curing those metals, and consequently in their relative abundance and price in many years, will now take place in a few years, and produce a similar effect. The annual product is already five or six times as great as it formerly was from the mines of Brazil and Spanish America; and it is likely, in a few years, to be ten, probably twenty, times as great. In some three or four years-perhaps sooner-we may expect gold to fall from 16 for 1 to 15 for 1 of silver; and the same cause continuing, it will probably go on declining to 14, 12, 10, for 1, as it was in some parts of Europe before the discovery of America, and yet lower. The point at which it will stop time only can show.

There are indeed natural checks to this downward course, to which we may briefly advert, though dependent as they are on so many contingencies, we cannot now measure the extent of their operation. The sure effect of the depreciation of gold will be both to increase the demand for it, not only in quantity, but in value, and to discontinue the working the least productive mines; by which double operation on the supply and demand an equilibrium between the two will, sooner or later, be restored. Should gold fall to one-half of its present price--that is, to be only eight times the value of silver--the real value expended for it in utensils and ornaments would be not merely double, but greatly beyond that proportion, as we have seen in the demand for both metals since the discovery of America; and this extra demand tends to check depreciation. So, on the other hand, many mines that were profitably worked when gold was sixteen times as valuable as silver, will cease to reward the laborer, or to reward him sufficiently, when it has fallen to only eight for it, by which means one source of supply will be cut off.

2. Another consequence will be that in all countries in which gold continues to be a legal tender, its depreciation will injure creditors and benefit debtors, according to the extent of the depreciation and the duration of their contracts. This of course applies to all national debts. Legislatures in countries in which gold is the standard, either solely or jointly with silver, if at once prudent and just, will make the latter metal the exclusive standard. When the question of a single or double standard was agitated in this country some years since, Congress, apparently influenced by the opinion of Mr. Gallatin, decided in favor of both metals. It then appeared to some that that distinguished man, usually so sound and practical in his views, had not, in relying on the example of France, where both metals are legal tenders, sufficiently regarded two important points of difference between that country and this, to wit: the greater proportion of paper currency in this country, and that here coinage is gratuitous, while in France it is subjected to a seignorage; which circumstances defend her from the inconveniences of a double standard to which we are exposed.* The experience of Russia, and indeed our own experience, show that gold will not cease to circulate as coin because it is not a legal tender.

3. The greater cheapness of gold will benefit the world by making that beautiful metal attainable by a larger number of persons, and to a greater extent. In this way it will multiply gold watches, gold ornaments for the person, silver-gilt utensils, and gilding generally; but it will, at the same time, also

* The advantages of a double over a single standard, and of silver over gold for that standard, were fully discussed by the writer of this article in his essay on Money and Banks, published in 1839, to which he begs leave to refer the reader.

lessen the value of all the gold previously in existence. This gain and this loss will be confined to the wealthy classes of society; but as to that portion of gold which is in coin, the depreciation will be an uncompensated loss to all countries who so use it. If gold were to decline in value 50 per cent, double the quantity would be required to discharge the same functions of money as before; and consequently the cost of keeping up the original circulation would also be 50 per cent of its value at the time. Where the specie currency is principally gold, as in England, this loss would amount to £30,000,000 or £40,000,000, that is, from $150,000,000 to $200,000,000. It would thus be found that while the Californians were enriching themselves by their very fertile mines, they were deducting from the wealth of all the rest of the world. It is totally unimportant to the wealth of a nation whether its coin consists of 10,000,000, 50,000,000, or 100,000,000 pieces; but it is a serious deduction from that wealth, if, when 50,000,000 is sufficient for its circulation, it is compelled to buy 50,000,000 more, though at half the former price.

However little the world in general may be benefited by the abundance of gold in California, its local effects are likely to be very great.

4. By the resistless attraction of its gold, the settlement of that country will advance beyond all example. Already its population has grown in two years from 10,000 to 150,000; and the stream of immigration, both round Cape Horn and across the continent, still flows on with unabated force. It is likely to continue until the average profits of mining labor does not exceed, or much exceed, that of other occupations-at least in the United States. When greater facilities for going thither from the Atlantic States shall be afforded by railroad or canal, the number of adventurers will be prodigiously multiplied.

5. The commerce of California with the East-which, however, is the West to them-must soon be very great. As in China the precious metals are dearer and labor cheaper than in any other part of the world, and in Caliifornia gold is cheaper and labor dearer than elsewhere, there is the greatest possible encouragement to trade between the two countries; and this interchange, creating a great and growing vent for gold, will tend to lessen its depreciation.

