covery of America, when European nations took possession of
accumulations among the inhabitants of Central and South America,
diminished to a little more than one-fourth of the value previous to that
discovery. It is estimated that the value of gold since the discovery of
1849, in California, followed by the opening of mines in Australia and
South Africa, has been reduced to little more than three-fifths of its
value in 1850. This estimate is based upon careful comparisons between
what an ounce of gold in 1850 would buy of some hundred staple products,
and what the same ounce of gold will buy today of the same hundred
products. The test is a somewhat uncertain one, from the fact that many
products are much more affected by improved methods of production than
others, and changes of habits and customs among the people greatly affect
the prices by changing demands. The combination of a large number of
products being less likely to be affected than any one, the comparison is
worthy of some confidence. Nevertheless, it is possible for two different
persons, making different selections for comparison, to arrive at very
diverse results. If the selected articles are those of ready manufacture
where improved methods have most largely entered, the value of gold will
seem to have increased; if, on the other hand, the selected articles are
raw materials, in which the law of diminishing returns gives greater cost
of production, the value of gold will seem to have diminished.

A test easily applied, though not absolutely correct, is in the amount of
labor of the most common sort which an ounce of gold would pay for at the
different periods compared. Careful comparisons show that an ounce of gold
today buys more of all sorts of manufactured articles and more of most
articles of food, though less of the better class of meats and less of
labor, than ever before. This fluctuation in the value of gold has its
chief importance in connection with long extended credits, though its
influence is felt in other directions through a common system of accounts,
in which the standard unit of some system of coinage is the sole basis of
comparisons. If the standard unit is growing less valuable, in a series of
years the book-keeper will show a constantly increasing total of wealth;
if, on the other hand, it is growing more valuable, the books will show an
apparent loss. Were a perfectly uniform standard possible, all interests
would be best provided for