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The Pamphlet Collection of Sir Robert Stout: Volume 73

The Gold Monopoly

The Gold Monopoly.

Please note particularly that the point which gold-money advocates always contend for is that such money will prevent a country from being flooded with paper money. That is neither a fact nor a sound conclusion; but assuming, for the sake of argument, that there is some foundation for it, cannot that alleged flooding be provided against in another way, and without incurring the great risks and dangers of a gold standard of payments, which all economists admit to be a standard of the most fluctuating kind? If there be any advantages—which, to say the least, is very doubtful—there is the vastly greater risk and danger to the world from using a valuable and scarce metal like gold as the standard of payments—viz., the risk and danger of monopoly—of the power to hoard it—of the power to control and manipulate a standard which is so limited in quantity compared with the enormous volume of trade and transactions to be paid for in gold. The mint authorities in England give the total coinage of gold in the United Kingdom at one hundred and two million pounds (£102,000,000). And Mulhall and Giffen put the income per year of the United Kingdom at twelve to thirteen hundred millions (£1300,000,000). What is the yearly amount of the turn-over or volume of transactions, which produces such an income, I am not aware, nor so far as I know are there statistics on the subject, but it must be an amount almost beyond conception. We can hardly put it lower than twenty times the income, or say thirty thousand millions of pounds (£30,000,000,000). And yet, according to the Act of 1816, which established specie payments, that immense volume of transactions is based upon £102,000,000 of gold coin, and the law says these transactions must be paid in gold. They are, of course, not so paid in fact, They could not possibly be so paid.