A Treatise on Gold and Silver: To Show a Chief Cause of Present Depression ...

George O'Brien · 1884 · Historical

I beg to claim by prescriptiye right, as a subject of this great Smpire, the honor of dedicating to its Prime Minister,

This 1884 document, A Treatise on Gold and Silver: To Show a Chief Cause of Present Depression ..., is preserved in the Mountain Man Mining Library for research and reference. Original source: archive.org.

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A Treatise

Gold

On

TO SHOW A CaiEF CAUSE OF PRESE.YT DEPRESSION IX TRADE, AND SHRIN-KAGE IN VALUE OF ALL PEODUCE

And Property.

By GEORGE O'BRIEN.

Bbdioated To

THE RIGHT HON. WILLIAM EWART GLADSTONE, Esq., M.P.,

First Lord Op The Treasury. Etc.

Price, On

London :

Printed At The "Mining Journal" Office,

26, Fleet Street, E.G.

♦

%i

A Treatise

On

Gold And Silver.

TO SHOW A CHIEF CAUSE OF PRESE.YT DEPRESSIOT IN" TRADE, AND SHRINKAGE IN VALUE OF ALL PRODUCE

And Property.

By GEORGE O'BRIEN.

Dmdicatmd To

THE RIGHT HON. WILLIAM EWART GLADSTONE, Esa., M.P.,

First Lord Op The Treasury, Etc.

Fbice, One Shilling.

London :

Printed At The "Mining Journal" Office,

26, Fleet Street, E.G.

130, Fknohttbor Street, London, E.G.,

December, 1884.

Sib,

I beg to claim by prescriptiye right, as a subject of this great Smpire, the honor of dedicating to its Prime Minister,

and most influential personage, this short Treatise on Gold and Silver ; and thus ensure attention to its contents.

Toar obedient Servant,

George O'Brien.

IS THE AMOUNT OF GOLD IN CIRCULATION THROUGHOUT THE WORLD SUFFICIENT FOR THE REQUIREMENTS OF COMMERCE. AND CAN WE INCREASE THE SUPPLY ?

Bt Geobqb O'Bbien.

Gold being the paramount metallic carrenoy and general representative of values of all property its abandanoe or scarcity controls both national and individual prosperity, and the above serious propositions must shortly be well considered, as its insufficiency as the only standard medium is too apparent, and gradually enforcing return to the ancient barter system of a " hatchet for a pearl/ causing by its exclusive sway the bankruptcy, and consequent repudiation, of various countries with whom we trade, and general depression in oar own industries.

The alternations in the prosperity of nations with whom we trade are created not always by their positive poverty in material wealth or industry, but from their not possessing the necessary and universal token gold, and many countries which formerly yielded the greatest amount of the precious metal are now completely denuded of it, impoverished by commercial transactions from depreciation of values of native products, and have reverted to silver currency amongst themselves, having only local circulation, and as we are not always in immediate want of their staple commodities and raw produce which we receive in payment foroar manufactured articles, or vice versa, both are then suddenly thrown upon an irregular and overstocked market at depreciated rates. Thus they with their monetary system destroyed from impecuniosity derange all manufacturing communities. But. on the whole, those favoured centres of commerce which by free import and consolidated capital are ready with coin to purchase the raw material, imported produce of nations with whom they trade at very low rates, and manufacture them into articles of enhanced value ; these of course recoup their advances with interest, and by the difference of values constantly inflate their abundant stock of gold. Thus the bullion of the world is in their possession by this decisive absorption, but having passed the point of equilibrium theycripple and destroy the purchasing and vital power of their customers, rendering some more procurable and abundant medium of reciprocity an immediate necessity.

The present monetary system may for a time be prolonged ; but an inevitable result can be conceived, and the now favoured centres of commerce will find themselves in the position of the fortunate gambler, who having raked in all the money of his companions remains the only capitalist, and has to discontinue further dealings with them as profitless, unless to protect them for further aggrandisement, or to procure payment of amounts still unsettled, and remain a burden to him hereafter. And of this nature we in particular have examples in all our own connections which will cost ua dearly, remaining nevertheless as proofs of our superior tactics in combination with capital and industry.

But let us carefully and keenly survey our prospects of future supply of gold, as ezhaudtion, climatic difficulties, extinction of inferior

popnlatioDS, and other causes render its sufficient increase an impos' sibility, and the current year will not yield 14,000,000 sterling value collected throughout the world, and which may be considered as above the future average. By reason of its colour, brightness, and location, closely beneath the earth's surface in alluvial depositions, it was probably the first metal that mankind came in contact with, and, therefore, the most abundant and manifest were discovered and ransacked before our time by the antecedent inhabitants of the earth.

It is found in most countries of the world, and generally dispersed over large areas, lodged temporarily on the bosoms or sides of hills, and deposited there in alluvials, being the clayey residium of disintegrated mountains, dissolved by the action of the elements since the creation of the world, and which mountains once existed miles higher than they at present are, and in close proximity to their alluvial remnants.

These, again, are gradually disintegrated by water, and the clean gold left behind or carried off with debris into the rivers, and deposited in its channels by its superior specific gravity, mingled with sand and silt at lower levels. Such, then, are alluvial deposits, and from such sources mostly has our stock of gold been derived , and chiefly by the manual labour of slaves, in Asia, Africa, and America, being the accumulations of all past ages. Also from another but very limited source we have increased our store, by deep mining and extraction from lodes or fissure veins, and those of gold without much alloy exist in altitudes of not more than 2000 ft. above the sea level, and downwards to the coasts, being formations and infiltrations from the disintegrated altitudes in union with silica, and carried there by floods in contact with such matrix from its original birthplace — the lofty mountains, where it was once more sparsely disseminated, and by the gradual removal of altitudes we enjoy the levelled plains and prairies which we cultivate for our existence, and which also frequently contain gold in minute quantities. Gold is likewise found in alloy with silver, in lodes or veins, and generally in the proportion of 65 per cent, value in silver and 35 per cent, value in gold, in Mexico and the border States ceded to the United States of North America.

But gold lodes being a liquacious cementation from the mountains disintegrated by the action of air and water in past ages and washed downwards, therefore their relative height above the level of the sea depends upon the width of the continent in which they are situated, having also relation to the original height of the mountain from which their matrix was derived, and the volume of the torrents of water which effected their removal, and which water has consequently ceased or decreased with the diminution of the altitudes and former cappings of snow.

