768 EEPOET— 1888. 



precious metal and wheat as its most easily-produced article of export. Mr. 

 Harris attempts to show that, if the coinage in such a country were open to all 

 comers, the cost of wheat to an importing country like England (which has an un- 

 limited supply of iron at a very small cost of production) would he very little be- 

 yond the freight and insurance. He argues that in such a case tlie merchants 

 would have an enormous profit, and that the effect produced would be a rise of 

 price, and consequently a great impulse to production of wheat in the new country, 

 and a gradual fall in the price of wheat in England until no other exporting country 

 could afford to compete. 



He points out, however, that if the coinage of the iron were restricted by the 

 Government of the new country, and, in fact, kept in the hands of that Government, 

 the main part of the profit on export would remain in the hands of the new 

 country, and that the exchange of commodities would only take place to the extent 

 of the actual requirements of the people, thereby limiting the growth of wheat to 

 what they would require in other goods and to the amount of fresh coinage which 

 the Government might allow. 



Following this hypothetical preamble, Mr. Harris compares the circumstances 

 of the United States, where the Government keeps coinage entirely in its own 

 hands, and those of India, where the coinage and the consequent inflation of cur- 

 rency is open to all. He arrives at the conclusion that there is a real premium ou 

 production in India to the extent of the fall in value of silver, whereas there exists 

 no such premium in the United States. Then, taking the case of Russia, a paper 

 currency country, he attempts to show that she has superior chances of production 

 as compared with India. In fact, that so much as the paper rouble is depreciated 

 beyond the price of its silver representation, so great is the premium to the grower 

 of Russian wheat over and above any premium which the Indian grower may eu- 

 ioj. The paper leads to the conclusion that any important legislation which raised 

 the value of silver would in no way necessarily affect the value of the Russian 

 •currency, whereas it would affect the value of the Indian rupee, and that we might 

 see the trade of India to a large extent transferred to Russia and other countries 

 where the currencies were independent of the value of metals with an unvarying 

 mercantile value. 



5. The Effects on Indian Exports of the Fall in the Oold Price of Silver. 



Byli. C. Probyn. 



The paper states that the gold price of silver has fallen from QO^d. in 1871 to 

 ^2d. an ounce at the present time, and alludes to the encouragement thus said to 

 have been given to the competition of Indian with English produce and manufac- 

 tures. It is then shown that the great flow of silver to India, and the general rise 

 in silver prices, which Mr. Bagehot and others predicted would result from a fall in 

 silver, and which they thought would give a great stimulus to the Indian export 

 trade, have not occurred. The exports of the 18 years between April 1, 1870, 

 and March 31, 1888, are then examined, two tables being prepared showing the 

 fjo-ures of the first and last years of the period, and the increases and decreases 

 in the quantities and values of the 13 principal articles of export in each of the 

 intervening years. It is first shown that the actual increase in values is not 

 80 great as in the 17 years preceding 1870-71, though a rnuch higher average 

 annual increase might have been expected. An examination is then made of the 

 growth of the total value of the trade during each five consecutive years, which 

 shows that the greatest growths have occurred in periods of comparative steadmess 

 in the price of silver. The principal articles are then examined in detail, and no 

 indication is found that the exports of cotton, seeds, rice, jute, hides, indigo and 

 -ooffee have been stimulated by the fall in silver. 



The views of Mr. Barbour, Mr. O'Conor, and Mr. Waterfield are then briefly 

 stated, and the author's disagreement on some points shortly described. The paper 

 then examines in detail the circumstances of the export trade of wheat, tea, cotton 

 twist, piece goods, and gunny-bags. While attributing the development of the 

 wheat trade in a great measure to the extension of Indian railways, and the cheap 



