TRANSACTIONS OF SECTION F. 777 



2. A rrojwsal for a System of International Money. liy W. A. Shaw. 



3. The Gold Standard. By Hon. George Peel. 



4 The Menace to EngJhh Industry from the Competition of Silver-using 

 Countries. By R. S. Gundry. 



Although Englaud has had a single gold standard since 181G, all other countries 

 continued to use either silver alone or both metals linked together, as full legal tender 

 money, till 1873. Down to that year, therefore, gold and silver served equally as 

 international money. The demonetisation of silver, v^^hich began with Germany's 

 adoption of a gold standard, has entailed a gradually increasing divergence in the 

 relative value of the two metah. The value of gold necessarily rose in response to 

 increased demand, and the price of all commodities (as measured in gold) fell. 

 The price of silver fell with the rest, and is now 30f/. an ounce, instead of 60ri., at 

 which it stood so long as the French mints were open to coin it at the ratio of 

 15^ to 1. 



But though silver may appear in Europe to have shared the general fall, the 

 position is different if we turn to the East. The standard there is silver, and its 

 purchasing power over commodities has remained approximately stable. To au 

 Indian, or a Chinaman, or a Japanese, his silver money represents the same value 

 that it did twenty years ago. The English farmer who wants a sovereign has to 

 give two sacks of wheat where one used to suffice ; but the Indian ryot who w^auts 

 a rupee has to give no more of his produce than before, and his rupee will buy in 

 turn as many of the necessaries of life as it would a generation ago. 



The effect has been to encourage the importation of foreign produce into 

 England, and to render increasingly difficult the exportation of P^nglish industrial 

 products to the East. 



It is an error to suppose that the great fall in wheat, for instance, has been 

 caused by competition in the United States. The American farmer, on the con- 

 trary, is suffering nearly as we do ourselves. The root of the evil lies in differ- 

 ences of currency. As a sovereign, which used to be worth only ten rupees, will 

 now buy eighteen, and each rupee retains its purchasing power, it follows that a 

 sovereign will buy nearly twice as much Indian wheat, and the price of English 

 corn had to fall accordingly. The close of the Indian mints disadvantaged India 

 in turn by lifting her currency above the silver level, and she is being undersold 

 by Russia. 



The Lancashire manufacturer who wishes to sell his goods in Asia is confronted 

 by the coiiverse difficulty. As the Chinaman's dollar represents, to him, unchanged 

 value, he is not disposed to give more silver for his yarn or cloth than before. 

 But whereas the dollar used to be worth 4s., it is now worth only 2«. Id. ; 

 so that the English manufacturer who used to get, say, {2^ = ) 10s., now 

 gets 5s. 3f?. The effect has naturally been to check trade. The pro- 

 portion of total exports of British and Irish produce taken by silver-using 

 countries since 1876 — when the currency changes had had tiuie to take effect — 

 has been stationary. It was 20-67 per cent, in 1877 and ^OHo per cent, in 1894, 

 having never been above 2T90 in the interval. The export of cotton yarn from 

 England to China and Japan is less now than it was in 1876, while the export 

 from India has enormously increased ; though there has been a falling oft' in her 

 case also since the close of her mints (in. 1893) disturbed — by imparting a fictitious 

 value to the rupee — the silver level on which the trade had grown up. The addi- 

 tional blows dealt to silver and the increasing strain thrown on gold bj' that 

 measure and the repeal of the Sherman Act disabled the English manufacturer still 

 further. The gold price of silver fell another \()d. He was obliged to raise the 

 price of his goods in order to ensure an adequate gold return, and the Chinaman 

 restricted his demand. The import of cotton goods into China in 1894 was less by 

 4,000,000 pieces than in 1892. 



