VALUE OF GOLD 
21 
Obviously there would not, and the reason would be 
that the services and commodities would soon be 
present in sufficient quantities to equalize matters. 
When gold mining was carried on in so speculative 
a manner as it was till quite recent times, people were 
tempted to think that cost of production had little 
or nothing to do with the value of gold. But now we 
hear of mines on the margin which cannot be worked 
if the prices of commodities and services continue 
so high. This simply means that they cannot be 
worked when gold is so cheap. We are sometimes 
told that gold is unlike other commodities in the fact 
that the stock is so large in comparison with the 
annual output, and this is put forward to justify 
regarding the value of gold as being not affected by 
the cost of production like that of other commodi- 
ties. But there are other commodities besides the 
precious metals, for example, houses, of which the 
stock is large in proportion to the annual output, and 
no one thinks of suggesting that cost of production 
does not play -ts usual part in relation to these. 
Producers of gold sometimes reap large profits and 
sometimes small profits, and so do producers of 
houses. A largely increased demand for gold cannot 
be satisfied rapidly, neither can a largely increased 
demand for houses. Double the output of plums in 
any one year, and you will enormously reduce the 
value of plums: double the annual output of gold 
or houses and you will produce nothing like as much 
etfect. 
Anticipation, correct and incorrect, plays the same 
part in regard to the value of gold as in regard to that 
of other things. The terms on which people exchange 
things depend not ~n what is, but on what the 
exchangers believ About the present they are 
often misinformed, but their mistakes soon appear 
and mostlv cancel each other ; about the future they