ABSTRACT
We have seen that the total quantity of money functioning during a year is comprised of the gross incomes or receipts of all the members of the community plus any new supplies of gold and credit. Now the net income of the British nation alone is roughly computed to be £2,000,000,000. This at a very moderate estimate would imply a gross national income of £10,000,000,000. This sum of money, received within the year as the price of the various goods and services, is the main supply of money expended and operative on prices. To it must rightly be added a large quantity of bank credit. But since no even approximate figure can be given for this, and its origin and mode of creation are not yet discovered, let us leave it out of our account, and look only to the quantity of money consisting of gross income. Suppose, once more (a most generous supposition), that the gross income of this country were one-tenth of the gross income of the whole world, this would give £100,000,000,000 as the quantity of money operative for a year. To this sum there has been added from an extraneous source the gross income of the gold mines, an amount of £67,000,000. The gross income from gold-mining will have precisely the same amount of influence on general prices as the same gross income got from the textile or metal industries. The effect would be an increase of the aggregate quantity of money to the extent of The influence upon prices would thus be considerably less than or per cent. The actual influence of this addition to money in raising prices would of course be much less, if allowance were made for the increase of goods which has been going on.
