48 



W. G. Langii'orthy Taylor 



United States. 



Who loses 

 from fall of 

 silver (see also 

 § 14)? 



the outer market, takes that into the silver country, buys goods 

 with it, and brings them back to the gold country. That is what 

 took place in the British Empire. India being a silver standard 

 country, the fall in the ratio in the outer market forced an 

 export movement of commodities in the international markets 

 from that country, in order to obtain silver and thus adjust the 

 domestic ratio of silver to gold, while a corresponding export of 

 gold from England occurred with which to buy silver in Euro- 

 peon money centers. 



If the United States went over to the silver basis by the 

 bimetallic road, it would be put in the same position as India ; its 

 exports would be momentarily encouraged. The same thing has 

 happened in the relations between Germany and France, countries 

 that have adhered to the gold standard, and the grain-producing 

 and poor-standard lands surrounding them — Italy, Austria, and 

 Russia. The grain producers of Germany have complained 

 bitterly at the encouragement to importation of grain from 

 Austria and Russia, on account of the falling valuta or standard 

 of the latter two nations. 



If the falling standard is due to bimetallic legislation, which 

 makes those states adopting it a " dumping ground for silver," 

 the stimulus to their exports cannot last forever, partly because 

 the fall is anticipated by higher prices (that prevents loss), and 

 partly because the national ratio of the metals is soon equalized 

 with the external ratio, and hence the premium ceases. It is a 

 question whether it is worth while for England and the United 

 States to go over to a bimetallic stndard, simply in order to 

 obtain a temporary benefit during the period of adjustment. 

 Bimetallic legislation hastens the levelling process ; otherwise the 

 stimulus to exports of goods would last longer. 



§ 13. Again, the fall in the rate of foreign exchange is, to 

 some extent, compensated to the exporter from the gold standard 

 country, by the fact that he anticipates the amount of the decline 

 that is going to take place in silver in the immediate future. Not 

 being able to raise the price of the goods in silver, he adopts the 

 immemorial weapon of competition in countries of customary 

 prices, of degrading their quality. This resource failing, he 



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