This attractive picture cannot, however, be accepted as conclusive. All that has been here attributed, and rightly attributed, to the development of new goldfields would find an exact parallel in the influence of a great war, and yet everybody must be conscious that from the social and industrial point of view a great war, so far from being beneficial, is a great loss to humanity. A war may be necessary, may be justifiable, its result may be worth its cost, but apart from this result all the labour spent upon it is loss, all the industry it excites wasteful, and the community that has had to wage it ends by being poorer than when it began. The employment of labour for labour's sake is the idlest of all schemes for the betterment of labour; otherwise we might find an easy way to the improvement of the wellbeing of our masses by constantly building ships and taking them out to sea to be sunk, which, indeed, is one aspect of naval activity. The use of gold discoveries must be proved by the use of the gold when it is discovered, not by the quantity of labour expended in bringing it to market. If it does not, in some sort, help to reproduce the sustenance of labour, to keep in vigorous movement the great circle of interchanges of products satisfying the ever-recurrent wants of human lives, it must be pronounced as little entitled to the merit of utility as if no result whatever had been forthcoming. We must look, in a word, to the service of gold in the world for an answer to the question I have propounded.

A somewhat fantastic suggestion may be thrown out as a means of relieving ourselves from the confusion which enters into our thoughts when we dwell upon the labour of getting gold as proof of the utility of getting gold. Why not indulge in the theory of the discovery of gold without labour? Suppose a particular man had hit upon a huge mass of hidden treasure, the secret of which was known only to himself, but out of which he could, at pleasure, place large stocks of bullion to the improvement of his balance at his bankers'. In working out such a conception we seem to find a way of facilitating the solution of the naked question, What is the use of gold discoveries ? and if we added to the hypothesis thus stated the condition that the man with the treasure should be one of a limited and isolated community—a dweller in a new kind of Treasure Island-within the borders of which the effect of his discoveries would work and their course could be traced, we should still further facilitate the segregation of the question from confused and disturbing circumstances of world-wide extent. After thus working out the problem in little, we might lift up the barriers within which we had confined our speculations, and perhaps come to see, without much difficulty, that the movements we had tracked in an island were essentially the same as the movements to be followed on the island of the globe. The lover of variety may indulge in another fancy-to wit, that someone had realised the dream of ages and discovered the 'philosopher's stone,' so

that under a strictly patented process he might transmute the baser metals into gold, and thus command boundless wealth. What would be the use of the invention to the community of men?

The happy possessor of the hidden store, the discoverer of the great secret, would be able to go forth among his fellows and command their services or their goods with the certainty that whatever he wanted he could get. There might be some haggling about terms, but in the end his palace would be built, his chambers furnished to his desire, and his banquets supplied with the choicest foods and the best brands. He would secure a satiety of his wishes because those who served him would have a well-founded confidence that they, too, could be served in turn in exchange for the gold they had received from him. As long as they could get their subordinated supplies, he would get the satisfaction of his primary demands. What would be the situation in the end? If the organisation of the community had been at starting one of dynamical equilibrium in which the round of production and consumption had been steadily maintained with no great superfluity on the one side or falling off on the other, the introduction of the new demand for additional services or additional commodities must have occasioned, more or less obviously, a diminution of the services and commodities remaining for the rest of the society, or else a calling into work of new recruits of production, who would find a recompense for their toil in some allotment of the gold which the new Midas was putting into circulation. In the absence of this last enlistment of new producers, it would appear that the treasure-master must get his wants supplied by a diminution in the supply of consumable things and services distributed through the rest of the community, the net result being that though more money was passing, and each unit might find his coin receipts increasing, the money in his purse could not command the same share as before of the satisfactions of life. Even when we entertain the suggestion of newer recruits being pressed into activity, we must still confess that the absorption by the plutocrat of so much as he separates from the common stock for the gratification of the wants of himself and of his minions is balanced only by a dissemination of more money throughout the community, which of itself adds nothing to the capacity of production or the mass of products. If the gold of the treasure-master could be made the basis of new industries, or of industries offering ampler reward for toil than had been heretofore practised, the whole stock produced might have been so enlarged as to yield enough to satisfy the man of gold without trenching upon what remained to be divided among the rest; but it is the special characteristic of gold that it is comparatively of the least value in the processes of production and reproduction. It is of rare and occasional use in machinery. It does not lead to the improvement of machines, or in any practical way to their durability, or to the diminution of the labour of making

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them. So far as the metal passes into the arts, it serves almost exclusively for purposes of adornment, and its chief employment, the employment which is always open to possessors of it, is in the shape of money stored and in circulation.