Our own latest adventures in pursuit of gold have been made in India on exhausted alluvials, formerly worked by tyrant rajahs, who ruled India in detail before the advent of the Bast India Company, and who compelled their unfortunate slaves to work for a small pittance of rice or maggie, and on a deficiency in quantity of gold to be delivered up subjected them to torture, often crippling ihftm for life, as a warning to stimulate their fellow slaves. The alluvial depxraits in the Wynaad, Madras, and other districts in India, and on which above 3,O00,O0OZ. sterling have been fruitlessly spent in pursuit of gold, are located between 3000 and 4000 ft. above the sea level, and extending downwards to the sea coast of Calicut.

But these late operations on supposed lodes were merely on superfioial

mantles following down the sides of hills (not dipping into them), and whose bosoms and feet were loaded with allarials disintegrated from the moantains, and the fictitioasnes of these lodes was so apparent that allavials frequently existed both over and under them, and beneath the underlie of one in particular — the Perseverance — as much as 70 ft. thickness of clay reposed, being the primary disintegration from the mountains, and deposited there before the mantle of silica was formed, and 200 tons of this clay yielded only 2 grains of gold per ton. All these alluvials extend over a suiriface of more than 40 miles in length, and are perforated with hundreds of perpendicular shafts, circular in form, and without timber, and located in many places only a few feet apart, through the tenacious clayey deposition to a depth of 40 ft. and more, and were dug by Indian miners not two centuries ago in search of deposits of concentrated gold, found in such diggings on the bedrock beneath, and as each head slave worked independently of his fellow-slave thus the contiguity of such shafts in the Wynaad, as elsewhere in alluvials, can be accounted for by the eagerness of the slave to deliver his quantum of gold, from fear of punishment, locating a new sinking as near as possible to the one of his successful neighbour who had fallen upon a " pot or find," and in Peru, as in California, as much as 10,000Z. value in gold has been found within the space of a few square yards. Deeper trial shafts are also found isolated and in perfect condition throughout the Wynaad, extending in circuitous directions, following the windings of the hills, and sunk in the alluvials ; and one I found beyond 70 ft. deep, dug by the Indians to test the ground for gold, and miles of shallow alluvials in different directions have been systematically turned over by multitudes and ransacked of their contents, yielding probably millions of pounds sterling to their former masters, as from virgin patches which escaped their operations as much as . per ton can still be found, and may be taken as an exhibit of the former richness of these deposits.

China and Japan produce together only about 750,000Z. per annum, and, therefore, it is presumable that they have not much alluvials in reserve, as they are ancient and populous nations, very expert in gold finding and washing, and, in all probability, have thoroughly examined and exhausted their countries of it. The Chinese, in par- ' ticular, are very expert, and travel to the world's end in search of it, following, like vultures, the retreating footsteps of the Californians and Australians from their abandoned alluvials, extracting from their refuse sufficient gold to pay them a daily wage ; and they will always be found wherever gold is discovered, and may, therefore, be counted upon as its future producers ; and, from having fewer wants and more patience than Europeans, will probably continue its pursuit, with their redundant population, seeking outlet to other countries.

The Aussian Empire may be viewed as comparable to China as regards alluvials and yield of gold from all sources. Its extraction was reserved as a monopoly by the Government ; but, as the yield was so scanty, former dispositions were abandoned, and, in particular, the Ukas of 1812, and a further concession in 1819 to smelters and mineowners, removed many doubts about the possible yield. But further extension of privileges to private citizens has entirely dissipated future hopes of increase, as the results are miserable. At first, the usual enthusiasm induced by the magic word gold was exhibited by mining adventurers. Discoveries were made, companies formed, machinery invented ; but purchastid experience has sobered their imaginations respecting its illusions and taught them that in

Rassia, as in most places, that the indastry belongs, as of old, to the hardy poor who may casually and deservedly meet with the coveted prize io a rich concentration or deposit. And by reviewing the statistical accounts of its yield in the whole Empire, we note the recorded and ndaal decrease, and which depended upon the yield of private companies working on allavials at a loss. This decrease was at first charged to plavial variations, prodacing either droughts or excessive rainfall, and consequent overflow of rivers preventing operations ; so that, finally, these repeated molestations brought work to a standstill. But the real fact was deducible from their own reports ; and thus we find that the supposed rich washings are utterly exhausted, causing the abandonment of whole districts and complete failure of the adventurers. A temporary climax had been reached by chance discoveries of concentrations always found in alluvials. The total yield of Russia in 1877 was 2502 puds of impure gold (worth, net, 661,5002. sterling) from the washings in the Ural, with West and East Siberia, and of this amount three-fourths of the whole output was derived from Eastern Siberia, and its yield governs the increase or decrease of the Empire, and which, since 1877, has considerably declined.

A large field for gold is probably Africa ; but we must not, as in India, draw upon our imagination, without reflecting that inferior populations are best adapted for such operations requiring endurance for the climate, and which only the negro is fitted for, and we also remember that it has been more thickly inhabited, and, therefore, has in all probability been tracked over and ransacked of its richest contents, and which were only derived from alluvials. It has yielded from the year 1492 to 1883 about 107,000,000/., and still yields about 1,300,0002. per annum from all its native populations. But adventures have lately been made there by deep mining on lodes, but the samples indicate alluvial formation being granulated quartz studded with specks of gold.

The South American continent was famous for gold, and in the Republic of Chili many hundreds of abandoned gold mines are still open for inspection formerly worked during the rule of the Spaniards, having a depth of 200 ft. to as many yards, and the most extensive districts were Villa Rica and Talca in (iie south, and Talca, AndacoUs, and the desert of Atacama in the north, with also many other districts now without resource of water, and can only be worked in rainy seasons. This Republic still yields a few thousand pounds sterling annually ; but mining there on lodes is not now followed, as this source of yield is too precarious for mining experts like the Chilians, taught by past experiences, being very skilful, as the whole nation follow mining as a speciality.

