But coinage will not add to the present consumption of gold beyond what will be required to meet the increase of traffic consequent on the increase of population and wealth. The whole amount of gold currency in the civilized world is estimated at about fifteen hundred millions of dollars; and supposing the annual increase of wealth to be five or six per cent, a year, - a very liberal estimate, - the yearly addition to the gold currency cannot exceed ninety millions.

2. The consumption in manufactures and the arts. Gold is used so extensively in the manufacture of watch-cases, jewelry, trinkets, and in gilding, that it is not easy to estimate its consumption in this way. In France the annual consumption is computed to be twenty millions of francs - nearly four millions of dollars. Supposing the population of Europe to be eight times that of France, and its consumption of gold to be at half the rate, in proportion to numbers, the whole annual European consumption of gold in this way would be sixteen millions; which, by adding two millions for the consumption of America, would be eighteen millions.

3. The wear and tear of gold in coin, ornaments, and utensils. The whole amount of gold vested in these several ways has been computed at three thousand millions of dollars. The estimated rates of wear and tear vary greatly in different classes of objects. In coins of general circulation, the annual loss has been reckoned at from a four-hundredth to a thousandth part. In some articles of jewelry it may be as much; but in many more it is insignificant. If we suppose it to be a five-hundredth part of the whole amount, the annual consumption from this source would be six millions of dollars.

4. Losses at sea, etc. The amount of these is still more uncertain; but, supposing it to be five millions annually, the total consumption would then be -

If, then, we estimate the present annual consumption at one hundred and twenty millions, it is little more than half the computed annual production, and a fall in the value of gold must be the inevitable consequence.

But it is not more certain that depreciation will be the consequence of the excess of production over consumption, than that such depreciation would be followed by two effects - a diminution of the supply, and an increase of the demand. First, as to the supply: however the gold maybe procured, - whether by washing or mining, - there must be a gradation in the productiveness of the labor and capital employed in obtaining it; and supposing it to decline in value ten or fifteen per cent., then the labor and capital which could not bear that reduction would be thrown out of employment, and the quantity produced be proportionally diminished. And secondly, an increased consumption would as certainly follow in coining and manufactures. Thus, by this twofold effect of depreciation, the supply and the demand of gold - that is, its production and consumption - would finally be equal, and balance each other, when depreciation would cease.

The rate at which the excess of production over consumption would produce depreciation would depend on the proportion which such excess bore to the quantity of coin previously circulating in the commercial world. This quantity, before the discovery of the Californian and Australian mines, was supposed to be about five hundred millions of dollars - now increased to nine hundred millions. If, then, the annual excess of production over consumption is sixty millions, then the annual depreciation ought to be 6 2/3 per cent. But this estimate would be ever liable to be affected by variations in the supply and the demand, so that time alone can give the true and precise solution of the problem.

The consumption or employment of the precious metals for money is greatly diminished by the substitution of paper currency, by which communities have been able to save a large amount of expense, for the purchase of such costly materials as gold and silver; and of all the modes of providing this substitute, none have been found so safe and efficient as the promissory notes of banks - which we will now consider.