less than 6,078,3291. below the amount of declared value in 1811, being a fall of upwards of 20 per cent.

Whatever the cause of the fall of prices, therefore, may have been, it is certain that it began in this year, and was to this extent. It is not less certain that, previous to 1811, declared value continued to gain upon official value; but that since 1811 official value has continued to gain upon declared value; and the differences, while they mark the continuance, also show the amount, of the depression.

The amount of our exports in 1811, accord. ing to declared value, as already stated, was

which would be the amount of the depression, if

there had been no increase of export.

But the amount of Exports in official

value in 1831 was

And in the same value in 1811, the

amount was

Increase

£

The annexed table will show the differences between official and declared value in every

year since 1811 to 1831, both inclusive, and also the total amount of these differences :

Total amount of differences from 1811 to 1831 £34,564,515

The amount of the depression thus appears to increase every year, and must therefore proceed from a cause which began to operate in 1811, and has continued to operate ever since.

Now, there is no cause of this description, but the defalcation in the supply of gold and silver, which was occasioned by the overwhelming of the South American mines, by the revolution in the mining districts in 1810; at which time the annual supply from these mines was nearly forty* Records destroyed by fire.

1

eight millions of dollars, but has not since exceeded twelve millions of dollars.

Mr. Tooke, who wrote his book on high and low prices under the impression that there had been no defalcation in the supply of gold and silver from the mines, endeavoured to account for the depression of prices from over production. When the account of the supply from the South American mines for the ten years which preceded 1810, and for the ten years which followed that year, was sent to him by Mr. Jacob, Mr. Tooke published the account in a supplemental section to a second edition of his work. But he doubted the extent of its operation, 1. From the quantity of commodities, in the circumstances he adverted to, affecting the contingent as well as actual supply, compared to the average rate of consumption, which it appeared to him might account for the difference of bullion prices. 2. The diminution or cessation of the drain of silver from hence to the East Indies and China, and an inversion of the stream by the importation of the precious metals from the East Indies to this country. 3. From the increased transport to Europe of immense capitals in gold and silver, consequent upon the migration of old Spaniards from South America.

But none of these causes had any operation in 1811. Increased production since has, per

C

haps, been rather a consequence from than a cause of the rise in the exchangeable value of money, from a defalcation in the supply of the precious metals; because all commercial men have engagements to make good, and when they become unequal to meet their payments from returns falling off in money amount, they naturally endeavour to make up for deficiency of price by increase of quantity. The diminution or cessation of the drain of silver to the East, and the influx thence to this country (consequent upon gold and silver becoming scarcer in Europe than in Asia), did not take place for nearly ten years after 1810; and the supply brought by emigrant Spaniards could only be to a limited amount, and could produce only a temporary effect.

The termination of the war, and the preparation made for returning to a metallic standard in 1819, to which so much effect beyond their actual operation has been ascribed by others, could not account for the fall of prices in 1811. The one could not have any influence until 1816, nor the other for three years afterwards. Mr. Tooke appears to me to have shown, very successfully, that war or peace, or even taxes, have little effect upon general prices. He appears to me to be not less successful in showing that the diminution of prices, consequent upon

returning to a standard of gold, could not have any influence beyond the difference between the mint and the market price of gold, in which he supports Mr. Ricardo's opinion. It was the rise in the exchangeable value of the standard, and not the return to it, which has occasioned a depression of prices so much beyond the difference between paper and bullion prices.

*

In reviewing Mr. Jacob's book on the produc-. tion and consumption of the precious metals, the reviewer questions a rise in the exchangeable value of money, from a defalcation in the supply of gold and silver from the mines, upon grounds which either serve only to lessen the effects of the defalcation, or which resolve the rise into an increased supply of other commodities; but, if the supply of all other commodities be unquestionably increasing, and the supply of gold and silver be stationary, or increasing in a much smaller proportion, it necessarily follows that a continuing depression of prices must follow from the scantiness of the supply of the precious metals; and the amount of the depression must increase in proportion to the increasing abundance in the supply of other commodities, and the scantiness of the supply of gold and silver, varied by the difference in the abundance or scantiness in the

* Edinburgh Review for April, 1832.