Peru formerly produced enormously in gold from alluvials and dried up beds of rivers deviated from their courses by the Incas, and memorials of their gigantic operations remain to us for inspection and instruction. Their hill diggings " are studded with innumerable perpendicular shafts, and as in theWynaad, India, contiguously to each other. But their depositions have been much ransacked, and lie chiefly between the sea and coast ranges of the Andes ranging from south to north, and falling into the River Amazon, and whose pestiferous valleys guard for future explorations the remnant alluvials. The accumulated gold of the Incas transferred to their Spanish conquerors sensibly increased the money circulation of the world ; but the waste of human life since the conquest of Peru by Spain in mineral operations has been enormous, as it then contained from 30,000,000 to 40,000,000 of inhabitants, reduced at

the present time to about ;6,000,000, and these facts enable as to estimate the toils and costs incurred in pursuit of the precious metals, and no other nation probably has been more cursed by its presence. But no accurate archives have come to light to exhibit its approximate yield, excepting the partial statistics of one department in Upper Peru, now Bolivia, showing a yield under Spain of 41,OCX),0002. in 185 years. It was also famous for its silver mines, as the Cerro del Pasco and Potosi still proclaim, but it is now the poorest nation on the earth in both gold and silver coin, although the circular silver hill of Pasco has not yet been exhausted after £)0 years of extraction, but Pern has been a land for adventurers who have left nothing behind them. Allured by the supposed omnipotence of gold and silver, Spain revelled for the time in luxury and conquest. Thus, it has brought no established gain or endurable prosperity to countries which have yet possessed it, being only a fleeting alluring security, unless wisely regulated requiring now some other medium to assist it and promote more universal principles of reciprocity, and Spain rich in all else, is itself now completely denuded of it. The natives of Peru, drawn from the more permanent wealth to be contributed by the cultivation of their magnificent country as it existed in the time of the Incas, were driven from such employment to produce the precious metals, and they revealed to the Spaniards the localities for silver indicated, and in its extraction chiefly the loss of their population was incurred, showing that to acquire even this metal, time, skill, and capital are required, and that is not so easily procured as is generally supposed.

The silver mineral district of Potosi is situated in the Andes, between 12.000 and 13,000 ft. above the sea level, and a city containing 20,000 inhabitants was built there for their new masters, as also the marvellous reservoirs constructed to supply them with water, and also the operatives at the mines, and the numerous animals required to carry the silver ores, stores of food, and mining materials, for five consecutive years. These reservoirs are supplied with water from the melting snow of the Andes, and without them no continued work could be carried on. They have been designated as the eighth wonder of the world,'* and are constructed with great skill by building huge puddled -dams across deep valleys miles in width and length, and located in succession one above the other, and at the time of their cohstr notion, 300 years ago, cost, using slave labour, more than $5,000,000, and which would represent at the present day 5,000,000Z. sterling. These imperishable memorials will for ever remain, as every year they are further strengthened by the gradual deposition of silt, which time cements into stone, and during a revolution in Potosi the late President of Bolivia Juan Melgarejo, desiring to reduce the city, drove a tunnel through the dam of the lower reservoir, and meeting with the petrified silt, used a large charge of gunpowder, which failed to injure it, and forced him to abandon the work of destruction, which he had contemplated. These mines still produce small amounts of silver, but since the country has been released from Spain the population at Potosi has decreased, but by the previous destruction of their population they are unable to cultivate the soil as formerly, by using the canals which formerly intersected the whole country to the highest elevations, as the water required for the irrigation of their homesteads had been purposely deviated by cutting off the supply at the sources to starve the inhabitants into submission, and when in succession their attention wa8 directed to their new riches — the nitrate and soda deposits on their coasts, they had not the individual power to work them, employing

the Chinese coolie to operate on the guano* and the hardy native of Chile and capitalist, exploded the nitrate ; and as sequel to sach impotency these co vetted territories have passed by war from their possession, by inherent feebleness and ezhaastion caused by long ages of slavery in mining operations.

I have endeavoared to show the costincarred to procure both gold and silver, and that the presence race of Peruvians have not the numerical strength, or desire to pursue such adventui:es any longer, and that it can only be continued by alien races, probably the Chinese, and these immigrants subject to the penalties, and more than ordinary destruction of life suffered in like operations, in consequence of tropical heats, and the very malarious climate of the lower interior country between the inner and outer ranges of the Andes. The country has many railroads not all likely to be useful to the present generation, but two remarkable ones deserve mention.

The one, the Aroyo, from Lima to a summit pass, leading to the head waters of the River Amazon to connect the inner provinces with Brazil, to a height of 15,000 ft. above sea level, but it is not in running order to the summit indicated. The other is finished, and in running condition from the Port of Mollends in the Pacific Ocean to Lake Titicaca, of fresh water, the lake being about 160 miles long, and from 20 to 50 miles wide, and situated about 10,000 feet above the sea level, and is dotted with islands once in cukivation, the neighbouring country being extensive tablelands worthy of a numerous and vigorous race, and who will, at no distant period, repeople these regions. The River Pure or Azar, running into the Amazon, forms a boundary line between Peru, Bolivia, and Brazil. The neighbouring Empire of Brazil, bordering on Bolivia and Peru, is at the present time almost unexplored, being covered with forests, and peopled hy unsubdued Indians. Brazil has yielded gold to the value of 150,000,000/. from the year 1691 to 1884, and mostly from alluvials, but at present contributes only about 240,000Z. per annum, and the extinction of slavery will not alter this amount, as the native Indian races are chiefly independent tribes, and under self-control, and therefore, although the interior has not been so completely ransacked as other countries mentioned, but the disintegration of the Andes is very rapid on the eastern slope from heavy rainfall and sharp alternations from cold to heat, and the water system so ramified and perfect down the innumerable streams as to make it difficult to find concentrated gold as in the dried np beds of rivers elsewhere. The altitude of the Andes has diminished 17 ft. since the time of Humboldt, and the vast amount of debris thus thrown off has been deposited on the plains or pampas, covering up the disseminated gold, and thus whilst this activity continues the alluvial deposits will be too mixed and poor to pay for working. Deep mining on gold lodes in Brazil has been very productive in past epochs, yielding fortunes to individuals, but not largely increasing general circulation. The mines are situated as elsewhere, beneath the altitude of alluvials, in form of reefs, confirming in a measure the secret of their origination by liquacious removal and dislodgement of substances in society with gold. And geological teachings show that gold exists in the oldest known rocks, and not in limestone formations, and has been redistributed through all removals, and also that in the metamorphosis of these derived rocks it has been concentrated into segregated veins by liquacious agency in society with fluid silica, salts of iron, and other mineral Its, and cemented together by their action, and that it is a constituency of most earths, and is found in fissure veins of all ages.

