“Starting with these figures, if the demand for gold were likely to continue limited to its ordinary amount, an estimate of the effect of the supplies now pouring upon us could easily be formed. Those supplies within the few years since the discovery of California have probably in the aggregate left us an excess of upwards of £30,000,000 over what has hitherto been found sufficient for current wants, and to maintain an equilibrium in the general relations of property. The increase, therefore, has been equal to 20 per cent on the whole sum in existence; in other words, the measure of value would appear to have been extended one-fifth, (just as if a 25-inch measure were extended to 30 inches,) and hence the effect to be looked for is obvious. Where gold is the standard, the price of every article adjusts itself to the relation it bears to that metal. If sovereigns were twice as numerous, a man would demand two where he now takes one. An increase of 20 per cent in the supply should, therefore, have been followed by a proportionate advance in the nominal value of all things. “We have now, however, to consider the future. So long as there is any silver, to be supplanted in countries where, owing to the existence of a double standard, it is optional for the debtor to pay either in gold or in silver, the effects of the increased production will continue to be extended to both metals, and consequently, if the surplus of gold this year should be, as has been estimated, £25,000,000, its influence upon prices could be but 6 or 7 per cent. But the period must rapidly approach when the displacement of silver will have ended, and when the changes brought about will be upon gold alone. In France the existing amount of silver is still, doubtless, very large; but this is not the case in the United States, and the proposed law by which the coins below a dollar are to be deteriorated 6.91 per cent will prevent for the present any action upon that portion of the stock. In Germany the debased state of the silver coinage will likewise for a long time preserve it from displacement. In Holland, silver has been already established as the standard, and cannot therefore be driven out. With regard to Eastern nations, it is difficult to form any estimate. On the whole, however, we may infer the possibility of the displacement process still occupying three or four years, and that during that time, therefore, the effects to be produced will be spread, as they have thus far been, over both metals.