trees yield more than the indigenous trees of South America, and by "new and more economical processes more quinine can now be made at less cost in from three to five days than could have been effected by old methods in twenty days.' The fall in the price of quinine is hard upon those South Americans who used to get high prices for their bark, but the benefit to multitudes of human beings cannot be questioned. We may accentuate the bearing of the experience of quinine upon the silver question by remarking that both the South Americans who have lost and the East Indians who have gained are handlers of silver money; therefore, adopting the views of the "silverites," excluding natural causes, the decline of silver has been the cause of a transfer of business from one silver-using community to another silver-using community! What the "silverites" would say regarding the benefit derived by all other communities from the cheapening of quinine, no matter what moneys they use, we can not guess.1

1

1 N. Y. market price of quinine, 1891, about twenty cents an

ounce.

1896. Quinine is about one third higher in price than in 1891, and silver is as much lower.

In the most natural manner, too, the business of tea cultivation and tea exportation seems to be in process of transfer from China to India, India having adopted important improvements. The world is benefited by obtaining tea at very low cost, although Chinamen have never raised a hand against silver, and although the people of India use silver now as they always have used it.'

Then the beet-sugar industry has been built up largely at the expense of the cane-sugar industry, and this without regard to the circumstance that the Europeans engaged in raising beets and in making beet-sugar have to work upon the gold basis, while some of the countries, whose people are interested in cane-sugar, are upon a silver basis, and at least one, Cuba, But the world now upon a paper basis. gets very low-priced sugar.

A single day's observation of the industries about him will yield to anybody sufficient evidence of overwhelming industrial changes, all toward a lower cost of production. A little study will show that

1 1896. India, while still gaining in tea cultivation, is losing confidence in silver as perfect money.

in the past quarter of a century more important results have been attained by industrial development than in fifty previous years. If anything else has forced prices downward, that other thing must have had a comparatively insignificant effect. There is left no part of the decline in prices to be so accounted for; industrial develop ment not monetary change accounts for the whole decline; the action of industrial development is direct and is apparent to all; the monetary change, as charged, is itself denied, and if it could have caused any part of the decline in prices, its action is obscure and the measurement of the effect of the action must be left to guessing. Price movements used to be charged to currency movements but the theory was exploded long before Mr. Spencer penned the lines herein quoted, and he had no occasion to attribute price movements to changes either in the volume of money or the sum per capita. Due attention is given to this old currency theory in another chapter of this book.

CHAPTER III

INDIA AND HER SILVER RUPEE.

1

MUCH has been said of the advantages which India has enjoyed through the cheapening of silver, the farmer and planter of India receiving now, it is claimed, as many rupees for their crops as formerly, while the American farmer and planter receive fewer dollars than formerly. And the fact of the rupee retaining only its old purchasing power while the dollar has a higher purchasing power, is offered as evidence that instead of the supposed

1 The rupee is the standard unit of value of India and also a sil ver coin of India, nominally worth forty-eight cents or two English shillings. The market value of rupees changes hourly with the market value of silver bullion. At this writing rupees are worth in London only the equivalent of thirty-four cents each, silver bullion being down to ninety-five cents per ounce.

1896. The present value of the rupee is about twenty-four cents.

49

depreciation of silver, what has occurred is an appreciation of gold. When arguing in this manner the "silverite " loses sight of the circumstance that silver dollars will buy in America, just as much as gold dollars will buy, and that silver coins are equal in purchasing power to gold coins in most European countries, provided you wish to buy goods in the country which has issued the coins. Whether we speak of appreciation or depreciation, the question therefore must lie between the rupee and money generally, not between the rupee and gold. In many parts of this book, proof is given of the truth of the theory that prices have declined and reasons are given for be lieving that money has not appreciated. Simply stating here, that if money had ap preciated real-estate and rents and wages would have gone down, which they have not, and interest rates would have gone up, which they have not, we may well confine our present attention to India and to her silver rupee.

It has been pointed out that the wheat and cotton of India are sold in Liverpool