The United States of Colombia under Spain for more than 250 years employed annually thousands of slaves washing for gold, as well as all other provinces in South America, bat no exact record shows the entire amount produced, being about 40,000.0002., and the washings and mines in Colombia still yield about 200,000Z. per annum. Mexico appears by its annals to have yielded in 300 years about 37,000,0002. from alluvials, and assisted from lodes in alloy with silver, as in the State of Nevada, n.S.A., but it was chiefly dedicated to silver, of which it produced from 1804 to 1848 to the value of 140,000,000, and at the present time does not produce much gold, and the silver mines are not very prosperous. And it is manifest that gold washing from alluvials by manual labour was formerly the lot of the slave, and that the available alluvials exist generally in localities where water has now almost ceased to flow, and also that unless some other contrivance be employed that our present supply will diminish. Our hopes were centred on the skill and intrepidity of the Americans in California, but even they have paused in its pursuit, having been, as is usual with beginners, too sanguine and exhuberant at the outset, working hundreds of mines and diggings not having the necessary characteristics for profitable results.

In the year 1849 the State of California, in U.S. A., was invaded by hardy and intelligent bands of mining adventurers from all parts of the world, said to exceed 500,000 persons, and the greater part of whom perished from sickness and toil in 10 years. They began by washing surface gold, but this mode of labour there has since been abandoned to the Chinese coolie working on their residium, and with comparatively profitable results, and then their own energies and power of invention were directed to explore deeper and more permanent depositions, and which they designated as " hill diggings," being huge ridges of gold-bearing alluvium several hundred feet thick, the clayey remnants of huge mountains, extending over lengths of 40 miles and more, burying the lines of ancient rivers, once channels of the water from the snow-capped mountains which formerly existed there. They attacked these huge auriferous deposits by means of hydraulic mining at enormous outlay in canals, aqueducts, tunnels, and iron pipes to convey the necessary supply of water around the sides of the hills, and across deep valleys. But this system requires 17 tons of water to deal with 1 ton of gravel, delivered at a pressure of from 40 to 200 lbs. to the square inch, and the profits resulting; from it are very speculative, as the ground to be worked for gold cannot be properly tested until the water arrives upon it, and the gold is very unequally distributed throughout the alluvium. Thus, for example, we take the investments of the Excelsior Water Company, with its eight amalgamated canals, costing with interest of capital nearly for the purpose of supplying with water several mining claims now extinct, and one of these — the Blue Gravel Mining Company — washed down in four years 1,000.000 cubic yards of gravel, using 17,000,000 tons of water. The gravel operated upon was supposed to contain an average of above 20 cents of a dollar in gold per cubic yard, but such previous estimates of averages require explanation, as the upper gravel is very poor, and the lower stratifications may contain above 50 cents per square yard, and the richest concentrations always lie in the silt reposing on the bed-rock of the dyke, or ancient river beds, and thus the difficulty of working out the lower concentration increases as the work advances into the alluvium by this process. And this is verified in the operations of this company, whose gross yield from the million tons specified was only $837,399, instead of the $2,000,000 calculated upon, and thus we find that In

the year 1866 the returns of the Blae Gravel Company paid all the costs of the developments, becaase at first they had a lower frontage exposed, bat in 1867 assessments were paid by the owners to meet the costs arising from the sinking of two new shafts, and driving fresh tunnels to work the lower concentrations. Bat this system, even if it were effective or profitable as a mining operation, is now prohibited by the State Government as prejudicial to the general interests of the public, as the vast quantities of material which it so suddenly removes by force of water from many such companies, is merely shifted into the shallows beneath, to be redistributed at every freshet to points lower down, until it reaches the sea coast, creating bars at the mouths of rivers in its course, and changing the hydrography of harbours by its silt, as it has done with the port of San Francisco de California. The hills behind torn up and ravaged by the gold miner are abandoned as desolate and irredeemable ; and the costly canals, constructed with peculiar conveniences for mining purposes, eventually fall into disuse, from being too expensive to maintain, or to alter for other uses. Therefore, for many reasons, such a system is impracticable ; but we are greatly indebted to these adventurers for their costly experiments, as they have shed a fiood of light for our future explorations in gold alluvials,and evidences also the wisdom of the ancient Indian and Peruvian miner in his method of sinking innumerable shafts through the alluvium down to the bed-rock, and shows us that we should only work out the lower concentrations, following it as in a coal mine, and support the firm conglomerate above by pillars made from the huge boulders which repose in all alluvials. In 1858 Califoruia alone had 6000 miles of mining canals, constructed at a cost of 3,000,000/., and these now are mostly in disuse. By these gigantic operations we increased our stock of gold, but with heavy loss to the investors, as we have also from mining on the Comstock lode, extracting gold in alloy with silver.

The operations executed at this mining district in the State of Nevada, U.S A., have been very rapid and extensive, partly from its being the most favoured mining district in the world, and also from the extreme width of the deposits on this lode, and fear that the timbers would rot and the mine fall together. It is surrounded by dense forests, containing trees of the largest growth, and is supplied with sufficient water for all metallurgical purposes. In mining par* lance this is a mother lode," and the greatest mining feat of the century has been performed here, at the Virginia Consolidated Mine, which had the extreme width of 300 ft. in ore, continuing to a depth of over 2000 ft., arriving then at dead or barren ground. The value of the ore per ton was about lOl. average, having 33 per cent, of its value in gold and 66 per cent, value in silver, and as orey ground above the barren ground reached a phenomenal thickness so a corresponding depth of barren stratification may be expected, as such depositions are sy metrical. All modern skill and adequate machinery regardless of cost was here employed with day and night labour to arrive at an output of 300 tons of ore per day of 24 hours from such great depths, and its energetic owner exhausted the mine in 10 years, expending in timber alone more than 20O,00OZ. sterling to insure the safety of the operatives and prevent the mine from falling in, and only about six other mines on the Comstock lode were famous in their time a few years previously ; but several hundreds of other mines of a purely speculative character were sunk near them, but without mineral contents, as the neighbouring veins to such powerful lodes are generally barren and worthless. The

