The Principles and Practical Operation of Sir Robert Peel's Bill of 1844 Explained and Defended (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1857. Excerpt: ... CHAPTER IV. ON THE EFFECT OF THE NEW SUPPLIES OF GOLD UPON THE CUREENCY OF THE AUSTRALIAN COLONIES. The anomalous state of the Australian money market, subsequent to the discovery of the gold-fields, presents a striking illustration of the limitations to which, in their practical applications, theoretical principles are liable. No induction within the compass of commercial science rests on a wider basis of fact and experience, than the principle, that variations in the value of raw materials extend to finished goods. It would sound like an absurdity, almost like a contradiction in terms, to affirm that a deficiency in the supply, and a rise in the price of bread, had been caused by an excess in the supply, and a fall in the price of corn. Previous to the discovery of the Australian gold-fields, no one acquainted, whether practically or theoretically, with commercial and exchange transactions, would have ventured to maintain that the value of a manufactured article could be raised by a fall in the value of the material of which it is composed. But political economy has no universal truths. Its abstract principles are practically correct, in those cases only in which the circumstances to which they are applied coincide with those from which they are deduced. When this coincidence does not exist, scientific conclusions are contrary to facts. An economist who should have adopted, as a universal truth, the theoretical principle, that variations in the value of raw materials extend to finished goods, would have confidently predicted that the great increase in the supply and fall in the value of gold in Victoria and New South Wales, would have lowered the value of money throughout the Australian markets. That a rise in the value of currencies consisting of gold ...