of civilization and of agriculture.

In 1846 there was scarcely 10,000 of the original Spanish creoles, when a body of some hundreds of adventurers from the United States, under General Taylor, invaded and took possession of the country. The Government of the Union, in demanding its cession from Mexico, thought chiefly of an aggrandisement of territory; they wanted ports on the Pacific and a rival colony to Oregon. Little was it expected that in the valleys which descended from the Sierra Nevada would be found mines of gold likely to become the principal attractions to colonization, and a district whose exuberant products would be shortly disseminated throughout the markets of Europe, as well as of America.

The extension of the population of California which so speedily occurred, is greatly due to the truly fabulous success of the first washings; the miners naturally first planted themselves on the richest “placers,” they rather culled the produce, than exhausted it; they frequently discovered “pépites” weighing several ounces, if not pounds of gold; a clever workman made his fortune in a few days.

In June, 1848, Mr. Larkin, Consul of the United States at Monterey, valued the day’s work of a gold seeker at an average of 15 to 25 dollars ([74 - £5 to £10]133 to 267 francs). Colonel Mason, in his report of August, considered the produce of a day’s work of 4,000 European or Indian miners at [75 - £6,000 to £8,000]30,000 to 40,000 dollars, giving an average of about 10 dollars [76 - £2 2s. 6d.](53 francs) to each workman. Captain Folson writes about a month later, “I do not think that there can exist richer deposits in the world. I have myself ascertained that an active workman can collect from [77 - £5 to £8]25 to 40 dollars per day, valuing the gold at 16 dollars the ounce.” Mr. Butler King, whose report is of still later date, places the average day’s work per man at about 16 dollars, or one ounce of gold.

During the second period of working, when the miners flocked to the “placers,” and disputed every inch of the golden soil, the yield began to diminish in a very marked degree. A local mining journal, the “Placer Times,” of 26th October, 1850, giving a resumé of the proceedings of the season, including the encampment from the River de la Plume to the River Consumnes, covering an extent of about 100 miles, and occupied by 60,000 gold-seekers, estimated the mean result of a day’s work at from six dollars on the River de la Plume, to four dollars on the l’Yuba and Ours, and five dollars on the American Fork. The information collected by our consuls at the beginning of 1850, gives a result of one to two ounces per day in the Valley of the Sacramento, and from one to four in the newer regions of St. Joaquim. The diminishing produce, comparing one year with the other, was not without some compensation. If the miner gained less, he did not spend as much. The extravagant rise on all sorts of provisions, clothes, and tools, had been brought down to a more reasonable limit: – they no longer paid [78 - 4s.]one dollar for a pound of bread; [79 - £16]eighty dollars for an outer covering; [80 - £10]fifty dollars a-day for the use of a cart with two oxen, or [81 - £1000]5000 dollars for a cask of brandy. An artizan could no longer command sixteen dollars for a day’s work. Europe, the United States, and other nations, shipped to California cargoes of provisions and of manufactured goods; competition soon lowered the prices. Roads were made from the “placers” to San Francisco; bridges were thrown over the rivers; they established stores of provisions and merchandize at every canteen. Towns sprung up like mushrooms, and in 1850 San Francisco numbered 50,000 inhabitants. The production of gold in California appears to have now arrived at its third period. The miners have acquired a certain experience, their modes of working are less primitive, and they are more settled. The want of order is diminishing, and the average produce is increasing. The accounts from San Francisco in April, 1852, mentioned “placers” in the valley of the Sacramento, where a day’s working yielded from [82 - £3 to 4.]fifteen to twenty dollars, and others on the frontier of Oregon, where the average was from [83 - £1 to 2.]five to ten. On the frontier of Sonora the washings of the auriferous clay yielded [84 - 28s. to 32s.]seven to eight dollars a day with the roughest description of work; all agreed that eight hours hard work should produce everywhere from six to [85 - 24s. to 32s.]eight dollars, if the plain be rich; and as the miner could live on from [86 - 8s. to 12s.]two to three dollars a day, he might reckon on a gain of from [87 - £80 to £100.]400 to 500 dollars during the season. However, by the latest accounts, it would appear that the “placers” are beginning to be exhausted. 100,000 miners turning over continuously for three years the alluvial sands, (already successfully explored by the first comers in 1848 and 1849,) could hardly fail to extract everything of value. It remains now to explore the auriferous quartz veins which may extend to the centre of the Sierra Nevada. This new work, however, requires large capital, and extensive combinations. The success of such operations has hitherto been but moderate.