Sutro tunnel of 4 miles in length now taps beneath these once rich mines, having had for object extraction downwards, to save the cost of lifting produce and also to drain oat the water, and to sapply air by ventilation instead of forcing it down by machinery. The cessation of mineral supply from these mines has caused a notable diminution in the yield of gold from the United States ; but its yield and from other States in the Union facilitated by its circulation their return to specie payment ; but no geat increase can be again expected from here, and such productive lodes are rare in the world. The yield of gold from the State of California alone in 30 years, dating from 1849, reached the enormous value of 292,000,0002. sterling, and the other States and territories 35.000,000/. more, making a total of 327,000,000/. And from the year 1849 to 1879, during the period of its extraction, was a happy epoch in the world's history, during which it enjoyed unexampled prosperity. But in 1881 the output of all the States combined was reduced to 4,700,000/., and with the probability of further reduction in future, and with the reduced yield from Australasia and elsewhere has caused the present decrease of money in circulation, and consequent depression in trade. And at the commencement of this golden era the price of copper rose to above 130/. per ton, and now sells at 52/. per ton, and the Bepublic of Chili alone exported then three-fifths of world's production, and its value with that of the nitrate and guano deposits of Peru, and loans to their Governments drew gold from its slumber, and with that of California also in circulation, gave a generous impulse to commerce. But all this gold with all loans to foreign countries has returned chiefly to ourselves (as they have none left) to again sleep until dispersed by force of circumstances. But during tMs epoch statisticians conceiving that the supply of gold was perennial disestablished silver, and thus decreased purchasing power. The result of this temporary increase in circulation was marvellous, as the numerous costly railroads in Pern, Chili, and throughout the world bear witness, and our carrying fleet was transformed easily from sail to steam power, and even our own railway mania was inspired by this overflow of circulation and combination of influences, and our intermediary panics were only caused by alterations in business, resulting from machinery, inventions, and improvements, and more rapid communications with other countries. The British possessions of North America have yielded in many past years 940,000/. in gold per annum, but is now decreasing. Australasia in past years materially assisted our circulation ; but advices from those auriferous regions have latterly exhibited great diminution in yield ; but the output from all the colonies there amounted in 1867 to 7,500,000/. sterling, but now does not reach 3,000,000/. annually, and with expected decrease.

The statistics of the precious metals, and particularly of gold are very misleading, unless to instruct us of its history, and to exhibit that the amounts in actual circulation are the accumulation of all past ages, and that before the discoveries in California in 1848, the annual yield of the world was only 8,000,000/. sterling in gold, and that the present yield of silver from all parts does not exceed 10,000,000/. annual value. I have over-estimated the annual yield of the world in gold at 14,000,000/. annually, but this matters but little when we consider how this is disposed of, and that about 9,000,000/. sterling gold is annually required in the arts and jewellery, and about 2,000,000/. more are hoarded by Asiatics, and remains out of circulation. And the only real cause why the Jews in all ages have been considered as inconvenient subjects is on account of their

national and hereditary habit of " cornering gold, and for this reason they hare been persecuted in every country in every part of Earope, as they were thought to be the cause of decreased circulation, and consequent depression in trade, but in reality they have been its chief conservators and have maintained its supremacy and value.

The money advanced to foreign bondholders can never be repaid unless silver be readmitted as currency, and any endeavour to force payment can only bring about repudiation and disaster. The fall in the price of silver since much of this money has been advanced is 19 per cent, in value, and as there is no gold except in the hands of the " cornerers" and bankers, the unfortunate creditor has to purchase gold to pay interest at discount of 19, and thus a little oyer every five years has really repaid the entire amount of the primitive loan, but if a change be effected they may return to payment, as it is not so much the amount of debt which weighs upon those countries, as the insufficiency of their revenues valued in gold to be procured only by exchange with money brokers.

The present state of Egypt has been brought about by those unsound and unfair conditions, and she can never free herself from bondage unless these causes be recognised and tremedied, and a nsef nt text might be read to f oreigh bondholders. ' Take thy pound of flesh, but if thou shed one drop of blood,'' &c. The continued reign of prosperity and power centred in the governing classes of this country arises from our happy insular position, mineral wealth, and the inclemency of our climate, compelling every individual to work, or suffer privation and want. Thus every working man, woman, and child who pass us anxiously in early mom to their daily labour contribute to and support the national exchequer by transforming the raw produce imported into manufactured articles, and which are reshipped to foreign countries. They, therefore, are only national machines, and accumulated gold should be considered as the storage of their force and labour, and in which they have a moral interest, therefore it behoves us to watch its effect and governance, or conflicting causes may arise and derange its power, A golden age has been achieved in a comparative degree by the commercial centres of every country in the world, and their rise or fall should afford a lesson to ourselves. In ancient times, as examples, flourished those famous marts, Tyre, Sidon, Carthage, and Venice. " But where are now the fleets of Tyre, those dockyards of Arad, those workshops of Sidon, and that multitude of mariners, merchants, and soldiers ? Their temples are thrown down, palaces demolished, ports filled up, towns destroyed, and the earth, stripped of its inhabitants, seems like a burying place."— (Volney.)

These rose by commerce, and at ebb tide fell, having first excited admiration, worship, fear, and in succession envy and hatred. They were apparently firmly established, situated in fine climates, fomented by auriferous region. They were the seats of the then civilised world ; but as other populations advanced, and they were tyrannical in their sway, these centres of commerce were removed to improved and more convenient localities, their golden wealth having been conquered from them, or gradually conveyed to new centres, and thence in succession to the present generation of the world. Therefore, we must bear in mind that our circulation represents the labour and sufferings of untold millions of our predecessors, and who had at their discretion the richest alluvials of Asia, Africa, and America, with abundance of slave labour. How then can it be sufficiently increased to meet the expansions of commerce and increased values of property caused by

latter inventions 7 Our Continental neighbors in simultaneous activity have lately exhibited more -than ordinary national restleesness in their late colonial adventures in Africa and Asia; both localities credited with great mineral wealth, and we may reasonably conjecture that they will be deceived about gold ; but that they have concerted views and correct ideas on the subject of a famine in money, anticipating with sagacity the coming crisis, and are making an effort to sustain their expanding but injured-industries. " Over production is a selfish and hackneyed phrase, with our carrying fleet of vessels in langour and despair, and mankind in want of the necessaries of life, the produce of manufactures.