6. In consequence of California being a part of the United States, and most of its inhabitants having emigrated from other parts of the Union, the larger portion of its gold is likely to find its way to the Atlantic States, especially when there shall have been an easier communication between them across the Mexican isthmus. Gold is then likely to be cheaper and more abundant in the United States than in any part of the civilized world. We know that the value of the precious metals rose in value in proportion to their distance from the mines, so that it was cheaper in Mexico and Peru than in the west of Europe, cheaper there than in the east of Europe, and cheaper there than in India and China. It will therefore be very easy for the State Legislatures to make gold coin take the place of the small bank notes. Those institutions would find some compensation for the diminution of their profits in their greater security; and the public would be unquestionably benefited by the change. This further employment of gold would, by the quantity it would absorb, also somewhat retard the depreciation.

7, 8. Two consequences may be expected from this great increase of gold in the United States. One is, that the gradual enlargement of the circulation will

have its usual effect of giving a spring to useful enterprise and productive industry of every kind. This is the use of an augmented currency. The other may be regarded as its abuse. Our banks, being the chief depositories of the new accessions of gold, will be thereby enabled to add to their profits by extending their loans; and, judging from past experience, this state of things, by distending the currency, is likely to engender a wild spirit of speculation, and inflated prices of most articles, especially of town lots, and every species of real estate, since they cannot be affected by competition from abroad.

Such seem to be the prominent effects to be expected from the unexampled richness of the California mines. Should these views prove to be correct, they will, in a few years, have brought about a revolution in the monetary concerns of the civilized world.

The subject may be hereafter resumed.

THE OPIUM TRADE:

AS CARRIED ON BETWEEN INDIA AND CHINA, INCLUDING A SKETCH OF ITS HISTORY, EXTENT, EFFECTS, ETC.

PART I.

FEW persons in this country are aware of the extent of traffic, or amount of capital invested in what is called the "opium trade," and carried on mostly in South Eastern Asia. China expends for this single article, annually, more money than the entire revenue of the United States from all sources whatever, and a larger sum than any one nation on the globe pays to another for a single raw material, with the exception of what Great Britain pays to this country for cotton. The traffic is yet comparatively new-has grown with unparaleled rapidity, and is almost unknown, except to those personally concerned in it.

Opium is a production of the common English poppy, originally a native of Persia, but it may now be found growing as an ornamental plant in gardens throughout the civilized world. Most of the opium used for medical purposes in Europe and America is exported from Turkey; but India affords a far more extensive field for its cultivation. It is estimated by good judges, that more than 100,000 acres of the richest plains of Central India, are occupied for this purpose, giving employment to many thousands of men, women, and children. Formerly these same grounds were used for the production of sugar, indigo, corn, and other grain; but these useful crops have yielded to the more profitable culture of the poppy. It appears that a mild climate, rich soil, plentiful irrigation, and diligent husbandry, are absolutely necessary for its successful cultivation. The seed is sown in November, and the juice is collected during February and March. The falling of the flowers from the plant is the signal for making incissions, which is done by the cultivators in the cool of the evening, with hooked knives, in a circular direction, around the capsules. From these incisions, a white, milky juice exudes, which is concreted into a dark brown mass by the heat of the next day's sun, and this, scraped off every evening, as the plant continues to ex

ude, constitutes opium in its crude state. It is then converted into balls or cakes, covered with dried poppy leaves, and packed in chests of mango-wood, made expressly for the purpose, each chest containing from 125 to 150 pounds. Benares and Patna, two of the principal localities for the cultivation of this drug in Bengal, have been for many years subject to the East India Company, and consequently the manufacture of opium, as well as the traffic in the article, is a monopoly of government. The native inhabitants being generally poor, and very few of them owning land, large sums of money are advanced to them by the company, to meet in part the expenses of cultivating the poppy, and when the juice is collected, it must all be delivered to government agents at a fixed price. For superintending the business there is an extensive system of government agency, and such is the effect of this management, that by keeping the poor laborers and native land-holders constantly in debt, and making all their interests conspire one way, the cultivation of the poppy becomes almost a matter of absolute necessity on the part of the Hindoos. Thus the Company are able to obtain the opium at almost its own price.

