in competition with American wheat and cotton, and that the Oriental, because of willingness to receive silver, while we exact gold, has an advantage of twenty or thirty per cent. over American competitors.' The Oriental producer and exporter have been growing rich at our expense, it is said, and the really great industrial progress which India has made in the past decade or so is triumphantly referred to as the natural result of India's

holding to the silver basis.' Strange as it may seem, the silver advocate does not call attention to the Oriental importers and to the Oriental consumers of foreign goods. Are these people growing rich, too, or do they find that foreign goods have to be paid for with gold? And if the producer and exporter gain twenty or thirty per cent., because exportations are paid for in silver, must not the importer and consumer lose twenty or thirty per cent. because importations have to be paid for in gold? In other words, through the medium of

1 1896. Now about fifty per cent.

2 India had made great strides in railway development, and vast new areas are now reached by trade and commerce.

foreign trade, must not some people in India be rapidly obtaining possession of the wealth of other people in India? And at a twenty-or-thirty-per-cent. rate the transfer of the total wealth of India from some pockets to others will not take very long; indeed, it ought to have been accom plished some years ago!

In truth, however, India carries on for eign trade in the manner pursued by other countries she both buys and sells commodities on the gold basis of value, and the contrivance of foreign exchange is the means of purchase and sale, silver not being received in direct payment for exportations of merchandise, and gold not being sent away in direct payment for importations of merchandise, as a general thing. The producer receives money in the form of silver rupees from the exporter, but the exporter draws a commercial bill of exchange on London, and this bill of exchange is for gold. Conversely, the Indian importer of merchandise pays for that merchandise in gold in London, providing money or credit there to meet a

bill of exchange drawn against him, although this same importer sells the merchandise in India, and for silver rupees. The rupee is suitable for the interior business of India, but when Indian products reach the seaports, and when foreign products come to these seaports, the bullion value of the rupee has to be taken into the calculation, and the changes in that bullion value must necessarily be reflected throughout India, whether the result be to hold such prices up as would otherwise go down, or to put such prices up as would otherwise remain stationary. The competition among Indian importers forces them to pay as high gold prices as possible and to sell for as low silver prices as possible. The competition among Indian exporters forces them to pay as high silver prices as possible and to sell for as low gold prices as possible. This double competition adjusts the prices of exportable and importable goods, in India, as elsewhere; and there, as throughout the commercial world, the competition helps to adjust, also, the prices of domestic goods when sold for domestic consump

tion. This fact should not be lost sight of the unit of value of India, the rupee, constantly changes in price, the price moving upward and downward with the price of Mexican dollars or of other silver moneys of the Orient, all of them following closely the fluctuations in the price of silver bullion. If you use the money of the United States or Canada, or of most of Europe, you can buy commodities, on the average, at prices say thirty per cent. below the average of 1872, and there are many reasons for this decline in prices. If you cannot buy at low prices, with Indian rupees, Mexican dollars, or Eastern silver money, still when you do change your money into these moneys you obtain, say thirty per cent. more of these moneys than you could have obtained in 1872. You can buy at low prices with good money, or you can buy at high prices with depreciated money, and not make any better bargain in either case. And you may be very sure that the great merchants of India, China, and the East generally watch closely the price of the rupee, the Mexican dollar, and of silver

1 Mexican dollars circulate extensively in the East.

regu.

bullion on the London market, and late their own prices of commodities in accordance therewith.

The declining value of silver has given a slight advantage to Oriental producers and exporters of merchandise over Oriental importers and consumers, and the flow of silver to the East has been accelerated by the willingness of Europe to get rid of silver or, let us say, a willingness to give more silver for Oriental products than formerly. When silver declines a fraction, foreign exchange in the East is affected at once; exporters of merchandise must find it easier to transact business, and importers must find difficulty, until prices adjust themselves to the new conditions. Or, looking on silver as a commodity, we can see that for many years, because of a low price, the East has been able to obtain easily large quantities of silver. Apparently, silver being the money of the East, this accumulation of silver has been advantageous. Is the advantage real or nominal? There is now such an abundance of silver in the East as to make what has been called a