Free Trade does not exist whilst gold remains the paramount legal tender, as its scarcity hampers commerce, and checks Fair Trade and freedom of exchange, and other countries would be greater purchasers if another more abundant metallic medium were admitted as an assistant ; nor would all the silver in the world be sufficient for the purpose, and also to redeem the paper currency which bankrupt States have necessarily emitted from deductions chiefly required by financial exchanges for the benefit of the few bullion-holders. We have more largely invested our earnings in railroads, docks, manufactories, buildings, and carrying fleets, than any other nation, but these, with all land estates, produce, and other property, will gradually shrink in value, subject to the mercy of gold, as it passes into fewer hands. I have endeavoured to show that the manifest cause of the great depression in trade with ourselves, and throughout the world, and consequent distress and discontent amongst nations has a hidden but powerful cause, and easily traceable to the want of a more abundant representative of values than gold. And having carefully examined the chief ' auriferous regions mentioned, and enquired of those I have not visited, have, therefore, imported as chief factor in the argument the paucity of gold, and also the time required for its accumulation, and methods employed in collecting it, being those very necessary parts not generally known and understood, and about which so much stress and sophistry is used, based on statistics compiled by persons unaware of its detailed history and origination, increasing thereby the difficulty of statesmen, politicians, and trade statisticians to form correct conceptions on the subject, in order to formulate economic theories regarding currency in general, and Its prospective influence on trade and property. The subject demands attention, or inevitable disasters will result to national and individual interests, as rapidly and silently has a blight been creeping over us, but mankind will soon perceive it, and revolt from its pernicious tyranny, and insist on an increased . circulation to promote reciprocity and prevent general insulation. The restoration of silver to its old position as a bi-metal with gold would increase monetary circulation by about 70 per cent, at most, remaining probably in the ratio of 15 per cent, gold to 10 per cent, silver, based also on the supposition that silver would again rise about 19 per cent, over its present rate, or (say) to about a par of 20 shillings coin to the pound sterling ; and this increase of medium would relieve mankind and general trade by assisting bankrupt nations to solvency, instead of draining their remaining resources. At the present moment the granaries of the World are flUed to overflowing, and warehouses crammed with merchandise; but these, with sll products of industry and landed property, have decreased in value 10 per cent, since last year, and sales impossible even at further reduction, and the unfortunate producer of each speciality, in his endeavours to maintain existence must continue to produce greater

amoants at lower rates, until thoroughly prostrated, and estates worn out and abandoned, with industries destroyed, as no reaction is possible under the sole control of gold ; and it will be found in future experiences that silver is not so plentiful in Nature as is generally supposed, being a product resulting from deep mining only, and that, like gold, it has been worked for ages past, and therefore comparatively is as much exhausted as its associate metal. Our Indian Empire, with military and civil service, would be particularly benefited by the change, and their now slumbering silver be brought into enhanced and useful circulation, and by its expanded value capital made able to continue the necessary railways for its vast population .

Sumhabibs Of Yield Of Gold Thbouhout Thb Wobld.

Europe, extracted from imported ores and mines £ 438,500

Asia, „ „ alluvials 1,631,500

Africa, „ „ alluvials 1,300,000

North America, United States, mines and alluvials 4,700,000

„ „ British possessions, alluvials 940,000

South America, chiefly from alluvials 790,000

Australasia, „ , 3,000.000

Additional amounts possibly unaccounted for 1 ,200,000

Total £14,000,000

Used in the arts, jewellery, &c 9,000.000

Balance for increase of circulation £5,000.000

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Gold And Silyee.

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TO SHOW A CHIEF CAUSB OF PIIESEJST BEiniESSION IN TUADE, AND SHRINKAGE IN VALUE OF ALL PRODUCE

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By GEORGE O'BRIEN.

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Supplement To A Treatise

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TO SHOW A CHIEF CAUSE OF PEESEIST DEPRESSION IN TRADE, AND SHRINKAGE IN VALUE OF ALL PRODUCE

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By GEORGE O'BRIEN.

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Preface.

The accompanying remarks formed part of the original "Treatise on Gold and Silver," and were withdrawn at moment of publication, but to complete the subject, have now been added in form of Supplement; and the author respectfully submits them also to the Prime Minister for his kind and wise consideration, hoping that at next meeting of Parliament influential members will cause the matter to be thoroughly investigated.

GEORGE O'BRIEX. London, January 1885.

IS THE AMOUNT OF GOLD IN CIRCULATION THROUGHOUT THE WORLD SUFFICIENT FOR THE REQUIREMENTS OF COMMERCE, AND CAN WE INCREASE THE SUPPLY?

By George O'Brien.

Having endeavoured in the preceding part of this treatise* toshov the decreasing yield of gold. I will now more particularly than in tlie former exhibit the dearth also of silver.

Silver may be considered as appertaining to the American continent, and for many past ages has been found in profusion only there, in steppes and spurs of the Andes, in its upper crusts of limestone formation on their western inclinations. Each mineral zone is separate and distinct, containing generally in family silver, copper, and gold. Silver occurs at the higher level, copper lower, with gold beneath, and as the mountains wear down by alternations of temperature and action of water the metallic outcrops become bared and visible, being generally discovered by shepherds and wood-cutters in the autamn months, when vegetation has disappeared from aridity. And the manifestations of its existence beneath are thus evidenced on the surface by " horn " silver in patches, or a greenish hue over larger areas. The abundance of silver in the world dates only from the time of the Emperor Charles V., after the conquests of Mexico and Peru, and its sudden introduction into Europe impulsed the Interests and civilisation of European populations, and enabled monarchs to pay their soldiers in coin, instead of remunerating them with the ruthless pillage of conquered towns and countries. Thus by its means power was centralised, and nations constituted themselves by having, for the first time, a procurable medium for the storage of their industry and intelligence. By it France became a homogenous nation, and Holland freed itself from Spain, and grew into a great naval power, as the prudent Flemings only promoted shipping and trade enterprises to the New World, leaving the toils and mining risks to the bold and enthusiastic Spaniard, contenting themselves purely with their share, as trade profits, in bar silver. Therefore, as we owe so much to silver, and, considering also that the yield of gold throughout the world will soon be very limited, and probably to less than 8,000,000Z. sterling per annum, we should measure well its past services, and whether it is not indispensable as a present and future meter of the labour, and necessities of mankind, and whether its disestablishment as legal tender, and also positive scarcity in those countries which yield it, has not already caused such alternations in values and conflicting interests as to create the prevailing destitution and advancing socialism, the sure precursors of violent ideas and national disputes, with gradual return to that state of society as it existed before the advent of silver. And as regards its yield in ancient times we now know by its scarcity as a mineral or metal in Europe, Asia, and Africa that it may be doubted if it was or will be abundant in any continent but America.

