planet; as well as the difficulties interposed in consequence of its remote distance from our earth, must necessarily render the absolute determination of all its peculiar phenomena a work of time. Meanwhile it may be permitted us to reason that, if Neptune is self-luminous, this condition may enable it, with its solitary satellite, to possess a sufficiency of light for the existence and enjoyment of life by creatures of a higher organization than some feel disposed to accord to it, should life indeed exist upon it at present.

With regard to the temperature of these remote bodies which must necessarily be dependent upon a variety of considerations, I cannot but think some allowance should be made for the greater amount of internal heat which may possibly be a condition of the superior planets; for if, as some are disposed to consider, the Solar System had a common origin, and the planets originally were in an incandescent state, then under such circumstances the larger bodies would take longer to cool down than the smaller ones-and if any degree of probability is to be attached to such speculations, our friends on the confines of the system, (if such there be) may still be warmer than we give them credit for.

I am not, however, going to inflict on the members of the Institute any dissertation on the plurality or non-plurality of worlds, which subject has assuredly been sufficiently discussed of late years, leaving us all much of the same opinion still, although some of us may have been convinced against our will. But if any feel disposed to view this vexed question under a new aspect, and see much that is valuable, original and interesting, presented in a very condensed form, I strongly recommend them to peruse a little work called "The Chemistry of the Stars," written by Dr. George Wilson, the recently appointed Professor of Technology, at Edinburgh; and I think they will come to the conclusion, that it contains as much as need be said upon the subject to convince us all, that it is not probable there is any planet in the Solar System adapted for the residence of beings constituted precisely as we are.

I may add that when Neptune was discovered by Dr. Galle, it appeared as a star of the 8th magnitude; its apparent diameter is about 2"-8 when in opposition, that of Uranus in the same position is about 4". If we had a first class telescope attached to this Institute, or to one of the Universities, we might have opportunities of satisfying ourselves by personal inspection of the comparative light given forth by these two planets. The acquisition of such an instrument is, I regret to say, still a consummation devoutly to be wished.

INFLUENCE OF RECENT GOLD DISCOVERIES ON

PRICES.

as

BY E. A. MEREDITH, LL. B., ASSISTANT PROVINCIAL SECRETARY.

Read before the Canadian Institute, 19th April, 1856.

The general rise in the prices of commodities in the old as well the new world, within the last four or five years, is one of the most striking and important economic phenomena of the present century.

June, 1848-the date of the first discovery of gold on the Sacramento River in California-may be taken as the commencement of the era of high prices. California and Australia, when they became the centres of cheap gold for the world, became of necessity, at the same time, the centres of high prices. From these centres the tide of gold has flowed over the civilized world in all directions, and wherever it has flowed it has raised in a greater or less degree the level of prices.

Looking to the statistics of prices for the sixty years preceding 1848, we find that the former half of that period is marked by a high, and the latter half, say from 1819 to 1848, by a low level of prices. The causes, however, which kept up a high range of prices during the thirty years preceding 1819, will, I think, be found to differ in some essential features, from those which, since 1848, have operated to produce a similar result.

In the former period, the high prices (as Tooke has conclusively proved in his elaborate work on the History of Prices,) were due to the combined effects of the great war in which Europe was then involved and of a series of unfavourable seasons. Whereas the general advance of prices since 1848, although no doubt in some degree intensified by the recent war and by other causes, is, as I hope to shew, mainly due to the unparalleled influx of the precious metals from California and Australia into Europe and the rest of the civilized world, and to other causes more or less intimately connected with and growing out of the gold discoveries in those countries. That these discoveries are destined to bring about not only great economic and commercial changes, but also materially to affect the social, political, and moral condition of the world, cannot, I think, be questioned. As to the general bearing of these various changes on the well-being and happiness of mankind, thinking men indeed entertain widely

different views: while many see in the consequences of the gold discoveries nothing but unmixed good; a few, including among their number the ingenious and acute De Quincey, look more than doubtfully to the future, and seem disposed to believe that it had been better for the world if the gold nuggets had remained for ever buried in the bowels of the earth.

Into the large and tempting field of enquiry which the discussion of the probable moral and social results of the modern gold discoveries would carry us, it is not my design to enter. I shall confine myself exclusively to the economic bearings of the discoveries; and consider only the effect of those discoveries on the prices of commodities. This indeed is only one (doubtless the most important,) of the many interesting phases which the subject presents, considered in an economic point of view.

Strange as it may appear, this subject, although practical and important, has not hitherto received any considerable share of public attention, or been discussed on general principles and with reference to the admitted truths of Political Economy.*

To connect the gold discoveries and high prices together as cause and effect, and to indicate the process by which the rise in prices has been brought about, as well as the probable permanency of their present level, are the principal objects of the present paper.

It can hardly, I conceive, be necessary to adduce elaborate statistics to establish the fact assumed as the ground work of my remarks that the general level of prices on this continent and in Great Britain as well as in California and Australia has, within the last six or eight years, been considerably raised.

