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to perform a greater number of transactions, but calls into action a greater quantity of credit and private paper,[1] so that a general rise of bullion prices, including labour, seems to be at all times possible, even without any fresh importations of the precious metals; and the only practical limit to this rise, is the turn of the exchange, and the impossibility of maintaining the exchanges nearly at par beyond a certain elevation of labour and commodities.
The secondary and incidental causes here enumerated, as affecting the value of gold, often completely overcome the effects arising from the primary cause. The state of bullion prices in most of the countries of the commercial world make it evident, that the efficiency of labour, and the abundance of exportable commodities, are much more powerful in lowering the value of bullion in the countries where they prevail, than high profits in raising it; and the same appears to be true, in reference to an increased demand for corn and labour.
It cannot be doubted that the rate of interest
- ↑ One of the most valuable sections in Mr. Tooke's late work Of High and Low Prices, is the seventh, in which he proves the frequent occurrence of this event, and explains, with great clearness and knowledge of the subject, the mode in which it takes place.