Therefore it is evident that either the mountainous stratifications which formerly yielded it have been worn away with their metallic contents unnoticed in barbarous ages, and dispersed like gold in alluvials or that silver manifestations as they occur in South America have

See Mining Journal, Vol. LIV., pp. 1395, 1425.

toot yet been mad& bare, or have never existed. And thia certain progressive development is the expositor of the preoious metals and monitor of all fatare discoveries, and this is exemplified more particalarljr in copper minerals in untrodden districts. And as slight proof thereof, a capriferons deposit, now well known in Arizona, U.S.A., which 16 years ago I went to examine, accompanied by Indians, including an aged chief, who remarked " that when he was a child the coloured demonstrations were very small," whereas when I arrived they extended over several acres. Bnt this change is observable everywhere, and the silver oatcrops visible in Spanish America at the time of its conquest roust have been very numerous and rich. The Emperor Charles V. fomented the chivalric, and enthusiastic spirit of the Spaniards who invaded America, by granting the title of " noble " to all those who followed the avocation of miner, doi el titulo de nobleca," as per mining code (" codigo de mineria ") of his time, and which is still regent in Spanish America in all its practical details as being the most perfect system of laws adapted for the protection and impulsion of general and individual mining interests in pursuit of the precious metals. And this spirit was further encouraged by a proud, reverential desire to receive riches as " hidalgos " from the hand of Providence, rather than by vulgar commercial profits. The yield of silver from South America alone during the present century — from 1804 to 1848— and chiefly from Mexico and Peru, averaged 5,000,0002. sterling per annum, but these two countries, which from the date of their conquest by Spain have yielded the largest amounts, appear for the time being as exhausted of it, and requiring larger expenditure of capital to extract it than formerly, resulting from the necessary changes in metallurgical operations attending the variations in minerals at greater depths, and their alloy with other metals, as arsenic or copper, and which prohibit the continued use of quicksilver as the auxiliary absorbent. And thus lixiviation, smelting, and other processes, are now on trial, requiring chemicals, or fluxes, earthy and mineral, and which are expensive and diflicult to procure in distant mining districts. And it is not generally known that the South Americans are n3ted for their skilful treatment of refractory ores, and as was certified by the accomplished Humboldt in a detailed account of their manipulations.

I will now pass in review the chief silver-yielding countries of America, commencing with Chili, and which vigorous Republic has yielded since the year 1833 above the value of 60,000,0002. sterling and chiefly from three districts— Arqueros, in the province of Coquimbo, and Chanarcillo, with Tres Puntas in Altacama. Arqueros district was discovered by a woodcutter in 1835, and lasted about 12 years, but is now in an abandoned state; it yielded silver ores proper without alloy.

Chanarcillo was discovered in 1840, and for 30 years was worked with great energy and profit in many of the mines, and one, named Colorado, was sunk to a depth of 600 yards ; but the whole district is now in a very decayed state, and its present small yield is chiefly from the pickings of former refuse dumps, and the district is connected by railroad with sea coast. The matrix is blue and white limestone, in successive layers, varying from 60 yards in thickness, with intrusive strata of greenstone, but the lodes only bear silver whilst passing through the limestone, the greenstone being dead, or barren ground.

The lodes or veins have only one defined wall (the foot), which generally carries on it the richest metal, and frequently of pure

tilver, bat poorer ores generally bathe the matrix on the hangingside, and sometimes for many jards in width, and this width or irregularity is caused by the intrusive greenstone rook which apparently bulges or heaves the upper structure, as in a ooal mine, and in the Valenoiana Mine (Mexico), the head or upper portion of its immense lode was removed 80 yards distant, exhibiting distinctly the two fractures caused.

Tres Pnntas district was discovered by a postman, named Osorio, in 1850, but now, after many years of rich returns from about six mines, is also abandoned from exhaustion of mineral. The re maining silver district worked by Chilian industry and capital is called Caracoles, and situate on the confines of Bolivia, bordering on Northern Chili, but now under the control of the latter, and is not in flourishing condition. Its redaction works are at the Port of Antofagasta, in the Bay of Mejillones, on the Pacific Coast, and the silver remittances from Chili are almost exclusively from this source. The neighbouring Bepublic of Peru for 300 years has not ceased to yield vast amounts from Potosi and Cerro del Pasco. The latter being a circular hill, with alternate layers of barren strata and mineral, containing about 22 ozs. of silver per ton only, but the native Peruvian, being a skilful metallurgist, and with very primitive methods, continues, at the expense of his health, his operations, by treading out the orey and quicksilver mass with his feet, and those of animals, until the hoofs of j the latter falljoff from mercurial disease. Both of these famous districts are nearly exhausted, and their small yield is disbursed on the Pacific Coast for pressing necessities.

All the other intervening Bepublics to Mexico extract some silver, but their inhabitants follow other specialities, and no very rich discoveries of that metal have yet been met with in their limits. But Mexico has yielded more silver than any other country in the world, having had so many more rich mineral districts spread over its greater width of mountainous surface than either Peru or Chili, but by continued operations for 300 years its most fruitful zones have been discovered by skilfully trained experts, who have succeeded each other from generation to generation up to present date, and operated upon them as far as the State of Arizona, now forming part of the United States of America, where still the terrible Apache Indian remains unconquered, but whose presence preserved, with other indomitable natives, the reserves of precious metals remaining in the provinces ceded by Mexico to the United States, or these also, with the gold of California, would probably have been ransacked by former Spanish adventurers, and traditions amongst Indians remain of slaughtered explorers which occurred in Arizona and Utah more than 200 years ago ; and it is marvellous that Mexico, after so many years of continuous yield, should still have much in store, but we cannot expect its long continuance, as the silver ore proper," or those reducible by the cheap and ready quicksilver process, are becoming rare. But this plan of extraction is very destructive to the health of the operators, and by it (the " Patio " system) nearly all the yield from South America has been derived, and contributed greatly to the destruction of the natives of Peru. The wages of the miners of South America vary from $10 to 24 ideas per month, with food rations also, and the truck " system is connected with each mine. And it is observable that by taking the pay-roll of operatives and other attendant expenses of cost of extraction at each mining district that the total expenditure exceeds greatly the value of the silver yield, and generally by 50 per cent., and therefore is a nation al

losB at the cost of the country prorlucing it. And thus the trade cost price of silver at the present time is over 70d. per ounce, and no calculation is conceived regarding the probability of its approximate exhaustion. And the imaginary plethora is only from its demonitisalion since 1870, in Germany, causing rise in the price of gold, fall in values of produce, decreased commercial transactions, and diminution of wages everywhere.