In my last sentences I may be said to have allowed myself to run to the end before I had well surveyed the beginning, but this kind of anticipation may enable the reader to go more easily over an argument prosaically conducted from circumstances more exactly corresponding to the actual facts of life. Let us put aside, then, the notion of a hidden treasure secretly found, and the other fancy of the discovery of a philosopher's stone. Let us confine ourselves to the hypothesis of an isolated community possessing, among the industries that make up the circuit of its employments, that of gold-mining. The gold-mines, we will assume, are worked under fairly steady conditions, yielding annual results which are put upon the market and converted into coin, or put to use in the arts and in the decoration of life. The problem may be further simplified by supposing that the addition thus made to the stock of coin in the community is just sufficient to meet the annual wear and tear and loss of gold, and any increasing demand that must be satisfied if the unit of coin in circulation is to maintain a fairly steady relation in exchange for commodities and services which have not themselves undergone changes affecting the extent and ease with which they may be respectively rendered. A little reflection may lead us to the conclusion that this state of things will be realised if, a certain number of mines being kept continually working, the normal day's wage of a miner in a mine just paying its way, or, in other words, on the margin of profitable work, remains the same. This means that the share of gold of the working miner—that is, the actual amount of gold assigned to him— is fairly constant, and his real wages must correspond to his money wages, since we have assumed that the mining industry maintains the same relative position with other industries. All this is by way of enabling us to realise the picture of an industrial community in a fairly stable and yet healthy course of life. One more circumstance may be imagined to give the wavering outline a more definite shape. Assume that, in the condition of things we have pictured, the monthly wage of the average miner, working at the margin of productive mining, is one ounce of gold. What results would be produced if, in the circumstances suggested, newer and richer deposits of gold were hit upon, yielding bigger weights of gold both for the recompense of the workman and the profit of the mine adventurer? Assume, for a time, that the whole produce of this added gold not only passes into the currency, as the bulk of it does, but remains also as currency and reserves of gold held through the community, putting aside, therefore, any consideration of that comparatively small proportion which is used up in the arts of life. The men who brought the gold

to the mints directly, or through their bankers, would have, as has been already suggested, a great command in the markets of the community, and would be able to acquire not only the means of gratifying their instant desires, but investments in funds or the abiding bases of industry, so as to secure the enjoyment of permanent incomes. The new demand would naturally excite an increase in the scale of prices where it was working, and as the money passed from hand to hand this increase would spread from commodity to commodity, and from occupation to occupation. Much admirable work has been done in tracing out the probable course of this movement, and, again, in noting statistically its onward flow; and science has been vindicated by the attestation of its speculations in accomplished facts. The names of Cairnes and of Jevons must be especially mentioned as eminent respectively in this analysis and observation. I do not purpose to follow on their track, but would rather reach forward to what may, I think, be justifiably assumed would be the end; and for the sake of realising this in a more definite and precise shape, I would assume, as the final result of richer discoveries, that the normal wage of the working miner, working in mines just holding their own, had become two ounces of gold per month. Now, as all the gold had been used up in currency or in reserves, no lasting effect would be produced in altering the ratio of productive effectiveness among the different industries of the community. Temporary movements and temporary excitement of particular occupations would doubtless have happened, but in the end the order of the community would have resettled itself in the form from which it started, wages and prices having just doubled themselves all round, and what would remain as permanent consequences of the change would be that the holders of fixed charges and of fixed incomes would find themselves half as rich as before, and the people who had had in their pockets or kept at their bankers money and money claims would find that these had diminished to half their value in buying, and the losses thus suffered would be counterbalanced by the gains of permanent debtors-including national debtors-and by the acquisitions of abiding sources of income by those who took the earliest occasion of exchanging their newly acquired gold for income-yielding properties. As between debtor and creditor, it may be argued with much force that it is a benefit to the community that the money claims of creditors should diminish in real value, and that the burden on debtors should be permanently lightened. Creditors are fewer than debtors, and, as the diminution in the real value of their property would be gradual, the loss would not be severely felt at any moment, and as a generation passed away the new generation that followed would, so to speak, be born into a less commanding position. On the whole, I should agree that if money must rise or fall in value, it is better for a community it should fall; but the ideal condition would be the maintenance of a value in

money undergoing the least possible change. If change must be, let us have a change that favours the working multitude; but the best thing would be no change at all. As for that other range of consequences, the installation of an enriched class who have got themselves well nested whilst the process of rising prices was going on, and whose position is counterbalanced by a general fall in the value of money in circulation, I confess I can see no gain to the community in this change which should make us regard it with any favour.

I have jumped from one condition of dynamic equilibrium to another, the change being that the profitableness of the gold-mining in the production of gold has just doubled, a miner getting twice the former weight of gold in wages, and the adventurer getting twice his former allotment; and I have assumed that all the additional gold produced has passed into the currency and reserves. On these hypotheses it would seem that in the end prices would be doubled, and the inert possessors of fixed money claims would find their command of things and services reduced to one-half. It is assumed that additions to the currency would not of themselves affect the relative efficiency of industry in its several occupations, and though there might be temporary oscillations through the diversity of demands made by these coming on the market with new supplies of gold, these oscillations would pass away and the old order re-establish itself. The mere multiplication of money would have no effect on the efficiency of industrial work. This is a difficulty with many people, and it is worth while to examine a little more closely an argument adduced by the other side. It is said that if more gold is produced in a country, and passes through its mints and its banks into circulation, the immediate effect is to increase the quantity of money on loan, to diminish the rate of interest, and to develop industry which is waiting for the advent of cheaper capital to grow larger or to come into existence. That this is the transitory effect is true, but it is one of those effects which are essentially transitory. The cheapness of the new money depends upon the fact that prices do not at once respond to the affluence of the new supplies, but as these rise the abundance of money in the market in relation to the demand for it disappears, until, in fact, that second state of dynamic equilibrium would be reached, when prices in circulation should conform to the new affluence of the metal, when, under the hypothesis of double productivity of mines, there would be double prices and double money necessary to maintain the same transactions. We come around to the same conclusion-that, in the absence of independent causes of change in the efficiency of industrial production, an increase in the currency produces only temporary and transitory consequences. How far is this argument modified by the consideration that all the new gold produced does not pass into employment as money? I answer-to a very slight extent. In the first place, it is admitted by statisticians that only a