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The Gold Standard in the Nineteenth Century*

Published online by Cambridge University Press:  07 November 2014

H. Michell
H. Michell*
Affiliation:
Bishop's University
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Extract

On May 1, 1851, Queen Victoria, accompanied by the Prince Consort, to whom must be given credit for the undertaking, with the royal family, the ministers of state, ambassadors, and a great throng of all who were famous in the United Kingdom, opened the Great Exhibition housed in the Crystal Palace, “that blazing arch of lucid glass.” A massed choir of a thousand voices—the Victorians loved massed choirs and massed orchestras—sang an ode composed by Tennyson, the Poet Laureate, in which they praised “the invisible, universal Lord,”

      Who lets once more in peace the nations meet,
      Where Science, Art and Labour have outpour'd
      Their myriad horns of plenty at our feet.

The exhibition was off to a good start, and its success was phenomenal. Fourteen thousand exhibitors from all the leading nations of the world had brought the best they had of their wares. Six million visitors, brought to England by the new steamships and to London by the new railways, came to see the marvels displayed, and thought it all very wonderful. And it was wonderful; nothing like it had ever been seen before. It was the apotheosis of the Industrial Revolution. The Victorians believed in Progress; they had every reason to believe in it and the Crystal Palace was its outward and visible sign. The entrepreneurs, the manufacturers were entirely satisfied with things. Everything was for the best in the best of all possible worlds. God was in his heaven and all was right everywhere; or at least it was all right in Manchester where they made fortunes from cottons; and in the Black Country where, under the shadow of those “dark satanic mills” which had vexed the gentle soul of William Blake, they were making even greater fortunes.

Type
Research Article
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 17 , Issue 3 , August 1951 , pp. 369 - 376
Copyright
Copyright © Canadian Political Science Association 1951

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Footnotes

*

This paper was read at the annual meeting of the Canadian Political Science Association in Montreal, June 6, 1951.

I have dealt with earlier aspects of the problems of monetary standards in “The Impact of Sudden Accessions of Treasure upon Prices and Real Wages,” Canadian Journal of Economics and Political Science, XII, Feb., 1946, 1–17; “The Edict of Diocletian: A Study of Price Fixing in the Roman Empire,” ibid., XIII, Feb., 1947, 1–12; “The Golden Florin,” Transactions of the Royal Society of Canada, XLI, 1947, Section II, 103.

References

1 Figures of the United States Mint, the value of gold reckoned at $20.67 per fine oz. and silver at the ratio of 15:1.

2 A. L. Bowley's revision of the index numbers of Jevons (to 1885) and Sauerbeck (later Statist) to 1900; on new base 1913–100; the two series equated at 1856–9.

3 Clapham, J. H., An Economic History of Modern Britain, II (Cambridge, 1932), 366.Google Scholar

4 The gyrations of the price of silver since have been extreme. In 1920 it fetched $1.29 in North America, and Canadian silver coins began to disappear. The Ottawa mint in a panic reduced the silver content from 925 to 700 parts fine, and our nickels today are a reminder of that disturbing incident. In December, 1932 silver was selling in New York for 24½ cents per fine oz., the lowest price in recorded history. See my article “The Crisis in Silver” in Journal of the Canadian Bankers' Association, 07, 1936.Google Scholar

5 It is to be noted that Keynes, J. M. in hisTreatise on Money (New York, 1930), II, 164 ff.Google Scholar in dealing with the fall in prices from 1886-96 seems to be frankly puzzled and falls back on what he calls a “commodity deflation” between 1890-6, “a situation where aggregate savings were seriously outrunning aggregate investments.” Careful study of the figures for investment from 1892-7 shows that the paid-up capital in “live” companies increased nearly £300 million in five years; see Macrosty, H. W., The Trust Movement in British Industry (London, 1907).Google Scholar It is difficult to accept Keynes's view. What are we to understand by the term “commodity deflation”? Does it mean over-production of commodities? If so, we are forced back to the old conclusion that, ceteris paribus, there cannot be general over-production, but a failure of consumption owing to lack of purchasing power. Prices turned upwards promptly when the new gold from South Africa began to reach Europe.

6 Official London Gazette averages for year. For repercussions on agriculture of this continuous fall in Canada, see my article “Notes on Prices of Agricultural Commodities in the United States and Canada, 1850-1934,” Canadian Journal of Economics and Political Science, I, 05, 1935, 269–79.Google Scholar