The atmosphere might become foul and putrescent with the mephitic exhalations of covetousness, stripped of every vesture of shame, and the crapulous excesses of coarse natures drawing from sudden wealth only animal enjoyments. Yet would all this leave the bulk of the gold hoards unmoved. For a hundred millions added to income, four or five might be drawn into the currency, but like the violence of the strain would be the violence of the recoil. Crushing, desolating, revolutionary, the recoil would come, flinging up the base to rank and wealth, casting down the noble, enriching the usurer, robbing the widow, rending the social ties on every hand; in one word, demoralising, and hurrying all yet faster down on that steep descent which leads to unknown, but most awful issues. I suppose the worst. I suppose the utmost activity of capital coming in the manner I have mentioned, in which case it could only reproduce on a larger scale, and with cycles more rapid and destructive, effects similar to those which have followed from our own accumulations. The best that could be hoped respecting such capital in our present state is, that it would be wholly inactive. New Gold in Payment for Exports. But, in point of fact, this is not the mode in which the new gold for the most part either has come or will come to this country. It comes in payment for exported goods. Coming thus, there are two cases which require to be considered separately. First, the aggregate of exports may not have increased, and the gold may have come only instead of goods which otherwise would have effected the payment; for instance, it may come from Australia instead of wool, which would be the ordinary return. Secondly, the aggregate of exports may have increased, and the extra portion may have been paid for in gold, the returns in goods for the other portion coming as usual. In the first case, there is no increase in the aggregate of exports estimated in money; there can be no addition to the aggregate of income. Manufacturers' profits and labourers' wages are exactly the same as if wool had come instead of gold. The only difference is, that there is more gold in the Bank, and less wool in the market. Some merchant, who in the ordinary course of things would have had a cargo of wool to dispose of, has instead a credit at the Bank of England, probably to him the less profitable of the two. I now come to the last and only mode in which the new gold can to any large extent enter into the English currency through an operation upon incomes and prices, and through which it must be felt for many future years, as the chief material impulse acting upon the whole structure of society. And here I conceive that the principle of Mr. Senior's theory', which, so far as I know, has never been contested, completely points out the order in which events must take place. Mr. Senior's Theory. Mr. Senior's principle is, that the bullion prices and incomes of all goods and persons in England are regulated by the prices of exported goods and the incomes to which they give rise. In other words, England, having no gold-mines, must get all her gold from abroad, and therefore at that point, wherever it may be, where her goods come into direct contact with foreign gold, the relation between the two must be determined. It does not matter whether the gold comes to us from a gold-producing country or not. It is enough that it comes from abroad. A piece of calico will sell for the same at Vera 1 I may say, that although familiar with Mr. Senior's theory for years, and receiving it as an exact and immovable piece of science, I only saw this application of it after a long and circuitous investigation. In other words, I walked many miles through all sorts of cross roads and wildernesses to a point which might have been reached by one step in a direct line. The coincidence, however, confirmed the conclusion. Cruz and at New York, allowing for differences in the cost of carrying it; and the price measured in gold which it will return to the manufacturer from thence, or from Hamburg, or from Hong-Kong, must determine the price in gold at which it will sell to consumers in England-must determine, therefore, the profits in gold and wages in gold of the manufacturers and labourers who made the calico; and then, according to Adam Smith's law of equalization, the profits, wages, and other incomes of all other classes successively. Hence, the reason why English labour obtains generally higher money wages than continental labour is, that it is more efficient in producing exportable commodities, and therefore the makers of those commodities obtain, man for man, more gold than their continental rivals do, out of the general markets of the world. Thus the highly-efficient industry of Lancashire and the West Riding has, in half a century, doubled the wealth of the gentry of England. The proudest, yet, after all, the best aristocracy in the world, has been borne up to its lofty elevation by the toil of those little ones whose sorrows breathe forth in that heart-wringing poem of Mrs. Browning's, the "Song of the Children." Mr. Senior's principle has, to my mind, the simplicity and, if I may so speak, the intuitive self-evidence of a great truth. Its working, however, in actual fact, cannot be other than most irregular-conflicting at every step with disturbing forces, and producing a violent friction and tendency to general dislocation in the social machinery-first in proportion to the vast magnitude and consequent immobility of that machinery; and secondly, to the greatness and violence of the new power brought to play upon it. It will make the matter clearer, however, to trace first the general line of direction of the new revolution, and afterwards to notice those facts which will tend to obstruct the movement. Prospect opened by the Theory. Lancashire, then, must receive, or rather-as I believe, from the great increase in our exports—has already received, the first gush of the incoming stream. There must have been recently a very considerable increase, through profits, of the incomes of the manufacturers, and no doubt much increase also in the gains of the workmen. The expansibility of the industrial system of Lancashire is something of which the mind does not readily embrace the idea. It can scarcely be said to have been ever yet tried to the whole of its extent. The reports of the Factory Inspectors at different periods represent the investment of capital in the building of new mills, during different periods of increased foreign demand, as something more like the creation of an Aladdin's lamp than the works of unaided men. With a proportionate increase of foreign demand, there is almost no point to which the energy of Lancashire could not push the supply. Mills would multiply like mushrooms, and the machinery could be, and I fear would be, worked day and night. No markets could fully absorb production bursting up out of sources so abundant; but before noting any consequences of a check, it is well to trace the result of the first movement. The quickened industry of Lancashire, of course, would make a large addition to the aggregate of income received and spent by all the manufacturing classes, and some fractional proportion of that sum would be drawn into the gold currency, to distribute the goods consumed. Concurrently with the movement in Lancashire proceed, with a shade less of vehemence, similar movements in the West Riding of Yorkshire, in Lanarkshire, in the Birmingham and Wolverhampton district, in the Potteries, in the iron-works both of Scotland and Wales, and, in short, in all those hives of industry where the daily bread for wife and child is procured by working for unknown brethren at the ends of the earth. All these industries re volving with unusual rapidity, fling off considerable additions to the aggregate of the national income, which draws out, as before, some additional circulation. Successive Rise of Incomes. The manufacturing incomes thus arising constitute an increase of demand, the play of which against existing stocks and services, heightens their value, and thus is generated an increase in a new and miscellaneous class of incomes, extending in a long and irregular line through a variety of trading and professional persons, from the little grocer whose tea is in double demand, to the fashionable music-master, who unfortunately can neither divide nor extend his supply, so as to give two guinea-lessons at the same time to two different manufacturers' daughters. The production of income out of income may be illustrated by a connection which competent judges have believed to exist between the outlay in railway salaries and wages in 1845, and other phenomena near that period. The enormous personal expenditure of that year in London was followed by most unusual gains to the jewellers through the sale of trinkets and gold watches. It was the impulse, no doubt unknown to themselves, behind the backs of those who set up a second Italian Opera; and, in conjunction with other circumstances, it contributed not slightly to the undertaking of what is the most difficult of all commercial enterprises in England, namely, a new London morning newspaper. At every step new incomes, or additions to old ones, were the necessary consequences. In this manner, step by step, an upward impulse would be given to one series after another of the more variable incomes; but still with slight effect on the large mass of salaried employés, and with none at all on that wide-spread agricultural interest, which for a time might see the golden tide swelling and surging over the scorched and blasted plains of northern and central England, and through the populous towns towards the metropolis, without once turn |