l62 PAPER MOXEV AXO COLD EXCHANGE. 



more wealthy. Of course, a rise in prices is never uniform. 

 Dealers in the commodities which are the first to rise benefit 

 from the better prices they obtain. But other classes suffer 

 in equal proportion. The view was put forward, too. that in- 

 creased issues had been necessary owing^ to the increased volume 

 of trade. The same argument was used as long as issues were 

 made. The notes scarcely circulated beyond Cape Town and 

 the surrounding districts. In the frontier districts, business 

 was carried on by barter or by private notes or bills of ex- 

 change, called " good fors," for small amounts. The evidence 

 for or against an increased volume of trade where the notes 

 circulated is inconclusive. Certainly the income tax figures, 

 when allowance is made for the depreciation of money, do not 

 show any expansion of trade after 1814. when this tax was 

 first imposed. But the method of assessment was very defec- 

 tive. On the other hand, the returns ' of imports and exports 

 show a great increase in the earlier years :— 



Year. Imports. Exports. 



Rds. Rds. 



1807 146.853 183,915 



t8io 659,315 644,319 



1815 4-257.385 1.319-505 



1820 3,414.336 2,142,753 



1825 3-943.893 3.200,467 



But even if there was a need for some increase in the circulating 

 medivmi during the earlier years, the depreciation which took 

 place shows that the increase was excessive. In any case there 

 was such a fall in the volume of trade after the reduction of 

 the garrison, that depreciation could only ha\-e been ]:)revented 

 by contracting the issues. 



Somerset reported his disagreement with the findings of 

 the Finance Comnfittee. As practically the same discussions 

 were going on in England at this time about the inconvertible 

 lia])er there, naturally no attem])t was made to enforce a re- 

 duction in issues in .^outh Africa against the wishes of the 

 Crovernor. But, though Somerset would not accept the recom- 

 mendation of the Committee for a large reduction in the 

 circulation, he only created 300,000 Rds.. while a C(intiiuious 

 destruction of small amounts resulted in a fall in the circulation 

 to 3.099,204 Rds. by Jvme. 1825. 



In February of that year the Treasury in luigland had 

 been considering the state of the currencies in all the British 

 Colonies. It wishe.d to introduce a fixed and uniform medium 

 of exchange for all public payments. In all the colonies the 

 Sijanish dollar had generally been the money of account. Even 

 if. as at the Ca])e. ])ayment to the troops had been made in 

 other monev, its value was deternfined by reference to the 

 S])anish dollar. Difliculty was being experienced in obtaining 