It is found that the expenses in this way amount from $125 to $150 per chest. It is then transported down the river Ganges to Calcutta, and sold on set market days by auction to merchants at prices from $500 to $600 per chest, being about four times its first cost, or 400 per cent. The Indian government thus receives annually an immense revenue from this source. The official returns, as published in the Friend of India for November 8th, 1849, make the number of chests and amount of revenue for the last six years as follows:

The above table includes only the sales at Calcutta, and comprise, therefore, only a part of the trade. The poppy is cultivated somewhat extensively in Malwa, a province lying on the western part of India, and subject in its government to native princes, being entirely independent of all control of the East India Company. There the poppy is cultivated, and opium is manufactured as freely as rice and wheat are raised, and the question with the farmers is simply one of profit. But their principal market is the city of Bombay, from 400 to 500 miles distant, and in order to reach this place, all their opium must be transported through certain territories of the East India Company. For the mere privilege of passing through these lands, the company levy a tax, or "transit duty," so called, of 400 rupees, or about $187 on each chest. Thus a large revenue is also annually collected at Bombay, where this duty is always paid. From an official report of the chief articles of trade exported from this city, we find that the capital invested in this traffic alone, is greater than in any other article. In 1846, the value of the opium exported from this city to China was more than three times the amount of exports to England, and more than the entire trade, exports and imports, between Bombay and all Europe. The price of the Malwa opium varies from $600 to $650 per chest, being of a more desirable quality than the Benares or Patna, sold at Calcutta. The Bombay Gazette of November 20th, 1849, gives the following table on the trade, for the last six years, copied from the official reports of the East India Company, as presented to Parliament:

By adding the above tables, we have, then, the whole number of chests exported from India, and the entire revenue of government from this source for the last six years. In 1848-49, it amounted to 57,918 chests, and almost $15,000,000 net revenue, averaging annually for these six years over 40,000 chests, and about $12,000,000 revenue each year.

The price of opium, both at Bombay and Calcutta, is quite variable. The average rate for which the article has been sold for several years past, as near as we can make the estimate from price-currents, will range between $550 and $600 per chest. Thus 57,918 chests, the quantity for 1848-49, at $600 per chest, amount to $34,750,800, which gives the sum that China paid to India for this single article.

After the opium leaves the hands of the Indian government, it is purchased by merchants, and shipped to China. The vessels used for transporting it are built expressly for this purpose, constructed in the form of schooners or brigantines, with low hulls, and being adapted to cut the waves with remarkable speed, are called "clippers," or "runners." It is stated on good authority, that there are about fifty of these clippers embarked in this traffic, constantly plying between India and China, besides many other vessels which are only partially freighted with the drug. It is stated by Mr. Martin that the clear profit to merchants will average about 15 per cent, and in consequence of realizing such sure gains in so short a time, and with so little trouble, they seem unwilling to engage in any other branch of commerce or business. It should be borne in mind that cargoes of opium, in point of value, and certainty of sale, are very unlike those of any other goods. The vessels that transport the drug from India to China, generally carry from 800 to 1,300 chests, making two or three voyages in a year, which, selling in China at $700 per chest, will produce in return from $500,000 to $1,000,000. In 1848 one ship carried 1800 chests from Bombay to Hong Kong, and sold it for $750 per chest, receiving for this single cargo $1,350,000. Suppose a vessel carries 1,000 chests, and sells for $700,000; this, at 15 per cent, would net the owner $105,000. Besides, there is no risk or delay in the sale, and the pay is always cash, or what amounts to the same thing, bills of exchange. Formerly, the payment for opium was made wholly in specie, but of late years bills of exchange are received in part-pay, bearing a cash value, and are used by English and other merchants to purchase teas, silks, &c., of the Chinese. Mr. William Sturgess stated in a lecture delivered not long since before the Boston Mercantile Library Association, that in 1818 $7,000,000 in specie was carried from the United States to China to pay our importations from that country, but now most all our purchases are paid by bills of exchange on England from the proceeds of the opium trade.

The retail part of the trade is mostly carried on by the Chinese themselves, who undoubtedly make large profits on the article, as it passes through several hands, and is sold in small quantities. The vessels that transport the opium from India anchor on the coast of China, in the vicinity of large cities, and constitute a kind of floating depot of store-houses, from which the Chinese junks purchase the drug in cases or chests, to be retailed at various points on shore. In many of the cities of China may be found numerous shops devoted exclusively to the sale of the drug, with accommodations fitted up ex