The extraordinary advancement of the prices of the necessaries of life, and of the wages of labour, in the two countries last mentioned, immediately after the first discovery of their mineral treasures, is yet fresh in the recollection of us all. The influence of the golden tide, which then began to set in from those remote lands to Great Britain and the States, soon also made itself apparent in the latter countries. During the last four years the Congress of the United States, in consequence of the admitted depreciation of the value of money throughout the Union, was compelled to raise, from 25 to 40 per cent, the salaries of the officers and servants of the Government. In England in 1854, the rise of wages and prices according to Mc

* Sterling's Work on "Gold Discoveries," to which frequent reference is made in subse. quent parts of this paper, is certainly an exception to this remark-I may add that I had not seen this work until a large portion of this article had been written.

Culloch was not less than from 12 to 35 per cent., while in Ireland it was much more.*

On the continent of Europe a similar rise in prices, though not perhaps to the same extent, could be shewn to have taken place;† while, as regards Canada, any statistics to prove the advance of prices within the last six years, would be considered, I am sure, as quite superfluous. Six years ago Canada was rightly considered as one of the cheapest countries of the world; now, assuredly, it is one of the most expensive. Here, as in the States, the Legislature has been compelled to interfere, to rescue the civil servants and officers of the Government from the ruinous effects of the enhanced prices of labour and of the necessaries of life. Within the last two years, accordingly, the salaries of almost all public officers in this country have been augmented, and the indemnity allowed members of Parliament, the salaries of the Executive Councillors, as well as as the salaries of most of the employés of the Government, have been raised. The scale of increase, however, varies somewhat strangely in the different cases. In the case of Members of Parliament and Executive Councillors, 50 per cent. has been added, while the incomes of the great mass of Government officials, (where any addition whatever has been made to their salaries,) have been augmented at rates varying from 12 to 25 per cent. These several advances being all grounded on the increased cost of the necessaries of life, we might perhaps a priori' have anticipated that the augmentation would have been in the inverse ratio of the salaries, in other words, that the lowest salary should have had the largest per centage, inasmuch as the smaller the whole salary the greater the proportion of it spent in the purchase of mere necessaries. The Legislature however would appear to have judged differently, and from the graduated scale adopted by them, we are forced to conclude that the pressure of high prices is most acutely felt by Executive Councillors and Members of Parliament, and but slightly, if at all, by the subordinate officers and servants of the Government. Had the increase of salaries been made on the ground of the decline in the value or purchasing power of money, as compared with all other commodities, then all salaries large and small should have been raised in the same ratio; assuming of course, that

* McCulloch's Commercial Dictionary, p. 1055, Edition of 1854, see also "Statistical Journal," for 1854, p. 1055.

+ In the "Annuairé de L'Economie Politique "-for 1855, published at Paris, we read at the commencement of the article entitled 'Coup d'œil sur l'année 1854'

"L'année 1854, a vu soevir à la fois trois fléaux; la guerre, le Choléra et la cherté des subsistances." In another part of the same article it is stated that the price of meat in France in 1854 was 25 per cent. above the average price of preceding years:

before the decline in the value of money they had been fairly adjusted.

To return, however, from this digression. I think that sufficient has been said to establish the fact that a considerable advance in prices has within the last five or six years taken place not only in Califor nia and Australia, but in this country and throughout the Continent generally, as well as in Great Britain and the rest of Europe.

To what causes, then, is this phenomenon due? I answer-firstly, and chiefly, to the recent gold discoveries; secondly, and in a lesser degree, to the war and other local and temporary causes.

It is with the former of these causes only that we have now to do. Before entering, however, on a discussion as to the degree of influence or mode of operation of the gold discoveries in effecting the results which I assign to them, it may not be out of place to make some brief remarks in reference to the general fundamental laws regulating prices.

The relative values of commodities are commonly estimated by referring them to the common measure or standard of value-money; in other words, by their relative prices-the price of every commodity being its value in money. The relative prices of different commodities at any given time are of course an accurate index of their relative values at that time. And if our standard of value were (like our standards of weights and measures) invariable, the relative prices of the same commodity, at different times, would also indicate accurately its relative values at those times. The fall or rise in the price of any article would shew precisely the fall or rise in its value. But our standard of value is not thus invariable, nor indeed can it be, inasmuch as the precious metals, which form the standard, are themselves liable (though not to the same extent as most other commodities) to fluctuate in value.

It is obvious then that a change of the price of any article may arise from two distinct classes of causes, either those affecting the intrinsic value of the article itself, or those affecting the value of the money with which it is compared.

Now the values of all commodities (gold and silver included) are determined ultimately and permanently by their cost of production, temporarily and proximately by the relation existing between their demand and supply. The value of any article, considered as deter mined by the relation existing between the demand and supply, is styled its "market value;" while its value, considered as regulated by its cost of production, is termed its "natural value." The market value of most commodities is constantly changing, now rising above

G*