The laws, according to which a depreciation of the precious metals consequent upon an increase of supply takes place, considered in connection with the recent gold discoveries

Abstract

It appears to me, however, that misconceptions respecting the influence of an increased supply of gold upon its value and upon general prices are by no means confined to the class who could be misled by such fallacies, but that even among economists (at least among economists in this country) we may observe the same indisposition to believe in an actual and progressive depreciation of this metal. It is not indeed denied ? at least, I presume it is not denied ? by anyone pretending to economic knowledge, that the enlarged production of gold now taking place has a tendency to lower its value; but it seems to be very generally supposed that the same cause ? the increased gold production ? has the effect, through its influence on trade, of calling into operation so many tendencies of a contrary nature, that on the whole, the depreciation must proceed with extreme slowness, the results being dispersed over a period so great as to take from them any practical importance, and that, at all events, up to the present time no sensible effect upon prices has hence arisen.