The ruinous condition of the South American Republics is hastened by this continuous drain on their resources, with also fall in price of their other products ; and they are ceasing to be our customers from impecuniosity only, and having now resorted to paper currency have thus assisted to inflate our stock of silver by the export of their coin ; but this source of supply will soon cease, as they have little or none left. The remaining stores of silver in the world lie hidden in the United States of America — in Nevada, Montana, Colorado, Utah, and other States, but subject to the same difficulties as beset other parts, and with this additional burden, that wages are three times higher than in the aforementioned countries, and also that its miners are new in the profession, and, therefore, not so aware of the contingencies and consequences entailed by exuberant calculations regarding the merits of a newly opened silver discovery, unmindful of the adage that " a rich mine covers any errors, and that a poor mine will ruin a corporation."

But their skill in engineering, and indomitable perseverance has been exhibited in so many of their mining undertakings on stock lode, and other districts giving rich prizes, as to create a desire to follow too eagerly the pursuit of the precious metals, and which only purchased experience will sober or dissipate ; and we leave to them the difficult task of extracting gold and silver at a lover rate than Spanish Americans, and feel certain that they will more quickly count the average cost required to procure it.

It is manifest from the Isthmus of Panama northwards, that, although the mineral zones still lie chiefly towards the Pacific coast, and the yield in silver is not so concentrated, they are more numerous in Mexico and the United States, where the Andes are lower and more subdivided than in other Republics; and the Western States of North America are also thus characterised. But it will be found that the areas of silver districts are smaller in expert than any other familiar metal, and that those areas have one rich metallic centre, like the Virginia Consolidated Mine, in Nevada, U.S.A. ; Yalenciana, in Mexico ; Cerro del Pasco, in Peru ; and Discnbridora, in Chanarcillo, Chili, and all others. And it is chronicled in the Mining History of South America that these centres are the mineral beacons discovered first in the new districts by reason of their more visible demonstrations.

Thus the Discovery " Mine is generally the richest and Che most permanent, and is ceded to the finder by Spanish law, with triple rights of area, ampliations, and direction of lode, in priority over other succeeding acquirements. Lead with silver is abundant in America and Europe, but experience shows that with such alloy its presence is not to be depended upon, as its yield constantly varies in identical classes of mineral, and that unless the working expenses are fully covered by the lead proceeds, the silver must be considered as unreliable* There are, however, some exceptions to this rule in all countries, as, for example, the Richmond Consolidated Mines in Nevada, U.S.A. ; but such large bodies of mineral are also rare. And should the yield of silver from South America greatly diminish, or not increase, then we must rely upon this source of restoration, but at very

B

enhanced prices, and this contingency willprobabl soon occur, as the poverty of those countries yielding it clearly indicates exhaustion, having caused their rapid and successive transfer frona gold to silver coinage, and now entirely to paper currency with subsequent depreciation, and continued dedication in value to average fall of 50 per cent, from first issue, and Peru to 90 per cenc. reduction. The silver of the world is now passing to our Eastern empire, China, and Japan, and where its presence is hardly perceptible among their vast and thrifty populations. But the keen Asiatics know its scarcity and value better than ourselves, and increase their monetary power, whilst Europe lavishly decreases her own circulation, and which, in future will be difficult to replace, as well as in many countries who ar in trade connection with her, and must cause their insulation. And by the decay of commercial extremities her own crisis approaches, and can only be arrested by promoting the return to prosperity of those she has drained by her financial systems and policy, in utter disregard of future supplies of the precious metals. I noted in the preceding portion of this treatise that the annual yield of silver throughout the world does not at present exceed in value 10,000,000/. sterling. But by the sale of coined money several Governments have inflated these amounts, and enabled merchants of Europe, United States, and South American Republics to ship to the East for many years past more than 11,000,OOOZ. in value as a commercial article for sale like any other commodity. And the Indian Circular, just issued by Mr. Westwood Thompson, for the year 1884 indicating the remittances (removement) of specie to the East during the last 32 years confirms these statements, and exhibits the totals of gold as 90,314,925/., and silver 275,144,249/., with annual average from Europe alone of 2,822,314/. gold, and 8,598,257/. silver, and the remittances during the year 1884 were as follows : —

Gold.

From England £2,532,340

„ Australia 720,000

,, Mediterranean Ports.. 928,873 „ San Francisco 95,464

Total £4,276.677

From England £ 7,969,25

„ Mediterranean Forts. 699,097

„ San Francisco 2,457,856

„ South America 250,000

Total £11,376,211

And of this bullion, as regards silver entirely, only a small portion returns to Europe, as once in possession of the Asiatic he hoards it with miserly care, and the difference against us is a heavy drain upon coin circulation, our national resources and earnings, with increasing home population, and ever extending colonies and trade. Thus the immense amounts sent to the East in 32 years almost equal our coinage value in gold and silver, and this withdrawal deranges trade, by enriching one Continent at the expense of all the others, as once in the East it is lost to the rest of the world ; and this evil will continue until free coinage of silver, as of gold, be allowed, and it must also be admitted as legal tender, and this would soon regulate its true value relatively as to gold, and again return the world to prosperity.

Abundant circulation improves the general condition of mankind by the generous and more equal distribution of the earth's produce and favours, which from the scarcity of coined money are now isolated, and whole populations in enforced idleness and despair.

I have cited in proofs of my assertions the effects of the two most notable examples in modern history, exhibiting the magnificent consequences which resulted from the discovery of silver in America, and its diffusion in Europe, succeeded in 300 years by the discovery and dispersion of the gold of California after 1849, and few events have produced more important changes.

r