, 1876-08-09

1870 - ~ A@ANNSA
out in Silver. The annual payments OF
the Government in India to the Home
Government have greatly increased, part.
ly through On increase OF home charges
partly through the increase in the interest
on the Guaranteed Debt, partly because
Of the approximate completion OF the
railway system and consequent dlminution
in the capital annually RENTED to India
and the result is o complete inversion of
the proportions of bullion and bills making
up the II millions. In the years 186S-79
we sent out an average of 910,000,00 In
bullion {Silver), and 9~7,400,000 in bills;
in 1876 we sent out an average OF
94, 100, 900 in bullion and $4,000, 600 in
bills and the proportion OF Silver Ia con-
tinuously declining. If, instead of sending
out ten millions q year In Silver we have
to send out no more than four, or even
three millions, the great market for our
Silver is stopped, and importers OF the
metal are obliged to submit to the tall
which has, in fact, occurred.
There are three leading facts In refer
ence to the Silver trade. First, there 10
an enormous Increase of production in
the United States, the full effect of which
is not yet felt here because the produce
is being accumulated preparatory to q re-
sumption of cash payments in the States.
When resumption is accomplished, we
shall share with the rest of the world the
Eruption of Silver, which, far outbalanc-
ing any wear and tear in the United
States currency, must intensity the present
depreciation OF the metal. Next, there is
%L, ,,,O,o{i9atiO If CiIvar -, Gorooouv
which, operating at once, prepares us foE
the experiences to follow. Lastly, there
is the decline of the demand for Silver to
export to India, because Government
bills have increased so as to supply the
largest part of the balance due on Indian
trade. Is there any hope of altering this
last fact2 The answer depends on a ques.
ton the Select Committee have not in-
vestigated the extent to which Silver ia
deprecated in India. We know,o of course,
that Silver is deprecated in India as q
purchasing power of bills on England just
as much as it is deprecated here; but
there is some reason to believe that it is
not yet deprecated to the same extent as
the purchasing power OF commodities.
Some of the reasoning OF the Select Com
mittee appears to proceed on the hypothe-
sis that in this respect it has not been de-
preciated at all. The Indian merchants
must be as slow as the native population
if this is strictly true now, or if it remains
true in any degree for any considerable
time. The Silver Of four rupees costs in
London now no more than the Silver Of
three rupees cost very few years since;
aud if Silver has not deprecated in India,
the buyers Of Indian produce ought to be
able to make rare profits. If they cannot
do this, the presumption is that the gene
raj depreciation of Silver has commenced
aud 10 any case the competition of buyers
must soon precipitate it, The fond notion,
which the Select Committee appear to
have borrowed from the evidence Of Mr..
BAGEHoT, that before a fall of 2 per cent
could happen in the value of Silver in
India there would be developed such an
increase in the purchase of Indian products
as to absorb all the additional Silver that
can be expected to reach our market, ap.
pears to US to be wholly chimerical. We
do not look, therefore, for any arrest OF
the diminution of the value of Silver here
by an extraordinary increase in the exports
from India, The conditions most favoura-
BILE to that increase have now existed for
months, and even years, and there 10 no
sign of its coming. Hthe productiveness
~ l. H. = 4~N M