The auriferous richness of the quartz rocks in California appears sufficient to remunerate the speculator; and foreign capital is not deficient at St. Francisco. Whence is it, then, that the quartz mines have hitherto been but slightly attractive? It has arisen from the want of the requisite and essential conditions for the progress of such undertakings.

Property in “placers” or in mines is not yet sufficiently secure; it is neither yet placed fully under the safeguard of law, nor is it protected by police regulations. Anarchy still reigns in this new country; – not only have the miners to defend their persons and their acquisitions against the incursions from Indian tribes; not only are crimes and offences common (lynch law maintaining a permitted existence instead of laws and police); but every one appears to hold his property by right of first comer: a miner chooses the spot he likes best; a strong arm and a carbine, with a steady eye, are his title deeds. To seize upon a rich “placer” from a miner too weak to resist, is called in the slang of the district, to “jump a claim.” The President of the United States himself, stated in his last message, that “The mineral lands should remain free to every citizen;” and the Secretary of State has added, “that the right of occupancy should be submitted only to such laws as the miners themselves thought fit to make.”

The continuous flow of emigration, and the continuous working of the gold districts, appear to indicate, that in spite of many reverses and sufferings, the mass of emigrants consider the result as likely to be profitable. Without approaching to the fabulous accounts of the early adventurers, these results have certainly largely exceeded in magnificence those of any former period in history; let us endeavour to particularize some of them.

Mr. Butler King, in his report to the Secretary of State, in 1850, after a careful examination of California, values the washings and gold working of the two years, 1848 and 1849, at [88 - £8,000,000]40,000,000 dollars. The basis of this calculation, the first officially presented, was a produce of 1000 dollars ([89 - £214]5350 francs) per miner, per annum.

According to Mr. Butler King, American emigration hardly began to flow towards California until September, 1849; up to that period, foreigners, principally from Mexico and Oregon, had reaped all the profit of the washings. The San Francisco Herald estimated, that at the end of 1850, the gold produce of California, for the twenty-one months between 1 April, 1849, and 31 December, 1850, at the sum of 68,587,591 dollars (nearly [90 - £14,680,000]367,000,000 francs). According to the documents published in France by the Minister of Commerce, which appear to have been derived from local statistics, the produce was rather less than the above. From 1 April, 1849, to 31 March, 1851, in two years, it was raised to [91 - £13,160,000]329,000,000 francs.

Monsieur Emilie Chevalier, who has just returned from a government mission to Panama, in a report to the Minister for Foreign Affairs, considers the result as having been much larger. The gold brought as freight by steamers in 1850, he estimates at [92 - £10,061,305]50,306,525 dollars. The author of the report adds, on the testimony of a person whom he considers as competent to give a sound opinion, that the sums carried by passengers are not less than three fourths of the amounts brought as merchandize; and thus he arrives at the extraordinary figures of 88,000,000 dollars (more than [93 - £18,800,000]470,000,000 francs) for a single year. At St. Francisco, where they are able to form probably a more correct estimate on a subject so difficult to trace accurately, they do not value the amount of gold carried by passengers at above one-fourth the amount taken in freight. Even on this supposition there will be a sum of 25,000,000 dollars, or above [94 - £5,320,000]133,000,000 francs to be deducted; but it appears to me very doubtful, if the produce of 1850 exceeded this figure of [95 - £13,160,000]329,000,000 francs, according to the French documents already referred to. We have more valuable documents of another kind to rely upon, in the quantities of gold coined at the United States’ Mint; the following are the official figures: —

All the gold sent to the Mint did not, however, come from California. A part consisted of specie sent from Europe, in exchange for American stocks or merchandize. The treasure found in 1848 in the Valley of the Sacramento, belonged, as it has been stated, principally to foreigners. Up to the month of March, 1850, the United States’ Mints had not received above 11,000,000 or [96 - £2,400,000]12,000,000 dollars of Californian gold. At the end of August in that year the amounts paid in did not exceed [97 - £4,900,000]24,500,000 dollars. A year later, the mints had received in gold from that source [98 - £16,000,000]80,000,000 dollars.