CHANGES IN VALUES OF PRECIOUS METALS. 183 



The whole subject of the disturbing influence of the decline in the 

 value of silver on the trade between gold and silver using countries is 

 complicated and difticult of analysis, and the opinions of persons prac- 

 tically interested in such trade are not harmonious ; but it is difhcult 

 to see how one can investigate the subject, with the light of the expe- 

 rience which the years that have elapsed since 1873 has contributed, 

 without coming to the conclusion that the seriousness of the dis- 

 turbances has been greatly exaggerated, and that the expediency 

 of attempting to provide remedies by legislation for such as may 

 be acknowledged to exist — if legislation were practical — is very 

 doubtful.* 



One feature contingent on the fall in the value of silver, which ap- 

 pears to be regarded in England somewhat in the light of a popular 

 grievance, is the decline in the value of the pensions, or " half " pay 

 allowances which have been given by the Indian Government to their 

 retiring officials for good and extended service. These pensions are 

 granted in India, and are payable there in the current money of the 

 country — i. e., the silver rupee — and, before the decline in silver, had an 

 equal purchasing power with gold ; and at the present time, so far 

 as these pensions are spent in India, no loss occurs, because the pur- 

 chasing power of silver in that country has not fallen materially. 

 But, on the other hand, if the rupees are remitted to England, and 

 sold there at the price of bullion, or if, what amounts to the same 

 thing, the remittance is effected by the purchase of a bill of gold ex- 

 change on England, the loss in English money to the pension or half- 

 pay recipient residing in England is considerable, and has been esti- 

 mated to average about 25 per cent. At the same time, it is to be 

 remembered that there has been no loss, but rather a gain, in the pres- 

 ent purchasing power of silver, as compared with its purchasing power 

 at the time when the pensions or half -pay in question were granted. 



* In connection with this subject, the following extract from the record of the ex- 

 amination of Mr. H. Waterfield, Financial Secretary of the India Office, London, before 

 the British Trade and Silver Commission (February, 1887), will be read with interest: 



Question (Sir T. Farrer). " So that, while India has been doing much more, Lancashire 

 has been doing more than she did before ? " 



Answer. " Yes." 



Q. " Then I will ask you, do the figures [submitted] justify the statement that the 

 present state of things — that is, the fall in exchange — is causing the gradual transfer of 

 the yarn-trade of China to India ; that the exports from England have steadily declined 

 since the fall of silver commenced, while those from India have enormously increased ? " 



A. " The increase of the imports from India may, indeed, be termed enormous ; but 

 it is not correct to say that the exports from England have steadily declined since the 

 fall of silver commenced ; and I think that the fall in exchange is not the cause of the 

 improvement in the Indian trade." 



Q. " At any rate, you would not see in these figures any reason for protecting Lan- 

 cashire against India by a radical alteration of our currency system ? " 



A. " No ; I should think it as objectionable as allowing any protection of India 

 ajrainst Lancashire." 



